How to deliver NEC projects in a volatile market — lessons from our Building Links event

NEC was designed to encourage collaboration, early intervention and active management — but how well does that model hold up when projects are dealing with rising costs, programme pressure, supply-chain disruption and continual change?

That was the question at the heart of the latest Building Links event at our Manchester office, where legal, commercial and delay specialists explored how NEC projects perform in a volatile market. 

The panel brought together Mary Cross (Founder of ConsultCross) Chris Jones (Director of Oraculum Consulting) and Barry Goodall (our Head of Construction). The discussion was moderated by Jennie Jones, Partner and founder of Building Links.  

The consensus was broadly positive but with an important caveat: while NEC can provide the right tools to manage uncertainty, the contract can’t compensate for poor preparation, unrealistic expectations or a project culture that becomes defensive when problems emerge.  

Here are some of the panel’s practical lessons from the day.

Get the scope, risk & programme right from the start

One of the strongest themes was that the success (or failure) of an NEC project can be heavily influenced before work starts.

Chris Jones warned against underinvestment in the scope. Rather than relying on standardised drafting, clients and delivery teams need to consider what the project is intended to achieve and whether the scope, Z clauses and supporting documents operate coherently. 

Barry Goodall similarly highlighted the risks created by a contract that’s flawed from the outset. Bespoke amendments may address particular commercial concerns but can create difficulties where they conflict with the Scope or other contract documents. Clear risk allocation matters but so does communication between those negotiating the contract and the team that ultimately has to deliver it. 

The programme demands the same attention. Mary Cross described it as central to effective NEC administration. A project described as having a 60-week programme shouldn’t be surprised by delay if proper analysis later demonstrates that 80 weeks was always more realistic. 

The key message was that poorly defined scope, unrealistic risk transfer and an unachievable programme can put a project under strain before there’s a spade in the ground.

Use NEC early warnings to manage risk, not to apportion blame

NEC's early warning process is intended to identify potential problems while the parties still have an opportunity to do something about them, yet the panel questioned whether it’s always used that way in practice. 

An early warning may be issued but too often that’s where the process stops. Chris Jones emphasised that issuing a contractual notice shouldn’t be regarded as unnecessarily "contractual", nor should an early warning simply become a precursor to a compensation event. Its purpose is to bring the parties together to understand and manage risk. 

How the recipient reacts matters too. If an early warning is immediately treated as an attempt to establish blame or contractual positioning, parties can become defensive and contractors may be discouraged from raising further issues.

A notice alone doesn’t manage risk. The value lies in the conversation and action that follows it.  

Compensation events: establish entitlement before arguing delay & cost 

Similar issues arise with compensation events.

The panel discussed a recurring pattern of procedural mistakes: early warnings being treated as compensation event notifications, events not being notified properly, assessments being delayed and programme consequences not being adequately analysed. The risk is increased by bespoke Z clauses which may alter the standard NEC position. 

There’s a more fundamental point, however. Before significant time and cost are committed to proving delay or quantum, the parties need to establish whether there’s an entitlement in the first place.

Jennie Jones shared an example from an adjudication where she acted for the client under a NEC4 infrastructure project where a contractor advanced a compensation event claim worth approximately £7m, together with more than 450 days of alleged delay, arguing that loading restrictions imposed by the client amounted to a change to the Scope. 

The client disagreed. Its position was that developing a compliant solution within the structure's existing constraints already formed part of the contractor's obligations. The adjudicator agreed: the proposed solution had changed but the underlying contractual obligation hadn’t.  

The example reinforced the importance of distinguishing between an actual change to the Scope and the contractor developing its solution to meet an obligation that was already there.

Treat the programme as a management tool, not a battlefield

Few things signal emerging difficulty on an NEC project more clearly than a failure to secure acceptance of updated programmes.

Sometimes the contractor's programme doesn’t realistically reflect the project's position. In other cases, the programme may do exactly that, but accepting it becomes difficult because of what it reveals about the likely completion date. Either way, the danger is that programme acceptance turns into a proxy battle over liability. 

The panel's view was that this misses the purpose of the programme. If the parties don’t share a realistic understanding of where the project actually is, it becomes much harder to work out how to get it back on track.

Chris Jones gave the example of a subcontractor that had misunderstood its scope. Rather than allowing the disagreement to escalate, the main contractor engaged in frank discussions, worked through the programme, clarified responsibilities, revised timescales and resequenced the works. That gave the parties a realistic basis from which to move forward.  

Where positions have already become entrenched, the panel also discussed the value of early third-party intervention, including mediation, rather than allowing every disagreement to move automatically towards adjudication. On a live project, mediation can give the parties greater flexibility to agree practical solutions that may not be available to a court or adjudicator, such as agreeing the treatment of a compensation event or acceleration measures to help keep the project on track.

Build better records to support better decisions

While good records are often associated with preparing for a future dispute, their value is much wider.

Progress information, updated programmes, site attendance records and other contemporaneous evidence can help teams to understand what’s actually happening, identify the causes and effects of delay and decide what can be done about it. 

That may mean resequencing works, reallocating resources or changing procurement arrangements. The important point is that reliable information allows teams to make decisions during the project, rather than reconstruct events months later when positions have hardened.

Contract or culture: what really drives NEC disputes?

When asked whether NEC disputes are driven principally by problems with the contract or failures in administration and behaviour, the panel placed considerable emphasis on people and project culture. 

NEC is procedurally demanding and can become difficult to administer on projects experiencing extensive or continual change — but problems are compounded when teams haven’t been properly trained, pre-construction and delivery teams fail to communicate or individuals become more focused on defending their position than completing the project.  

Mary Cross cautioned against "ostriching": hoping emerging problems will disappear rather than confronting them.

Successful NEC projects require commercial and site teams alike to be honest about where a project stands and willing to address problems while there’s still an opportunity to resolve them. 

Data centres: can NEC keep pace?

That question becomes particularly interesting in fast-moving sectors such as data centres.

The panel considered whether projects subject to continual evolution in power, connectivity and design requirements risk becoming swamped by compensation events. At what point does a process designed to manage change begin to struggle with the sheer volume and pace of it? 

The discussion included an example of a client moving away from NEC towards JCT 2024, with FIDIC and construction management routes also under consideration. Chris Jones offered an important counterpoint, however: NEC's administration can provide clarity and changing the form of contract doesn’t remove the underlying project risks. 

Mary Cross also prompted the panel to consider whether NEC is particularly well suited to more repetitive, tried-and-tested works, referencing projects including the A14, London Power Tunnels and M60 repairs, and whether the same approach translates as comfortably to the rapidly changing requirements of data-centre development. 

For clients, that leads to a broader procurement question: which contract gives the project enough flexibility to keep moving without losing control of time, cost and risk?

Invest early, manage actively & choose carefully

Ultimately, successful NEC projects aren’t necessarily those that avoid change or disruption. They’re those where the project team identifies problems early enough to do something about them.

For Chris Jones, the priority was investing sufficient time and resource in the Scope, pre-tender workshops, pre-contract discussions and training. Barry Goodall emphasised clear risk allocation and communication between those negotiating the contract and those delivering the works. Mary Cross's advice was to start with a properly considered, project-specific programme rather than simply recycling a standard construction programme. 

Taken together, the message from the panel was to invest early, plan realistically, communicate openly and use NEC's procedures as management tools, rather than weapons once a dispute has developed.

The discussion also raised a more fundamental point. Particularly in markets characterised by rapid and continual change, project teams shouldn’t simply ask whether they know how to operate NEC. They should first ask whether NEC is the right fit for the project at all.

Talk to us

Our construction team supports stakeholders across the sector during the full lifecycle of construction projects, from contract drafting and risk allocation through to project delivery, dispute avoidance and formal dispute resolution. The team takes a practical and commercially focused approach, helping clients to navigate issues before they escalate and supporting them when disputes do arise.

If you’d like to discuss any of the issues raised in this article or how they may affect your current or upcoming projects, call us on 0333 004 4488, email hello@brabners.com or fill in our contact form.

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