How is value engineering managed within NEC3 ECC contracts?
Under options A and B, the priced based options, the answer is ‘No’. There is no standard wording.
Under options C & D, there are two contractual paths :
- in the second bullet point of core clause 60.1 (1), if the Contractor suggests a change to their own Works Information and the Project Manager instructs it, then the target Prices is not changed. Hence any savings are shared between the Parties under the pain /gain arrangement.
- under option C and D clauses 63.11, first bullet, if the Contractor suggests a change to the Employer’s Works Information which reduces costs and the Project Manager instructs it, then the target Prices is not changed. As before any savings are shared between the Parties under the pain /gain arrangement.
Note that these clauses only cover savings in construction costs, not maintenance costs or other additional in operation benefits.
60.1 (1) Bullet 2
- The Contractor request a change for his design made either by his design or to comply with other Works Information provided by the Employer.
If a change in WI is designed by the Contractor, it is a VE and there is no change in the Target Cost, if it was designed by the Employer it is a CE and therefore there is an adjustment to the Target Cost.