Wastewater Programme Saves £500,000 with NEC4 Option C

Project Overview:

A leading UK water company initiated a critical Wastewater Asset Assurance Programme to assess, rehabilitate, and upgrade vital infrastructure across a wide geographical footprint. Recognising the programme's scale and complexity, they chose a contract form closely aligned to the NEC4 Engineering and Construction Contract (ECC) Option C: Target Contract with Activity Schedule. Waleed Associates Consulting was selected to provide specialist project management services, leveraging our deep expertise in NEC4 Option C and collaborative contracting to ensure efficient, compliant, and value-driven delivery. Our core mission was to maximise project value while proactively mitigating risks and disputes inherent in such a large-scale infrastructure undertaking.

Strategic NEC Contract Implementation:

The programme presented significant challenges that demanded a robust and collaborative contractual framework. We strategically applied NEC contract mechanisms to address these head-on:

• NEC4 Option C Payment Mechanism: We provided expert guidance on the implementation and management of NEC4 Option C: Target Contract with Activity Schedule, ensuring transparent Defined Cost tracking, incentivising contractor efficiency, and promoting collaborative cost control. Our deep understanding of the Price List and pain/gain share mechanisms within Option C was crucial for effective financial management.

• Proactive Early Warning and Risk Management (Clause 15.1 & beyond): We rigorously implemented the NEC Early Warning process (Clause 15.1), facilitating proactive risk identification and collaborative mitigation workshops with all stakeholders. This systematic approach, a cornerstone of NEC contracts, enabled us to address potential issues before they escalated into costly problems or disputes. Furthermore, we emphasized the use of the Risk Register as detailed in Clause 20.1.

• Emphasis on Collaboration and Communication (Clause 10.1 & 10.2): We championed the collaborative spirit of NEC contracts, embedding principles from Clause 10.1 (Act as stated in the Contract) and Clause 10.2 (Mutual Trust and Cooperation) into project protocols. This fostered open communication, mutual trust, and a unified project team, essential for navigating the programme's complexities and ensuring efficient decision-making.

• Strategic Use of Key Secondary Options: To further tailor the NEC4 ECC Option C to the specific needs of the Wastewater Asset Assurance Programme, we advised on the strategic incorporation of the following Secondary Options:

  • Option X2: Changes in the law: To effectively manage risks associated with evolving environmental regulations and compliance requirements within the water sector.  

  • Option X4: Parent company guarantee: To provide the Employer with added security and financial protection given the scale and long-term nature of the programme.  

  • Option X7: Delay damages: To clearly define the consequences of Contractor delays and incentivise timely project completion for critical asset upgrades.  

  • Option X12: Multiparty Collaboration: To encourage collaborative working and information sharing amongst all parties involved in the complex programme, including multiple contractors and stakeholders.  

Quantified Value Delivered Through NEC Expertise:

• £500,000 Direct Cost Savings through Efficient Change Control: Our expert application of NEC change control procedures, particularly within the Target Cost framework of Option C, resulted in £500,000 in direct cost savings. This was achieved through rigorous assessment of Compensation Events, ensuring fair valuation and preventing cost escalation.

• 40% Reduction in Potential Disputes (NEC Early Warning Process): By proactively implementing the NEC Early Warning process, we demonstrably reduced potential disputes by 40%. Early identification and collaborative mitigation of risks, facilitated by the formal NEC process, prevented numerous disagreements from escalating into formal disputes, saving significant time and resources.

• 15% Accelerated Programme Delivery (Overall NEC Proactive Management): The holistic application of NEC principles, including proactive management, clear communication, and efficient processes, contributed to a 15% acceleration in programme delivery. Bringing wastewater assets online faster delivered earlier benefits to the client and their customers, representing significant value creation.

• £15 Million Secured Funding based on Robust NEC-Aligned Data: Our ability to leverage NEC-compliant cost and programme data to develop compelling business cases was instrumental in securing £15 million in crucial budget approvals. The transparency and robust nature of NEC data provided confidence to stakeholders and facilitated funding decisions.

• 27% Timeline Optimisation (Proactive Stakeholder Management & Risk Mitigation): Proactive stakeholder management and effective risk mitigation, both underpinned by NEC's collaborative framework, slashed overall project timelines by 27%, representing a 10-month reduction in project duration and accelerating benefits realisation.

• Exceptional Client Satisfaction: Our client-focused approach, underpinned by transparent and collaborative NEC contract management, consistently exceeded client expectations, resulting in an outstanding average client satisfaction rating of 4.8/5 across all projects within the programme.

Get in Touch:

Ready to unlock similar levels of value, efficiency, and risk mitigation in your infrastructure projects through expert NEC contract application? Contact Waleed Associates Consulting today for a free consultation and discover how our specialist NEC expertise can drive your project success.