According to a recent national survey, the popularity of NEC suite of contracts continues to rise. 30% of organisations surveyed use NEC contracts more often than any other form of contract. This represents a rise of 14% since 2011. Over the same period of time, the use of JCT contracts as the main form of contract now stands at 39% (a decrease of 21%). The use of bespoke contracts has not really changed.
One reason for the increased use of NEC contracts is the ever-increasing familiarity of such contracts, in part due to the insistence of its use by public sector bodies. Furthermore, as BIM is increasingly being used, organisations are looking towards contracts which better support collaborative working like NEC3 contracts. As all centrally-funded work is to be undertaken using BIM by 2016, this factor may become increasingly prominent.
It should be noted though that the majority of organisations surveyed were professional consultants (61%). It is this group of participants that has seen the biggest increase in the use of NEC contracts. 37% of projects used the NEC Professional Services Contract to appoint professional consultants, which is now more common than RIBA agreements. However, it still remains the case that the most popular form of appointment is a bespoke contract (51% of projects). Bespoke contracts are favoured by various clients and their popularity continues to rise as well.
Signature of contracts alert…
On a separate note, the same survey also established that:
- 30% of organisations only sign building contracts after work has commenced; and
- 3% sign contracts after completion or not at all.
This is a worrying statistic and only increases the scope of a dispute occurring between parties as the terms of the engagement have not been agreed and set out. It is of course sensible on any project to agree the terms of a building contract, and sign the contract, before works/services are commenced. If it is left until a future date, then it may already be too late.
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