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5 Feb 2025 • Andrew Shaw

NEC4: Contract Data

We continue our NEC4 mini-series, and this week we focus on Contract Data. This is the section of the contract that provides specific information about the agreement between the parties, including key general contract information, scope, site information, works methodology, risks, programme, and prices.

It is split into two parts, with Contract Data Part One containing information provided by the client and Contract Data Part Two containing information provided by the contractor. These parts should ensure a clear and consistent understanding of the agreement and should complement, rather than contradict, each other.

This article is based on the NEC4 ECC Option A, but the principles should be relevant to most, if not all, contracts in the NEC4 suite. We will provide an overview of the standard form requirements before concluding with some practical tips and guidance.

The basics

This week’s article is relevant to last week’s compensation event article because the Contract Data provides the baseline information that is used to assess the impact of a compensation event on the price and programme. It will act as your first port of call, along with the risk profile agreed at clause 60, if you are looking to establish whether an issue is a compensation event. The Short Schedule of Cost Components (for Main Option A and B, or the Schedule of Cost Components for the other Main Options) is used to assess Defined Cost for compensation event quotations; this will be covered in a future article.

The standard form requires various pieces of information to be included in Contract Data Part One and Two, some of which include General (selection of Main Option and Secondary Option clauses, Scope and Site information, etc.), the contractor’s main responsibilities (key dates and conditions to be met), time (starting date, access dates, completion date, etc.), and payment (assessment intervals and payment periods, etc.).

When you are tendering a project, you need to carefully understand the Part One information issued to you and ensure that the Part Two data reflects your position. In any tender process, there is likely to be a period of receiving documents, submitting documents, discussions, clarifications, etc. that can sometimes be overwhelming. You can lose track of the position because of the speed, complexity, or volume, so always track these issues carefully during tender and ensure checks are performed before a contract is presented for execution.

The backwards and forwards in the tender process are washed away once the agreement is made, so make sure things aren’t slipped in to, or taken out of, the final version because it can fundamentally alter your entitlement to additional time and cost later down the line.

Scope Information

For the purposes of this article, it is the importance of the Scope information that we would like to bring to your attention. This is a crucial section when assessing the scope of a compensation event because it doesn’t matter what you want this section to say or what you think it says; it is what it actually says that is important. Put more simply, if it says something is in your scope, then it is, and if it doesn’t, then it isn’t!

When you tender a project that will be executed as an NEC4 contract, it is principally the Scope information that you should price. This section will contain specifics about your design responsibilities, performance obligations, project constraints, technical standards, etc. You must read it, understand it, and ensure your price and programme are compliant with what it is you have been asked to include.

If there is ambiguity or something is unclear, then, subject to the tender rules, you should raise this and seek clarification. If there is an opportunity and it is appropriate, then you should clarify these issues in the Scope information submitted by you to be included in Contract Data Part Two. As we have previously mentioned, you should not contradict what you have been asked to provide.

For example, if you are asked to price 10 widgets, then it is not helpful to say you price 5 widgets so that your price appears competitive. However, if the requirements are outline/conceptual, then you might look to include the specific quantities and specification of items so that there is a clear baseline. This can form the basis of discussion and adjustment at tender so that any subsequent contract is clear about the basis of your allowances.

You might also include information about your construction methodology in this section. This might not always be needed because the method is obvious or not overly relevant; however, if you are dependent on things at certain times or you have selected a particular method due to a site constraint, then you should describe the methodology. The reason for doing this is that it forms a baseline from which you can demonstrably measure change, so if there is a change to that constraint, you can show the impact on your resources, and that is used to substantiate the quantities in your quotation.

This will be a 'go-to' part of the contract, so ensure you diligently check this section before signing the contract, and make sure that you know it inside and out.

Final Reflections

The Contract Data provides the baseline from which the impact of a compensation event on time and cost is used. You need to read and understand the contents and ensure it is aligned with your understanding of the agreement before you execute a contract.

If you compromise your right to a compensation event because you agree to Scope information being included that does not form the basis of your price and programme, then you could be giving a substantial discount on your price without realising it. The consequences only come to pass when an event occurs, and you realise you either have no entitlement to recover or you are liable to someone else.

In next week’s article, we will build on previous articles in the mini-series by covering the Schedule of Cost Components/Short Schedule of Cost Components.

Keep an eye out for that, and, in the meantime, enjoy the rest of your week!

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