NEC Contracts

What is NEC and why do we endorse it?

NEC is a family of contracts that help apply good project management principles and practices, and define legal relationships. NEC’s vision is to become the global leader in promoting best practice procurement of works, services and supply.

The contracts are suitable for procuring a diverse range of works, services and supply, ranging from major framework projects through to minor works and the purchase of supplies and goods. NEC contracts have produced major benefits for national and international projects, in terms of collaboration, time, cost savings and improved quality.

The first NEC contract – known as the ‘New Engineering Contract’ – was published in 1993. It was a radical departure from existing building and engineering contracts, as it was written in plain language and designed to stimulate, rather than frustrate, good management. Its second edition, NEC2, was launched in 1995.

NEC3 was launched in 2005 and helped to procure high-profile projects such as the London 2012 Olympic and Paralympic Games. In 2009, ICE's Council formally decided to solely endorse the NEC3 suite of contracts, which built on more than a decade of extensive international use of its predecessors. The Hong Kong government also mandated that all projects use NEC3 contracts.

After 12 years, NEC introduced its fourth edition, NEC4, in 2017 with two brand new contracts added to the NEC4 suite:

• NEC4 Design Build and Operate Contract (DBO) - allows Clients to procure a more integrated whole-life delivery solution
• NEC4 Alliance Contract (ALC) – it will support clients wishing to fully integrate a multi-party delivery team for large complex projects

The NEC4 suite was expanded in 2021 with the addition of the Facilities Management Contracts, which enable the facilities management sector to offer more integrated and consistent procurement strategies.

NEC published secondary Option X29 Climate Change in 2022 for all NEC4 main and main subcontract forms. It is designed to help NEC users in their drive towards achieving net zero greenhouse gas emissions and other related climate change and biodiversity targets by 2050, which aligns with ICE’s goal.

Two brand new contracts have been added to the NEC4 suite:

Who uses NEC?

NEC contracts reflect procurement and project management developments and emerging best practice, with improvements in flexibility, clarity and the ease of administration.

NEC3 and NEC4 contracts have become public sector contracts of choice in the UK. They're used for nearly all projects procured by national and local government bodies and agencies in a wide variety of commercial situations, work and locations.

NEC contracts have been used on a number of major projects across the world.

• Sydney Water, Australia
• Office Tower, Hong Kong International Airport
• England’s Environment Agency
• The London 2012 Olympics
• Christchurch International Airport

Key benefits of NEC include:

• Streamlined processes and updated definitions
• Improved contract administration and reduced administration costs
• Greater clarity and reduced potential for problems
• Provision for building information modelling and early contractor involvement
• Improved risk opportunity and risk management
• Stimulate good management of the relationship between the two parties to contract

Find out more

ICE's Conditions of Contract

Following ICE's formal endorsement of NEC3 contracts, its council made the decision to withdraw from the ICE Conditions of Contract (CoC). ICE transferred its part ownership of this contract to the Association for Consultancy and Engineering (ACE) and the Civil Engineering Contractors Association (CECA). ICE is no longer involved in administering this form of contract.

ICE Conditions of Contract FAQ

If you've previously used the ICE Conditions of Contract or are looking for information, we've put together a list of answers the most commonly asked questions. For further information you should contact either CECA or ACE directly.