Overview of New Engineering

Contract (NEC)

Dr Daniel W.M. Chan, Associate Professor

and Associate Head (Teaching)
Department of Building and Real Estate
The Hong Kong Polytechnic University
 HKICM / HKIPM / PolyU Joint CPD Seminar on
“Holistic Risk Assessment Model for Target Cost
Contracts – A Reality or Myth?”
16 March 2017 (Thu); 7:00 pm – 8:30 pm

2
 Outline of
New Engineering Contract (NEC)
(TCC = Target Cost Contract)

 Background, History and Key Features of NEC

Contracts

 Highlights of Research Findings on Benefits, Difficulties

and Success Factors for NEC/TCC Contracts

 Selected Case Studies of NEC Completed Projects in

Hong Kong, United Kingdom and the Belt and Road
Initiative (BRI) Countries

 Future Development Trend of NEC Contracts

3
 Common Types of International
Construction Contracts
International Federation of Joint Contracts Tribunal New Engineering
Consulting Engineers (FIDIC) (JCT) Family of Contract (NEC) Family
Suite of Contracts (Switzerland) Contracts (UK) of Contracts (UK)
Principles, Practices and Values
under NEC Contracts

Sound Principles

Good Practices

Good Values
 Background of NEC Contracts
 History of NEC contracts

1985 The Institution of Civil Engineers (ICE) conducted a

fundamental review of alternative contracting strategies for civil
engineering design and construction
1986 Specifications for a new style contract identified
1991 Consultative version of NEC published
1993 First edition of NEC (NEC1) published (March)
1994 Professional Services contract and Adjudicator’s contract published
1995 Second edition of NEC published (NEC2) (November)
1999 Engineering and Construction Short Contract and Short Sub-
Contract published
2005 Third edition of NEC (NEC3) published (June)
2017 Fourth edition of NEC (NEC4) published (June)
6
 Background of NEC Contracts
 Why to use NEC contracts?
 Latham Report (1994), United Kingdom
 To bring an end to the adversarial approach that had become
prevalent in the construction industry
 To produce a single contract with a wider application
 To stimulate productive management and collaboration

The New Engineering Contract Version 4 (NEC4) is a

family of contracts that facilitate the implementation of
sound project management principles and practices
based on a spirit of mutual trust and co-operation.

7
 The HK Construction Industry Today
(Construction Industry Review Committee 2001) Construction 1.0

Potential problems besetting the current construction industry:

 Poor site safety record

 Unsatisfactory environmental performance
 Need for a more client-focused approach
 Extensive use of traditional construction methods
 An inadequately trained workforce

 Tendency to award contracts to the lowest bidders

 Short-term attitude to business development
 Non value-adding multi-layered subcontracting
 Declining productivity growth and high building cost
 Fragmentation and adversarial culture within the industry
8
 The HK Construction Industry Today
(Construction Industry Review Committee 2001) Construction 1.0

Measures to improve:
 Fostering a quality culture Need an integrated
 Achieving value in construction and co-operative
procurement procurement
approach among
 Nurturing a professional stakeholders – a
workforce target cost
 An efficient, innovative and contracting approach
productive industry under a partnering
 A safer workplace and an arrangement
environmentally responsible
industry

9
 Hong Kong SAR Government’s Drive for
Using NEC (Government Tenders)
Source: https://www.neccontract.com/About-NEC/News-
Media/Hong-Kong-government-endorses-NEC-as-main-contract)

 The Hong Kong SAR Government announced at the

NEC Asia Pacific Users’ Group’s Annual Conference
2016 on 21 November 2016 that a full suite of
NEC3 contracts will be used for all new public
works projects as far as practicable, unless there
are justifiable reasons to do otherwise.

 Ir HON Chi-keung (Former Permanent Secretary for

Development – Works): “We will try to adopt NEC3
target cost options in larger scale and complex
projects, such as those exceeding HK$1 billion”.

10
 Hong Kong SAR Government’s Drive for Using NEC
(Government Tenders)
(Source: Practice Notes for NEC ECC for Public Works Projects in Hong
Kong, Development Bureau, 2017)

11
 Hong Kong SAR Government’s Drive for Using NEC
(Government Tenders)
(Source: Practice Notes for NEC ECC for Public Works Projects in Hong
Kong, Development Bureau, 2017)

12
 Hong Kong SAR Government’s Drive for
Using NEC (Government Tenders)
(Source: Practice Notes for NEC ECC for Public Works Projects in
Hong Kong, Development Bureau, 2017)

 By early 2016, a number of public works projects

have adopted the NEC form using different Options
and covering a wide variety of works. The
Government have achieved satisfactory results for
those completed and on-going pilot projects, which
responded and supported the use of NEC thereafter.

 The Government have extended the application of

NEC in public works project procurement after 2016,
in particular, the adoption of target cost Options (i.e.
Options C and D) in suitable mega scale projects over
HK$ 1 billion, such as tunnelling works, high speed
roads, land formation works, etc.
13
 Construction Industry Council (CIC)’s
Drive for Using NEC
(Source: Review Report on Quality Site Supervision Practices of the Hong
Kong Construction Industry, Construction Industry Council, 2020)

 The Task Force on Construction Industry Site

Supervision Practice under the Construction
Industry Council (CIC) published on 2 September
2020 the “Review Report on Quality Site
Supervision Practices of the Hong Kong
Construction Industry”.

 One of the 8 recommendations made with a view

to addressing the challenges faced by industry
stakeholders and improving the current site
supervision standards includes: “Driving
collaborative culture from top-down by
government and employers, and expanding
the use of New Engineering Contract (NEC)
and other contractual partnering methods
in Hong Kong”.
14
 Aims and Objectives of NEC

3 clear objectives:
1. Flexibility of use (i.e. new building vs. maintenance vs. civil
works; design-and-build vs traditional; international wide
application, e.g. UK, France, Ireland, Netherlands, Sweden,
New Zealand, Australia, South Africa, United Arab Emirates
(UAE), India, Philippines, etc; contractual relationships
between various parties)

2. Simplicity and Clarity (i.e. simple language; easy to

understand; clear actions of parties; minimal legal jargons;
procedural logic backed up by user guides and flowcharts)

3. Stimulus to good project management (i.e. early risk

identification; clear division of responsibilities; integrated
project team via mutual trust and co-operation) 15
 The NEC4 Family of Contracts
(Source: https://www.neccontract.com/NEC4-Products)

Engineering and Construction Contract (ECC)

between an Employer and a Contractor

Engineering and Construction Subcontract (ECSC)

between a Contractor and a Subcontractor

Engineering and Construction Short Contract (ECSC)

for “simple low-risk” work (not necessarily low value)

Engineering and Construction Short Subcontract (ECSS)

as a subcontract to ECC or ECSC
16
 The NEC4 Family of Contracts
(Source: https://www.neccontract.com/NEC4-Products)

Professional Services Contract (PSC)

between an Employer and a Consultant

Dispute Resolution Service Contract (DRSC)

between two contracting parties and an Adjudicator

Term Service Contract (TSC)

where the contract is for a period of time rather than a single
project to provide a service such as planned or unplanned
maintenance
17
 The NEC4 Family of Contracts
(Source: https://www.neccontract.com/NEC4-Products)

Design, Build and Operate (DBO) Contract

integrated responsibilities for design, construction, operation and/or
maintenance which can be procured from a single supplier such as
public-private partnership (PPP) model

Alliance Contract (ALC)

a multi-party contract for the appointment of all key members of
the supply chain under a single contract to create an alliance with
an integrated risk and reward model

Supply Contract
for procurement of goods and related services 18
 The NEC4 Family of Contracts
(Source: https://www.neccontract.com/NEC4-Products)

Contractor’s Design-and-Build (D&B) Option

contractor’s design duty aligned with industry standard for
designers

Early Contractor Involvement (ECI)

Launched separately from the contracts in 2015 and
ECI is now part of the NEC4 ECC

Procurement and Contract Strategies - User

Guides and Guidance Notes
(including flowcharts) 19
 ECC – Main Contract Options
between an Employer and a Contractor

ECC - Six types of payment mechanisms to Contractors

available in the main options:
Contractor’s risk
Main Option Clauses
Option A - Priced Contract with Activity Schedule
Option B - Priced Contract with Bill of Quantities
Option C - Target Contract with Activity Schedule
Option D - Target Contract with Bill of Quantities
Option E - Cost Reimbursable Contract
Option F - Management Contract
Employer’s risk
20
 ECC – Main Contract Options
between an Employer and a Contractor (Tsui 2012)

 Options A and B
Priced contracts with the risk of carrying out the
work at the agreed prices being largely borne by the
Contractor (similar to fixed-price lump-sum)
 Options C and D
Target cost contracts in which the out-turn financial
risks are shared between the Employer and the
Contractor in an agreed proportion
 Options E and F
Cost reimbursable types of contract with the financial
risk being largely taken by the Employer
21
 ECC – Main Contract Options
between an Employer and a Contractor (Tsui 2012)

Employer

Level of
Financial
Risk
Allocation

Contractor

Options Options Options

(A and B) (C and D) (E and F) 22
 ECC – Main Contract Options
between an Employer and a Contractor (Tsui 2012)

 Options A and C – Priced / Target Contract with Activity Schedule

 An activity schedule which relates to a programme where each
activity is allocated a price and interim payments are made
against the “completion” of each activity. Only when the whole
activity is complete, does the payment become due to the
contractor. There is no provision for partial payment.

 Options B and D – Priced / Target Contract with Bill of Quantities

 The bill of quantities (BQ) is a “traditional” bill of quantities.
 The contractor is entitled to interim payments, certified at stated
assessment dates by the Project Manager as set out in the
contract (e.g. monthly payment). The price for the work done to
date is the quantity of completed work for each BQ item
multiplied by the relevant unit rates. 23
 Parties Named in ECC
 The Employer
 The Contractor
 The Project Manager – appointed by the Employer and
administers the contract on behalf of Employer
 The Supervisor – administers testing, inspection,
quality of work and defects (similar to Clerk of Works
or Resident Engineer)
 The Adjudicator (appointed jointly by the Employer and
the Contractor)
 Others - people or organisations (e.g. design team and
cost manager) who are not the above, or any
employee, Subcontractor or supplier of the Contractor
24
 Role of Project Manager in ECC
 Review and acceptance of designs
 Review and acceptance of programmes
 Issue instructions
 Certify payments
 Assess compensation events and their
impact on time and cost
 ……….

25
 Rationale for NEC Contracts
Contractual Partnering - ECC Core Clause 10.1
“The Employer, the Contractor, the Project Manager and the
Supervisor shall act as stated in this contract and in a spirit of
mutual trust and co-operation.”
= REAL PARTNERING / COLLABORATIVE WORKING

26
 Overview of ECC – Core Clauses
 Core Clauses (common to all contracts)
1. General
2. The Contractor’s main responsibilities
3. Time
4. Testing and Defects
5. Payment
6. Compensation events (19 CEs: EOT + Direct Loss and
Expenses)
7. Title
8. Risks and insurance
9. Termination
27
 Overview of ECC - Secondary
Optional Clauses
 Secondary Optional Clauses
 X1. Price adjustment for inflation (used only with Options
A, B, C & D) (similar to “Fluctuation Clause”)
 X2. Changes in the law
 X3. Multiple currencies (used only with Options A & B)
 X4. Parent Company Guarantee
 X5. Sectional Completion
 X6. Bonus for Early Completion
 X7. Delay Damages (similar to Liquidated and Ascertained
Damages)
 X12. Partnering (for multi-contract partnering and
including KPIs)
 X13. Performance bond 28
 Overview of ECC - Secondary
Optional Clauses
 Secondary Optional Clauses
 X14.Advanced payment to the Contractor
 X15.Limitation of the Contractor’s liability for his design to
reasonable skill and care
 X16.Retention (not used with Option F)
 X17.Low performance damages
 X18.Limitation of liability
 X20.Key Performance Indicators (not used with Option X12)
 Y(UK)2. The Housing Grants, Construction and
Regeneration Act 1996
 Y (UK)3. The Contracts (Rights of Third Parties) Act 1999
 Z. Additional Conditions of Contract (similar to
Special Conditions of Contract with some
project-specific changes / amendments added)
29
 Overview of ECC – Dispute
Resolution Clauses
 Dispute Resolution Clauses (not applicable in Hong Kong)
 W1. Dispute resolution procedure (used in places other than UK)
 W2. Dispute resolution procedure (if HGCAR Act 1996 applies,
i.e. used in UK only)
 Note: HGCAR = Housing Grants, Construction and
Regeneration Act 1996

 Other than using adjudication as the first step, mediation or

Dispute Resolution Advisors (DRA) may be considered after
taking into account the partnering nature of NEC and the project
management tools built up in NEC to facilitate early resolution of
problems (e.g. approved compensation events).

30
 Key Features of NEC3 ECC
 NEC3 ECC combines obligations of contracting parties with
project management processes to make improvement to
traditional forms of contract in four main areas.
 Risk Management (Early Warning Notification and Risk

Reduction Meeting)
 Time Management (Regular Updates of Works
Programme)
 Change Management (Compensation Events)

 and foster a collaborative working relationship between the

Employer and the Contractor
 Relationship Management (Contractual Partnering, KPIs) 31
 Key Features of NEC3 ECC
(Ko 2012)

 (1) Risk Management (Core Clause 16)

 Early warning notification: The Project Manager, Contractor or
Supervisor may notify each other upon becoming aware of any
matter which could have an impact on cost, time or quality (Clause
16).

 The Contractor may give an early warning by notifying the Project

Manager of any other matter which could increase his cost. The
Project Manager enters early warning matters in the risk register.

 Risk reduction meeting: Seek effective solutions together to bring

advantage to all those who will be affected.

 Risk register revised by the Project Manager to record the decisions

or actions taken for avoiding or reducing the risk.
 Risk is owned by all contracting parties !!! 32
 Key Features of NEC3 ECC – Risk
Management (Ko 2012)
Risk Register (ECC Core Clause 16.1 - 16.4)

Following the Risk Reduction Meeting, Risk Register shall

be revised by Project Manager to record the decisions or
actions taken for avoiding or reducing the risk.
Item Date of Issued Date of Risk Potential Action to Action Action
No receipt by Reduction problem(s) be taken to taken by
Meeting(s) and the avoid /
risk(s) reduce the
risk(s)

33
 Key Features of NEC3 ECC
(Ko 2012)

 (2) Time Management (Core Clauses 31.2 and 32.2)

 Programme recognized as a key time management tool (i.e.
heart of ECC).

 Programme updates/revisions at intervals no longer than a

period of time as stated in Contract Data Part One (say one
month).

 Response by the Project Manager within 2 weeks of the

Contractor submitting the programme to him for acceptance.

 More stringent management and regular updates of works

programme.
34
 Key Features of NEC3 ECC
(Ko 2012)

 (3) Change Management (Core Clause 60)

 19 Compensation Events (CEs) under Core Clause 60 (e.g.

unforeseen ground conditions, inclement weather,

variations of works, etc)

 If the early warning is certified as a CE, the PM will issue

the PM’s instructions within 2 weeks (Clause 61.4), and
then the Contractor can submit claims for both TIME and
COST for each CE within 3 weeks.

 Monetary claims and EOT claims are separately considered

in many other construction contracts (e.g. HKIA Standard
Form 2005; GCC 1999, etc). 35
 Key Features of NEC3 ECC
(Ko 2012)

 (3) Change Management (Core Clause 60)

 Definite timeframe on agreement of CEs for

both Project Manager and Contractor.

 Estimation shall be agreed prior to work by

avoiding potential disputes in future and
facilitating faster settlement of claims and
final project account.

36
 Key Features of NEC3 ECC
(Ko 2012)

 (4) Relationship Management (Optional Clauses X12 or

X20)
 Introduction of Partnering clause (Optional Clause X12).

 Contractual partnering approach adopted

 Further encourages collaboration between the Employer

and the Contractor.

 Introduction of Key Performance Indicators (KPIs)
(Optional Clause X20).
 The Contractor reports his performance against each of the

KPIs, which are established when the contract is made, to

the PM on a regular basis.
 The Contractor is paid the amount stated in the Incentive

Schedule if the target stated for a KPI is improved or

achieved. 37
Highlights of Research Findings on
Benefits, Difficulties and Success
Factors for NEC/TCC Contracts

38
 Highlights of Research Findings on
Benefits, Difficulties and Success Factors
for NEC/TCC Contracts
 Chan, D.W.M., Chan, A.P.C., Lam, P.T.I. and Wong, J.M.W. (2011a). An
Empirical Survey of the Motives and Benefits of Adopting
Guaranteed Maximum Price and Target Cost Contracts in
Construction. International Journal of Project Management, 29(5),
July, 577-590. [URL: http://dx.doi.org/10.1016/j.ijproman.2010.04.002]

 Chan, D.W.M., Chan, A.P.C., Lam, P.T.I. and Wong, J.M.W. (2010a).
Empirical Study of the Risks and Difficulties in Implementing
Guaranteed Maximum Price and Target Cost Contracts in
Construction. Journal of Construction Engineering and Management,
ASCE, 136(5), May, 495-507.
[URL: http://dx.doi.org/10.1061/(ASCE)CO.1943-7862.0000153]

 Chan, D.W.M., Chan, A.P.C., Lam, P.T.I. and Wong, J.M.W. (2010b).
Identifying the Critical Success Factors for Target Cost
Contracts in the Construction Industry. Journal of Facilities
Management, 8(3), July, 179-201.
[URL: http://dx.doi.org/10.1108/14725961011058820] 39
 Perceived Benefits of NEC/TCC
(Chan et al. 2007a, 2007b, 2011a)

 Client provides financial incentives for contractor to become

efficient and achieve cost saving via gain-share/pain-share
mechanism.

 Early settlement of final project account because the valuation of

variations must be agreed progressively during the construction
phase, through the mechanism of compensation events.

 Bring in expertise in building designs and innovations in

construction methods and materials by submitting alternative
proposals from contractor to enhance the buildability of the
project.

 Provide a dispute resolution mechanism by way of adjudication

committee leading to reduction in contractual claims / disputes.
40
 Perceived Benefits of NEC/TCC
(Chan et al. 2007a, 2007b, 2011a)

 Conducive to improving partners’ working relationships at all

levels via partnering spirit and collaborative culture.

 Enable a more equitable risk apportionment amongst project

participants.

 Early warning mechanism promotes joint and prompt problem

solving together.

 More opportunities for participants to express opinions and

concerns openly and freely during workshops or beyond.

 The gain-share arrangement helps establish mutual objectives

and produce an integrated, trustful working team.
41
 Potential Difficulties of NEC/TCC
(Chan et al. 2007a, 2007b, 2010a)

 Longer time in preparing contract documents

due to a new collaborative form of contract.

 Unfamiliarity with or misunderstanding of

NEC/TCC concepts by senior management and
project team members.

 NEC’s provisions for the use of Z clauses

(additional conditions of contract) - the
possible problem of overusing Z clauses
gradually chipping away from the principle of
collaborative working.
42
 Potential Difficulties of NEC/TCC
(Chan et al. 2007a, 2007b, 2010a)

 Difficult to develop mutual trust and understanding

as a project team.

 Clients (i.e. Project Managers) have to be more

involved in contract administration and closely
monitor a project with heavier burden.

 Not suitable for projects where many changes are

expected or it is difficult to define the scope of
work.

 Lack of relevant law cases and hence no doctrine

to follow in case of litigation. 43
 Critical Success Factors for NEC/TCC
(Chan et al. 2007a, 2007b, 2010b)

 Standard form of contract for NEC/TCC projects (NEC3/4: well-

established contractual partnering model)

 Well-defined scope of work in client’s project brief and minimal

scope changes or variations

 Familiarity with and hands-on experience of NEC/TCC methodology

among client, consultants, main contractor and subcontractors (e.g.
attendance to seminars, forums, workshops, etc)

 A right selection of project team to facilitate mutual trust, effective

communication, efficient co-ordination and productive conflict
resolution

 Reasonable share of cost saving and fair risk allocation

44
 Critical Success Factors for NEC/TCC
(Chan et al. 2007a, 2007b, 2010b)

 Acceptance to cultural / mindset change through collaborative

partnering spirit maintained from all contracting parties with
more harmonious working relationship

 Establishment of adjudication committee and meeting to resolve

any possible issues and disputes

 Proactive risk management throughout the whole construction

process to deal with any intractable issues by the project team

 Regular update of “practicable” programme (e.g. monthly by

including any agreed compensation events and necessary re-
sequencing)

 Timely agreement of compensation events

45
 Discussion Forum
1. Is NEC a suitable contractual partnering
form of contract for use in Hong Kong?
Why?

2. Would the General Conditions of Contract

for Building Works or Civil Engineering
Works (1999 Edition) be replaced by NEC
in future? Why?

46
 Selected Case Studies of NEC
Completed Projects in Hong Kong,
United Kingdom and the Belt and Road
Initiative (BRI) Countries
 Previous Applications of NEC in Hong Kong
• Early adopters of NEC form of contracts (1991-1995)

• Hong Kong Jockey Club (first NEC project adopting

ECC Option C: construction of a 36-hole public golf
course in Kau Sai Chau ( 滘 西 洲 ), Sai Kung with
project value of HK$30M opened for service in
September 1996)

• South China Morning Post’s Building

• Hong Kong Academy’s new school campus in Sai Kung

(project value of HK$400M completed in June 2013) 48
 Current Users of NEC3
(Government Tenders)

 Clients using NEC3 in Hong Kong

 Drainage Services Department

 Improvement of Fuk Man Road Nullah Project in Sai Kung

(August 2009 – May 2012)
 Happy Valley Underground Stormwater Storage Scheme Project
 Highways Department (e.g. retrofit noise barriers of roads)
 Water Supplies Department (e.g. fresh water supply system)
 Architectural Services Department (e.g. Tin Shui Wai Hospital)
 Civil Engineering and Development Department (e.g. Road P2 / TKO)
 MTR Corporation (e.g. Kennedy Town Swimming Pool Phase 2)
 CLP Power Hong Kong Ltd
 Construction of transmission substations (civil work) and term
services contract for maintenance services
49
 Current Applications of NEC3
(Government Tenders)
• Improvement of Fuk Man Road Nullah Project in Sai Kung
by Drainage Services Department / Chun Wo in 2009 (ECC
Option C: target cost with activity schedule)

• Retrofit Noise Barriers of Fanling Highway between MTR

Fanling Station and Wo Hing Road by Highways
Department / Chun Wo in 2010 (ECC Option C: target cost
with activity schedule)

• Retrofit Noise barriers of Tai Po Road by Highways

Department in 2011 (Tai Po Tai Wo Road Noise Barriers)

• Happy Valley Underground Stormwater Storage Scheme

Project by Drainage Services Department / Chun Wo in
2012 (ECC Option C: target cost with activity schedule)
50
 Discussion Forum
3. Would NEC be widely adopted for public
works projects in future? Why and How?
Any prime concerns?

51
 Partners with a Common Goal - Hong
Kong Government's First NEC Contract

同舟共濟 - 香港首項NEC項目
香港首項 項目

YouTube video (Chinese – Abridged version with 10 minutes):

https://www.youtube.com/watch?v=PjlfC_G0VG4

Partners with a Common Goal - Hong Kong Government's first

NEC Contract

YouTube video (English – Abridged version with 10 minutes):

https://www.youtube.com/watch?v=XZiEaqCCCz0

52
Project Name: Improvement of Fuk Man Road Nullah
Project in Sai Kung (First NEC Project in HK)

 Main Contract: Engineering and Construction Contract

(ECC) Option C (Target Cost with Activity Schedule)

 Scope of Work:
 A decking over an existing about 180 m long and 12 m
wide open nullah at Fuk Man Road in Sai Kung
2
 A 4,000 m urban park over the top and upgrading an

adjacent roundabout improvement works

 Contract commencement: August 2009
 Contract completion: May 2012
53
Project Name: Improvement of Fuk Man
Road Nullah Project in Sai Kung

西貢福民路
(西貢福民路
明渠改善計劃)
明渠改善計劃

54
 Project Name: Improvement of Fuk Man
Road Nullah Project in Sai Kung
 Employer:
 Drainage Services Department (DSD), HKSAR Government
 Project Manager (Chief Engineer of Drainage Projects):
 Drainage Services Department (DSD), HKSAR Government
 Supervisor:
 Black & Veatch Ltd
 Main Contractor:
 Chun Wo Construction & Engineering Co Ltd
 NEC Advisor and Partnering Workshop Facilitator:
 JCP Consultancy International Ltd

55
 Choosing the Right Option by DSD
(Tsui 2012)

Project Name Contract NEC Form Start / Completion

Sum
DC/2012/01: Building and Civil HK$160M TSC Option A – Dec 2012 / Nov 2016
Maintenance and Minor Works Priced contract with
to DSD Plants and Facilities price list
DC/2012/09: Pak Hok Lam HK$187M ECC Option B – Jun 2012 / Aug 2016
Trunk Sewer and Sha Tau Kok Priced contract with
Village Sewerage bill of quantities
DC/2012/07: Lam Tsuen Valley HK$173M Oct 2012 / Jan 2016
Village Sewerage, Stage 2,
Phase 1
DC/2008/02: Improvement of HK$76M ECC Option C – Aug 2009 / May 2012
Fuk Man Road Nullah Project Target contract with
DC/2012/03: Happy Valley HK$678M activity schedule Sep 2012 / Apr 2018
Underground Stormwater
Storage Scheme
DC/2012/05: Yuen Long and HK$145M ECC Option D – Sep 2012 / Sep 2016
Kam Tin Sewerage, Stage 3, Target contract with
Package 2 bill of quantities 56
 Industry Awareness about NEC
(Tsui 2012)

 Before Tendering
 Contractors’ forum

 Invite eligible tenderers

 During Tender Stage

 Tender briefing

 Enhance understanding

 e.g. type of contract (priced / target cost), fee

percentage (overheads, profits, etc)

 Ensure correct tender submissions

 e.g. proper pricing documents

 Assistance from NEC Advisors 57

 Relationship Management
(Tsui 2012)

 Establish partnering spirit

 Start-up partnering workshop
 Joint NEC training workshops
 Set up joint site office
 Joint problem solving
 Maintain and improve
 Partnering review
 Champion Group meeting
58
 Relationship Management
(Tsui 2012)

 Establish partnering spirit

 Start-up workshop to align mutual objectives:

 Time – completed 6 months ahead of schedule

 Cost – completed with 5% cost saving
 Others – quality, safety, developing landmark
Supervisor’s
Assistant Resident
Engineer

 Joint Site Office

Contractor’s
Engineer
59
 Relationship Management - Cultivation of
Partnering Spirit and Teamwork (Tsui 2012)

 Maintain and Improve

 Half-yearly partnering review

 Bi-monthly Champion Group

meeting
 Open discussion
 Review Team’s performance,
including frontline staff (Pioneer  Joint DSD / BV / CW dragon
Group)
boat team 2011 and 2012 60
 Pilot Case Study of NEC3
Contract by DSD
Group Photo after First Start-up Partnering
Workshop (15-Mar-2010)

61
 Compensation Events (Tsui 2012)
 Compensation Event (CE)
 The Contractor estimates time frame and cost incurred
 Default acceptance if no reply [i.e. PM should within 2
weeks reply to a Notification of CE (ECC 61.4)]
 Typical types of 19 Compensation Events are listed in NEC-ECC
Core Clauses 60
 NEC vs GCC
 Quick settlement (pre-agreed variation mechanism)
 Unforeseen physical conditions, inclement weather,
variations – compensation events
 TIME and COST [Quotation for CE always cover both
time and cost (ECC 62.2)]
 Fairer risk sharing and less disputes
62
 Final Out-turn Project Performance
Improvement of Fuk Man Road Nullah Project in Sai Kung
(Chan et al. 2014)
KPI Target Final Out-turn Performance
Outcome
1. User 7 out of 10 score  8 out of 10 by Leisure and Cultural
Satisfactions (10 = totally Services Department (LCSD) and DSD
satisfactory)  8 letters of commendation received

2. Time 6 months of early  Completed in 141 weeks against an

Performance completion (20% extended contract period of 165
of time saving) weeks (completed ahead of schedule
by 24 weeks or 6 months)
3. Cost 5% of cost saving  Agreed final target cost of HK$ 76.7M
Performance for gain share less actual project cost of HK$ 72.9M
at completion = gain share of HK$
3.8M (4.95% of cost saving)
4. Quality No major rework  Minor defects found on non-critical
Performance required items. Handover to LCSD within 10
days after completion of works
5. Safety and Zero accident  No recorded incidents of safety or
Environmental environmental infringements
Performance  3 industry safety awards obtained
63
 Final Out-turn Project Performance
(Tsui 2012; Ko 2012)

 Lessons learned from adopting NEC3 ECC:

 Harmonious working relationship via partnering spirit

 Compensation events

 Early finalization of project account: 80% of CEs

agreed at completion in May 2012; and 100% agreed

at end of November 2012
 Early warning mechanism

 15 early warnings issued

 Resolved jointly and promptly

64
 Case Study Investigation

 Chan, J.H.L., Chan, D.W.M. and

Clifford, Bryan (2014). “New
Engineering Contracts
(NECs) in Practice -
Empirical Evidence from a
Pilot Case Study in Hong
Kong”. Construction Law
Journal, 30(4), June, 217-235.

65
 Interview with Mr Mak Ka-wai, Drainage
Services Department, Hong Kong SAR

YouTube video (English version with 7 minutes):

https://www.youtube.com/watch?v=mZTavEoyREU

Posted Date: 24 September 2015

Mr K.W. Mak is the Deputy Director of the Drainage Services Department

for the Hong Kong Special Administrative Region (HKSAR). In this short
interview, Mr Mak talked about the challenges and successes of adopting
NEC3 across projects. He discussed the Hong Kong Government's
completed, current and planned large-scale public capital works projects,
and how he and his colleagues in the Drainage Services Department
have benefited from using NEC3 and its associated products and
services.
66
 Case Study – Happy Valley Underground
Stormwater Storage Scheme Project
跑馬地地下
 Happy Valley Underground Stormwater Storage Scheme (跑馬地地下
蓄洪計劃)
蓄洪計劃 for flood prevention – pilot project supervised by in-house
staff from Drainage Services Department

 NEC type: ECC (Option C) – target cost with activity Schedule

 Contractor: Chun Wo Construction and Engineering Co Ltd

 Contract sum: HK$678 million (not including contingency and price

fluctuation)

 Project duration: 3 Sep 2012 – 2 Apr 2018 (5 years 7 months)

67
 Scope of Works (DSD 2013)
• The scope of the project comprises the
construction of an underground
stormwater storage tank with a capacity
of 60,000 m3, a pump house and
associated drains.

• The project aims at alleviating the flooding

problems in Happy Valley and Wan Chai
areas.

68
Happy Valley Underground Stormwater
Storage Scheme – Layout Plan (DSD 2013)

69
70
 Observations from Client (DSD)
(Tsui 2012)

 Contractor’s proposed alternative foundation

designs
 Option C (TCC) encourages innovation and drives
cost effectiveness via gain-share/pain share
mechanism
 Liaison meetings with designers and maintenance
parties (i.e. Hong Kong Jockey Club)
 Briefing to senior management
 Agreed to carry out detailed design on the
alternative proposals
 Potential cost and time savings, and risk reduction
71
 Cost-saving Design for Foundation
of Underground Storage Tank (Tsui 2013)

72
 Joint Site Office (Tsui 2013)
• Project Manager,
Supervisor and Contractor
shared the same site
office

• Facilitating joint problem

solving

• Improved communications

73
 Cultivation of Partnering Spirit and
Teamwork (Tsui 2013)
Dragon Boat Race Team (Sai Kung)

Soccer Team
74
Project Name: Re-provisioning of Kennedy Town
Swimming Pool Phase 2 Project
(堅尼地城游泳池
堅尼地城游泳池重置
堅尼地城游泳池重置工程二期 重置工程二期)
工程二期
(Source: https://www.neccontract.com/NEC-in-Action/Case-
Studies/Kennedy-Town-Swimming-Pool-Phase-2-Hong-Kong)
 Employer:
 Mass Transit Railway Corporation (MTRC) Ltd
 Project Manager:
 Mass Transit Railway Corporation (MTRC) Ltd
 Main Contractor:
 Paul Y Construction Co Ltd
 Contract Value:
 HK$ 671 million
 Contract Duration:
 2014 - 2016
75
 “Re-provisioning of Kennedy Town Swimming Pool
Phase 2” Project – MTR Contract #713
(HKIPM and HKIE (BUD) Joint Site Visit on 9 July 2016)
• NEC3 ECC Option A (Priced Contract with Activity Schedule)

76
 Project Name: Re-provisioning of Kennedy Town
Swimming Pool Phase 2 Project
(堅尼地城游泳池重置工程二期)
(Source: https://www.neccontract.com/NEC-in-Action/Case-
Studies/Kennedy-Town-Swimming-Pool-Phase-2-Hong-Kong)
Benefits of NEC3
• Communication is enhanced among project team members
through frequent discussions on potential time and cost
implications required under NEC.

• Potential project risks are identified through the early warning

system and effectively mitigated through risk reduction
meetings.

• The compensation event system helps expedite agreement and

payment on time and cost effects in a timely manner.

• Early agreement on compensation events also enables early

settlement of final project account. 77
 Project Name: Tin Shui Wai Hospital
(Large-scale Pilot Building Project)
(Source: https://www.neccontract.com/NEC-in-Action/Case-
Studies/Tin-Shui-Wai-Hospital-Hong-Kong)

• First NEC contract procured by ArchSD and the largest

government project awarded so far under NEC form of
contract
• Contract type: NEC ECC Option A (Priced Contract with
Activity Schedule) with D&B procurement strategy
• Contractor: Leighton-Able Joint Venture (awarded in
February 2013)

• Contract sum: HK$2.9 billion

• Contract duration: March 2013
– May 2017

78
 Project Name: Tin Shui Wai Hospital
(Large-scale Pilot Building Project)
(Source: https://www.neccontract.com/NEC-in-Action/Case-
Studies/Tin-Shui-Wai-Hospital-Hong-Kong)

Benefits of NEC3
• Collaborative nature of NEC helps accommodate design
changes evolving from users’ requirements.

• NEC encourages both employer and contractor to act

on compensation events at the earliest stage so that
they can be quickly implemented and minimize the
impact on progress.

• Application of NEC procedures and improvements in

communications have led to effective partnering being
maintained throughout the project.
79
 Project Name: Road P2, Tseung Kwan O,
Hong Kong
(Source: https://www.neccontract.com/NEC-in-Action/Case-
Studies/Road-P2-Tseung-Kwan-O-Hong-Kong)

 Employer:
 Civil Engineering and Development Department, HKSARG
 Project Manager:
 Civil Engineering and Development Department, HKSARG
 Main Contractor:
China Road and Bridge Corporation-Build King Joint Venture


 Contract Value: HK$ 1.777 million

 Contract Duration: July 2016 – July 2021

 Scope of Work:
 Construction of associated roads, cycle tracks, footpaths,
retaining walls, drainage and plant rooms, as well as
landscaping, and environmental protection and mitigation
works. 80
Project Name: Road P2, Tseung Kwan O, Hong Kong
• NEC3 ECC Option C (Target Contract with Activity Schedule)

81
 Project Name: Road P2, Tseung Kwan O,
Hong Kong
(Source: https://www.neccontract.com/NEC-in-Action/Case-
Studies/Road-P2-Tseung-Kwan-O-Hong-Kong

Benefits of NEC3
• NEC contracts are clear, flexible and easy to use.

• NEC stimulates the development of a spirit of mutual

trust and co-operation among contracting parties.

• The NEC early warning mechanism facilitates the

reduction of potential risks.

• NEC enables better risk allocation and risk sharing than

traditional contracts.
82
 Discussion Forum
4. Would NEC be adopted for private
building projects in future as well?
Why and How? Any prime
concerns?

83
 CLP Power Hong Kong Ltd
(Cheung 2012)

Maintenance in Power Stations

• Effective maintenance is crucial to ensure asset reliability and
operational efficiency.

Journey to Partnering
• In 2007, learnt from UK power stations the benefits of partnering
with maintenance contractors.
• In 2008, supported by top management, a pilot was approved to
apply partnering model in CLP.
• On 19 April 2010, a new partnering model was employed for a “5-
year Coal Mill Group Maintenance Services” contract in Castle Peak
Power Station to Kum Shing E&M Ltd.
• NEC Framework Contract and Term Service Contract (Option C)
was adopted as the first NEC3 contract solution in CLP.
84
 CLP Power Hong Kong Ltd
Wider Applications in CLP (Cheung 2012)

Year Name of Services / NEC Type Start /

Construction Project Completion
2010 5-year Coal Mill Group NEC FC and TSC 2010 / 2014
Maintenance Services (Option C)
2011 Integrated Facilities NEC FC and TSC ---
Management (Option C)
2012 Chun Yat Street NEC ECC (Option B) Nov 2012 /
Transmission Substation Dec 2013
(Civil Work)
2013 Lam Tei Transmission NEC ECC (Option D) May 2013 /
Substation (Civil Work) Mar 2014
2013 Lai Wan Interchange NEC ECC (Option B) Jul 2013 /
Substation (Civil Work) May 2014
85
 CLP Power Hong Kong Ltd
Key Project Success (Chan 2013)

Superstructure of Duration for Completion Accepted Programme

132kV Substation of Similar Projects under NEC ECC
Lai Wan Interchange 12 months 11 months
Substation
Lam Tei Substation 12 months 10 months

Chun Yat Street 18 months 15 months

Substation (double size
of normal substation)
Project Manager Senior Project Engineer, Engineering Projects
Department, CLP Power Hong Kong Ltd
Contractor Hip Hing Construction Co Ltd
86
 CLP Power Hong Kong Ltd
Observations from Implementing NEC
(Chan 2013)

• Generate collaborative working environment between all contracting

parties

• Simplify contract administrative procedures

• Provide an effective project management framework for facilitating early

identification and mitigation of risks

• Encourage efficient treatment of any issues related to time and cost

• Continue to build up capability to adopt other NEC contract models with

different options (e.g. target cost and management contracts) in future

• Commence the construction of 3 more best value transmission

substations to community in 2014
87
 Future Development Trend of NEC
(Government Tenders)
(Source: Practice Notes for NEC ECC for Public Works Projects in
Hong Kong, Development Bureau, 2017)

 By early 2016, a number of public works projects

have adopted the NEC form using different Options
and covering a wide variety of works. The
Government have achieved satisfactory results for
those completed and on-going pilot projects, which
responded and supported the use of NEC thereafter.

 The Government have extended the application of

NEC in public works project procurement after 2016,
in particular, the adoption of target cost Options (i.e.
Options C and D) in suitable mega scale projects over
HK$ 1 billion, such as tunnelling works, high speed
roads, land formation works, etc.
88
 NEC3 Training Course by ICE:
ECC Project Manager Accreditation

89
 NEC3/4 Training Course by ICE:
ECC Project Manager Accreditation
(https://www.neccontract.com/Products/Training/ECC-Project-
Manager-Accreditation-Hong-Kong.aspx)

 The popular “NEC3/4 ECC Project Manager

Accreditation” programme has been delivered since January
2015 to the Asia Pacific Region in partnership with the
Construction Industry Council (CIC) of Hong Kong.

 The programme is designed to equip construction

professionals with the skills necessary to be able to manage
a high standard of specialized project using the NEC3 ECC.

 Fee: ~HK$20,000 per delegate (5 interactive teaching days)

Video (Why get accredited?):
https://www.youtube.com/watch?v=Pa5UCTaCv-o

 ECC Supervisor Accreditation and TSC Service Manager

Accreditation
90
 NEC Track Record in the United Kingdom –
Infrastructures and Buildings
Railway (Crossrail) Highway (ECI) School

Olympic Stadium Hospital (PFI) Airport Terminal 91

NEC Track Record in the United Kingdom –
Infrastructures and Buildings
• Utilities
– Most UK water companies
• Power
– UK Atomic Energy Authority
– British Nuclear Group
– British Energy
• Transport
– Highways Agency
– Transport for London
– Channel Tunnel Rail Link
– Environmental Agency 92
NEC Track Record in the United Kingdom –
Infrastructures and Buildings
• Hospitals - National Health Service (NHS)
– England: ProCure21 Framework, 5 years with £1.4
billion per year (NEC ECC Option C)
– Welsh, Scottish and Northern Ireland: equivalent
programmes

• British Airport Authority (e.g. Heathrow Airport Terminal

5 with £4 billion and Terminal 2 with £8.12 billion,
both using NEC ECC Option C)

• “Schools for the Future”

• HM Prison Service – 3 prisons
• London 2012 Olympic Delivery Authority
(including infrastructure, construction and transport) 93
London 2012 Olympic Park Developments
NEC ECC (Option C) with D&B Procurement Strategy

94
 London 2012 Olympic Park Developments
Preconditioning for Success (Shiplee 2012)

• Over £7 billion has been spent delivering the platform to

host the London 2012 Olympic Games over the past five
years of 2008-2012.

• 120 NEC3 contracts have been managed based on a spirit of

mutual trust and co-operation.

• Gain-share / pain-share mechanism in place

• Subcontractors need to be approved by the client

organization before appointment

• On-time project completion and within budget

95
 London 2012 Olympic Park Developments
Reasons for Choosing NEC (Shiplee 2012)

• Sound project management (e.g. schedule, cost, quality, safety,

substainability, etc)

• Encouraged co-operation as an integrated team (e.g. early warning

system, better risk identification and mitigation)

• Clear and understandable contract documentation (simple English

and non-legal language)

• Dispute avoidance and resolution (e.g. external adjudication panel

consisting of 6 adjudicators)

• Wide range of applications (e.g. lump sum, target cost,

reimbursement, professional service, subcontract, term service, etc)
96
Brief Case Studies of NEC Construction Projects
in Belt and Road Initiative (BRI) Countries
 NEC4 – Design-Build-Operate (DBO)
Contract
• The massive Belt and Road Initiative (BRI) plans to build roads,
railways, seaports and other trade infrastructure in dozens of
developing countries in the Eurasian continent. The BRI aims to
connect Asia to Europe, and the initiative has steadily expanded
economic corridors and projects as far as Africa.

• NEC4 - Built on success of NEC3 and launched in UK in June

2017 which has incorporated contractor’s design and build (D&B)
option.

• NEC4 DBO Contract - Combines responsibility for usually

disparate functions of design, construction, operation or
maintenance to support operational requirements procured
from a single supplier – used in PPP projects (e.g. DBO).
98
 NEC Projects in Belt-and-Road
(B&R) Countries
(Source: https://www.neccontract.com/NEC-in-Action/Case-Studies/Manila-North-Expressway-
Philippines?utm_source=Email&utm_medium=Email&utm_campaign=Manila%20Case%20Study%20email
%2027032015&hq_e=el&hq_m=3682373&hq_l=10&hq_v=5f255b34db)

• Harbour Link − Segment 10, Manila North Expressway, Philippines – new 5.65 km
elevated dual two-lane carriageway toll road being a major segment of Phase 2 of
the Manila North Expressway Project (also a PPP project)

 Value: PHP 10.5 billion (£158 million)

 Contracts Used: NEC3 ECC Option D

(target contract with bill of quantities)

 Start-Finish: 2014 − 2016

 Employer: Manila North Tollways

Corporation
 Contractor: Leighton Contractors
(Asia)
 Project Manager: Nemesio Castillo,
Manila North Tollways Corporation 99
 NEC Projects in Belt-and-Road
(B&R) Countries
• First NEC contract in Philippines

• BENEFITS OF NEC3

• Encourages all parties to work together collaboratively, ensuring

project goals of time, quality and costs are achieved.

• Assists the parties in jointly mitigating identified risks, avoiding

delays and disputes.

• According to MNTC contract/commercial manager Renato

Martinez: "if the Segment 10 project proves to be a success,
MNTC will consider adopting NEC contracts to procure future
expressway projects in the region.” 100
 NEC Projects in Belt-and-Road
(B&R) Countries
(Source: https://www.neccontract.com/NEC-in-Action/Case-
Studies/Indira-Airport)

• Indira Gandhi International Airport Terminal 3, Delhi, India - eighth

largest in the world, with a floor area of over 500,000 m2 and
capacity of 34 million passengers a year (also a PPP project)

 Location: Delhi, India

 Value: $1 billion

 Contracts Used: ECC, PSC, TSC

 Start-Finish: 2006-2012

 Employer: Delhi International Airport

(P)Ltd

 Contractor: Larson & Toubro

 Project Manager: GMR Group

101
 NEC Projects in Belt-and-Road
(B&R) Countries
• Benefits of NEC3

• NEC3 is a neutral and fully-integrated family of contracts, well-

proven in multiple jurisdictions around the globe, making the
family an ideal choice for this wide-ranging project with most
subcontractors and consultants headquartered outside India.

• All NEC3 forms are written for international use, so no

customisation was necessary for use within India.

• NEC3 forms accommodate the full range of civil, structural,

finishes and systems work, and any required division of design
responsibilities, and include all common payment structures and
risk allocations.
102
 NEC Projects in Belt-and-Road
(B&R) Countries
(Source: https://www.neccontract.com/NEC-in-Action/Case-
Studies/Waitaki-hydropower-station-refurbishment-New-Zeal)

• Waitaki Hydropower Station Refurbishment, New Zealand - 4 year project

to refurbish the dam, power station and surrounding infrastructure using
over 50 NEC3 contracts. Location: Waitaki Valley, North Otago, New
Zealand

Value: NZ$40 (£20 million)

Contracts Used: ECC (Options A, B and C),

SC, PSC

Start-Finish: 2012 − 2016

Employer: Meridian Energy

Contractor: Various
Project Manager:
Caroline Rea and Chris Baldwin, Project
Delivery Team, Strategic Asset Management,
Meridian Energy
103
 NEC Projects in Belt-and-Road
(B&R) Countries
• BENEFITS OF NEC3

• Integrated suite of contracts provides a consistent

procurement approach across a wide range of specialist
services and suppliers (i.e. ECC, SC, PSC, TSC, etc).

• Offers a wide range of procurement options, from priced

contracts to target cost, from small task orders to major
works, and from simple to complex supply contracts.

• Ensures a complicated programme of specialist work is

delivered in a fair, collaborative and productive manner under
the integrated partnering arrangement.
104
 Conclusions
 Reference Materials - Frequently Asked Questions on “NEC3
Collaborative Contracts” (Version 1 - September 2015) published
by the Construction Industry Council (CIC). Available at URL:
(http://www.cic.hk/eng/main/aboutcic/publications/reference_materials)

 NEC Asia Pacific Users’ Group launched in December 2011

(Quarterly newsletters and case study reports). Available at URL:
(https://www.neccontract.com/NEC-in-Action)

 Are you ready to take on the journey to NEC in near future?

 NEC should work but is hard work !!!

105
 Summary of
New Engineering Contract (NEC)
(TCC = Target Cost Contract)

 Background, History and Key Features of NEC

Contracts

 Highlights of Research Findings on Benefits, Difficulties

and Success Factors for NEC/TCC Contracts

 Selected Case Studies of NEC Completed Projects in

Hong Kong, United Kingdom and the Belt and Road
Initiative (BRI) Countries

 Future Development Trend of NEC Contracts

106
 References [1]
 Chan, A. (2013). CLP’s Substations Using the NEC ECC Contract, The
NEC Asia Pacific Users’ Group Conference 2013 on the Impact of Collaborative
Contracting, 25 November 2013, Sheraton Hotel, Tsim Sha Tsui, Hong Kong.

 Chan, D.W.M., Chan, A.P.C., Lam, P.T.I., Lam, E.W.M. and Wong, J.M.W.
(2007a). An Investigation of Guaranteed Maximum Price (GMP) and
Target Cost Contracting (TCC) Procurement Strategies in Hong Kong
Construction Industry. Research Monograph, Department of Building and
Real Estate, The Hong Kong Polytechnic University, 152 pages, ISBN 978-
962-367-593-2, October 2007.

 Chan, D.W.M., Chan, A.P.C., Lam, P.T.I., Lam, E.W.M. and Wong, J.M.W.
(2007b). Evaluating Guaranteed Maximum Price and Target Cost
Contracting Strategies in Hong Kong Construction Industry. Journal
of Financial Management of Property and Construction, 12(3), December,
139-149.

 Chan, A.P.C., Chan, D.W.M., Fan, L.C.N., Lam, P.T.I., and Yeung, J.F.Y.
(2008). Achieving Partnering Success through an Incentive
Agreement: Lessons Learned from an Underground Railway
Extension Project in Hong Kong. Journal of Management in Engineering,
ASCE, 24(3), July, 128-137.
107
 References [2]
 Chan, D.W.M., Chan, A.P.C., Lam, P.T.I. and Wong, J.M.W. (2010a).
Empirical Study of the Risks and Difficulties in Implementing
Guaranteed Maximum Price and Target Cost Contracts in Construction.
Journal of Construction Engineering and Management, ASCE, 136(5), May, 495-
507.

 Chan, D.W.M., Chan, A.P.C., Lam, P.T.I. and Wong, J.M.W. (2010b).
Identifying the Critical Success Factors for Target Cost Contracts in
the Construction Industry. Journal of Facilities Management, 8(3), July,
179-201.

 Chan, D.W.M., Lam, P.T.I., Chan, A.P.C. and Wong, J.M.W. (2010c).
Achieving Better Performance through Target Cost Contracts – The
Tale of an Underground Railway Station Modification Project. Facilities
- Special Issue on Performance Measurement and Management in Facilities
Management, 28(5/6), April, 261-277.

 Chan, D.W.M., Chan, A.P.C., Lam, P.T.I. and Wong, J.M.W. (2011a). An
Empirical Survey of the Motives and Benefits of Adopting Guaranteed
Maximum Price and Target Cost Contracts in Construction.
International Journal of Project Management, 29(5), July, 577-590.
108
 References [3]
 Chan, D.W.M., Lam, P.T.I., Chan, A.P.C. and Wong, J.M.W. (2011b).
Guaranteed Maximum Price (GMP) Contracts in Practice – A Case
Study of a Private Office Development Project in Hong Kong.
Engineering, Construction and Architectural Management, 18(2), March, 188-
205.

 Cheung, Chris (2012). NEC – Enabling Contractor Partnering in Power

Engineering, The Inaugural NEC Asia Pacific Users’ Group Conference 2012,
21 November 2012, The Excelsior Hotel, Causeway Bay, Hong Kong.

 Construction Industry Council (2020). Review Report on Quality Site

Supervision Practices of the Hong Kong Construction Industry,
Construction Industry Council, August. Available at URL:
http://www.cic.hk/files/page/56/20200901_Site%20Supervision%20Practice.pdf
(accessed on 15 September 2020).

 Development Bureau (2017). Practice Notes for New Engineering

Contract (NEC) - Engineering and Construction Contract (ECC) for
Public Works Projects in Hong Kong, Development Bureau, HKSAR
Government, March. Available at URL:
https://www.devb.gov.hk/en/publications_and_press_releases/publications/standard_contract_documents/index.html 
Item 15 (accessed on 15 September 2020).
109
 References [4]
 Ko, Ken (2012). Tendering and Working with Project Team of ECC
Option C Contract, Seminar on “Evolution of Partnering Contracts - NEC
Trial in Government Projects”, 2 June 2012, The University of Hong Kong,
Hong Kong.

 Shiplee, Howard (2012). Seminar on “Real Case for Implementing

NEC3 in London Olympic Park for E&M Subcontracts”, 21
November 2012, The Charterhouse Causeway Bay Hotel, Wanchai, Hong
Kong.

 Tsui, Wai (2012). Tender Preparation and Administration of NEC

Contracts, Seminar on “Evolution of Partnering Contracts - NEC Trial in
Government Projects”, 2 June 2012, The University of Hong Kong, Hong
Kong.

 Tsui, Wai (2013). NEC in DSD at 2013, The NEC Asia Pacific Users’
Group Conference 2013 on the Impact of Collaborative Contracting, 25
November 2013, Sheraton Hotel, Tsim Sha Tsui, Hong Kong.
110
 References [5]
 Chan, D.W.M. and Chan, J.H.L.
(2017). "Target Cost
Contracting Strategy in
Construction: Principles,
Practices and Case Studies”,
Routledge of the Taylor &
Francis Group: UK, 172 pages,
ISBN 978-1-138-65190-6
(hardback)
(URL:
https://www.routledge.com/Tar
get-Cost-Contracting-Strategy-
in-Construction-Principles-
Practices/Chan-
Chan/p/book/9781138651906).
111
Overview of New Engineering
Contract (NEC)

~ THE END ~
112