NEC3 Supply Contract Consultative Draft

24 September 2007
Dear Consultee
NEC3 Supply Contract Draft for consultation In response to significant industry demand, the NEC Panel has designed the NEC3 Supply Contract for the purchase of goods and associated services. Typical target applications include: major supplies, particularly across international boundaries bulk supply of commodities or manufactured goods complex process plant installed by a purchaser but requiring on site commissioning and testing etc by the plant supplier.
A consultative draft, based on the NEC principles of clarity, simplicity, flexibility and stimulus to good management is now available for comment by potential users and supply practitioners. I have pleasure in enclosing / attaching a copy of this consultative draft and would welcome your comments on its suitability for practical use for the purposes described in the explanatory notes. People familiar with the NEC system will recognise the usual key NEC elements of early warnings and compensation events etc. The key innovations in the Supply Contract are the processes arising from the need to provide for a wide range of delivery requirements. These key innovations are highlighted in the explanatory notes. The first edition will be accompanied by a set of full Guidance Notes. The NEC Panel is keen to receive your considered comments and hope that you will be able to respond by 2 November 2007. The Panel will then take account of all comments before finalising a first edition for publication within the NEC3 family of contracts early in 2008. A half day seminar is being arranged at which the principles and key details of the new contract will be explained and an opportunity provided to discuss the contract with representatives of the NEC Panel. Further details will be issued shortly. Users may use the contract but must understand that there are aspects that are not finalized and caution in its use is recommended. Yours sincerely
Nigel Shaw NEC Panel Chairman
Supply Contract
This contract is used for supply of goods and any related services including design
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An NEC document
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September 2007
Consultative Edition
Consultees may use the contract but must understand that there are aspects that are not nalized and caution in its use is recommended.
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Copyright nec 2007 All rights, including translation, reserved. This consultative draft contract contains copyright material from the NEC Contracts. No part of this document may be reproduced for the purpose of obtaining tenders, awarding and administering contracts. Except as permitted by the Copyright Designs and Patent Act 1988, no part of this publication should be stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the NEC Director, NEC, Thomas Telford Ltd, 1 Heron Quay, London E14 4JD NEC is a division of Thomas Telford Ltd, which is a wholly owned subsidiary of the Institution of Civil Engineers (ICE), the owner and developer of the NEC.
CONTENTS
Acknowledgements Schedule of Options Core clauses 1 2 3 4 5 6 7 8 9 Main Option clauses A G Note Dispute resolution W Secondary Option clauses X1 X3 X4 X7A X7B X7C X9 X12 X13 X14 X17 X20 X21 X22 General The Suppliers main responsibilities Time Testing and Defects Payment Compensation events Title Risks, liabilities, indemnities and insurance Termination Priced contract with activity schedule Term contract Options B, C, D, E and F are not used Option W1 Option W2
vi 1 3 7 9 11 13 14 19 20 23
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Z Note Contract Data
Price adjustment for ination Multiple currencies Parent company guarantee Delay damages for delay of Delivery (used only with Option A) Delay damages for delay of Completion (used only with Option A) Delay damages for delay of a Batch (used only with Option G) Transfer of rights Partnering Performance bond Advanced payment to the Supplier Low performance damages Key Performance Indicators Delay to the defects date Spare parts
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31 34 37 37 38 38 38 39 39 39 41 41 41 41 42 42 44 44 44
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Y(UK)2 The Housing Grants, Construction and Regeneration Act 1996 Y(UK)3 The Contracts (Rights of Third Parties) Act 1999 Additional conditions of contract Options X2, X5, X6, X8, X10 and X11, X15, X16, X18 and X19 are not used
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ACKNOWLEDGEMENTS
The consultative edition of the NEC3 Supply Contract was mainly drafted by P. A. Baird working on behalf of the Institution of Civil Engineers NEC Panel with the assistance of N. C. Shaw and J. J. Lofty. The original NEC was designed and drafted by Dr Martin Barnes then of Coopers and Lybrand with the assistance of Professor J. G. Perry then of the University of Birmingham, T. W. Weddell then of Travers Morgan Management, T. H. Nicholson, Consultant to the Institution of Civil Engineers, A. Norman then of the University of Manchester Institute of Science and Technology and P. A. Baird, then Corporate Contracts Consultant, Eskom, South Africa. The members of the NEC Panel are: N. C. Shaw, FCIPS, CEng, MIMechE (Chairman) P. A. Baird, BSc, CEng, FICE, M(SA)ICE, MAPM A. J. M. Blackler, BA, LLB(Cantab), MCIArb M. Codling, BSc, ICIOB, MAPM L. T. Eames, BSc, FRICS, FCIOB M. Garratt, BSc(Hons), MRICS, FCIArb J. J. Lofty, MRICS NEC Consultant: Secretariat
R. A. Gerrard BSc(Hons), FRICS, FCIArb, FInstCES J. M. Hawkins, BA(Hons), MSc S. Hernandez, BSc, MSc
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The Institution of Civil Engineers acknowledges the help of Peter Higgins and Dr Martin Barnes in preparing this draft
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SCHEDULE OF OPTIONS
The strategy for choosing the form of contract starts with a decision between two main Options, one of which must be chosen.
Option A Option G Note Option W1 Option W2
Priced contract with activity schedule Term contract Options B, C, D, E and F are not used Dispute resolution procedure (used unless the United Kingdom Housing Grants, Construction and Regeneration Act 1996 applies). Dispute resolution procedure (used in the United Kingdom when the Housing Grants, Construction and Regeneration Act 1996 applies). The following secondary Options should then be considered. It is not necessary to use any of them. Any combination other than those stated may be used.
Option X1 Option X3 Option X4 Option X7A Option X7B
Price adjustment for ination Multiple currencies Parent company guarantee
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Option X7C Option X9 Transfer of rights Partnering Option X12 Option X13 Option X14 Option X17 Option X20 Option X21 Option X22 Performance bond Spare parts Option Y(UK)2 Option Y(UK)3 Option Z Note
Delay damages for delay of Delivery (used only with Option A)
Delay damages for delay of Completion (used only with Option A) Delay damages for delay of a Batch (used only with Option G)
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Advanced payment to the Supplier Low performance damages Key Performance Indicators (not used with Option X12) Delay to the defects date
The following Options dealing with national legislation should be included if required. The Housing Grants, Construction and Regeneration Act 1996 The Contracts (Rights of Third Parties) Act 1999 Additional conditions of contract Options X2, X5, X6, X8, X10 and X11, X15, X16, X18 and X19 are not used.
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CORE CLAUSES
1 General
Actions 10 10.1 Identied and dened 11 terms 11.1 11.2
In these conditions of contract, terms identied in the Contract Data are in italics and dened terms have capital initials. (1) The Accepted Programme is the programme identied in the Contract Data or is the latest programme accepted by the Supply Manager. The latest programme accepted by the Supply Manager supersedes previous Accepted Programmes. (2) Completion is when the Supplier has
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(5) A Defect is
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(3) The Completion Date is the completion date unless later changed in accordance with this contract. (4) The Contract Date is the date when this contract came into existence. a part of the goods or of the associated services which is not in accordance with the Goods Information or . a part of the goods designed by the Supplier which is not in accordance with the applicable law or the Suppliers design which the Supply Manager has accepted.
(6) Dened Cost is the amount paid by the Supplier in Providing the Goods (excluding any tax which the Supplier can recover) for people employed by the Supplier, Equipment, Plant and Materials, manufacture and fabrication, work subcontracted by the Supplier, delivery including loading, unloading, transport, freight and insurance, customs duties and export and import taxes and charges.
The amount for Equipment includes amounts paid for hired Equipment and an amount for the use of Equipment owned by the Supplier which is the amount the Supplier would have paid if the Equipment had been hired.
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done all the work which the Goods Information states he is to do by the Time for Delivery, . done the associated services which the Goods Information states he is to do by the Completion Date and . corrected notied Defects which would have prevented the Purchaser from using the goods, the associated services or Others from doing their work.
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The Purchaser, the Supplier and the Supply Manager shall act as stated in this contract and in a spirit of mutual trust and co-operation.
Supply Contract
(7) Delivery is when the Supplier has placed the goods at the disposal of the Purchaser at the Delivery Place and the Purchaser takes delivery. (8) The Delivery Place is the delivery place unless later changed in accordance with this contract. (9) Equipment is items provided by the Supplier and used by him to Provide the Goods and which the Goods Information does not require him to include in the goods. (10) Goods Information is information which either
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species and describes the goods and the associated services or states any constraints on how the Supplier Provides the Goods in the documents which the Contract Data states it is in or in an instruction given in accordance with this contract.
and is either
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(11) Others are people or organisations who are not the Purchaser, the Supply Manager, the Adjudicator, the Supplier or any employee, Subcontractor or supplier of the Supplier. (12) The Parties are the Purchaser and the Supplier.
(13) Plant and Materials are items intended to be included in the goods and the associated services. main option clauses (14) To Provide the Goods means to do the work necessary to provide the goods and the associated services in accordance with this contract and all incidental work, services and actions which this contract requires.
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Interpretation and the law 12 12.1
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(15) The Risk Register is a register of the risks which are listed in the Contract Data and the risks which the Supply Manager or the Supplier has notied as an early warning matter. It includes a description of the risk and a description of the actions which are to be taken to avoid or reduce the risk. (16) A Subcontractor is a person or organisation who has a contract with the Supplier to
provide part of the goods or the associated services or supply Plant and Materials which the person or organisation has wholly or partly designed specically for the goods.
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In this contract, except where the context shows otherwise, words in the singular also mean in the plural and the other way around and words in the masculine also mean in the feminine and neuter. This contract is governed by the law of the contract. No change to this contract, unless provided for by the conditions of contract, has effect unless it has been agreed, conrmed in writing and signed by the Parties. This contract is the entire agreement between the Parties. Each instruction, certicate, submission, proposal, record, acceptance, notication, reply and other communication which this contract requires is communicated in a form which can be read, copied and recorded. Writing is in the language of this contract. A communication has effect when it is received at the last address notied by the recipient for receiving communications or, if none is notied, at the address of the recipient stated in the Contract Data. If this contract requires the Supply Manager or the Supplier to reply to a communication, unless otherwise stated in this contract, he replies within the period for reply.
12.2
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12.4 Communications 13 13.1
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13.4 The Supply Manager replies to a communication submitted or resubmitted to him by the Supplier for acceptance. If his reply is not acceptance, the Supply Manager states his reasons and the Supplier resubmits the communication within the period for reply taking account of these reasons. A reason for withholding acceptance is that more information is needed in order to assess the Suppliers submission fully. The Supply Manager may extend the period for reply to a communication if the Supply Manager and the Supplier agree to the extension before the reply is due. The Supply Manager noties the Supplier of the extension which has been agreed. The Supply Manager issues his certicates to the Supplier and the Purchaser. A notication which this contract requires is communicated separately from other communications. The Supply Manager may withhold acceptance of a submission by the Supplier. Withholding acceptance for a reason stated in this contract is not a compensation event. The Supply Managers acceptance of a communication from the Supplier or of his work does not change the Suppliers responsibility to Provide the Goods or his liability for his design. The Supply Manager, after notifying the Supplier, may delegate any of his actions and may cancel any delegation. A reference to an action of the Supply Manager in this contract includes an action by his delegate. The Supply Manager may give an instruction to the Supplier which changes the Goods Information or the Delivery Place. The Purchaser may replace the Supply Manager after he has notied the Supplier of the name of the replacement. The Supplier and the Supply Manager give an early warning by notifying the other as soon as either becomes aware of any matter which could
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13.5
13.6 13.7 13.8
The Supply Manager 14 14.1
14.3 14.4
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Early warning 15 15.1 15.2 15.3
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The Supplier may give an early warning by notifying the Supply Manager of any other matter which could increase his total cost. The Supply Manager enters early warning matters in the Risk Register. Early warning of a matter for which a compensation event has previously been notied is not required.
Either the Supply Manager or the Supplier may instruct the other to attend a risk reduction meeting. Each may instruct other people to attend if the other agrees. At a risk reduction meeting, those who attend co-operate in making and considering proposals for how the effect of the registered risks can be avoided or reduced, . seeking solutions that will bring advantage to all those who will be affected, . deciding on the actions which will be taken and who, in accordance with this contract, will take them and . deciding which risks have now been avoided or have passed and can be removed from the Risk Register.
15.4
The Supply Manager revises the Risk Register to record the decisions made at each risk reduction meeting and issues the revised Risk Register to the Supplier. If a decision needs a change to the Goods Information, the Supply
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increase the total of the Prices, delay Delivery, delay Completion or impair the performance of the goods in use.
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Manager instructs the change at the same time as he issues the revised Risk Register. Ambiguities and 16 inconsistencies 16.1 The Supply Manager or the Supplier noties the other as soon as either becomes aware of an ambiguity or inconsistency in or between the documents which are part of this contract. The Supply Manager gives an instruction resolving the ambiguity or inconsistency. The Supplier noties the Supply Manager as soon as he considers that the Goods Information requires him to do anything which is illegal or impossible. If the Supply Manager agrees, he gives an instruction to change the Goods Information appropriately. If an event occurs which
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Illegal and impossible 17 requirements 17.1
Prevention 18 18.1 core clauses
stops the Supplier Providing the Goods or stops the Supplier delivering the goods or completing the associated services by the date for Completion shown on the Accepted Programme, neither Party could prevent and an experienced supplier would have judged at the Contract Date to have such a small chance of occurring that it would have been unreasonable for him to have allowed for it,
and which
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the Supply Manager gives an instruction to the Supplier stating how he is to deal with the event.
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2 The Suppliers main responsibilities
Providing the Goods 20 20.1 20.2 20.3
The Supplier Provides the Goods in accordance with the Goods Information. The Supplier delivers the goods to the Delivery Place in accordance with the Goods Information and the delivery requirements. If necessary in order to Provide the Goods, the Supplier
. . .
obtains licenses and authorisations, completes formalities and pays duties, taxes and charges,
for export and import. The Suppliers design 21 21.1 21.2 The Supplier designs the goods and the associated services except for those parts which the Purchaser designs as stated in the Goods Information. The Supplier submits the particulars of his design as the Goods Information requires to the Supply Manager for acceptance. A reason for not accepting the Suppliers design is that it does not comply with either the Goods Information or the applicable law.
The Supplier does not proceed with the relevant work until the Supply Manager has accepted his design. 21.3 Using the Suppliers design 22 22.1
Working with the 23 Purchaser and Others 23.1
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23.2 Subcontracting 24 24.1 24.2 24.3
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The Supplier may submit his design for acceptance in parts if the design of each part can be assessed fully.
The Purchaser may use and copy the Suppliers design for any purpose connected with use or alteration of the goods unless otherwise stated in the Goods Information and for other purposes as stated in the Goods Information. The Supplier co-operates with Others in obtaining and providing information which they need in connection with the goods and the associated services.
If the Supplier subcontracts work, he is responsible for Providing the Goods as if he had not subcontracted. This contract applies as if a Subcontractors employees and equipment were the Suppliers. The Supplier submits the name of each proposed Subcontractor to the Supply Manager for acceptance. A reason for not accepting the Subcontractor is that his appointment will not allow the Supplier to Provide the Goods. The Supplier does not appoint a proposed Subcontractor until the Supply Manager has accepted him. The Supplier submits the proposed conditions of contract for each subcontract to the Supply Manager for acceptance unless an NEC contract is proposed or the Supply Manager has agreed that no submission is required.
The Supplier does not appoint a Subcontractor on the proposed subcontract conditions submitted until the Supply Manager has accepted them. A reason for not accepting them is that
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The Purchaser and the Supplier provide services and other things as stated in the Goods Information. Any cost incurred by the Purchaser as a result of the Supplier not providing the services and other things which he is to provide is assessed by the Supply Manager and paid by the Supplier.
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they will not allow the Supplier to Provide the Goods or they do not include a statement that the parties to the subcontract shall act in a spirit of mutual trust and co-operation.
Other responsibilities 25 25.1 25.2
The Supplier obtains approval of his design and the arrangements for Delivery from Others where necessary. The Supplier provides access to work being done and to Plant and Materials being stored for this contract for
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the Supply Manager and Others notied to him by the Supply Manager.
25.3 25.4
The Supplier obeys an instruction which is in accordance with this contract and is given to him by the Supply Manager. The Supplier acts in accordance with the health and safety requirements stated in the Goods Information.
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3 Time
Starting and Delivery 30 30.1 30.2 30.3
The Supplier does the work so that Delivery is within the Time for Delivery and Completion is on or before the Completion Date. The Supplier does not Deliver the goods until he has done all the work which the Goods Information states he is to do before the Time for Delivery. The Supply Manager decides the date and time of Delivery. The Supply Manager certies Delivery within one week of Delivery by endorsing a copy of the Suppliers delivery note conrming that the goods have been received, and showing the date and time of Delivery. If a programme is not identied in the Contract Data, the Supplier submits a rst programme to the Supply Manager for acceptance within the period stated in the Contract Data. The Supplier shows on each programme which he submits for acceptance
. . . . . .
The programme 31 31.1
31.2
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other information which the Goods Information requires the Supplier to show on a programme submitted for acceptance.
31.3
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the Suppliers plans which it shows are not practicable, it does not show the information which this contract requires, it does not represent the Suppliers plans realistically or it does not comply with the Goods Information.
Revising the programme 32 32.1
The Supplier shows on each revised programme

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the actual progress achieved on each operation and its effect upon the timing of the remaining work, . the effects of implemented compensation events, . how the Supplier plans to deal with any delays and to correct notied Defects and . any other changes which the Supplier proposes to make to the Accepted Programme. 32.2 The Supplier submits a revised programme to the Supply Manager for acceptance
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within the period for reply after the Supply Manager has instructed him to,
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Within two weeks of the Supplier submitting a programme to him for acceptance, the Supply Manager either accepts the programme or noties the Supplier of his reasons for not accepting it. A reason for not accepting a programme is that
access to the Delivery Place, acceptances, Plant and Materials and other things to be provided by the Purchaser, information from Others and access for carrying out associated services and
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the starting date, planned Completion, the Time for Delivery, the Completion Date, provisions for the procedures set out in this contract, the dates when in order to Provide the Goods in accordance with his programme, the Supplier will need
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when the Supplier chooses to and, in any case, at no longer interval than the interval stated in the Contract Data from the Contract Date until Completion.
Access for Delivery 33 33.1
The Supply Manager arranges for access to be given to the Supplier for Delivery of the goods to the Delivery Place on or before the Time for Delivery. The Supply Manager noties the Supplier of the name and contact details of the person or party the Supplier is to contact in connection with a Delivery and certication of Delivery. Cost incurred by the Purchaser as a result of the Supplier not completing a Delivery within the time for which access has been arranged is assessed by the Supply Manager and paid by the Supplier. The Supply Manager arranges for access to be given to the Supplier for carrying out the associated services on or before the date for access shown on the Accepted Programme and as necessary for other work in this contract. The Purchaser takes delivery of the goods at the Delivery Place when they have been delivered in accordance with the Goods Information and the delivery requirements. The Supply Manager may instruct the Supplier to stop or not to start any work and may later instruct him to re-start or start it.
33.2
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Taking delivery 34 34.1
Instructions to stop or not 35 to start any work 35.1 main option clauses
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4 Testing and Defects
Tests and inspections 40 40.1 40.2 40.3
The subclauses in this clause only apply to tests and inspections required by the Goods Information or the applicable law. The Supplier and the Purchaser provide records, data sheets, materials, facilities and samples for tests and inspections as stated in the Goods Information. The Supplier and the Supply Manager each noties the other of each of his tests and inspections before it starts and afterwards noties the other of its results. The Supplier noties the Supply Manager in time for a test or inspection to be arranged and done before doing work which would obstruct the test or inspection. The Supply Manager may watch any test done by the Supplier. core clauses If a test or inspection shows that any work has a Defect, the Supplier corrects the Defect and the test or inspection is repeated. The Supply Manager does his tests and inspections without causing unnecessary delay to the work or to a payment which is conditional upon a test or inspection being successful.
40.4 40.5
40.6
Testing and inspection 41 before and on Delivery 41.1
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The Supplier does not deliver those goods which the Goods Information states are to be tested or inspected before Delivery until the Supply Manager has
41.2
The Supply Manager may inspect the goods before or on Delivery and the Purchaser does not take delivery of goods containing a Defect.
42.2
Until the defects date, the Supply Manager noties the Supplier of each Defect as soon as he nds it and the Supplier noties the Supply Manager of each Defect as soon as he nds it.
Correcting Defects 43 43.1 43.2 43.3
The Supplier corrects a Defect whether or not the Supply Manager noties him of it. The Supplier corrects a notied Defect before the end of the defect correction period. The defect correction period begins when the Defect is notied. The Supply Manager arranges for the Purchaser to allow the Supplier access to the goods after Delivery if they are needed for correcting a Defect. In this case the defect correction period begins when the necessary access has been provided. The Supplier and the Supply Manager may each propose to the other that goods found to be containing a Defect should be replaced by goods which do not contain a Defect or that the Goods Information should be changed so that a Defect does not have to be corrected.
Accepting Defects 44 44.1
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Searching for and 42 notifying Defects 42.1
Until the defects date, the Supply Manager may instruct the Supplier to search for a Defect. He gives his reason for the search with his instruction.
notied the Supplier that they have passed the test or inspection which the Supply Manager is to do and . accepted the Suppliers notication that they have passed the test or inspection which the Supplier is to do.
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The Supply Manager assesses the cost incurred by the Purchaser in repeating a test or inspection after a Defect is found. The Supplier pays the amount assessed.
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44.2 If the Supplier and the Supply Manager are prepared to consider the change to the Goods Information, the Supplier submits a quotation for reduced Prices or an earlier Time for Delivery or both to the Supply Manager for acceptance. If the Supply Manager accepts the quotation, he gives an instruction to change the Goods Information, the Prices and the Time for Delivery accordingly. If the Supplier is given access in order to correct a notied Defect but he has not corrected it within its defect correction period, the Supply Manager assesses the cost to the Purchaser of having the Defect corrected by other people and the Supplier pays this amount. The Goods Information is treated as having been changed to accept the Defect. If the Supplier is not given access in order to correct a notied Defect before the defects date, the Supply Manager assesses the cost to the Supplier of correcting the Defect and the Supplier pays this amount. The Goods Information is treated as having been changed to accept the Defect.
Uncorrected Defects 45 45.1
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5 Payment
Assessing the amount due 50 50.1
The Supplier assesses the amount due and submits an invoice at each assessment date. The rst assessment date is decided by the Supply Manager to suit the procedures of the Parties and is not later than the assessment interval after the starting date. Later assessment dates occur
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at the end of each assessment interval until four weeks after the defects date and . at Completion. 50.2 Invoices submitted by the Supplier include the details stated in the Goods Information and account for any credits to show how the amount due has been assessed. The rst invoice is for the amount due. Other invoices are for the change in the amount due since the previous invoice. The Supplier provides with an invoice the documents which the Goods Information, the credit arrangements and the law require. The amount due is
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50.3
Any tax which the law requires the Purchaser to pay to the Supplier is included in the amount due.
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Payment 51 51.1 51.2 51.3
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50.4
Each payment is made by the Purchaser within three weeks of receiving the Suppliers invoice or, if a different period is stated in the Contract Data, within the period stated. Payments are in the currency of this contract unless otherwise stated in this contract.
If the Supply Manager does not accept the Suppliers assessment of an amount due, he noties the Supplier of his reasons and the amount which he assesses is due before the payment becomes due. The Purchaser pays the amount of the Supply Managers assessment. The agreed part of the invoice is paid. The Supplier either corrects the invoice to the amount assessed by the Supply Manager or provides further information to justify the amount assessed on the invoice.
51.4
If a payment is late or has been delayed because of a disagreement, interest is paid. Interest is assessed from the date by which the late payment should have been made until the date when the late payment is made, and is included in the rst assessment after the late payment is made. Interest is calculated on a daily basis at the interest rate and is compounded annually.
51.5
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If the Contract Data states that the Supplier is to identify separately the cost of import into the country where a Delivery is to be made the Supplier includes with each assessment of the amount due the import documents listed in the Contract Data.
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the Price for the Goods to Date, plus other amounts to be paid to the Supplier, less amounts to be paid by or retained from the Supplier.
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6 Compensation events
Compensation events 60 60.1
The following are compensation events. (1) The Supply Manager gives an instruction changing the Goods Information except
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a change made in order to accept a Defect or a change to the Goods Information provided by the Supplier for his design which is made either at his request or to comply with other Goods Information provided by the Purchaser.
(2) The Supplier is not given access to the Delivery Place within the Time for Delivery or because the Supply Manager did not make the access arrangements this contract requires him to make. core clauses (3) The Purchaser does not provide something which he is to provide by the date for providing it shown on the Accepted Programme. (4) The Supply Manager gives an instruction to stop or not to start any work. (5) The Purchaser or Others main option clauses
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do not work within the times shown on the Accepted Programme or, do not work within the conditions stated in the Goods Information.
(6) The Supply Manager does not reply to a communication from the Supplier within the period required by this contract.
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(7) The Supply Manager gives an instruction changing the Delivery Place.
(8) The Supply Manager changes a decision which he has previously communicated to the Supplier.
(9) The Supply Manager withholds an acceptance (other than acceptance of a quotation for not correcting a Defect) for a reason not stated in this contract. (10) The Supply Manager instructs the Supplier to search for a Defect and no Defect is found unless the search is needed only because the Supplier gave insufcient notice of doing work obstructing a required test or inspection.
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(11) A test or inspection done by the Supply Manager causes unnecessary delay. (12) An event which is a Purchasers risk stated in this contract. (13) The Purchaser does not take delivery by the Time for Delivery as shown on the Accepted Programme. (14) The Purchaser does not provide records, data sheets, materials, facilities and samples for tests and inspections as stated in the Goods Information. (15) The Supply Manager noties a correction to an assumption which he has previously stated about a compensation event. (16) A breach of contract by the Purchaser which is not one of the other compensation events in this contract. (17) An event which stops the Supplier Providing the Goods or stops the Supplier delivering the goods or completing the associated services by the date for Completion shown on the Accepted Programme, neither Party could prevent,
and which
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an experienced supplier would have judged at the Contract Date to have such a small chance of occurring that it would have been unreasonable for him to have allowed for it and . is not one of the other compensation events stated in this contract. Notifying compensation 61 events 61.1 For compensation events which arise from the Supply Manager giving an instruction or changing an earlier decision, the Supply Manager noties the Supplier of the compensation event at the time of giving the instruction or changing the earlier decision. He also instructs the Supplier to submit quotations, unless the event arises from a fault of the Supplier or quotations have already been submitted. The Supplier puts the instruction or changed decision into effect. The Supply Manager may instruct the Supplier to submit quotations for a proposed instruction or a proposed changed decision. The Supplier does not put a proposed instruction or a proposed changed decision into effect. The Supplier noties the Supply Manager of an event which has happened or which he expects to happen as a compensation event if
. .
61.2
61.3
the Supplier believes that the event is a compensation event and the Supply Manager has not notied the event to the Supplier.
61.4
If the Supply Manager decides that an event notied by the Supplier

. . .
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he noties the Supplier of his decision that the Prices, the Time for Delivery and the Completion Date are not to be changed. If the Supply Manager decides otherwise, he noties the Supplier accordingly and instructs him to submit quotations. If the Supply Manager does not notify his decision to the Supplier within either one week of the Suppliers notication or a longer period to which the Supplier has agreed,
the Supplier may notify the Supply Manager to this effect. A failure by the Supply Manager to reply within two weeks of this notication is treated as acceptance by the Supply Manager that the event is a compensation event and an instruction to submit quotations.
61.5
If the Supply Manager decides that the Supplier did not give an early warning of the event which an experienced supplier could have given, he noties this decision to the Supplier when he instructs him to submit quotations. If the Supply Manager decides that the effects of a compensation event are too uncertain to be forecast reasonably, he states assumptions about the event in his instruction to the Supplier to submit quotations. Assessment of the event is based on these assumptions. If any of them is later found to have been wrong, the Supply Manager noties a correction. A compensation event is not notied after the defects date. After discussing with the Supplier different ways of dealing with the compensation event which are practicable, the Supply Manager may instruct the Supplier to submit alternative quotations. The Supplier submits the required
61.6
61.7 Quotations for 62 compensation events 62.1
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arises from a fault of the Supplier, has not happened and is not expected to happen, has no effect upon Dened Cost, Completion or meeting a Time for Delivery or . is not one of the compensation events stated in this contract
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If the Supplier does not notify a compensation event within eight weeks of becoming aware of the event, he is not entitled to a change in the Prices, the Completion Date or a Time for Delivery unless the Supply Manager should have notied the event to the Supplier but did not.
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quotations to the Supply Manager and may submit quotations for other methods of dealing with the compensation event which he considers practicable. 62.2 Quotations for compensation events comprise proposed changes to the Prices and any delay to a Time for Delivery or the Completion Date assessed by the Supplier. The Supplier submits details of his assessment with each quotation. If the programme for remaining work is altered by the compensation event, the Supplier includes the alterations to the Accepted Programme in his quotation. The Supplier submits quotations within three weeks of being instructed to do so by the Supply Manager. The Supply Manager replies within two weeks of the submission. His reply is
. . .
62.3
an instruction to submit a revised quotation, an acceptance of a quotation, a notication that a proposed instruction will not be given or a proposed changed decision will not be made or . a notication that he will be making his own assessment. core clauses 62.4 The Supply Manager instructs the Supplier to submit a revised quotation only after explaining his reasons for doing so to the Supplier. The Supplier submits the revised quotation within three weeks of being instructed to do so. The Supply Manager extends the time allowed for
. .
62.5 main option clauses
the Supplier to submit quotations for a compensation event and the Supply Manager to reply to a quotation
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Assessing compensation 63 events 63.1
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62.6
. . . . . . . .
if the Supply Manager and the Supplier agree to the extension before the submission or reply is due. The Supply Manager noties the extension that has been agreed to the Supplier.
If the Supply Manager does not reply to a quotation within the time allowed, the Supplier may notify the Supply Manager to this effect. If the Supplier submitted more than one quotation for the compensation event, he states in his notication which quotation he proposes is to be accepted. If the Supply Manager does not reply to the notication within two weeks, and unless the quotation is for a proposed instruction or a proposed changed decision, the Suppliers notication is treated as acceptance of the quotation by the Supply Manager. The changes to the Prices are assessed by forecasting the effect of a compensation event upon the amount of the Dened Cost or, if the compensation event has already occurred, the assessment is based upon the Dened Cost due to the event which the Supplier has incurred. Effects on Dened Cost are assessed separately for people employed by the Supplier, Equipment, Plant and Materials, manufacture and fabrication, work subcontracted by the Supplier, delivery including loading, unloading, transport, freight and insurance, customs duties and export and import taxes and charges.
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The Supplier shows how each of these effects is built up in each quotation for a compensation event. The percentages for overheads and prot stated in the Contract Data are applied to the assessed effect of the event on the Dened Cost except to the cost of customs duties and export and import taxes and charges. 63.2 The effects of compensation events upon the Dened Cost are assessed at open market or competitively tendered prices with deductions for all
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discounts, rebates and taxes which can be recovered. In the assessment of compensation events
.
the cost of events for which this contract requires the Supplier to insure and . other costs paid to the Supplier by insurers are deducted from Dened Cost. 63.3 A delay to the Time for Delivery is assessed as the length of time that, due to the compensation event, planned Delivery is later than planned Delivery as shown on the Accepted Programme. If the Supply Manager has notied the Supplier of his decision that the Supplier did not give an early warning of a compensation event which an experienced supplier could have given, the event is assessed as if the Supplier had given early warning. Assessment of the effect of a compensation event includes risk allowances for cost and time for matters which have a signicant chance of occurring and are at the Suppliers risk under this contract. Assessments are based upon the assumptions that the Supplier reacts competently and promptly to the compensation event, that any Dened Cost and time due to the event are reasonably incurred and that the Accepted Programme can be changed.
63.4
63.4
63.5
63.6
63.7
The Supply Managers 64 Assessments 64.1
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. . . .
If the effect of a compensation event is to reduce the total Dened Cost and the event is
the Prices are reduced.
The Supply Manager assesses a compensation event if the Supplier has not submitted a quotation and details of his assessment within the time allowed, . if the Supply Manager decides that the Supplier has not assessed the compensation event correctly in a quotation and he does not instruct the Supplier to submit a revised quotation, . if, when the Supplier submits quotations for a compensation event, he has not submitted a programme or alterations to a programme which this contract requires him to submit or . if, when the Supplier submits quotations for a compensation event, the Supply Manager has not accepted the Suppliers latest programme for one of the reasons stated in this contract. contract data
64.2
The Supply Manager assesses a compensation event using his own assessment of the programme for the remaining work if
. .
there is no Accepted Programme or the Supplier has not submitted a programme or alterations to a programme for acceptance as required by this contract.
64.3
The Supply Manager noties the Supplier of his assessment of a compensation event and gives him details of it within the period allowed for the Suppliers submission of his quotation for the same event. This period starts when the need for the Supply Managers assessment becomes apparent.
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a change to the Goods Information, a change to the Delivery Place or a correction of an assumption stated by the Supply Manager for assessing an earlier compensation event
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A compensation event which is an instruction to change the Goods Information in order to resolve an ambiguity or inconsistency is assessed as if the Prices, the Time for Delivery and the Completion Date were for the interpretation most favourable to the Party which did not provide the Goods Information.
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64.4 If the Supply Manager does not assess a compensation event within the time allowed, the Supplier may notify the Supply Manager to this effect. If the Supplier submitted more than one quotation for the compensation event, he states in his notication which quotation he proposes is to be accepted. If the Supply Manager does not reply within two weeks of this notication the notication is treated as acceptance of the Suppliers quotation by the Supply Manager. A compensation event is implemented when
. . .
Implementing 65 compensation events 65.1
the Supply Manager noties his acceptance of the Suppliers quotation, the Supply Manager noties the Supplier of his assessment or a Suppliers quotation is treated as having been accepted by the Supply Manager.
65.2
The assessment of a compensation event is not revised if a forecast upon which it is based is shown by later recorded information to have been wrong.
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7 Title
The Purchasers title to 70 Plant and Materials 70.1
Whatever title the Supplier has to goods and associated services before Delivery passes to the Purchaser if the Supply Manager has marked it as for this contract. Whatever title the Supplier has to goods passes to the Purchaser on Delivery, unless stated otherwise in the Contract Data. Whatever title the Supplier has to Plant and Materials included in the associated services passes to the Purchaser on completion of the associated services, unless stated otherwise in the Contract Data. core clauses The Supply Manager marks goods and associated services if
. .
70.2 70.3
Marking Plant and 71 Materials before Delivery 71.1
this contract identies them for payment before Delivery and the Supplier has prepared them for marking as the Goods Information requires.
The Parties do not disclose information obtained in connection with this contract except when necessary to carry out their duties under this contract.
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Condentiality 72 72.1
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8 Risks, liabilities, indemnities and insurance
Purchasers risks 80 80.1
The following are Purchasers risks.

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Claims, proceedings, compensation and costs payable which are the unavoidable result of Providing the Goods or which are due to
.
negligence, breach of statutory duty or interference with any legal right by the Purchaser or by any person employed by or contracted to him except the Supplier or . a fault of the Purchaser or a fault in his design.
.
Loss of or damage to Plant and Materials supplied to the Supplier by the Purchaser, or by Others on the Purchasers behalf, until the Purchaser takes delivery. . Loss of or wear or damage to the goods and the associated services after the Supplier has fullled his obligation to Deliver them as stated in this contract, except loss, wear or damage occurring before the defects date which is due to
. . . .
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a Defect which existed at Delivery, an event occurring before Delivery which is not a Purchasers risk or the activities of the Supplier after Delivery.
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The Suppliers risks 81 81.1 Repairs 82 82.1 Indemnity 83 83.1 83.2 Insurance cover 84 84.1 84.2
Loss of or wear or damage to the goods and the associated services and Plant and Materials retained after Delivery by the Purchaser after a termination, except loss, wear or damage due to the activities of the Supplier after Delivery following the termination. . Additional Purchasers risks stated in the Contract Data.
From the starting date until the last defects date the risks which are not carried by the Purchaser are carried by the Supplier.
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Until the defects date and unless otherwise instructed by the Supply Manager, the Supplier promptly replaces loss of and repairs damage to the goods, the associated services, Plant and Materials. Each Party indemnies the other against claims, proceedings, compensation and costs due to an event which is at his risk. The liability of each Party to indemnify the other is reduced if events at other Partys risk contributed to the claims, proceedings, compensation and costs. The reduction is in proportion to the extent that events which were at the other Partys risk contributed, taking into account each Partys responsibilities under this contract.
contract data
The Supplier provides the insurances stated in the Insurance Table except any insurance which the Purchaser is to provide as stated in the Contract Data. The Supplier provides additional insurances as stated in the Contract Data. The insurances provide cover for events which are at the Suppliers risk from the starting date until the last defects date or a termination certicate has been issued.
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INSURANCE TABLE Insurance against Loss of or damage to the goods, Plant and Materials Minimum amount of cover or minimum limit of indemnity The replacement cost, including the amount stated in the Contract Data for the replacement of any Plant and Materials provided by the Purchaser The replacement cost The amount stated in the Contract Data for any one event with cross liability so that the insurance applies to the Parties separately
Loss of or damage to Equipment Liability for loss of or damage to property (except the goods, Plant and Materials and Equipment) and liability for bodily injury to or death of a person (not an employee of the Supplier) caused by activity in connection with this contract Liability for death of or bodily injury to employees of the Supplier arising out of and in the course of their employment in connection with this contract
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85.2 85.3 85.4 Insurance by the 87 Purchaser 87.1 87.2
Insurance policies 85 85.1
Insurance policies include a waiver by the insurers of their subrogation rights against directors and other employees of every insured except where there is fraud. The Parties comply with the terms and conditions of the insurance policies. Any amount not recovered from an insurer is borne by the Purchaser for events which are at his risk and by the Supplier for events which are at his risk. The Purchaser may insure a risk which this contract requires the Supplier to insure if the Supplier does not submit a required certicate. The cost of this insurance to the Purchaser is paid by the Supplier. The Supply Manager submits policies and certicates for insurances provided by the Purchaser to the Supplier for acceptance before the starting date and afterwards as the Supplier instructs. The Supplier accepts the policies and certicates if they comply with this contract.
If the Supplier does 86 not insure 86.1
The Suppliers acceptance of an insurance policy or certicate provided by the Purchaser does not change the responsibility of the Purchaser to provide the insurances stated in the Contract Data. The Supplier may insure a risk which this contract requires the Purchaser to insure if the Purchaser does not submit a required policy or certicate. The cost of this insurance to the Supplier is paid by the Purchaser.
87.3
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Before the starting date and on each renewal of the insurance policy until the last defects date the Supplier, if instructed by the Supply Manager, submits to the Supply Manager for acceptance certicates which state that the insurance required by this contract is in force. The certicates are signed by the Suppliers insurer or insurance broker. A reason for not accepting the certicates is that they do not comply with this contract.
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The greater of the amount required by the applicable law and the amount stated in the Contract Data for any one event
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Limitation of liability 88 88.1 88.2
The Suppliers liability to the Purchaser for the Purchasers indirect or consequential loss is limited to the amount stated in the Contract Data. For any one event, the liability of the Supplier to the Purchaser for loss of or damage to the Purchasers property is limited to the amount stated in the Contract Data. The Suppliers liability to the Purchaser for Defects due to his design that were not notied before the last defects date is limited to the amount stated in the Contract Data. The Suppliers total liability to the Purchaser for all matters arising under or in connection with this contract, other than the excluded matters, is limited to the amount stated in the Contract Data and applies in contract, tort or delict and otherwise to the extent allowed under the law of the contract. The excluded matters are amounts payable by the Supplier as stated in this contract for
88.3
88.4
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. . .
loss of or damage to the Purchasers property, damages for delay if Option X7A, Option X7B or Option X7C applies and damages for low performance if Option X17 applies.
88.5
The Supplier is not liable to the Purchaser for a matter unless it is notied to the Supplier before the end of liability date.
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9 Termination
Termination 90 90.1
If either Party wishes to terminate the Suppliers obligation to Provide the Goods he noties the Supply Manager and the other Party giving details of his reason for terminating. The Supply Manager issues a termination certicate promptly if the reason complies with this contract. The Supplier may terminate only for a reason identied in the Termination Table. The Purchaser may terminate for any reason. The procedures followed and the amounts due on termination are in accordance with the Termination Table. TERMINATION TABLE Terminating Party The Purchaser Reason A reason other than R1R21 R1R15 or R18 R17 or R20 R21 The Supplier Procedure P1 and P2 Amount due
90.2
P1, P2 and P3 P1 and P3 P1 and P4
90.3
Reasons for termination 91 91.1
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90.5
Either Party may terminate if the other Party has done one of the following or its equivalent.
.
If the other Party is an individual and has

. . . .
presented his petition for bankruptcy (R1), had a bankruptcy order made against him (R2), had a receiver appointed over his assets (R3) or made an arrangement with his creditors (R4).
If the other Party is a company or partnership and has

. . .
had a winding-up order made against it (R5), had a provisional liquidator appointed to it (R6), passed a resolution for winding-up (other than in order to amalgamate or reconstruct) (R7), . had an administration order made against it (R8), . had a receiver, receiver and manager, or administrative receiver appointed over the whole or a substantial part of its undertaking or assets (R9) or . made an arrangement with its creditors (R10).
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co or f
R1R10, R16 or R19 R17 or R20
The procedures for termination are implemented immediately after the Supply Manager has issued a termination certicate. Within thirteen weeks of termination, the Supply Manager certies a nal payment to or from the Supplier which is the Supply Managers assessment of the amount due on termination less the total of previous payments. Payment is made within three weeks of the Supply Managers certicate. After a termination certicate has been issued, the Supplier does no further work necessary to Provide the Goods.
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91.2 The Purchaser may terminate if the Supply Manager has notied that the Supplier has defaulted in one of the following ways and not put the default right within four weeks of the notication.
. . .
Substantially failed to comply with his obligations (R11). Not provided a bond or guarantee which this contract requires (R12). Appointed a Subcontractor for substantial work before the Supply Manager has accepted the Subcontractor (R13).
91.3
The Purchaser may terminate if the Supply Manager has notied that the Supplier has defaulted in one of the following ways and not stopped defaulting within four weeks of the notication.
. .
Substantially hindered the Purchaser or Others (R14). Substantially broken a health or safety regulation (R15).
91.4 91.5 core clauses 91.6
The Supplier may terminate if the Purchaser has not paid an amount certied by the Supply Manager within thirteen weeks of the date of the certicate (R16). Either Party may terminate if the Parties have been released under the law from further performance of the whole of this contract (R17). If the Supply Manager has instructed the Supplier to stop or not to start any substantial work or all work and an instruction allowing the work to re-start or start has not been given within thirteen weeks,
.
main option clauses
the Purchaser may terminate if the instruction was due to a default by the Supplier (R18), . the Supplier may terminate if the instruction was due to a default by the Purchaser (R19) and . either Party may terminate if the instruction was due to any other reason (R20).
Procedures on Termination 92 92.1 92.2
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91.7
The Purchaser may terminate if an event occurs which
stops the Supplier Providing the Goods or stops the Supplier delivering the goods or completing the associated services by the date for Completion shown on the Accepted Programme and is forecast to delay Completion by more than 13 weeks, neither Party could prevent and an experienced supplier would have judged at the Contract Date to have such a small chance of occurring that it would have been unreasonable for him to have allowed for it (R21).
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On termination, the Purchaser may complete the goods and associated services and may use any Plant and Materials to which he has title (P1). The procedure on termination also includes one or more of the following as set out in the Termination Table. P2 The Purchaser may instruct the Supplier to leave the Delivery Place or other place (other than the Suppliers premises) where goods or associated services are being provided, remove any Equipment, Plant and Materials and assign the benet of any subcontract or other contract related to performance of this contract to the Purchaser.
P3 The Purchaser may use any Equipment to which the Supplier has title (other than Equipment xed in the Suppliers premises) to complete the delivery of the goods and associated services. The Supplier promptly removes the Equipment when the Supply Manager noties him that the Purchaser no longer requires it to complete the delivery of the goods and associated services. P4 The Supplier leaves the Delivery Place or other place (other than the Suppliers premises) where goods or associated services are being provided and removes the Equipment.
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Payment on Termination 93 93.1
The amount due on termination includes (A1)

. .
an amount due assessed as for normal payments, the cost of Plant and Materials ordered by the Supplier specically for the goods, which cannot be resold or used elsewhere and of which the Supplier has to accept delivery and . any amounts retained by the Purchaser. 93.2 The amount due on termination also includes one or more of the following as set out in the Termination Table. A2 The forecast Dened Cost of removing the Equipment. A3 A deduction of the forecast of the additional cost to the Purchaser of providing the whole of the goods and associated services. A4 The average of the fee percentage for people and other Dened Cost applied to
.
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for Option A any excess of the total of the Prices at the Contract Date over the Price for the Goods to Date or . for Option G, any excess of the total of the Prices of a Batch Order over the amount of the Batch Order paid to date.
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MAIN OPTION CLAUSES
Option A: Priced contract with activity schedule
Identied and dened 11 terms 11.2
(17) The Activity Schedule is the activity schedule unless later changed in accordance with this contract. (21) The Prices are the lump sums and the amounts obtained by multiplying the rates by the quantities for the items in the Activity Schedule. (23) The Price for the Goods to Date is the total of
. . . .
each group of completed activities, each completed activity which is not in a group and
A completed activity is one which is without Defects which would delay immediately following work.
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The programme 31 31.4 Acceleration 36 36.1 36.2 52.2 52.3
(25) The Time for Delivery is the time for delivery unless later changed in accordance with this contract.
The Supplier provides information which shows how each item on the Activity Schedule relates to the operations on each programme which he submits for acceptance.
The Supply Manager may instruct the Supplier to submit a quotation for an acceleration to achieve Completion before the Completion Date. The Supply Manager states changes to the Time for Delivery to be included in the quotation. A quotation for an acceleration comprises proposed changes to the Prices and a revised programme showing the changes to Time for Delivery and earlier Completion Date. The Supplier submits details of his assessment with each quotation. The Supplier submits a quotation or gives his reasons for not doing so within the period for reply. When the Supply Manager accepts a quotation for an acceleration, he changes the Prices, the Time for Delivery and the Completion Date accordingly and accepts the revised programme.
The Activity Schedule 52 52.1
Information in the Activity Schedule is not Goods Information. If the Supplier changes a planned method of working at his discretion so that the activities on the Activity Schedule do not relate to the operations on the Accepted Programme, he submits a revision of the Activity Schedule to the Supply Manager for acceptance. A reason for not accepting a revision of the Activity Schedule is that
. . .
it does not comply with the Accepted Programme, any changed Prices are not reasonably distributed between the activities or the total of the Prices is changed.
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where a quantity is stated for an item in the Activity Schedule, an amount calculated by multiplying the quantity which the Supplier has completed by the rate.
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Supply Contract
Assessing compensation 63 events 63.8 Implementing 65 compensation events 65.3 Payment on termination 93 93.3
Assessments for changed Prices for compensation events are in the form of changes to the Activity Schedule. The changes to the Prices, Time for Delivery and the Completion Date are included in the notication implementing a compensation event. The amount due on termination is assessed without taking grouping of activities into account.
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Option G: Term contract
Identied and dened 11 terms 11.2
(18) A Batch is a collection of items selected from the Price List. (19) A Batch Order is a Supply Managers instruction to the Supplier to deliver a Batch within the times stated in this contract. (20) The Price List is the price list unless later changed in accordance with this contract. (22) The Prices are the lump sums and the amounts obtained by multiplying the rates by the quantities for the items in the Price List. (24) The Price for the Goods to Date in a Batch is the total of
.
the lump sum Price for each completed item in the Price List included in the Batch and . where a quantity is stated for an item in the Price List, an amount calculated by multiplying the quantity which the Supplier has completed in the Batch by the rate.
(26) The Time for Delivery of the Batch is the time for delivery of the Batch stated in the Batch Order unless later changed in accordance with this contract. Providing the Goods 20 20.4 20.5
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Each Batch Order includes
a priced list of items in the Batch taken from the Price List, the total of the Prices for the Batch, the time for delivery of the Batch which is not less than the lead time stated in the Contract Data after the date of the Batch Order and . the amount of delay damages, if any, for late Delivery of a Batch.
20.6
The Prices for items in the Batch Order which are not taken from the Price List are assessed in the same way as compensation events. The Supplier does not start any work included in the Batch until he has received the Batch Order, and does the work so that completion of the Batch is on or before the Time for Delivery of the Batch. No Batch Order is issued after the end date.
Starting and Delivery 30 30.4
30.5 Batch Order programme 31 31.5 Acceleration 36 36.3
The Supplier submits a rst programme for each Batch Order to the Supply Manager for acceptance within the period stated in the Contract Data. The Supply Manager may instruct the Supplier to submit a quotation for an acceleration to achieve Completion before the Completion Date. The Supplier states changes to the Time for Delivery of the Batch to be included in the quotation. A quotation for an acceleration comprises proposed changes to the Prices in the Batch Order and a revised programme showing the earlier Time
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contract data
The Supply Manager consults the Supplier about the contents of a Batch Order before he issues it.
The Supply Manager issues a Batch Order to the Supplier for each Batch.
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A completed item is one which is without Defects which would delay immediately following work, and if it is a goods item, has met the delivery requirements.
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for Delivery of the Batch. The Supplier submits details of his assessment with each quotation. 36.4 The Supplier submits a quotation or gives his reasons for not doing so within the period for reply. When the Supply Manager accepts a quotation for an acceleration, he changes the Batch Order Prices and the Time for Delivery of the Batch accordingly and accepts the revised programme. Information in the Price List is not Goods Information. The following are compensation events. (18) The Supply Manager gives an instruction changing a Batch Order. (19) The Supplier does not receive the Batch Order before the start of the lead time applicable to the Time for Delivery of the Batch. (20) The Time for Delivery of the Batch is later than the end date. core clauses Assessing compensation 63 events 63.9 Implementing 65 compensation events 65.4 Assessments for changed Prices for compensation events are in the form of changes to the Batch Order.
The Price List 53 53.1 Compensation events 60 60.1
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The changes to the calculated total of the Prices for the Batch Order and any delay to the Time for Batch Delivery are included in the Supply Managers notication implementing a compensation event.
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DISPUTE RESOLUTION
Option W1
Dispute resolution procedure (used unless United Kingdom Housing Grants, Construction and Regeneration Act 1996 applies). Dispute resolution W1 W1.1 The Adjudicator W1.2 Any dispute arising under or in connection with this contract is referred to and decided by the Adjudicator. (1) The Parties appoint the Adjudicator under the NEC Adjudicators Contract current at the starting date. (2) The Adjudicator acts impartially and decides the dispute as an independent adjudicator and not as an arbitrator.
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(5) The Adjudicator, his employees and agents are not liable to the Parties for any action or failure to take action in an adjudication unless the action or failure to take action was in bad faith.
(1) Disputes are notied and referred to the Adjudicator in accordance with the Adjudication Table. contract data
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(4) A replacement Adjudicator has the power to decide a dispute referred to his predecessor but not decided at the time when the predecessor resigned or became unable to act. He deals with an undecided dispute as if it had been referred to him on the date he was appointed.
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(3) If the Adjudicator is not identied in the Contract Data or if the Adjudicator resigns or is unable to act, the Parties choose a new adjudicator jointly. If the Parties have not chosen an adjudicator, either Party may ask the Adjudicator nominating body to choose one. The Adjudicator nominating body chooses an adjudicator within four days of the request. The chosen adjudicator becomes the Adjudicator.
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ADJUDICATION TABLE Dispute about Which Party may refer it to the Adjudicator? The Supplier When may it be referred to the Adjudicator? Between two and four weeks after the Suppliers notication of the dispute to the Purchaser and the Supply Manager, the notication itself being made not more than four weeks after the Supplier becomes aware of the action Between two and four weeks after the Suppliers notication of the dispute to the Purchaser and the Supply Manager, the notication itself being made not more than four weeks after the Supplier becomes aware that the action was not taken
An action of the Supply Manager
The Supply Manager not having taken an action core clauses
The Supplier
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A quotation for a compensation event which is treated as having been accepted
The Purchaser
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Any other matter
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(2) The times for notifying and referring a dispute may be extended by the Supply Manager if the Supplier and the Supply Manager agree to the extension before the notice or referral is due. The Supply Manager noties the extension that has been agreed to the Supplier. If a disputed matter is not notied and referred within the times set out in this contract, neither Party may subsequently refer it to the Adjudicator or the tribunal.
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Either Party
Between two and four weeks after the Supply Managers notication of the dispute to the Purchaser and the Supplier, the notication itself being made not more than four weeks after the quotation was treated as accepted
Between two and four weeks after notication of the dispute to the other Party and the Supply Manager
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(3) The Party referring the dispute to the Adjudicator includes with his referral information to be considered by the Adjudicator. Any more information from a Party to be considered by the Adjudicator is provided within four weeks from the referral. This period may be extended if the Adjudicator and the Parties agree. (4) If a matter disputed by the Supplier under or in connection with a subcontract is also a matter disputed under or in connection with this contract and if the subcontract allows, the Supplier may refer the subcontract dispute to the Adjudicator at the same time as the main contract referral. The Adjudicator then decides the disputes together and references to the Parties for the purposes of the dispute are interpreted as including the Subcontractor. (5) The Adjudicator may review and revise any action or inaction of the Supply Manager related to the dispute and alter a quotation which has been treated as having been accepted, . take the initiative in ascertaining the facts and the law related to the dispute,
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instruct a Party to provide further information related to the dispute within a stated time and . instruct a Party to take any other action which he considers necessary to reach his decision and to do so within a stated time. (6) A communication between a Party and the Adjudicator is communicated to the other Party at the same time. (7) If the Adjudicators decision includes assessment of additional cost or delay caused to the Supplier, he makes his assessment in the same way as a compensation event is assessed. (8) The Adjudicator decides the dispute by notifying the Parties and the Supply Manager of his decision and his reasons within four weeks of the end of the period for receiving information. This four week period may be extended if the Parties agree. (9) Unless and until the Adjudicator has notied the Parties of his decision, the Parties and the Supply Manager proceed as if the matter disputed was not disputed. (10) The Adjudicators decision is binding on the Parties unless and until revised by the tribunal and is enforceable as a matter of contractual obligation between the Parties and not as an arbitral award. The Adjudicators decision is nal and binding if neither Party has notied the other within the times required by this contract that he is dissatised with a decision of the Adjudicator and intends to refer the matter to the tribunal. (11) The Adjudicator may, within two weeks of giving his decision to the Parties, correct any clerical mistake or ambiguity. Review by the tribunal W1.4
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(1) A Party does not refer any dispute under or in connection with this contract to the tribunal unless it has rst been referred to the Adjudicator in accordance with this contract.
(2) If, after the Adjudicator noties his decision a Party is dissatised, he may notify the other Party that he intends to refer it to the tribunal. A Party may not refer a dispute to the tribunal unless this notication is given within four weeks of notication of the Adjudicators decision.
(4) The tribunal settles the dispute referred to it. The tribunal has the powers to reconsider any decision of the Adjudicator and review and revise any action or inaction of the Supply Manager related to the dispute. A Party is not limited in the tribunal proceedings to the information, evidence or arguments put to the Adjudicator. (5) If the tribunal is arbitration, the arbitration procedure, the place where the arbitration is to be held and the method of choosing the arbitrator are those stated in the Contract Data. (6) A Party does not call the Adjudicator as a witness in tribunal proceedings.
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contract data
(3) If the Adjudicator does not notify his decision within the time provided by this contract, a Party may notify the other Party that he intends to refer the dispute to the tribunal. A Party may not refer a dispute to the tribunal unless this notication is given within four weeks of the date by which the Adjudicator should have notied his decision.
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Supply Contract
Option W2
Dispute resolution procedure (used in the United Kingdom when the Housing Grants, Construction and Regeneration Act 1996 applies). Dispute resolution W2 W2.1 (1) A dispute arising under or in connection with this contract is referred to and decided by the Adjudicator. A Party may refer a dispute to the Adjudicator at any time. (2) In this Option, time periods stated in days exclude Christmas Day, Good Friday and bank holidays. The Adjudicator W2.2 core clauses (1) The Parties appoint the Adjudicator under the NEC Adjudicators Contract current at the starting date. (2) The Adjudicator acts impartially and decides the dispute as an independent adjudicator and not as an arbitrator.
(3) If the Adjudicator is not identied in the Contract Data or if the Adjudicator resigns or becomes unable to act
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the Parties may choose an adjudicator jointly or a Party may ask the Adjudicator nominating body to choose an adjudicator.
The Adjudicator nominating body chooses an adjudicator within four days of the request. The chosen adjudicator becomes the Adjudicator.
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The adjudication W2.3
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(4) A replacement Adjudicator has the power to decide a dispute referred to his predecessor but not decided at the time when his predecessor resigned or became unable to act. He deals with an undecided dispute as if it had been referred to him on the date he was appointed. (5) The Adjudicator, his employees and agents are not liable to the Parties for any action or failure to take action in an adjudication unless the action or failure to take action was in bad faith. (1) Before a Party refers a dispute to the Adjudicator, he gives a notice of adjudication to the other Party with a brief description of the dispute and the decision which he wishes the Adjudicator to make. If the Adjudicator is named in the Contract Data, the Party sends a copy of the notice of adjudication to the Adjudicator when it is issued. Within three days of the receipt of the notice of adjudication, the Adjudicator noties the Parties that he is able to decide the dispute in accordance with the contract or that he is unable to decide the dispute and has resigned.
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If the Adjudicator does not notify within three days of the issue of the notice of adjudication, either Party may act as if he has resigned. (2) Within seven days of a Party giving a notice of adjudication he refers the dispute to the Adjudicator, provides the Adjudicator with the information on which he relies, including any supporting documents and . provides a copy of the information and supporting documents he has provided to the Adjudicator to the other Party. Any further information from a Party to be considered by the Adjudicator is provided within fourteen days of the referral. This period may be extended if the Adjudicator and the Parties agree. (3) If a matter disputed by the Supplier under or in connection with a subcontract is also a matter disputed under or in connection with this contract,
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the Supplier may, with the consent of the Subcontractor, refer the subcontract dispute to the Adjudicator at the same time as the main contract referral. The Adjudicator then decides the disputes together and references to the Parties for the purposes of the dispute are interpreted as including the Subcontractor. (4) The Adjudicator may
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review and revise any action or inaction of the Supply Manager related to the dispute and alter a quotation which has been treated as having been accepted, . take the initiative in ascertaining the facts and the law related to the dispute, . instruct a Party to provide further information related to the dispute within a stated time and . instruct a Party to take any other action which he considers necessary to reach his decision and to do so within a stated time. (5) If a Party does not comply with any request within the time stated by the Adjudicator, the Adjudicator may continue the adjudication and make his decision based upon the information and evidence he has received. (6) A communication between a Party and the Adjudicator is communicated to the other Party at the same time. (7) If the Adjudicators decision includes assessment of additional cost or delay caused to the Supplier, he makes his assessment in the same way as a compensation event is assessed. (8) The Adjudicator decides the dispute and noties the Parties and the Supply Manager of his decision and his reasons within twenty-eight days of the dispute being referred to him. This period may be extended by up to fourteen days with the consent of the referring Party or by any other period agreed by the Parties. (9) Unless and until the Adjudicator has notied the Parties of his decision, the Parties and the Supply Manager proceed as if the matter disputed was not disputed.
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(10) If the Adjudicator does not make his decision and notify it to the Parties within the time provided by this contract, the Parties and the Adjudicator may agree to extend the period for making his decision. If they do not agree to an extension, either Party may act as if the Adjudicator has resigned.
(11) The Adjudicators decision is binding on the Parties unless and until revised by the tribunal and is enforceable as a matter of contractual obligation between the Parties and not as an arbitral award. The Adjudicators decision is nal and binding if neither Party has notied the other within the times required by this contract that he is dissatised with a matter decided by the Adjudicator and intends to refer the matter to the tribunal.
(12) The Adjudicator may, within fourteen days of giving his decision to the Parties, correct any clerical mistake or ambiguity. Review by the tribunal W2.4 (1) A Party does not refer any dispute under or in connection with this contract to the tribunal unless it has rst been decided by the Adjudicator in accordance with this contract. (2) If, after the Adjudicator noties his decision a Party is dissatised, that Party may notify the other Party of the matter which he disputes and state that he intends to refer it to the tribunal. The dispute may not be referred to the tribunal unless this notication is given within four weeks of the notication of the Adjudicators decision. (3) The tribunal settles the dispute referred to it. The tribunal has the powers to reconsider any decision of the Adjudicator and review and revise any action or inaction of the Supply Manager related to the dispute. A Party is not limited in the tribunal proceedings to the information or evidence put to the Adjudicator.
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(4) If the tribunal is arbitration, the arbitration procedure, the place where the arbitration is to be held and the method of choosing the arbitrator are those stated in the Contract Data. (5) A Party does not call the Adjudicator as a witness in the tribunal proceedings.
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SECONDARY OPTION CLAUSES
Option X1: Price adjustment for ination
Dened terms X1 X1.1
(a) The Base Date Index (B) is the latest available index before the base date. (b) The Latest Index (L) is the latest available index before the assessment of an amount due.
Price Adjustment Factor Option A Price Adjustment Factor Option G
(d) On each anniversary of the Contract Date, the Supplier calculates a Price Adjustment Factor equal to (L-B)/B, where L is the last published value of the index and B is the last value of the index published before the Contract Date. If an index is changed after it has been used in calculating a Price Adjustment Factor, the calculation is repeated and a correction included in the next assessment of the amount due. The Price Adjustment Factor calculated at the Time for Delivery for the whole of the goods is used for calculating price adjustment after this date.
Price Adjustment Factor X1.2
Compensation events X1.3
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Price adjustment X1.4 Option A
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The change to the Prices for a compensation event is assessed using the change to the Prices current at the time of assessing the compensation event adjusted to base date by dividing by one plus the Price Adjustment Factor for the last assessment of the amount due.
Each amount due includes an amount for price adjustment which is the sum of the change in the Price for the Goods to Date since the last assessment of the amount due multiplied by the Price Adjustment Factor for the date of the current assessment, . the amount due for price adjustment included in the previous amount due and . correcting amounts, not included elsewhere, which arise from changes to indices used for assessing previous amounts for price adjustment.
Price adjustment X1.5 Option G
On each anniversary of the Contract Date, the rates and Prices in the Price List are adjusted by multiplying the rates and Prices applicable at the Contract Date by one plus the Price Adjustment Factor.
Option X3: Multiple currencies

Multiple currencies X3 X3.1
The Supplier is paid in currencies other than the currency of this contract for the items listed in the Contract Data. The exchange rates are used to convert from the currency of this contract to other currencies.
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(c) The Price Adjustment Factor is the total of the products of each of the proportions stated in the Contract Data multiplied by (L-B)/B for the index linked to it.
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X3.2 Payments to the Supplier in currencies other than the currency of this contract do not exceed the maximum amounts stated in the Contract Data. Any excess is paid in the currency of this contract.
Option X4: Parent company guarantee

Parent company X4 guarantee X4.1
If a parent company owns the Supplier, the Supplier gives to the Purchaser a guarantee by the parent company of the Suppliers performance in the form set out in the Goods Information. If the guarantee was not given by the Contract Date, it is given to the Purchaser within four weeks of the Contract Date.
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Option X7A: Delay damages for delay of Delivery (used only with Option A)
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Delay damages X7A X7A.1 The Supplier pays delay damages at the rate stated in the Contract Data from the Time for Delivery for each day until Delivery.
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X7A.2 If the Time for Delivery is changed to a later date after delay damages have been paid, the Purchaser repays the overpayment of damages with interest. Interest is assessed from the date of payment to the date of repayment and the date of repayment is an assessment date.
X7A.3 If Delivery of a part of the goods or a part of the associated services is before the Time for Delivery, the delay damages are reduced from the date of Delivery of the part. The Supply Manager assesses the benet to the Purchaser of Delivery of the part as a proportion of the benet to the Purchaser of Delivery of the whole of the goods and the associated services not previously delivered. The delay damages are reduced in this proportion. X7A.4 If the Time for Delivery is stated as a period of days, the Supplier pays delay damages from the latest day in the period for each day until Delivery.
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Option X7B: Delay damages for delay of Completion (used only with Option A)
Delay damages X7B X7B.1 The Supplier pays delay damages at the rate stated in the Contract Data from the Completion Date for each day until Completion. X7B.2 If the Completion Date is changed to a later date after delay damages have been paid, the Purchaser repays the overpayment of damages with interest. Interest is assessed from the date of payment to the date of repayment and the date of repayment is an assessment date. X7B.3 If Completion of a part of the goods or a part of the associated services is before the Completion Date, the delay damages are reduced from the date of Completion of the part. The Supply Manager assesses the benet to the Purchaser of Completion of the part as a proportion of the benet to the Purchaser of Completion of the whole of the goods and the associated services not previously completed. The delay damages are reduced in this proportion.
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Main Option Clauses
Option X7C: Delay damages for delay of the Batch (used only with Option G)
X7C X7C.1 The delay damages stated in the Batch Order are not more than the estimated cost to the Purchaser of late Delivery of the Batch. If delivery of the Batch is later than the Time for Delivery of a Batch, the Supplier pays delay damages at the rate stated on the Batch Order from the Time for Delivery of the Batch for each day until Delivery of the Batch. X7C.2 If Delivery of a part of the goods or a part of the associated services is before the Time for Delivery of the Batch, the delay damages are reduced from the date of Delivery of the part. The Supply Manager assesses the benet to the Purchaser of Delivery of the part as a proportion of the benet to the Purchaser of Delivery of the whole of the goods and the associated services in the Batch not previously delivered. The delay damages are reduced in this proportion. core clauses contract data
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X7C.3 If the Time for Delivery of the Batch is stated as a period of days, the Supplier pays delay damages from the latest day in the period for each day until Delivery of the Batch.
Option X9: Transfer of rights
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X9.2
Transfer of rights X9 X9.1
The Supplier may use the material provided by him under this contract for other work unless stated otherwise in the Goods Information.
Option X12: Partnering

Identied and dened X12 terms X12.1 (1) The Partners are those named in the Schedule of Partners. The Client is a Partner. (2) An Own Contract is a contract between two Partners which includes this Option. (3) The Core Group comprises the Partners listed in the Schedule of Core Group Members. (4) Partnering Information is information which species how the Partners work together and is either in the documents which the Contract Data states it is in or in an instruction given in accordance with this contract. (5) A Key Performance Indicator is an aspect of performance for which a target is stated in the Schedule of Partners.
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The Purchaser owns the Suppliers rights over material prepared for this contract by the Supplier except as stated otherwise in the Goods Information. The Supplier obtains other rights for the Purchaser as stated in the Goods Information and obtains from a Subcontractor equivalent rights for the Purchaser over the material prepared by the Subcontractor. The Supplier provides to the Purchaser the documents which transfer these rights to the Purchaser.
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Supply Contract
Actions X12.2 (1) Each Partner works with the other Partners to achieve the Clients objective stated in the Contract Data and the objectives of every other Partner stated in the Schedule of Partners. (2) Each Partner nominates a representative to act for it in dealings with other Partners. (3) The Core Group acts and takes decisions on behalf of the Partners on those matters stated in the Partnering Information. (4) The Partners select the members of the Core Group. The Core Group decides how they will work and decides the dates when each member joins and leaves the Core Group. The Clients representative leads the Core Group unless stated otherwise in the Partnering Information. (5) The Core Group keeps the Schedule of Core Group Members and the Schedule of Partners up to date and issues copies of them to the Partners each time either is revised. (6) This Option does not create a legal partnership between Partners who are not one of the Parties in this contract. Working together X12.3 (1) The Partners work together as stated in the Partnering Information and in a spirit of mutual trust and cooperation. (2) A Partner may ask another Partner to provide information that he needs to carry out the work in his Own Contract and the other Partner provides it.
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(3) Each Partner gives an early warning to the other Partners when he becomes aware of any matter that could affect the achievement of another Partners objectives stated in the Schedule of Partners.
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(4) The Partners use common information systems as set out in the Partnering Information. (5) A Partner implements a decision of the Core Group by issuing instructions in accordance with its Own Contracts.
(6) The Core Group may give an instruction to the Partners to change the Partnering Information. Each such change to the Partnering Information is a compensation event which may lead to reduced Prices. (7) The Core Group prepares and maintains a timetable showing the proposed timing of the contributions of the Partners. The Core Group issues a copy of the timetable to the Partners each time it is revised. The Supplier changes his programme if it is necessary to do so in order to comply with the revised timetable. Each such change is a compensation event which may lead to reduced Prices. (8) A Partner gives advice, information and opinion to the Core Group and to other Partners when asked to do so by the Core Group. This advice, information and opinion relates to work that another Partner is carrying out under its Own Contract and is given fully, openly and objectively. The Partners show contingency and risk allowances in information about costs, prices and timing for future work. (9) A Partner noties the Core Group before subcontracting any work.
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Incentives X12.4 (1) A Partner is paid the amount stated in the Schedule of Partners if the target stated for a Key Performance Indicator is improved upon or achieved. Payment of the amount is due when the target has been improved upon or achieved and is made as part of the amount due in the Partners Own Contract. (2) The Client may add a Key Performance Indicator and associated payment to the Schedule of Partners but may not delete or reduce a payment stated in the Schedule of Partners.
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Option X13: Performance bond

Performance bond X13 X13.1 The Supplier gives the Purchaser a performance bond, provided by a bank or insurer, which the Supply Manager has accepted, for the amount stated in the Contract Data and in the form set out in the Goods Information. A reason for not accepting the bank or insurer is that its commercial position is not strong enough to carry the bond. If the bond was not given by the Contract Date, it is given to the Purchaser within four weeks of the Contract Date.
Option X14: Advanced payment to the Supplier

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Advanced payment X14 X14.1 The Purchaser makes an advanced payment to the Supplier of the amount stated in the Contract Data. X14.2 The advanced payment is made either within four weeks of the Contract Date or, if an advanced payment bond is required, within four weeks of the later of
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the Contract Date and the date when the Purchaser receives the advanced payment bond.
Option X17: Low performance damages
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X14.3 The advanced payment is repaid to the Purchaser by the Supplier in instalments of the amount stated in the Contract Data and at the intervals stated in the Contract Data. An instalment is included in each amount due assessed after the period stated in the Contract Data has passed until the advanced payment has been repaid.
Low performance X17 damages X17.1 If at the defects date performance of the goods shows low performance with respect to a performance level stated in the Contract Data, the Supplier pays the amount of low performance damages stated in the Contract Data.
Option X20: Key Performance Indicators (not used with Option X12)
Incentives X20 X20.1 A Key Performance indicator is an aspect of performance by the Supplier for which a target is stated in the Incentive Schedule. The Incentive Schedule is the incentive schedule unless later changed in accordance with this contract.
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The advanced payment bond is issued by a bank or insurer which the Supply Manager has accepted. A reason for not accepting the proposed bank or insurer is that its commercial position is not strong enough to carry the bond. The bond is for the amount of the advanced payment which the Supplier has not repaid and is in the form set out in the Goods Information. Delay in making the advanced payment is a compensation event.
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X20.2 From the starting date until the last defects date, the Supplier reports to the Supply Manager his performance against each of the Key Performance Indicators. Reports are provided at the intervals stated in the Contract Data and include the forecast nal measurement against each indicator. X20.3 If the Suppliers forecast nal measurement against a Key Performance Indicator will not achieve the target stated in the Incentive Schedule, he submits to the Supply Manager his proposals for improving performance. X20.4 The Supplier is paid the amount stated in the Incentive Schedule if the target stated for a Key Performance Indicator is improved upon or achieved. Payment of the amount is due when the target has been improved upon or achieved. X20.5 The Purchaser may add a Key Performance Indicator and associated payment to the Incentive Schedule but may not delete or reduce a payment stated in the incentive Schedule.
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Option X21: Delay to the defects date

Delay to the defects date X21 X21.1 If after Delivery and before the last defects date a Defect is notied by the Supply Manager due to the whole of the goods not performing as stated in the Goods Information, the Supply Manager may notify the Supplier of a delay to the defects date equal to the period during which the whole of the goods do not perform as stated in the Goods Information.
Option X22: Spare parts
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X21.2 If after Delivery and before the defects date a part of the goods is replaced or repaired as a result of a Defect notied by the Supply Manager, the Supply Manager may notify the Supplier of a delay to the defects date which applies only to the replaced or repaired part of the goods.
X21.3 The Supply Manager noties the Supplier of delays to the defects date for the whole or a part of the goods within four weeks of his notication of the Defect. The Supply Manager does not extend the period between Delivery of the goods and a delayed defects date by more than twice the period between Delivery and the defects date stated in the Contact Data.
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Spare parts X22 X22.1 In addition to providing Plant and Materials, the Purchaser may until the spares date instruct the Supplier to supply spare parts (including software) necessary for the operation and maintenance of the goods and the Supplier provides the spare parts to the Purchaser, unless the spare parts have become unavailable. X22.2 Until the spares date the Supplier noties the Purchaser if spare parts may become unavailable. X22.3 The Supplier noties that spare parts are no longer available in time to allow the Purchaser to purchase the spare parts he may require, or to make other arrangements for future supplies. X22.4 If the Supplier is no longer able to supply a necessary spare part, the Supplier, if instructed by the Purchaser before the spares date,
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provides manufacturing information about the spare part,
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procures licences or software which will enable the Purchaser to obtain the spare parts from others, or . provides on loan patterns or tools to allow the Purchaser to procure others to manufacture the spare parts. X22.5 The Purchasers instruction to the Supplier to provide spare parts is a compensation event. X22.6 If spare parts are instructed for delivery after Completion, the date of delivery of the spare parts is an assessment date.
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OPTION Y
Option Y(UK)2: The Housing Grants, Construction and Regeneration Act 1996
Denitions Y(UK)2 Y2.1 (1) The Act is The Housing Grants, Construction and Regeneration Act 1996. (2) A period of time stated in days is a period calculated in accordance with Section 116 of the Act. Dates for payment Y2.2 The date on which a payment becomes due is seven days after the assessment date. The nal date for payment is fourteen days or a different period for payment if stated in the Contract Data after the date on which payment becomes due. core clauses The Supply Managers certicate is the notice of payment from the Purchaser to the Supplier specifying the amount of the payment made or proposed to be made and stating how the amount was calculated. Notice of intention to Y2.3 withhold payment
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If either Party intends to withhold payment of an amount due under this contract, he noties the other Party not later than seven days (the prescribed period) before the nal date for payment by stating the amount proposed to be withheld and the reason for withholding payment. If there is more than one reason, the amount for each reason is stated. A Party does not withhold payment of an amount due under this contract unless he has notied his intention to withhold payment as required by this contract.
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Option Y(UK)3: The Contracts (Rights of Third Parties) Act 1999

Third party rights Y(UK)3 Y3.1 A person or organisation who is not one of the Parties may enforce a term of this contract under the Contracts (Rights of Third Parties) Act 1999 only if the term and the person or organisation are stated in the Contract Data.
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Suspension of Y2.4 performance Additional conditions Z1 of contract Z1.1
If the Supplier exercises his right under the Act to suspend performance, it is a compensation event.
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Option Z: Additional conditions of contract
The additional conditions of contract stated in the Contract Data are part of this contract.
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CONTRACT DATA
Part one Data provided by the Purchaser
Completion of the data in full, according to the Options chosen, is essential to create a complete contract. Statements given in all contracts 1 General
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The goods are The associated services are The Purchaser is
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Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Supply Manager is
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Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Adjudicator is .............................................................. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Goods Information is in .............................................................. .............................................................. ..............................................................
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The Adjudicator nominating body is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The tribunal is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The following matters will be included in the Risk Register .............................................................. .............................................................. ..............................................................
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The law of the contract is the law of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The language of this contract is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The period for reply is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . weeks.
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The conditions of contract are the core clauses and the clauses for main Option . . . . . , dispute resolution Option . . . . . and secondary Options . . . . . of the NEC3 Supply Contract (xxxxxxxx).
Supply Contract
2 The Suppliers main responsibilities
.
The delivery requirements are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The delivery place is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . loading and unloading responsibility Purchaser Supplier ........... ......... ........... ......... contracting for carriage responsibility Purchaser ........ ........ Supplier ......... ......... costs of carriage responsibility Purchaser ........ ........ Supplier ......... .........
3 Time
The Supplier submits revised programmes at intervals no longer than . . . . . . weeks. The defects date is . . . . . . . . . . . weeks after Delivery of the goods. The defect correction period is . . . . . . . . . . weeks except that
.
4 Testing and Defects
. .
The defect correction period for . . . . . . . . . . . . is . . . . . . . . . . . weeks The defect correction period for . . . . . . . . . . . . is . . . . . . . . . . . . weeks.
core clauses
5 Payment
. . .
The currency of this contract is the . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The interest rate is . . . . . . . . . . . . . %.
The assessment interval is . . . . . . . . . . . . . . . . . weeks (not more than ve).
8 Risks, liabilities, indemnities and insurance
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. . . . .
The minimum limit of indemnity for insurance in respect of loss of or damage to property (except the goods, Plant and Materials and Equipment) and liability for bodily injury to or death of a person (not an employee of the Supplier) caused by activity in connection with this contract for any one event is ..............................................................
The minimum limit of indemnity for insurance in respect of death of or bodily injury to employees of the Supplier arising out of and in the course of their employment in connection with this contract for any one event is . . . . . . . . . .
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main option clauses
The Suppliers liability to the Purchaser for indirect or consequential loss is limited to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Supplier is not liable to the Purchaser for loss of or damage to the Purchasers property for any amount in excess of . . . . . . . . . . . . . . . . . . . . . . The Suppliers liability for Defects due to his design which are not notied before the defects date is limited to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
contract data
The Suppliers total liability to the Purchaser for all matters arising under or in connection with this contract, other than the excluded matters, is limited to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The end of liability date is . . . . . . . . . years after delivery of the whole of the goods.
Optional statements
If the tribunal is arbitration

. .
The arbitration procedure is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The place where arbitration is to be held is .............................................................. The person or organisation who will choose an arbitrator
. .
if the Parties cannot agree a choice or if the arbitration procedure does not state who selects an arbitrator is
..............................................................
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Contract Data Part 1

If there are responsibilities for costs and carriage
.
Responsibilities for costs and carriage are Purchaser .............................. .............................. .............................. Supplier .............................. .............................. ..............................
If there are arrangements for Customs and Duty

.
The Customs and Duty arrangements and payments are Responsibility for arrangements and payment export import Customs clearance Purchaser ......... ......... Supplier ......... ......... Duty paid Purchaser ......... ......... Supplier ......... core clauses contract data 47 secondary option clauses main option clauses .........
If the Purchaser has decided the completion date

.
The completion date is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If no programme is identied in part two of the Contract Data

.
The Supplier is to submit a rst programme for acceptance within . . . . . . weeks of the Contract Date.
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.
If the Supplier is to identify costs associated with imports
The Supplier includes these documents with assessments of the amount due document The Bill of entry endorsed by the importation authority Customs work sheets, showing tax, duties and surcharges which the law of the country into which the goods are being imported requires the importer to pay Air waybill or bill of landing with the associated landing, delivery and forwarding order
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yes no
Invoice from the importation clearing agent showing airline fees, landing charges, wharfage and dock dues Packing lists for cases and their contents Other import documents required by authorised ofcials
If the period in which payments are made is not three weeks and Y(UK)2 is not used
.
The Period within which payments are made is . . . . . . . . . . . . . . . . . . . . . . . .
If Y(UK)2 is used and the nal date for payment is not 14 days after the date when payment is due
.
The Period for payment is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If the Suppliers title to the goods does not pass to the Purchaser on payment
.
The Suppliers title to the goods passes to the Purchaser on . . . . . . . . . . . . .
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Supply Contract
If there are additional Purchasers risks
.
These are additional Purchasers risks 1 ............................................................ 2 ............................................................ 3 ............................................................
If the Suppliers title to the goods does not pass to the Purchaser on delivery
.
The Suppliers title to the goods passes to the Purchaser on . . . . . . . . . . . . .
If the Suppliers title to Plant and Materials included in the associated services does not pass to the Purchaser on completion
.
The Suppliers title to Plant and Materials included in the associated services passes to the Purchaser on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If the Purchaser is to provide any of the insurances stated in the Insurance Table core clauses
.
The Purchaser provides these insurances from the Insurance Table
1. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The deductibles are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The deductibles are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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. .
3. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The deductibles are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If additional insurances are to be provided
The Purchaser provides these additional insurances
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contract data
1. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The deductibles are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The deductibles are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The deductibles are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Supplier provides these additional insurances 1. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The deductibles are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The deductibles are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The deductibles are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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If Option A is used If no activity schedule is identied in part two of the Contract Data
.
The activity schedule is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If the Purchaser is to state the time for delivery of the goods

.
The time for delivery of the goods is Item from Activity Schedule time for delivery
[state a period within which delivery is to be made or a date for delivery]
........................ ........................ ........................ If Option G is used

. .
.................................... .................................... ....................................
The end date is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The time for delivery of the Batch is Item from Price List time for delivery
of Batch Order]
[state a period within which delivery is to be made from date
........................ ........................ ........................
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.
If Option X1 is used
.
The proportions used to calculate the Price Adjustment Factor are 0. 0. 0. 0. 0. ......... ......... ......... ......... ......... linked to the index for ........................... ........................... ........................... ...........................
non-adjustable
1.
. .
00
The base date for indices is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The indices are those prepared by . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.
The Purchaser will pay for the items listed below in the currencies stated items (from a Batch Order or Other currency Activity Schedule) total maximum payment in the currency
........................ ................ .................... ........................ ................ .................... ........................ ................ ....................

.
The exchange rates are those published in . . . . . . . . . . . . . . . . . . . . . . . . . . .
on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (date).
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contract data
The Supplier submits a Batch Order programme to the Supply Manager for acceptance within . . . . . . . . . . . . . . . . . . weeks of receiving the Batch Order.
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core clauses
Supply Contract
If Option X7A is used
.
Delay damages are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . per day.
If Option X7B is used

.
If Option X7C is used

.

.
The Client is Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............................................................
core clauses
. .
The Clients objective is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Partnering Information is in .............................................................. .............................................................. .............................................................. ..............................................................
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. . . . . .
The amount of the performance bond is . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The amount of the advanced payment is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Supplier repays the instalments in assessments starting not less than . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . weeks after the Contract Date. The instalments are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . An advanced payment bond is/is not required.
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contract data
(either an amount or a percentage of the payment otherwise due)
If Option X17 is used The amounts for low performance damages are amount .................... .................... .................... .................... performance level for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If Option X20 is used (but not if Option X12 is also used)

. .
The incentive schedule for Key Performance Indicators is in . . . . . . . . . . . . . A report of performance against each Key Performance Indicator is provided at intervals of . . . . . . . . . . . . . . . months.

.
The spares date is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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If Option Y(UK)3 is used
.
term ....................... ....................... .......................
person or organisation ................................... ................................... ...................................
If Option Z is used
.
The additional conditions of contract are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............................................................
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contract data
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main option clauses
core clauses
Supply Contract
Part two - Data provided by the Supplier
Completion of the data in full, according to the Options chosen, is essential to create a complete contract.
Statements given in all contracts
The Supplier is Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..............................................................
The following matters will be included in the Risk Register .............................................................. .............................................................. .............................................................. .............................................................. ..............................................................
core clauses
The percentage for overheads and prot added to the Dened Cost for people is . . . . . . . . . . . . . . . %. . . . . . . . . . . . . . . . . . . . . . . . %.
The percentage for overheads and prot added to other Dened Cost is
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Optional statements
. . . . .
If the Supplier is to provide Goods Information for his design The Goods Information for the Suppliers design is in
.............................................................. .............................................................. .............................................................. .............................................................. .............................................................. .............................................................. ..............................................................
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main option clauses
If a programme is to be identied in the Contract Data The programme identied in the Contract Data is . . . . . . . . . . . . . . . . . . . . . .
If the Supplier is to decide the completion date The completion date is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If Option A is used The activity schedule is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The tendered total of the Prices is . . . . . . . . . . . . (excluding VAT) (in words) .............................................................. If the Supplier is to state the time for delivery of the goods
.
The time for delivery of the goods is
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Item from Activity Schedule time for delivery
........................ ........................ ........................ If Option G is used

.
.................................... .................................... ....................................
The price list is in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If a lead time is required from the date of the Batch Order

.
The lead time is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . weeks.
If the Supplier is to state the time for delivery of the Batch

.
The time for delivery of the Batch is

........................ ........................ ........................
.................................... .................................... ....................................
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contract data
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core clauses
Item from Price List
time for delivery

NEC3 Supply Contract Consultative Draft

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NEC3 Supply Contract Consultative Draft

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24 September 2007

Nigel Shaw NEC Panel Chairman

Option A Option G Note Option W1 Option W2

Option X1 Option X3 Option X4 Option X7A Option X7B

Price adjustment for ination Multiple currencies Parent company guarantee

Delay damages for delay of Delivery (used only with Option A)

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Actions 10 10.1 Identied and dened 11 terms 11.1 11.2

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secondary option clauses

main option clauses

Interpretation and the law 12 12.1

secondary option clauses

12.4 Communications 13 13.1

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13.6 13.7 13.8

The Supply Manager 14 14.1

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secondary option clauses

main option clauses

Illegal and impossible 17 requirements 17.1

Prevention 18 18.1 core clauses

secondary option clauses

main option clauses

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2 The Suppliers main responsibilities

Providing the Goods 20 20.1 20.2 20.3

Working with the 23 Purchaser and Others 23.1

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secondary option clauses

main option clauses

Other responsibilities 25 25.1 25.2

secondary option clauses

main option clauses

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Starting and Delivery 30 30.1 30.2 30.3

The programme 31 31.1

Revising the programme 32 32.1

The Supplier shows on each revised programme

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secondary option clauses

main option clauses

Access for Delivery 33 33.1

Taking delivery 34 34.1

secondary option clauses

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4 Testing and Defects

Tests and inspections 40 40.1 40.2 40.3

Testing and inspection 41 before and on Delivery 41.1

Correcting Defects 43 43.1 43.2 43.3

Accepting Defects 44 44.1

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Searching for and 42 notifying Defects 42.1

secondary option clauses

main option clauses

Uncorrected Defects 45 45.1

secondary option clauses

main option clauses

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Assessing the amount due 50 50.1

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secondary option clauses

main option clauses