NEC ECC Contracts - Assignment Example

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This is a project concerning a 100 million ? Postgraduate Student Accommodation and Outreach Center Project in Malaysia. The project provides accommodations for 2100 postgraduate students, along with teaching activities and a continuous professional development course…
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NEC ECC Contracts
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General Construction. Contract Principles The Housing Grants, Reconstruction and Regeneration Act 1996 (HGRRA) focuses on payments under a construction contract. Specifically, the Act states that, when a construction contract is for 45 days or more that the party to the construction contract is entitled to installment payments (HGRRA 1996 §109). Section 111 of the HGRRA 1996 states that a construction contract shall stipulate the dates of the payments, and when the final sum comes due. Section 112 forms the basis on when and why one party may not pay the other party. Local Democracy, Economic Development and Construction Act 2009 gives further protections to contractors. Another provision of this Act, section 142, appears to address the issue of subcontractors. Specifically, it states that any provision where payment is conditional upon performance of obligations under another contract, or a decision made by another person as to whether the obligations under another contract have been performed, is void. The terms are void, in that the time to make payment to the contractor cannot depend upon the performance of the other contract. This seems to specifically address subcontractors, and any kind of clause which might state that the general contractor will get paid if the subcontractor has performed his duties.
The Design of the NEC3 ECC Contract. Main Options. The main options that would be used in this project would be Option C– the reason why Option C is appropriate in this case is because the work is only planned, and there is not an indication that there is a design in place. Option A assumes that there is a design in place, therefore the contractor would provide the works that are described in the contract. In Option B, the employer assumes the risk of the correctness of quantities, because the Contractor is the person who prices the bill of quantities and is responsible for the remeasurement of quantities if not correct. Therefore, this option is not appropriate for a design and build contract, as this contract appears to be. Option D also has a greater risk for the employer, as the target price is adjusted for changes in quantities and for compensation of events. Option E is not appropriate because it is only used when the work is not defined at the outset, and, since the project is defined, this option shouldn't be used as it presents greater risks to the employer. Option F is inappropriate, because this option assumes that subcontactors do most of the work (Yuet, 1993). Option C is appropriate because, while there is a planned project in place, there is not yet a finished design. The employer can provide an activity schedule and the target price can be set according to this schedule. Moreover, costs are minimised to the employer, because the payments are made according to the actual costs that are incurred by the Contractor, and risks are shared by the Contractor and the Employer, because each party shares the burden of over-runs and each party also shares the benefits of savings. This also leads to fewer disputes. Secondary Options There are a number of secondary options which should be used, in order for disputes to be minimized. One of these is, Option P which should be negotiated, as this option provides for additional financial security should the contractor not complete any part of the works, and other contractors have to complete the works. Option Q might be used as an incentive for the contractor to complete the work early, as Option Q provides for a bonus for early completion. This might be appropriate if the University is motivated to open the centre early for the students to enjoy, especially if this centre is going to be one of the selling points for the University. By the ...Download file to see next pagesRead More
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