NEC4 Contract Data Part 1 & 2: Live Webinar Replay | Gather

Good afternoon everyone and welcome to our next webinar in our series. So warm welcome if this is your first one or welcome back if you've been in one of these previous webinars. Episode 7, time is, time is flying by. Today we're going to be talking about the role of the contract data. So data part 1, data part 2, we have a nice deep dive looking into this session. So I'll allow people to introduce themselves as we go through, but we've got Ben Walker here from Gather, David Allen from Seeker, and we're joined by Ian Jeffreys from NEC as well for this session today. So today, role of the contract data. So warm welcome to those joining live, also very warm welcome to those who are watching this on playback after the event. So these are available afterwards for anyone to catch up on as well. David, would you like to introduce CICA?

Thanks, Len. Yeah, hi again. I'm David Allen, the Executive Director for CICA Southern, and I'm looking forward to this separate episode around contract data within the NEC4. Ben, Glen, and our special guest at the end today will provide an overview around this topic shortly. But first, just a reminder about CICA. To be clear, it's the Civil Engineering Contractors Association, and its place— I want to talk about its place in representing those that deliver and maintain a significant part of our mainland UK infrastructure. SECA Southern is just one part of a member-led trade association that is made up of 6 English regions and the devolved nations of Scotland and Wales, with a policy office in Westminster. We collectively engage on industry issues with governments and those bodies that impact on our industry at both a national and regional level. You can find out more about our activities on our SECA website, but we also deliver training including that around the NEC4 contract where again we look to increase awareness and seek to promote a fair and equitable use of this tool. Today we look at an element of the contract that plays a big part in determining both the obligations on and the liabilities to be carried by the parties to the contract. This in turn also helps to determine the supply chain's thoughts around engagement with the contract. So I will now hand over to Ben and see how we go from there.

Thank you, David.

Good afternoon, everyone. So the role of contract data, episode 7. We're cracking on with these. So as always, the origins of the word. So contract, Latin, from contractus, that to bring together. And data is already Latin, the plural of datum, meaning something given or fact given. So bringing those two things together, we're going to have a look at why we have contract data and where to find it, getting ready to complete contract data— what do we do before we fill out that form, as we'll see shortly, hopefully digitally. And then we wanted to kind of drop into having a chat pre-this webinar with David really the perspective of the contractor in particular initially, and what does this actually present to us as a headline invitation to tender document that we would receive? And, you know, is it wise perhaps to see if we can get some sort of market engagement day in advance of that, particularly to look at the strategy? So that should be interesting. And then Glenn will take us through the flip side of that and what the client might be looking at and perhaps using that User Group Volume Guide, Volume 3, to have a look through selecting a supplier. Then we will give as much time as possible to our special guest today, Ian, who will take us through NEC Digital Live, where we can actually see this contract data being put together and also avoid some of the pitfalls that you can make by perhaps making an incomplete document if you're left to your own devices in a Word template, or choosing options that perhaps aren't compatible. So really looking looking forward to that. We'll draw it to a close with some short conclusions, but then we'll jump into your questions and answers and point you in the direction of some useful resources. So start off with an analogy which I've given many times during training. The contract would be an empty shell without contract data. If the contract was a finely tuned car, if the conditions of contract, those clauses, those core maintenance, secondary options that we take If they were a car, then contract data is the fuel that makes it move. There are 19 pages at the back of the Engineering and Construction Contract. We'll see this being fairly consistent across the family, and they won't be quite so large sets of pages, and there will be fewer pages in the short forms to capture these, these this contract data at the back after the conditions of contract. And as we say, it fuels up the contract with the particulars about the project. It's organized into two parts. We have Part 1, provided by the client, and this is, as we mentioned, sort of headline invitation to tender document. And we have Part 2, data provided by the contractor. So the successful bidder's Part 2, if it's a competitive environment, that gets brought together with Part 1, and together that's the fuel. Now, so we talked about those two things. How do we join them together? What's the sort of bridge between them? Well, thanks to AI, we can draw a little graphic of this. So we've got the conditions of contract, the car, if we like, and then the contract data, the fuel to make it go. And the link between them is very elegant. It's the use of italicized terms. So anywhere in the contract where we see a word written in italics. It's not a defined term, that's got a capital initial, so the word "defect" has a definition in that kind of glossary of terms, those glossary defined terms near the front of the book. But if it's written in italics like the word "project manager," then that means it's got a specific value. It might be a name, an address, a date, a percentage, a period of time, or a rate, and that You can't— mustn't guess what that is. Of course, that is actually identified in that sort of fill-in-the-blanks that we're going to have a look at today, and that's the bridge between the two. Glenn, over to you.

Excellent. So just to repeat what Ben said there, so anything capitalized in the contract is a defined term, and you can drop into Clause 11.2 and see what the definitions are. There's 20 in the standard core clauses few extra defined terms in the option specifics, and then no doubt an array in your Z clauses of extra defined terms as well. Anything that's project specific, as Ben said, is a value. And so that's what our italicized terms means. So whenever you've got something in italics in the contract, it means you can refer to that. You need to go to your contract data to find out what that particular thing is. I'm just going back, yeah, so just looking at just some of these. I won't read out all of those, but obviously some of the important things: the project manager. So who is the project manager? That's the only person who's given instruction to change the scope. The period for reply. So what is the generic period for reply? Some things, or a lot of things, have timescales built into the contract, but anything that doesn't have a set timescale reverts to the period for reply. So defect date and defect correction period— how long are you liable for defects for? And if there is a defect, how long have you got to correct the individual defect itself? And then some very important things like access date, completion date, fee percentages. So various elements there are italicized throughout the contract, and you need to refer back to the contract data for your projects to see what your element of that thing is. So a lot of things are italicized within the contract. And then where does it fit in, in terms of the contract as a whole? Well, we've seen this slide partly on one of our earlier webinars. So just a reminder, down the left-hand side we've got our conditions of contract. So obviously you've got your core clauses which are common to all of the options. We've got our main option clauses— is it A, B, C, D, E, or F? We've then got one dispute resolution option. And then any number of X clauses, Y clauses, and then Z clauses being additional conditions of contract. And we've had a webinar on Z clauses themselves to catch up on as well. So that's the conditions of contract that encompass together. And then also making up the contract, you've got scope. So that'll be all the drawings, specifications, standards that the contractor is to build to. So what basically what needs to be built and the constraints along the way as to how to build them. Site information is then describing the existing site conditions, so ground investigation reports, cable survey drawings, things like that. And then fundamentally, contract data is going to form part of this signed contract. So again, hence why it's, it's so important. So Contract Data Part 1 is provided by the client, filled in by the client, and then Data Part 2 is then filled in by the contractor. So it's really important to understand both elements. So if you're, if you're a contractor, it's important to understand what has the client written in Data Part 1, what do I need to fill in within Data Part 2. And from a contractor's, from a client's perspective, yes, you need to know what you're filling in with Data Part 1, and then understanding what information you've got in Data Part 2, because that should form part of the tender process. The— what a contractor has completed in Data Part 2 should be a factor obviously in the awards. Now obviously the price, the total prices, will be a big factor. That's where everyone's drawn to. But more subtle things like fee percentages, people rates for Option A, you know, you might have a contractor that seems cheaper but then a lot more expensive on their people rates. And if there's a lot of compensation events, that might tip them over maybe another tenderer who's appeared to be slightly more expensive may be cheaper. There's a lot to consider in the content that's filled in in contract data. So getting ready to complete it, well, if you're not using NEC Digital, which Ian's going to run us through today, then you will have a Word version of the contract which you can obtain from NEC. That's published for free, it's even on the GMH Planning website as well. You can download the Word versions. Edit the contract data form to remove entries for options that are not being taken. So if it says about Option A or Option B, take out the bits that aren't relevant for the, for the form. Just be careful though with that, because I've seen people delete elements that aren't relevant and then someone else comes along and takes that form for another contract, and then hang on, there's bits missing, and then they delete other bits and eventually get left about a page, one page where there's only a few bits left because everyone's deleted bits and So start from a clean page again. Every time you redo contract data, start again. Don't fill in previous contract data because there might be bits missing. Another really frustrating one I find is some clients recreate their own contract data form. I don't know why they do this. The best one I know is written by Ian's team, by the NEC, which has got everything in. So use the one that the NEC has written and then work through Fill in every entry, make sure it's full. Null values are very problematic. If a contractor forgets to put in a fee percentage, does that mean they're doing it for free? And if there's no delay damages, does that mean there are none? So it's really simple— fill in every entry and delete anything that's not relevant or remove it, but then start again from a clean page next time you fill in the new contract data. So really important. That we do that. Ben, anything else to add in terms of tips there? Once you're off mute.

My turn to buy beers again. I think you covered it, Glen. I mean, again though, use NEC Digital and you won't fall foul of most of those things we just mentioned, because in choosing those options, it will populate the relevant parts of contract data that you have to build, so that you have to enter. Yep, absolutely. So what does it look like then when we get this? Top things, I mean, we could spend a day on this, but we'll try and squeeze a few initial thoughts in. So as a contractor, the invitation to tender's gone out, you've got yourself a copy, and you're working through that headline document, which is in my mind Contract Data Part 1, because right at the very start of that template, whether you fill it out digitally or whether you get yourself a Word version, you'll see that the very first entry there is the conditions of contract, and you can see they're in italics, and that's why, because they're an entry. And it'll say something like, ah, the core clauses for the NEC4 ECC 2017 with January amendments, or whatever, and the main option clauses, and that's where you put your A, B, C, D, E, or F secondary options, and that's where you list your Xs and Ys and Zs. And so that very first entry is extremely powerful because as a contractor you should be seeing that, and with a little bit of familiarity with NEC, you can straight away be thinking, right, this client's going Option A, so whatever these works are, they're going to be done on a priced basis. So I'm looking for sound scope, good knowledge of ground conditions, and typically, typically there's always that trade going on in the background of the client's mind between budget, certainty of outcome, and value for money. So somewhere in that, that mix, we would typically look to see things that aren't quantity volatile or what have you. But sometimes there's no right or wrong, just perhaps more or less appropriate. Next are those secondary options. So X1 communicates to us, well, this job's likely to have some, perhaps some steel or some other materials that might be volatile, and therefore the client's communicating they would like some value for money in only paying for inflation as it happens rather than having supply chain in the market, kind of guess at what that might look like over the course of a long project. We've got X7, delay damages. We've got X15, which tells me straight away there's likely to be some design because that would limit my liability to reasonable skill and care. We've got YUK2, which we'd have to take for certain types of work in certain jurisdictions. And then we've got Z, of course we have, we've got option Z. And the very first thing I might do after realizing what the works are, which are the construction of a new Jewelled Highway Bridge over the River Chance, is to go and have a look at those Z clauses to see whether it really is an NEC contract we're about to sign. Now have a look at Episode 6 from— when did we do that, Glen? It would have been about a month ago. That one is all about Z clauses, so that one in concert with this one is quite useful also to appreciate some of those risk allocations that go on behind the scenes. The works We shouldn't be looking for a circular reference here that defines the works back in accordance with the scope. We'd really not mention scope here. We don't want to completely state the scope because it creates a bit of a loop that we— that isn't actually desirable for various reasons. It's just a sentence or two about what we're building and where. The client. So now we know who the client is, we know what the works are, and we know the strategy that's going to underpin this contract and all the detail in the ZEC clauses. We've got an awful lot there. Next, we're probably thinking about things like period for reply. What do we know about the client? Are they, are they really wrapped up in lots of governance, and is that why they've adjusted some of the period for replies or specified some of them to be longer than perhaps we might typically see? But that's communicating to us that we might need to leave a longer period of time before we get design acceptances back or what have you. So period for reply, Apply is where the contract is quiet about timescales for a communication response. So those replies, if they're not within the NEC standard timings, the period for apply will apply. Completion date— this is telling us the client's decided to put that in Contract Data Part 1. It can also be in Contract Data Part 2 and perhaps form part of the evaluation of which bidder is giving us, you know, the most overall advantageous tender. Key dates— any contractor who sees a key date should be thinking, okay, this is not necessarily— it's, it's something noteworthy, something we need to, to, to ask a few questions around. So key dates, remember, aren't just important dates. And again, a message to clients there: understand what key dates are. If you're only having a principal contractor in your supply chain is basically managed by that contractor, then there might not be that much need for key dates because these are dates that manage the interfaces between those contractors on the same contract. So, but that coordination activity, as a contractor, I'd be thinking, well, who are the others who are also working on this project that I'm going to need to meet a certain condition by in order to avoid what is essentially unliquidated costs? It's not damages, and those costs, at least I think our understanding, Glen would agree, don't extend the prolongation and things like that, but there are, they are still a bit of a risk to a contractor. So understanding what they are and clients only putting them in where relevant is another important thing to have a little zoom in on early on the tender environment. So overall, we've got these conditions of contract. They reveal the strategy. We look at these clauses that hopefully are fine-tuning of that rather than a kind of dramatic reset. We know who the client is and we can hopefully look into what their culture is. Remember, culture, knowledge, discipline, those three things are essential to getting this to work properly. We know that what works are. So what next? Well, we probably want to ask ourselves, you know, is there an opportunity to feed back on this? And hopefully if you're a client listening to this, you've built that market test for your strategy for this given contract context into your procurement process so that you're not sort of going down the wrong road, as it were, with a load of would-be bidders perhaps resistant to going down that direction because they've seen genuine issues with your plan that you haven't tested with them. So hopefully we can do a market day, and then obviously whatever the procurement laws allow us in terms of sharing information and thinking things through as a team before we go into that full competitive environment. Who's to carry the risk of changing the law? That's another one we would hope to see as a contractor. I struggle to think of too many examples where the contractor taking that risk makes a great deal of sense. Perhaps maybe if they're doing big chunks of design as well and they're the experts, maybe that's something to subsummary, but typically it seems like a sound thing. Is it a good thing to have X7? I think David was telling me last week, certainly, that the members prefer to have X7 in there because at least they know what that is then, rather than having delay damages at large as an unliquidated damage. If we are expecting our contractor to design, then X15 is certainly something we'll be looking for. It's perhaps impossible perhaps to ensure without that test for reasonable skill and care. Be good to see X18 perhaps as a contractor. We're looking for that limitation of liability where appropriate. And also check that even with YUK2 bringing NEC into the jurisdiction of the Housing Grants, Construction and Regeneration Act, we're looking for any timings adjusted to the default. So it defaults at 14 days, but has that been extended perhaps to something else? Other places we're looking specifically at kind of risk allocation— 3 quick points here because they're quite, quite important points for contractors and clients alike. Firstly, Contract Data Part 1 enables us to add in additional conditions— sorry, additional compensation events. So we can just set an objective statement, don't put a kind of remedy or a pre-estimation a pre-estimate of what that would mean in terms of money or time, just the objective statement. So, site inundated due to floodwater above a certain level AOD, leave it at that. We know, we then know that it triggers. Asbestos would be another example, presence of asbestos in the site. So rather than leaving it to the subjectivity of ground investigation, site information, and Clause 60.2, we could just push and say we want the presence of asbestos to be a compensation event. But maybe we want to go a step further than that and actually have something added in. Again, there's an entry in Contract Data Part 1 for adding additional client liabilities. Now this automatically brings them into the Compensation Event world through, uh, Compensation Event number 14. So a client liability is automatically a Compensation Event, which would give you cost and time, but liabilities have a broader coverage for losses claims and things like that as well. So that will give you a deeper set of coverage. And finally, a point just to mention about the early warning register known as the risk register in NEC3. Mechanically, this hasn't changed at all, it's just called something different. So, and it's always been the case that this register is— it doesn't exist pre-contract, but this pump priming of this register there's a place in both Contract Data Part 1 and Part 2 to include matters that will be included on the Early Warning Register when the contract's made. Entries in there have absolutely no effect of allocating anything, so they are conversation starters to pump prime that Early Warning Register. And I'm sure Glen's seen occasions, as I have, where people have got very confused with that and they see something included for inclusion in the early warning register and mistakenly think that that's the other party taking that risk. It isn't, it's just a conversation starter. Anything to add there, Glen?

No, just as you said, we'll talk about it in data part 2 as well, but yeah, that inclusion in the early warning register is just an early warning. It's, these are issues we're going to start the project by discussing early on, yeah, and it doesn't allocate that risk.

Absolutely. So I think those are kind of the main entries that you would perhaps review to take an initial view as to your appetite for tendering. There, of course, the devil's in the detail, and certainly the ZEC clauses could take us in all sorts of directions. But if you've got a fairly good knowledge of how an EC fits together, I think covering off those few things will give you a good head start. Of course, there's more to do. Glen, looking at it from kind of the, the Part 2 bit.

Yeah, there's, there's less pages to fill in. So if you just look at the number of pages, there's a lot more pages to fill in with Data Part 1 and a lot fewer— 2 pages from memory— where broadly anyway that you're, you're filling in, filling in the elements. But again, it's really important stuff, so it's important that whoever's completing their entry for contract data, you fill in every entry, and only if there's something that's not relevant, then okay, you can take it out, delete it, write N/A, make it clear that that element is not necessary, it's been deliberately not filled in, but need to make that clear within the submission. So the contractor is going to fill in who they are. Now it's always interesting, so they can write a company name, but also it's good to get a representative who is representing from the contractor, who's going to be the equivalent of the project manager. There has been discussions about whether, you know, the NEC should actually stipulate there needs to be the name of a contractor's representative, which I can understand either side. I'm fairly relaxed about whether or not we have that. So it's the name of the contractor, but also we need to convey who that person is that is going to be administering the project on behalf of the contractor because they're the equivalent of the contractor's project manager. Again, cloud-based systems— if we're using one of these established cloud-based systems, then people are given admin rights. So it's relatively straightforward that you can't go wrong with a cloud-based system. So again, a bit like Ian's going to make it foolproof in terms of filling in contract data, it's kind of foolproof by using a cloud-based system with admin rights that no one can write a communication, then they're not authorized to do so. The fee percentage, a lot simpler now in EC4. You might remember in EC3 there was multiple fee percentages to dream up— sorry, to calculate, very detailed, and then different percentages would apply at different situations. Much easier now, it's just one single fee percentage. The working areas, so here's the opportunity for the contractor to identify any other areas as well as the boundaries of the site that would form part of the working area. So the contractors' elements that they want added in, because they only get paid for people within the working area, so it is important that these are identified at tender stage. It's not the last opportunity because there is another space, or in the contract it says at any point under Clause 16.2 3, I'm thinking. The contractor can propose further working areas during the life of the project, and the project manager has to accept or not accept them. So that one, you— it's not your last chance, working areas, but much better you get that set out at tender stage, and there's no question that that then is part of the working area. It's one less thing to have to get accepted during the life of the project. Key persons, So the contractor can name key persons. A lot of people say, well, how many should we put? The form seems to default to 2 people. Sometimes the client would list how many they want, but otherwise, as a contractor, it's how many you think you need to convey to demonstrate you've got a good team of people you're committing to put on the project. You don't list the whole organogram here, so you don't list the whole organogram, but you just list the people important roles like the senior construction manager, senior commercial manager, you know, people like that that are going to make a difference on the job. And you're conveying you've got good people to fulfill this job, especially if it's something like an Option C or an Option E where the client wants good people because there it's a cost-reimbursable contract. So it's more likely to go better with good experienced people. And yes, if you can't provide a key person that you said you would Well, Section 24 of the contract deals with alternative key persons that need to be issued for acceptance. So as a contractor, just list the number you think you need to do to convey the caliber, the experience you're planning to put on this project. The program— it's not compulsory to submit a program as part of the tender submission. It's just a very, very, very good idea, because if you do submit a program as part of contract data. You're demonstrating you've understood the project, you understood programmes, you understand NEC requirements. One of our seekabilities was the importance of submitting a programme at tender stage. You can read up on that one as to— I think it was number 49 from memory. So that goes into detail as to why the programme is so important at tender stage. You hit the ground running. That becomes, in effect, the first accepted programme as well. So this one's Option A, as Ben said, in data part 1, in which case we've got an activity schedule to fill in. Obviously there's an entry if it's Option B for bill of quantities, but that's not relevant, so we'll take that out and we'll state where within our tender submission the activity schedule is, which is kind of a segue to next month's webinar, which is going to be on activity schedules for A and C and when we change them and how we change them. So that's going to be the fun next month. There's various data entries for the schedule of cost components. So this is option A, why not use the SECA rates? I'm guessing, David, you'd advocate using the SECA rates for equipment. Just give us a thumbs up, David, there. So other rates are available, but why look further than the SECA rates for that? There's an option to also add a percentage, a discount. So SECA rates may or may not be considered in your particular sector slightly high or maybe low, possibly. But so the contractor's got the opportunity to put a discount or an increase. Normally I'll see discounts on that rate. Again, this is going to be part of the competitive tender process, so the contractor's going to decide what offer they want to give. So it might be Seeker rates less 10%, so that will be their decision as part of the tender submission. And then lastly, matters for the Early Warning Register. So from a contractor's perspective, why do I want to fill these in if it doesn't change the risk allocation? Well, all it's there is to sell to the client, look, we understand this type of work because here we've listed 2 or 3 items that could be a problem. We already think about them for you, and we're going to help you avoid these become a problem on the project. So again, it's a selling point that you understand NEC, you understand the job, and it's another reason why hopefully the, the client should be giving you the job when you submit the tender return. You've got to find, you've got to find a way of standing out. Obviously price will be a way of standing out, but there's other ways— quality, rates. These are all going to be factors on which the job will be awarded, not solely on the bottom line price, although that will help if it's cheap.

Cheap, terrible, terrible test. Just a question.

We must look at value. There's a couple of these. It's all about what's best value. And you— I mean, looking at Contract Data Part 1, really, when a Contractor looks at it, it's what is being said and why, and what are the implications. So what do you read into that? What do you need to be aware of? So that's important. And from the Contract Data Part 2, Glen, you talked about the Project Manager is identified already, but it's up to the Contractor to identify how many people they want to expressly sort of announce, as it were. But they're still in part of a competitive process, and this is a competitive process. The Project Manager is already appointed and known for the client, but the Contractor is not known because the competitive process hasn't finished. So there's another dimension to the world that the contractor is operating within. And for instance, around the Seeker Schedule of Rates as well, I mean, those are a schedule of rates and the contractor has to use their skills and awareness of where those rates are in that market at any point in time as to what percentage to apply to that. So, and again, it's a competitive scenario, but you're looking for the contractor to convey that understanding what the project's about, You should be looking at the value that you're going to get from that as well. The understanding will relate to the value that you as a client and the project manager will probably get as a consequence of that process.

I think that's a really good point, David. Certainly with the key persons bit, if the client's saying, you know, we want this treated seriously, then maybe that becomes part of your quality quality submissions to the seniority and, and, uh, sort of credibility of that person you put forwards. But I do see this section typically being filled out by, uh, the client. So not completely, of course, they wouldn't put the names in, but they would populate those key person entries with, um, with a job role qualification and experience minimums and then allow the supply— the bidders to, to bid against them. Um, so that we, you know, it's a little bit more structured, but nothing stopping you perhaps in support of your quality submission, adding more commitments in there.

But yeah, we should add, Ben, I guess this is not the complete list because the one thing we haven't got in here is the total prices. So just for the points of doubt, this is just giving a sample. Yeah, the important thing there is best value is not solely looking at the total prices.

No, and again, have a look at User Guide Volume 3 for a bit more guidance on selecting a supplier there.

Good. Another aspect is, yes, thinking about the rhythm of your business, and this will be a factor for a number of things that we're considering here. So ZEC clauses, you know, communication, time changes. You might have some client's internal governance that some things need a bit longer to go through. Really a problem when you've got internal governance that contradicts the rules of the contract. So if you are stuck with internal governance— and I do say if because sometimes people make up blockers in internal governance that don't exist— so do your valid internal governance that you've got to follow, make sure you align the ZER clauses or the timescales rather accordingly. So yes, if you need to change a timescale for internal governance, then fine, but don't make it— oh, don't change it for 2 weeks to 12 weeks because just remember what other impacts that's going to have. Think about your intervals. So as a client, you, you can now dictate, or you do need to dictate, in data part 1, how often are we going to have early warning meetings. Obviously they can be instructed by either party at any stage, but at least the client can set out their stall as to how often they think they're going to need meetings. You can have this 4-weekly, 2-weekly, 1-weekly, but a minimum is going to be either 4-weekly or monthly. So at least once a period We're going to have a discussion about the early warnings and also think about your payment assessments, your forecast and defined cost. How often do you want these? You can set them accordingly. The main option choice will have a dramatic impact on the resources required. So in very simple terms, there's a sliding scale as we go from A through to option E. There's an increase in the client's resources required to check the contractor's defined cost and things like that and application values. And also for the contractor, there's an increase in their resources to be able to demonstrate the same thing. So, you know, a big factor on the option choice is how well defined the scope is, and also, yeah, where do we want the cost certainty, and resources will be changing depending which option you've decided upon. And scope—do we need additional information? Think about the format for programmes, the format for the applications, the quotations. Any of these rules we can set within the scope. So really think about those things and make sure we're covering them. And remember, NEC4 have written these two great user guides. Volume 2 is preparing an ECC contract and Volume 4 is managing an ECC contract. So the Volume 2 is putting together the contract. It talks about how you fill in contract data. It's got a worked example of contract data in there as well. With a commentary against it, so you can review that. And then Volume 4, as well as we've got the guidance notes in there, there's also some really useful downloadable elements. One of them is starting up an NEC contract and closing down an NEC contract. So you've got two checklists there in terms of starting up and closing down an NEC contract. So use them. There's a wealth of information available here to help you with these elements. You're, you're not alone.

Good stuff. Thank you, Glen.

And with that, we will hand over to Ian, who will take us through NEC Digital. Are you ready?

I'll put you on. Fantastic. Yeah, can you— excellent. There we go. Right, thank you for that. So, just a quick introduction. I'm Ian Jeffreys. I'm the Head of Products at Thomas Telford, to the authors of the contracts. So I've been working there for a couple of months, but I have a lot of experience of a couple of years of developing this system with them. So this is just a bit of background. This was launched a couple of months ago, so it's fairly fresh, but we're still going through development at the moment. What I'm going to show you today is using one of our development environments so that I can play around and do stuff and show you new features that are coming up as well. So this is your kind of homepage when you're in NEC Digital, and obviously I'm going to try and focus predominantly on the contract data journey. So let's go ahead and create a new contract. So I just need to put in a name for this. This is where I have fun typing as well as speaking. One of the things which we're working on at the moment is obviously the why clauses are dependent on the region of the contract. So we're looking to add in the other regions that currently have their own bespoke Y clauses, but at the moment I'm just going to leave it to default to UK. And we're going to say create that contract. Next thing is to then select the contract. We have all of the different contracts within the system. Seems to be running a little bit slow because obviously sharing things at the same time as having cameras on and everything, uh, does hit the performance of the browser a little bit. But yeah, you have all 20 of the contracts in there to choose from. So I'm going to choose an ECC, uh, and then we're going to go through and pick our options. And you can see the, the journey down the side here to configure the contract. Um, so I'm going to pick Option C and next step, and then I've got to pick my disputes options. I'm going to pick W2, and then I can pick my options. And this is what the guys were thankfully telling you earlier in a preview for me, is that the system will stop you from preventing things which are not compatible with each other. So because I've selected option C, I can't now select X3 because that's only available with A and B. So I'm going to pick a couple of options there, and equally, if I wanted to select X12 and X20, if I select X20, X12 is then going to get greyed out as well. So make sure that you're picking things that are compatible with each other. Let's go on to the wise. Obviously, if I want to add one of those, I can add that in. And then that's going to take me through to my contract data. And again, thank you to the team earlier. Um, essentially this is now compiling all of the fields that you need to fill in, um, and getting rid of all the ones that are not appropriate for this contract. So really make sure that you're filling in the appropriate data and not missing anything that's required. You can see all the things required with little stars against them. Um, within each of these fields, I can show you we've got various different field types. So we've got some which are kind of paragraph, um, where you can format the text within it. Some of them just short line text. Uh, we've also got select fields where you can pick from a set of options. We've got details for companies and equally for individuals. Um, we've also then got— obviously there's various periods and frequencies throughout the contract, so I can select a set of a number and some units to go with it. Um, and then as we talked about, there's various lists and things. So if I was wanting to add something to early warning register, I can type and add that in there. Um, just to take you back up to the top here, I'm just going to highlight a couple of things quickly. Obviously compiling contract data is— can be quite a lengthy task. You don't want to lose anything, so you can see this little cloud icon up here says the save status. If I start typing anything in there, you can see it then changes to a little wheel. It's now saved. So if I was to now leave this page and come back to it, I'm not going to lose anything that I've typed. I can also, within here, I can share this contract with somebody else within my own organization. Or with somebody else that I want to collaborate with outside. So if I was putting in someone else in my own company and they're already in the system, I can select them to share it with. And equally, if I want to invite someone in, I can invite them with an external email address here. Um, if we scroll on down then, so you can see down the side of the page here all of the different sections that you would normally find on the contract data sheet. So all of those are there. And just to show you that this is compiling specifically the fields that are required, if I go to Contractor's Main Responsibilities, we've got Defined Cost in here because we went for an Option C. Now, if I'm trying to fill this out, I think Glen mentioned that there's some very good guidance documents that the NEC has produced, but obviously you have to then flick between those. So what we've managed to do is pull out these specific sections that you're working in. So if I wanted to see what it says in the guidance document about preparing a contract for the scope, I can just click that little dropdown and see the example entry as well as the high-level detail of it, anything else in there as well. So all of the fields, and also when we were selecting the options, you might have seen the little question marks there as well. So that's able to tell me a little bit of guidance on what the options are when I'm adding them to the contract as well. Let me then take you through— I'm not going to take you through every single field because obviously that would take quite a while. But if I go down to our Z clauses— well, actually, hang on, first of all, the X options. So I can see that the ones I added to the contract are here. Obviously there is no contract data for X2, so there doesn't appear anywhere to put that in. So what I've got to fill in is the ones for X1 and for X20, and I can see obviously required fields remaining are both on the individual fields and on the tabs as well to show me whether I filled everything out. Now let's nip on to Z clauses for a minute. And so within the system here, we can add Z clauses directly to this contract. I can also have a Z clause library where I can type in some standard Z clauses I might want to use on multiple contracts. So if I'm adding one from here, I can either choose from the library or create a new clause. I'm going to create a new one just because there's something, uh, new which hasn't been released yet, but I want to show it to you here as well. Um, so if I was to enter in some data here for our clause, one of the things we've heard people talk about problems with is being able to see where Z clauses are impacting within the contract. So we've added a way to be able to link to those clauses. So essentially, I'm not going to expect you to read all of this, but if you type an symbol while you are drafting your Z clause, so I could say this impacts @20, and then it'll start to give me all of the clauses which are listed with 20. So if I pick 20.1 and something else there. I can also in the system add a kind of justification, so why I'm adding this clause. That doesn't actually come out through the, the official contract data, if you like, so it's not part of that, but it helps as a bit of guidance to understand why things might have been added. If I mark that as complete and then save it off, if I then go to this little tab up here, I've got the clause navigator. So in here I can see all of the core clauses, the main option clauses that were added. So again, this is only the specific clauses that are relevant for this contract based on the options that were selected. So again, a thing that I know that has been a pain for some people trying to figure out which clauses are included with the contract you're getting. So if we go down to Contractor's Main Responsibilities, Providing the Works 20.1, I can see that there is a Z clause which is impacting this. And if I click that, it will show me what that Z clause is. So it's going to help in terms of being able to see what's impacting the clauses, what the client has done to change those, and where they are within the core clauses. So if we go on to— let's imagine that we've put in all of the data that we need to. Obviously it's telling me we haven't, and I'll show you I'm not able to publish it because we haven't. But it will give me a quick summary of the things that are there. If I click Publish and Export I'm going to show you one in a minute which is completed so that we can show it, but you can also then export the PDF here. So at the moment that would export Contract Data 1, and when we show you the client journey in a minute, if I was to export it from there, it would be Contract Data 1 and Contract Data 2 that has been entered. So let me exit here quickly and just go to one which has been completed. So if I go to published one, and I'm going to go to this one here. So you can see we've now got all of the fields complete apart from some optional pieces. So if I go to the Summary and Publish and then to Publish and Export, so now as a client, I— because I published this, all of the fields are now locked. I can then invite a contractor to come into the system and view this. So type in their email address, type in a subject line, a little message for them to come on Bidnet, and send the invite. They will receive an email which will provide a link to the contract and also this information that was provided here. So I'm going to exit this quickly and take you into the journey for receiving that contract and then preparing your Contract Data 2. So sign out from there and log in with one of my many other accounts. Uh, go down here, log back into the system. So now when I come into the system, um, I'm going to be looking for things that are contracts for bidding on. Here we go. So as we saw before, we were preparing something as a client, but now if I look as a bidder, I can see this is that published contract that, uh, I had. It shows it's in draft status. Just want to assure everyone that when you are getting a contract So the client is the only one that can change things within the client side of that contract. But as the bidder on this, now that the client has invited me, this is in a draft state and the client cannot see any of this. They can see that I'm preparing something, but they can't see any of the data that I've entered into this until I actually publish it back to them. So I can see here who the client is at the top here. And I can look at the Contract Data 1 that was provided. As you can see, all of these are now locked so that I can't play around with what the client has provided me. I can look through all of those. I can go down all of the tabs and see anything, obviously. And if I go now to Contract Data 2, I can then start entering things. I've got exactly the same as the client was getting. So I've got all of the guidance in here. I've got all of the validation on the fields. If I go to a different section, so say I was in time and I wanted to quickly see what the client had entered in time, I could actually just click this associated contract data link. It then brings up that particular section of the contract data for me to review and look at while I'm submitting things. So obviously I prepare all the details in here. We've also got obviously the, the schedule for cost components or the short schedule depending on what you are looking at as contract. And again, it will make sure that the correct one of those is entered for you to put the data into. If we assume that I've done all of those kind of things, if I now go to the publishing page for my version here, I can then type a message for the client to receive, confirm that I'm happy with all the data I've entered. Once I've entered that data, I'm not going to be able to change it. So I want to make sure I'm happy before I do that. And I can also then, as I said, export the contract data, Part 1 and Part 2 here. I can't show you that because it'll open in a different tab. I can also, as the client could, I can share this with any colleagues that I'm working on as well. So, you know, I can invite other people from my organization or I can invite external users if I'm working with a consultant. As well. So then I would publish that back to the client. The client will then get a notification that they've received bids on this, and they can then review those bids within the system as well to see which of those they're going to progress with. So I think at a quick sort of fly-through, that's probably me done, Ben.

Thank you very much, Ian.

So I would just say to invite people to put their questions in. There should be a way of putting them into us, and, and Will is in the background there bringing them forward. But thank you very much for that enlightening presentation, and it certainly looks like a big leap forward in achieving both the sort of compliance and rigor of filling this out whilst also holding our hands a little bit through some of those option choices and And it's great to see those other features as well around how you interact directly with the client there. So yeah, really good stuff. So we have our first question. If you have a team of 40 individuals identified to work on the contract and they have the working area as the site and named office, how is days working from home to be included in Contract Data Part 2 in the working areas? Okay, so a bit of a technical question that I think there was a practice note or a fourth bullet on this, if you like, added to the people part of the schedule of cost components. Glen, do you remember anything about that? I think it was around the January time. It's not in my copy of the contract, but it specifically talks, I think, about people who are not working on the site but not involved in manufacturing fabrication. So it's a bit of a test one.

Yeah, that's basically it. So yeah, there is that extra bullet point point which suggests or alludes to the fact that, yeah, there is the facility to recover people working from home. We've debated in the group as to whether it's— it's definitely better— whether it's, yeah, nice and easy and it sorts it out is still up for debate. What I would say to this question user is there's nothing for you to fill in Data Part 2, so you don't need to identify this separately. It's the schedule of cost components that should then allow you to say 'Yeah, okay, there is provision for people working from home.' The most important thing I'd say though is talk, communicate, tell the client early on what you're doing. Don't let this be a big surprise when 6 months in and they said, 'Oh,' and suddenly the client says, 'Oh well, you didn't tell us that, so we know we're not going to pay for that now,' and you might be unpaid obviously in a next assessment. So talk to each other, make it clear that that if people are working from home, that they're productive, that there's evidence that they are being productive. Because especially on cost reimbursable contracts, the last thing you want is disallowed costs coming either during or even worse towards the end of the project when you've got no time to do anything about it.

I've just Googled it. If you look up on neccontract.com news, there's an article published on the 27th of November 2023 NEC4 ETC January 2023 amendment allows homeworkers to be a defined cost, and there's some key points there, 4 bullets to follow, one of which suggests you may want to put some categorisation into the people, into persons. But yeah, have a look at that, hopefully you should find that useful. And I think you had a follow-up. If you can mobilise your resources— sorry, if you can't mobilise your resources to the identified working area, due to access delays, how would the contractor recover the people costs of staff staying at home? So compensation events. So compensation event is at number 2 in the list— client not providing access. And compensation events are assessed as their impact upon defined cost and planned— and the completion date. And so an element of defined cost would be those people that were sort of stood, and of course any prolongation that goes with that. So that would just be through compensation at number 2 in the list and then Clause 63 in the usual way. Okay, have we got any questions on NEC Digital, Will? Oh, here we go. So, question about NEC Digital: is there an AI integration so as to find probable clashes of Z clauses with CORE clauses? Oh, that's a good question.

It is a very good question, isn't it? And it is, I can tell you, it's something we have been looking at, absolutely. So, you know, there are various ideas of applications for AI, and obviously at the same time we need to be careful and make sure that everyone is still taking responsibility for, you know, the quality of what they're responding and putting into those documents. But Yeah, absolutely. This is actually one of the things we have been looking into, um, because it does seem like a really good kind of application for AI. One of the other things might be also to, um, looking at the, uh, drafting of such clauses to try and make sure they're in close connection with the principles of how clauses should be written. And so essentially, I think I mentioned earlier, the system is still We're developing extra features at the moment, so we have a roadmap of things that we're looking at, and certainly that specific use case is one of the things which we are looking at.

These systems, they're never finished, are they? There's always more to build. What about where somebody wants to dimension one of the existing contract datas or treat it in a slightly different way because of a Z clause? Is that something on the roadmap? So we talked about choosing different options in the contract, meaning different entries. What if we choose a standard option but we've somehow changed its nature?

Yeah, that's exactly what I can tell you. We're actually working on that at the moment. So I've just briefed that into my development team. So yeah, I can tell you that is definitely on the roadmap. So yeah, we're looking at essentially with any Z-clauses, is there then a change to one of the existing contract data fields, or indeed do you need to introduce a new contract data field because of the Z Clause that you're adding? So yeah, the ability to kind of make things as flexible as possible in that respect, but also make it as clear as possible for contractors what has been done. And equally again, sort of calling back to that justification point as well, of why those things have been done.

Brilliant, interesting.

AI has like a tone checker, doesn't it? So you can check the tone of your communications. Maybe we just need an AI dumb checker for Z clauses, as in a level of dumbness from 1 to 10 as to whether or not they should do it.

Another good thing to check would be with contractors themselves, get it out there and just say, if we're going to do this, what will that mean? How will that impact on you? Because obviously the Procurement Act is has been introduced to increase sort of early contractor engagement and involvement. And if you're going to put any new sort of Z clauses out there, maybe you test the market first just to see how they go down.

100%, as we said in our Episode 6. I think, David, you made a point there as well. And Ian, where we've got these Z clauses, so it can already take those additional conditions of contract if they do speak to a particular condition of contract, so they're not brand new provisions, they're adjusting something. I think you said that you can link through.

What does that look like? Yeah, so essentially where you are writing a piece of text in the Z Clause, if you put an symbol before that as you type the number, it will give you a list of any of the clauses that are starting with those numbers essentially, and it will go down all the way to sub-clauses as well. So it lets you reference that within the clause text. And then, as I said, when you're viewing the clauses, be it the core clauses or the additional ones for that contract, if you find one which has been changed as a result of one of those clauses, you're going to see an indication next to that and a link to actually view what that change is. So it kind of— it means that as a contractor, if you're receiving that contract and looking through this clause navigator feature at the clauses which are applicable for this contract, you'll be able to see directly when something has been changed or altered by a Z clause. So kind of not then a case of you need to read the two things together and then circle back and try and figure out what's been changed. It will do it actually as you're seeing it.

Brilliant. Now that's very helpful, isn't it? Because so often we might just be looking at our copy and not have that context of how the Z clauses have changed it. Have we got any more questions, Will?

I think we've only just got about time to advertise the next webinar, I think, Ben.

You're right, yeah. I've got loads of questions, but I have to catch up with you another time. I was going to ask one very quick one whilst I bring the slides up. A lot of customers will have frameworks in and there'll be 60— we always say don't copy and paste, but maybe 50-60% of contract data will be consistent. Is there a quick way of creating the next one?

I'm going to sound like a broken record, that is being worked on by the team at the moment as well. So the ability to kind of clone from an existing contract, but with obviously then the ability to change as you go.

Fantastic. Okay, right, I'm trying to find the slides. Unfortunately, my production thing here isn't working very well, so we might have to do this the old way and just talk about— oh, there we go, someone's put them up. Thank you very much. A bit of advertising there. Here we go. So the next episode, just go back one more. Will, to this one, which is a QR code. So if anybody does want to download some further information, book a demo on NEC Digital, as Ian's already said, then just put that on the screen there again in case you want to scan it with your phone. Which just leaves us time to thank our guests and also to advertise the next one, which is Understanding the Activity Schedule. So Glenn and I wrote a bulletin on this it's already gone live, isn't it, Glen, on, you know, how we might update the activity schedule. So look forward to unpicking that in a bit of detail next time. So that's it from me. Thank you very much all. Pleasure to see you all. I don't know if you want any final words, Ian, Glen, David?

No, thank you for the opportunity, guys. I think from my perspective— David?

Yeah, just really, I mean, I'll just reiterate I mean, I think it's been very useful to, to have an overview of this, but ultimately, what is the output you're looking for? And if we stay clear on that throughout the contact data, then obviously that helps everybody.

Great, thank you all. See you on the 30th of March because of the way the holidays fall. We're going to do the 30th of March for Episode 8. Until then, Happy contracting, and we'll see you next time. Thank you.

Thanks, everyone. Thank you.