A Practical Guide to the NEC3 Professional Services Contract -- Contents -- 1 Introduction -- 1.1 General -- 1.2 Mechanics not law -- 1.3 A simple formula for understanding a contract -- 1.4 Mandatory or discretionary -- 1.5 Conditions precedent -- 1.6 Note on use of upper case in key words and phrases -- 2 Background to the NEC Family of Contracts -- 2.1 The background: First editions -- 2.2 The second edition -- 2.3 The third edition -- 2.4 Endorsement of NEC3 by the Office of Government Commerce -- 2.5 General philosophy: Aims and objectives -- 2.6 Flexibility -- 2.7 Clarity and simplicity -- 2.8 Stimulus to good management -- 2.9 Other characteristics -- 3 The Options: An Overview -- 3.1 General arrangement of the PSC -- 3.2 Other documents referred to -- 3.3 Contract Data -- 3.4 The published documents -- 3.5 Main options: General outline -- 4 'Spirit of Mutual Trust and Cooperation' -- 4.1 Introduction -- 4.2 Core clause 10.1 -- 4.2.1 'Shall act' -- 4.2.2 The first requirement -- 4.2.3 The second requirement -- 4.2.4 Discretionary actions -- 4.3 What does it mean? -- 4.4 Practical issues -- 4.4.1 Co-location -- 4.4.2 Attitudes and behaviour -- 4.4.3 Appreciating each other's goals -- 4.4.4 Communicating -- 5 The Cast of Characters -- 5.1 Introduction -- 5.2 The Employer -- 5.3 The Employer's Agent -- 5.4 The Consultant -- 5.5 The Adjudicator -- 5.6 Subconsultants -- 5.7 'Others' -- 5.8 CDM Coordinator -- 5.9 Principal Contractor -- 5.10 Practical issues -- 5.10.1 Roles not job titles -- 5.10.2 People bring success -- 5.10.3 More than one Employer's Agent -- 6 Communications, Early Warnings and other General Matters -- 6.1 Introduction -- 6.2 Communications: The clause -- 6.3 Communications: Practical issues -- 6.3.1 Good practice.

6.3.2 Single-issue communications -- 6.3.3 Electronic communication systems -- 6.3.4 Different addresses for the receipt of different classes of communication -- 6.4 Early warnings: The clause -- 6.5 Early warnings: Practical issues -- 6.5.1 Purpose -- 6.5.2 Risk management in practice -- 6.5.3 Recognising the purpose of the Risk Register -- 6.5.4 Increases to the Consultant's cost -- 6.5.5 Volume of early warnings -- 6.5.6 Contents of the Risk Register -- 6.5.7 Removing expired risks -- 6.5.8 Preparing the Risk Register for following Contracts -- 6.6 Other matters: The clauses -- 6.6.1 Navigation tools -- 6.6.2 Consultant remains responsible -- 6.6.3 Ambiguities, discrepancies and impossibilities -- 6.6.4 Prevention -- 6.6.5 Law and interpretation -- 6.7 Other matters: Practical issues -- 6.7.1 Completing the Contract Data -- 6.7.2 Prevention -- 7 The Parties' Main Responsibilities -- 7.1 Introduction -- 7.2 The Employer's obligations -- 7.3 The Consultant's obligations -- 7.4 Other matters -- 7.4.1 People -- 7.4.2 Coordination -- 7.5 Practical issues -- 7.5.1 Importance of the Scope -- 7.5.2 Forecasting the Time Charge -- 7.5.3 The importance of key people -- 7.5.4 Access to people, places and things not listed in the Contract Data -- 8 Subconsulting -- 8.1 Introduction -- 8.2 Definition of a Subconsultant -- 8.3 The core clauses -- 8.4 Provisions in the main options -- 8.5 Practical issues -- 8.5.1 Shortcuts to the process -- 8.5.2 Accepting the supply chain -- 8.6 Using the PSC as a Subcontract -- 9 Quality -- 9.1 Introduction -- 9.2 Quality management system -- 9.3 What is a Defect? -- 9.4 The Defects procedure -- 9.5 Uncorrected Defects -- 9.6 Practical issues -- 9.6.1 Compatibility of quality management systems -- 9.6.2 Communications policy.

9.6.3 Multiple defects dates -- 9.6.4 Correction of everyday defects -- 10 Rights to Material -- 10.1 Introduction -- 10.2 The core clauses -- 10.3 Secondary option X9 -- 10.4 Practical issues -- 10.4.1 Managing rights to material across several consultancy agreements -- 10.4.2 Maintaining title after termination -- 11 Indemnity, Insurance and Liability -- 11.1 Introduction -- 11.2 The core clauses -- 11.2.1 Allocation of risk -- 11.2.2 Insurances to be provided -- 11.2.3 Limitation on liability -- 11.3 Secondary option X18: Limitation of liability -- 11.4 Practical issues -- 11.4.1 Insurance of Employer's property -- 11.4.2 Self insuring by Employers -- 11.4.3 Project insurance -- 11.4.4 Employer's option if Consultant does not insure -- 12 Time -- 12.1 Introduction -- 12.2 The programme: Contents -- 12.2.1 Fixed and variable dates -- 12.2.2 The Consultant's activities -- 12.2.3 The activities of the Employer and Others -- 12.2.4 Supporting statements -- 12.2.5 Other information -- 12.2.6 Summary -- 12.3 The programme: Submitting, accepting and revising -- 12.4 The programme: Practical issues -- 12.4.1 Accept the inaccuracies -- 12.4.2 Proportionality -- 12.4.3 Developing the programme -- 12.4.4 Key Dates and Conditions -- 12.4.5 Float -- 12.4.6 Time risk allowances -- 12.4.7 A family of documents -- 12.4.8 Resourced programme -- 12.4.9 Using programming software -- 12.4.10 Showing access as being later than the access date -- 12.5 Starting and finishing -- 12.5.1 Starting work -- 12.5.2 Completion -- 12.5.3 Key Dates -- 12.5.4 Option G -- 12.6 Other matters -- 12.6.1 Stopping and starting work -- 12.6.2 Acceleration -- 12.7 Secondary options related to Time -- 12.7.1 General -- 12.7.2 Sectional Completion: Secondary option X5.

12.7.3 Bonus for early Completion: Secondary option X6 -- 12.7.4 Delay damages: Secondary option X7 -- 12.8 Practical issues -- 12.8.1 Instructions to stop or not start any work -- 12.8.2 Bonuses for early Completion -- 12.8.3 Using the bonus for early Completion and delay damages secondary options together -- 13 Payment -- 13.1 Introduction -- 13.2 The payment process -- 13.2.1 The assessment process -- 13.2.2 Interest -- 13.3 Payments in multiple currencies -- 13.4 The amount due and the Price for Services Provided to Date -- 13.4.1 Main option A -- 13.4.2 Main options C and E -- 13.4.3 Main option G -- 13.5 Supporting documents and records -- 13.5.1 Activity Schedule -- 13.5.2 Task Schedule -- 13.5.3 Task Orders -- 13.5.4 Records -- 13.6 The Consultant's share -- 13.7 The Consultant's share: Practical issues -- 13.7.1 Principles and accuracy -- 13.7.2 'Win-win' outcome -- 13.7.3 Guaranteed Maximum Price -- 13.7.4 Target exceeded before Completion -- 13.8 Special provisions for the UK -- 13.8.1 From 1 May 1998 -- 13.8.2 From 1 October 2011 -- 13.9 Related secondary options -- 13.9.1 X1 : Price adjustment for inflation -- 13.10 Practical issues -- 13.10.1 Interest -- 13.10.2 Taxes -- 14 Compensation Events: Theory and Events -- 14.1 Introduction -- 14.2 The theory -- 14.2.1 Underlying principles -- 14.2.2 What is a compensation event? -- 14.2.3 What other contractual entitlements apply? -- 14.3 The events -- 14.3.1 Event 1 -- 14.3.2 Event 2 -- 14.3.3 Event 3 -- 14.3.4 Event 4 -- 14.3.5 Event 5 -- 14.3.6 Event 6 -- 14.3.7 Event 7 -- 14.3.8 Event 8 -- 14.3.9 Event 9 -- 14.3.10 Event 10 -- 14.3.11 Event 11 -- 14.3.12 Event 12 -- 14.3.13 Event 13 (main option G) -- 14.3.14 Event 14 (main option G) -- 14.3.15 Event 15 (main option G).

14.3.16 Clause 60.2 (main option G) -- 14.3.17 Secondary option X2 -- 14.3.18 Secondary option X12 -- 14.3.19 Secondary option Y( UK )2 -- 14.3.20 Additional compensation events -- 14.4 Practical issues -- 14.4.1 Events not in the list -- 15 Compensation Events: Procedures -- 15.1 Introduction -- 15.2 Notification by the Employer -- 15.2.1 Of actual compensation events -- 15.2.2 Of potential compensation events -- 15.3 Notification by the Consultant and the Employer's reply -- 15.3.1 The notification -- 15.3.2 The reply -- 15.4 Other matters associated with notifying compensation events -- 15.4.1 Failure to give an early warning -- 15.4.2 Latest time for notifying an event -- 15.4.3 Giving assumptions -- 15.5 Quotations: Substance -- 15.5.1 What is a quotation? -- 15.5.2 Status of quotations: If instructed -- 15.5.3 Status of quotations: If not instructed -- 15.5.4 Cost of preparing quotations -- 15.6 Quotations: Submission and reply -- 15.6.1 The requirement for quotations -- 15.6.2 Procedure and timetable -- 15.6.3 Revised quotations -- 15.6.4 The timetable simplified -- 15.6.5 Extended time for quotations and replies -- 15.6.6 Failure to reply to quotations -- 15.7 Assessments by the Employer -- 15.7.1 The trigger events -- 15.7.2 Assessing the programme -- 15.7.3 Timing of the Employer's assessment -- 15.7.4 If the Employer fails to do the assessment -- 15.8 Implementing compensation events -- 15.8.1 Procedure and timing -- 15.8.2 Effect of implementation -- 15.9 Practical issues -- 15.9.1 Employer's instructions and other notifications -- 15.9.2 Events which do not constitute compensation events -- 15.9.3 Not identifying compensation events when instructing change -- 15.9.4 Simplifying the quotation procedure.

15.9.5 The time periods are not long enough!.