An alternative to NEC3 is just around the corner

Peter Gracia FCIOB looks at a new update of an old favourite for managing infrastructure projects

“Other forms of contract are available” is often my response to the queries I now get from public sector clients who appear to think they must use the NEC3. Recently a consultation version of the Infrastructure Conditions of Contract (ICC) has been released which will be of considerable interest to many contractors working on road, rail, water and infrastructure projects, as well as their public sector clients.

Whilst public sector engineering departments are subject to the brainwashed auto-pilot selection of NEC3 the engineer on the ground (or even in a hole!) hankers after the good old days when the Institution of Civil Engineers (ICE) forms ruled the roost. Some firms, like Network Rail for example, use the ICC forms as an inherent part of their infrastructure delivery programme and the public sector should consider doing so too.

When the ICE junked the family of contracts which bore its name in August 2011 they were turning their back on a well-honed set of conditions which forms the skeleton of most international engineering forms of contract, for example FIDIC. The Association of Consultancy and Engineering (ACE) and the Civil Engineering Contractor’s Association (CECA) took the ICE forms over and re-branded them under the ICC suite of contracts. It contains many variants of the conditions for use in different situations but continues to rely upon CECA to provide the dovetailing subcontract forms which have also been updated.

The ICC Measurement form integrates the previous updates for the ICE forms and reflects the requirements of the Local Democracy Economic Development and Construction Act 2009 (LDEDCA), which actually went live in October 2011. This head document will seemingly form the structure for updates for others in ICC suite.

The drafters are to be congratulated in producing a readily understandable set of conditions true to the intent of its ancestor. If you want to see “plain English” then look no further than the definitions. Many will be happy to see the clear definition of “Cost” – ie it does not include profit, which can sometimes be difficult to ascertain in the NEC3 where the application of compensation events (variations) befuddles many.

Many public sector users will also appreciate that you can have Nominated Subcontractors under this form and even make direct payments to them when the main contractor starts to play games with down-stream payments. These are classic provisions missed by users who actually have mud on their boots.

The conditions are short, with only 21 main clauses (it may actually be only 20 as there is an error in the Index) and 3 Supplementary Clauses and an option to add in your additional Supplementary Clauses. There is no definition of Supplementary Clauses so their purpose as separate elements is unclear.

BIM rears its ugly head at Clause 20, which will keep the public sector box tickers happy and those who cannot visualise in three dimensions (you know who you are). The layout incorporates Appendix Part 1, prepared by the Employer providing basic information to allow tendering and Appendix Part 2, supplied by the Contractor in its tender. The Works Data is a blanket definition of the Employer’s requirements and the Contractor’s proposals. The Contractor may be required to design various elements of the works.

Another common sense feature is cross referencing of clauses which can guide you around the pertinent sections easily if you actually get the contract out during a site meeting. 

The ICE never quite accepted that you could go to adjudication at any time under the statutory scheme – historically the Engineer used to be make binding decisions on site and when the Construction Act came in they did not change their contracts to say you could adjudicate at any time. Now decisions of the engineer are “binding” unless one of the parties states its dissatisfaction in a time limited notice or an adjudicator/arbitrator decides the matter.

Conciliation and/or mediation is given a look in so there is plenty of opportunity for dispute resolution ranging from a kiss and a cuddle to all-out war. However, keep an eye on Clause 4.2 where the contract sets out all the party’s rights and obligations in a “whole agreement” approach. The aim here (if it is effective) is to only allow those remedies provided for by the conditions rather than common law rights, which will be more extensive.

Clearly there is some minor tinkering to be undertaken with the consultation document, but for those who actually want to be able to understand their contract and be able to control it, then it the ICC route is worthy of serious consideration.

Peter Gracia FCIOB is director of Gracia Consult www.graciaconsult.com