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A new edition of the FIDIC Red Book is under discussion. It is an issue whether this edition should be based on the current edition or there should be a complete break with tradition in favour of a contract based on a new philosophy such as that of the NEC, which is reported to be used in many countries in circumstances in which the Red Book would otherwise have been used. This article compares the two contracts on the way they deal with site conditions issues. The comparison is on equity and clarity in risk allocation, adequacy of contractual procedures for dealing with unforeseeable conditions encountered, effectiveness of contractual machinery for dispute resolution, and compliance with reported new developments in successful contractual practices in underground construction. Studies highlighting the recurring frequency of claims for unforeseen ground conditions suggest a need for such particular attention to this aspect of construction. Although a desire for some equity in risk sharing is discernible in both contracts, there is room for improvement in the clarity of both contracts. Each contract has commendable features which are not present in the other. However, a better approach involves a combination of these features with full compliance of the reported modern developments in successful contracting practices.

This paper examines the early experiences of the use of the New Engineering Contract (NEC) based on research at the University of Birmingham. It starts with a brief description of the research methodology before giving an overview of the extent of use of NEC, both in the UK and overseas, and the choices of contract strategy options which have been made. The third and main part of the paper concerns the experiences of the contract in use. The impact of the NEC on contract preparation is assessed followed by a review of the effectiveness of the new contract procedures and their implications. The changes in the roles and staffing that are required in the NEC are then considered and this leads to a discussion of the changes in culture and attitude which are stimulated by NEC. An emphasis has been put on the practical issues which a new user of the NEC will need to consider. Before concluding, the paper briefly presents the findings on whether the NEC is achieving its aims of improved clarity.

The paper begins with a brief history of the New Engineering Contract (NEC) and outlines the response by the NEC Panel to the proposals made in the Latham Report. The main principles adopted for the design of the contract are described and the main procedures which are used to implement the design principles are outlined. Emphasis is given to the way in which the procedures are intended to stimulate good management of contracts. The final section of the paper deals with risk allocation and management in NEC. The way in which the choice of contract strategy influences risk allocation is considered first and this is followed by a discussion of the principles used for the detailed allocation of risks in NEC. Risks which are carried by the employer are described and assessed through a novel procedure in NEC.

The use of the private sector in the provision of public services under the Private Finance Initiative (PFI) is still a relatively new concept. The structure of a project under the PFI leads to the involvement of a number of parties and this necessitates the formation of a number of different contracts to regulate the relationships. These range in complexity from the main concession contract for the funding, supply, operation and maintenance of the asset, to subcontracts between the concessionaire and the various subcontractors. As the New Engineering Contract (NEC) has been designed to provide a contracting system which stimuates good management and is sufficiently flexible to be used for all the interfaces in a complex project, it is a strong candidate for adoption at all the interfaces in a PFI project. The paper concludes that there is potential for using the different contract forms in the NEC family for a number of the different relationships under a PFI project and more specifically DBFO projects.

The introduction of the New Engineering Contract (NEC) in the United Kingdom came at a time when the Royal Hong Kong Jockey Club were embarking on major contract works. This new contract provided the type of simple, flexible document ideal for our organization, which seeks to enter into co‐operative joint ventures with contractors. This, however, has not been an example followed by other Employers in Hong Kong and this paper gives the author's views on the reasons for this and the prospects of a change in the future. The paper then summarises presentations by members of the Jockey Club's professional consultants and one of the Contractors at the Hong Kong NEC Conference. The Club's projects are described in detail, however, the timing of the paper in advance of completion of the two major projects prevents a final assessment of the use of NEC in Hong Kong.

This paper explains why Eskom, a large electrical utility, has decided to adopt the New Engineering Contract system of documents and assist the owners of the NEC with its further development. It describes the effect this decision is having on Eskom's ‘culture’, the benefits the introduction is providing through the opportunity to retrain all its contract practitioners and the response from South African industry. Types of project to which NEC has been applied are discussed. Examples of problems and successes with the introduction phase are given, with particular reference to the settlement of disputes. The paper concludes with a reference to the South African Government's Procurement Reform Initiative which is seeking standardization of conditions of contract used throughout the Republic.

This paper describes some current research into the impact of the New Engineering Contract (NEC) on the culture of the industry. The intention is to explain the purpose of this research, describe the methodology used and report on some early findings. In the early sections, the authors outline the thinking behind the research and some of the difficulties involved and briefly consider the limitations of a conventional approach and compare it with an outline of the authors' own. They then look at the analysis of data, with reference to some findings of this and a previous study. In doing so, the authors focus on some cultural patterns which may be resistant to the changes the NEC is intended to promote and they go on to discuss some of the ways in which culture is transmitted between individuals, since, if the NEC is to be successful, it will involve changes in these patterns. In the final section, the authors discuss some implications for the future of the NEC.

This paper considers the impact that contractual procedures have upon the client's control system's ability to deal with unexpected problems. An analysis is made of the relevant procedures set out in the New Engineering Contract (NEC) and a comparison is made to those set out in the Standard Form of Building Contract 1980 Edition (JCT 80). The comparative analysis is based upon a model of problem solving which identifies four critical stages in the problem solving process. The objective of the paper is to identify the strengths and weaknesses of JCT 80 and NEC in relation to the stages of this model. The aim of the paper is to make some recommendations which could be incorporated into future contracts to improve problem solving effectiveness. This work is a continuation of a research project which is considering the communication and behavioural aspects of the problem solving process in construction projects.

Disputes under the New Engineering Contract (NEC) 2nd Edition involve a new approach to the role of Adjudicator. Clauses 90–93 have been radically revised. They reflect the recommendations of Latham's Report Constructing the Team, and growing international practice (e.g. the Channel Tunnel Disputes Panel). Also clarified are some questions over the 1 st Edition. The independent Adjudicator provides a mandatory third‐party neutral settlement process. The decision is final and binding, unless and until revised by the eventual tribunal (court or arbitration) after completion of the works, or termination. Legal drafting is achieved in the NEC style of plain English and present tense. Latham's objectives are reminiscent of traditional decisions of an independent Engineer, or of modern short form arbitration; but the new substantive approach is distinguished from both. The Adjudicator's decision determines the parties' rights and obligations. It does not depend on the Project Manager's implementation, but the latter is free to choose in accordance with the decision, e.g. by changing the Works Information as a compensation event. Distinctive of the NEC is the openness of procedure for the Adjudicator, and even‐handedness between the parties as to the continuing works while the Adjudicator is acting. The parties, by contract, given the independent Adjudicator jurisdiction to settle by its decision all disputes arising under or in connection with the contract. This is neither expert determination nor arbitration. The Adjudicator is to act fairly, not judicially. Some jurisdictional issues may remain, and are explored. There must be a proper substantive characterization of the new role, according to its true context and the parties' expressed intentions. NEC 2nd edition has clarified and enhanced the definition of the first third‐party stage fully to meet Latham's objectives, and to encourage by rapid but effective early resolution of disputes, within the overall NEC philosophy, a substantial reduction in the incidence of disputes.

Project delays and cost over-runs are few common major problems arising from conventional contracts. To overcome these issues, the Hong Kong Government has been practicing the use of the New Engineering Contract (NEC) forms in several public works projects. However, despite the successful outcomes and the positive signs of adopting NEC, it appears that NEC forms of contracts are not widely adopted in the Hong Kong construction industry even after 25 years of their first introduction. The purpose of this paper is to identify the challenges and barriers for not implementing NEC widely in Hong Kong.

Based on a questionnaire survey data collected from 45 senior industry professionals, and six semi-structured interviews, the study evaluated the perceptions of construction professionals as to why NEC is still not popular in the industry and reported the relative importance of challenges in the implementation of NEC in Hong Kong.

The results reveal that “People are not willing to change,” “Limited number of trained professionals” and “Insufficient case law and adjudication experience” are the most significant challenges and barriers in adopting NEC. These findings are also supported by the opinions of construction professionals through semi-structured interviews.

The findings are relevant and would benefit to the industry stakeholders for adopting NEC contracts by informing them of the most significant challenges so that proper strategies may be devised to overcoming them for early contractors’ involvement, controlling cost and time overruns in infrastructure projects.

The empirical evidence of the study provides an insight into the challenges faced by the construction industry of Hong Kong. NEC form of contract is the way forward in order to create a better working environment conducive for all the parties that would result in better construction project performance and productivity.