april 2013 term service contract

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Term Service ContractThis contract should be used for the appointment of a supplier for a

period of time to manage and provide a service

An NEC document

April 2013

Construction Clients’ Board endorsement of NEC3

The Construction Clients’ Board recommends that public sector organisationsuse the NEC3 contracts when procuring construction. Standardising

use of this comprehensive suite of contracts should help todeliver efficiencies across the public sector and promote behaviours

in line with the principles of Achieving Excellence in Construction.

Facilities Management Board support for NEC3

The Facilities Management Board recognises that the NEC Term Service Contractssupport good practice in FM Procurement in the public sector.

Cabinet Office UK

BIFM recommends the use ofNEC3 Term Service Contract and

NEC3 Term Service Short Contract for all typesof Facilities Management and maintenance contracts.

For use only on projects associated with Canal & River Trust

NEC is a division of Thomas Telford Ltd, which is a wholly owned subsidiary ofthe Institution of Civil Engineers (ICE), the owner and developer of the NEC.

The NEC is a family of standard contracts, each of which has thesecharacteristics:

. Its use stimulates good management of the relationship between the twoparties to the contract and, hence, of the work included in the contract.

. It can be used in a wide variety of commercial situations, for a widevariety of types of work and in any location.

. It is a clear and simple document – using language and a structurewhich are straightforward and easily understood.

NEC3 Term Service Contract is one of the NEC family and is consistent withall other NEC3 documents. Also available are the Term Service ContractGuidance Notes and the Term Service Contract Flow Charts.

ISBN (complete box set) 978 0 7277 5867 5ISBN (this document) 978 0 7277 5891 0ISBN (Term Service Contract Guidance Notes) 978 0 7277 5921 4ISBN (Term Service Contract Flow Charts) 978 0 7277 5923 8ISBN (how to write the TSC Service Information) 978 0 7277 5925 2ISBN (how to use the TSC communication forms) 978 0 7277 5927 6

First edition June 2005Reprinted with amendments September 2006Reprinted 2007, 2009, 2010 (thrice), 2011, 2012Reprinted with amendments 2013

British Library Cataloguing in Publication Data for this publication is availablefrom the British Library.

# Copyright nec 2013

All rights, including translation, reserved. The owner of this document mayreproduce the Contract Data and forms for the purpose of obtaining tenders,awarding and administering contracts. Except as permitted by the Copyright,Designs and Patents Act 1988, no part of this publication may be otherwisereproduced, stored in a retrieval system or transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording or otherwise, withoutthe prior written permission of the NEC Director, Thomas Telford Ltd, OneGreat George Street, Westminster, London SW1P 3AA.

Typeset by Academic + Technical, Bristol

Printed and bound in Great Britain by Bell & Bain Limited, Glasgow, UK


CONTENTS

Foreword v

Preface vii

Acknowledgements ix

Amendments x

Schedule of Options 1

Core clauses 1 General 32 The Contractor’s main responsibilities 73 Time 94 Testing and Defects 105 Payment 116 Compensation events 127 Use of equipment, Plant and Materials 168 Risks and insurance 179 Termination 19

Main Option clauses A Priced contract with price list 22C Target contract with price list 24E Cost reimbursable contract 26

Note Options B and D are not used

Dispute resolution W1 Option W1 27W2 Option W2 30

Secondary Option clauses X1 Price adjustment for inflation 33X2 Changes in the law 34X3 Multiple currencies 34X4 Parent company guarantee 34X12 Partnering 34X13 Performance bond 36X17 Low service damages 36X18 Limitation of liability 36X19 Task Order 37X20 Key Performance Indicators 39

Y(UK)1 Project Bank Account 40Y(UK)2 The Housing Grants, Construction and Regeneration Act 1996 44Y(UK)3 The Contracts (Rights of Third Parties) Act 1999 44

Z Additional conditions of contract 44

Note Options X5 to X11, X14 and X16 are not used.

Contract Data 45

Index 52


FOREWORD

I was delighted to be asked to write the Foreword for the NEC3 Contracts.

I have followed the outstanding rise and success of NEC contracts for anumber of years now, in particular during my tenure as the 146th Presidentof the Institution of Civil Engineers, 2010/11.

In my position as UK Government’s Chief Construction Adviser, I am workingwith Government and industry to ensure Britain’s construction sector isequipped with the knowledge, skills and best practice it needs in its transitionto a low carbon economy. I am promoting innovation in the sector, including inparticular the use of Building Information Modelling (BIM) in public sectorconstruction procurement; and the synergy and fit with the collaborativenature of NEC contracts is obvious. The Government’s construction strategy isa very significant investment and NEC contracts will play an important role insetting high standards of contract preparation, management and thedesirable behaviour of our industry.

In the UK, we are faced with having to deliver a 15–20 per cent reduction inthe cost to the public sector of construction during the lifetime of thisParliament. Shifting mind-set, attitude and behaviour into best practice NECprocesses will go a considerable way to achieving this.

Of course, NEC contracts are used successfully around the world in bothpublic and private sector projects; this trend seems set to continue at anincreasing pace. NEC contracts are, according to my good friend and NEC’screator Dr Martin Barnes CBE, about better management of projects. This isquite achievable and I encourage you to understand NEC contracts to the bestyou can and exploit the potential this offers us all.

Peter Hansford

UK Government’s Chief Construction AdviserCabinet Office


PREFACE

The NEC contracts are the only suite of standard contracts designed tofacilitate and encourage good management of the projects on which they areused. The experience of using NEC contracts around the world is that theyreally make a difference. Previously, standard contracts were written mainlyas legal documents best left in the desk drawer until costly and delayingproblems had occurred and there were lengthy arguments about who was toblame.

The language of NEC contracts is clear and simple, and the procedures setout are all designed to stimulate good management. Foresightedcollaboration between all the contributors to the project is the aim. Thecontracts set out how the interfaces between all the organisations involvedwill be managed – from the client through the designers and main contractorsto all the many subcontractors and suppliers.

Versions of the NEC contract are specific to the work of professional serviceproviders such as project managers and designers, to main contractors, tosubcontractors and to suppliers. The wide range of situations covered by thecontracts means that they do not need to be altered to suit any particularsituation.

The NEC contracts are the first to deal specifically and effectively withmanagement of the inevitable risks and uncertainties which are encounteredto some extent on all projects. Management of the expected is easy, effectivemanagement of the unexpected draws fully on the collaborative approachinherent in the NEC contracts.

Most people working on projects using the NEC contracts for the first timeare hugely impressed by the difference between the confrontationalcharacteristics of traditional contracts and the teamwork engendered by theNEC. The NEC does not include specific provisions for dispute avoidance. Theyare not necessary. Collaborative management itself is designed to avoiddisputes and it really works.

It is common for the final account for the work on a project to be settled at thetime when the work is finished. The traditional long period of expensiveprofessional work after completion to settle final payments just is not needed.

The NEC contracts are truly a massive change for the better for the industriesin which they are used.

Dr Martin Barnes CBE

Originator of the NEC contracts


ACKNOWLEDGEMENTS

The first edition of the NEC3 Term Service Contract was drafted by theInstitution of Civil Engineers NEC Panel working through its Term ServiceContract Working Group whose members were:

P. A. Baird, BSc, CEng, FICE, M(SA)ICE, MAPMM. Barnes, BSc(Eng), PhD, FREng, FICE, FCIOB, CCMI, ACIArb, MBCS,FInstCES, FAPM

T. W. Weddell, BSc, CEng, DIC, FICE, FIStructE, ACIArb

The Flow Charts were produced by Ross Hayes with assistance from TomNicholson.

The original NEC was designed and drafted by Dr Martin Barnes then ofCoopers and Lybrand with the assistance of Professor J. G. Perry then of theUniversity of Birmingham, T. W. Weddell then of Travers Morgan Management,T. H. Nicholson, Consultant to the Institution of Civil Engineers, A. Normanthen of the University of Manchester Institute of Science and Technology andP. A. Baird, then Corporate Contracts Consultant, Eskom, South Africa.

The members of the NEC Panel are:

P. Higgins, BSc, CEng, FICE, FCIArb (Chairman)P. A. Baird, BSc, CEng, FICE, M(SA)ICE, MAPMM. Barnes, BSc(Eng), PhD, FREng, FICE, FCIOB, CCMI, ACIArb, MBCS,FInstCES, FAPM

A. J. Bates, FRICS, MInstCESA. J. M. Blackler, BA, LLB(Cantab), MCIArbP. T. Cousins, BEng(Tech), DipArb, CEng, MICE, MCIArb, MCMIL. T. Eames, BSc, FRICS, FCIOBF. Forward, BA(Hons), DipArch, MSc(Const Law), RIBA, FCIArbProfessor J. G. Perry, MEng, PhD, CEng, FICE, MAPMN. C. Shaw, FCIPS, CEng, MIMechET. W. Weddell, BSc, CEng, DIC, FICE, FIStructE, ACIArb

NEC Consultant:

R. A. Gerrard, BSc(Hons), MRICS, FCIArb, FCInstCES

Secretariat:

A. Cole, LLB, LLM, BLJ. M. Hawkins, BA(Hons), MScF. N. Vernon (Technical Adviser), BSc, CEng, MICE


AMENDMENTS JUNE 2006

The following amendments have been made to the June 2005 edition.

Page Clause Line

7 22.1 2 deleted: ‘, notifed early warning matters’

19 90.2, TerminationTableThe Employer

4 Procedure column: ‘, P3’ inserted after‘P2’

4 Amount due column: ‘, A2’ inserted after‘A1’

90.2, TerminationTableThe Contractor

7 Procedure column: ‘P3’ replaced with ‘P2’

9 Procedure column: ‘P3’ replaced with ‘P2’

38 X19.8 4 deleted: ‘and of notified early warningmatters’

39 X20.4 1 ‘mount’ replaced with ‘amount’

41 Contract Data Partone, 1.General

3 added before full stop: ‘(withamendments June 2006)’

42 Contract Data Partone, 8.Risks and insurance

3 deleted: ‘The minimum amount of coverfor loss of or damage to Plant andMaterials provided by the Employer is . . .’

43 Contract Data Partone, 1.Optional statements

1 deleted: ‘If there are additionalcompensation events’ and following4 lines


AMENDMENTS APRIL 2013

The following amendments have been made to the June 2005 edition.Full details of all amendments are available on www.neccontract.com.

Page Clause Line

4 11.2 (6) 19 added: ‘other’ between and ‘amounts’

10 40.1

42

1 replace: ‘The subclauses in this clause onlyapply’ with ‘This clause only applies’

1 Heading changed: ‘Notifying and’ insertedbefore ‘correcting Defects’

1 add ‘notified’ before ‘Defects’1 New 42.1 added, 42.1 and 42.2 renumbered

12 61.1 clause replaced

13 61.361.4

clause replacedclause replaced

14 62.663.2

2 ‘to this effect’ replaced with ‘of his failure’1 replaced ‘For other . . . three bullet points . . . If

the compensation . . . of the event’paragraph 2 delete final sentence: ‘In all other .. . the event.’ replace with ‘In all other cases,the date is the date of the notification of thecompensation event.’

15 64.3 2 ‘to this effect’ replaced with ‘of his failure’

20 91.4 clause replaced

22 2 added: new clause 63.13

31 W2.3 (7)W2.3 (8)W2.3 (12)

3 New sentence added5 New sentence added

clause replaced

37 X19.2X19.4

10 Text and bullet points addedNew paragraphs added at end of clause

39 X19.11 2 added: ‘to the Task Completion Date’ between‘delay is’New paragraph added after 2nd paragraph

40 Y(UK)1 1 insert new clause: ‘Project Bank Account’

42 Y(UK)1 1 insert new clause: ‘Trust Deed’

43 Y(UK)1 1 insert new clause: ‘Joining Deed’

44 Y2.1 (1)Y2.2Y2.3

1 text replaced1 paragraph 3,text replaced1 text replaced

45 Contract DataPart one, 1.General

3 date replaced with ‘April 2013’

50 4 New paragraph addedNew paragraph added before ‘If Option Z is used’

51 4th bulletpoint

1 replace: ‘key persons’ with ‘key people’

53 Contract DataPart two

New text added at end


SCHEDULE OF OPTIONS

The strategy for choosing the form of contract starts with a decision betweenthree main Options, one of which must be chosen.

Option A Priced contract with price list

Option C Target contract with price list

Option E Cost reimbursable contract

Note Options B and D are not used

One of the following dispute resolution Options must be selected to completethe chosen main Option.

Option W1 Dispute resolution procedure (used unless the United Kingdom HousingGrants, Construction and Regeneration Act 1996 applies).

Option W2 Dispute resolution procedure (used in the United Kingdom when the HousingGrants, Construction and Regeneration Act 1996 applies).

The following secondary Options should then be considered. It is notnecessary to use any of them. Any combination other than those stated maybe used.

Option X1 Price adjustment for inflation (used only with Options A and C)

Option X2 Changes in the law

Option X3 Multiple currencies (used only with Option A)

Option X4 Parent company guarantee

Option X12 Partnering

Option X13 Performance bond

Option X17 Low service damages

Option X18 Limitation of liability

Option X19 Task Order

Option X20 Key Performance Indicators (not used with Option X12)

The following Options dealing with national legislation should be included ifrequired.

Option Y(UK)1 Project Bank Account

Option Y(UK)2 The Housing Grants, Construction and Regeneration Act 1996

Option Y(UK)3 The Contracts (Rights of Third Parties) Act 1999

Option Z Additional conditions of contract

Note Options X5 to X11 and X14 to X16 are not used.

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Term Service Contract

CORE CLAUSES

1 General

Actions 1010.1 The Employer, the Contractor and the Service Manager shall act as stated in

this contract and in a spirit of mutual trust and co-operation.

Identified and definedterms

1111.1 In these conditions of contract, terms identified in the Contract Data are in

italics and defined terms have capital initials.

11.2 (1) The Accepted Plan is the plan identified in the Contract Data or is thelatest plan accepted by the Service Manager. The latest plan accepted by theService Manager supersedes previous Accepted Plans.

(2) Affected Property is property of the Employer or Others which is affectedby the work of the Contractor or used by the Contractor in Providing theService and which is identified in the Contract Data.

(3) The Contract Date is the date when this contract came into existence.

(4) A Defect is

. a part of the service which is not provided in accordance with the ServiceInformation or

. a part of the service which is not in accordance with the applicable law orthe Accepted Plan.

(5) Defined Cost is payments by the Contractor in Providing the Service for

. people who are employed by the Contractor,

. Plant and Materials,

. work subcontracted by the Contractor and

. Equipment,

less Disallowed Cost.

The amount for Equipment includes amounts paid for hired Equipment and anamount for the use of Equipment owned by the Contractor which is theamount the Contractor would have paid if the Equipment had been hired.

(6) Disallowed Cost is cost which the Service Manager decides

. is not justified by the Contractor’s accounts and records,

. should not have been paid to a Subcontractor or supplier in accordancewith his contract,

. was incurred only because the Contractor did not

. follow an acceptance or procurement procedure stated in the ServiceInformation or

. give an early warning which this contract required him to give


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and the cost of

. Plant and Materials not used to Provide the Service (after allowingfor reasonable wastage) unless resulting from a change to the ServiceInformation,

. resources not used to Provide the Service (after allowing for reasonableavailability and utilisation) or not taken away when the Service Managerrequested,

. events for which this contract requires the Contractor to insure and

. preparation for and conduct of an adjudication or proceedings of thetribunal

and other amounts paid to the Contractor by insurers.

(7) Equipment is items provided by the Contractor and used by him to Providethe Service and which the Service Information does not require him to includein the Affected Property.

(8) The Fee is the sum of the amounts calculated by applying the subcon-tracted fee percentage to the Defined Cost of subcontracted work and thedirect fee percentage to the Defined Cost of other work.

(9) Others are people or organisations who are not the Employer, the ServiceManager, the Adjudicator, the Contractor or any employee, Subcontractor orsupplier of the Contractor.

(10) The Parties are the Employer and the Contractor.

(11) Plant and Materials are items intended to be included in the AffectedProperty.

(12) The Price List is the price list unless later changed in accordance withthis contract.

(13) To Provide the Service means to do the work necessary to provide theservice in accordance with this contract and all incidental work, services andactions which this contract requires.

(14) The Risk Register is a register of the risks which are listed in theContract Data and the risks which the Service Manager or the Contractor hasnotified as an early warning matter. It includes a description of the risk and adescription of the actions which are to be taken to avoid or reduce the risk.

(15) Service Information is information which either

. specifies and describes the service or

. states any constraints on how the Contractor Provides the Service

and is either

. in the documents which the Contract Data states it is in or

. in an instruction given in accordance with this contract.

(16) A Subcontractor is a person or organisation who has a contract with theContractor to

. provide a part of the service or

. supply Plant and Materials which the person or organisation has whollyor partly designed specifically for the service.

Interpretation and the law 1212.1 In this contract, except where the context shows otherwise, words in the

singular also mean in the plural and the other way round and words in themasculine also mean in the feminine and neuter.

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12.2 This contract is governed by the law of the contract.

12.3 No change to this contract, unless provided for by the conditions of contract,has effect unless it has been agreed, confirmed in writing and signed by theParties.

12.4 This contract is the entire agreement between the Parties.

Communications 1313.1 Each instruction, certificate, submission, proposal, record, acceptance, notifi-

cation, reply and other communication which this contract requires is commu-nicated in a form which can be read, copied and recorded. Writing is in thelanguage of this contract.

13.2 A communication has effect when it is received at the last address notified bythe recipient for receiving communications or, if none is notified, at theaddress of the recipient stated in the Contract Data.

13.3 If this contract requires the Service Manager or the Contractor to reply to acommunication, unless otherwise stated in this contract, he replies within theperiod for reply.

13.4 The Service Manager replies to a communication submitted or resubmittedto him by the Contractor for acceptance. If his reply is not acceptance, theService Manager states his reasons and the Contractor resubmits the commu-nication within the period for reply taking account of these reasons. A reasonfor withholding acceptance is that more information is needed in order toassess the Contractor’s submission fully.

13.5 The Service Manager may extend the period for reply to a communication ifthe Service Manager and the Contractor agree to the extension before thereply is due. The Service Manager notifies the Contractor of the extensionwhich has been agreed.

13.6 The Service Manager issues his certificates to the Employer and theContractor.

13.7 A notification which this contract requires is communicated separately fromother communications.

13.8 The Service Manager may withhold acceptance of a submission by theContractor. Withholding acceptance for a reason stated in this contract is nota compensation event.

The Service Manager 1414.1 The Service Manager’s acceptance of a communication from the Contractor or

of his work does not change the Contractor’s responsibility to Provide theService or his liability for his plan or his design.

14.2 The Service Manager, after notifying the Contractor, may delegate any of hisactions and may cancel any delegation. A reference to an action of the ServiceManager in this contract includes an action by his delegate.

14.3 The Service Manager may give an instruction to the Contractor which changesthe Service Information.

14.4 The Employer may replace the Service Manager after he has notified theContractor of the name of the replacement.

Employer provides right ofaccess and things

1515.1 The Employer provides the right of access for the Contractor to Affected Prop-

erty as necessary for the work in this contract subject to any constraintsstated in the Service Information.

15.2 The Employer provides things which he is to provide as stated in the ServiceInformation.

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Early warning 1616.1 The Contractor and the Service Manager give an early warning by notifying the

other as soon as either becomes aware of any matter which could

. increase the total of the Prices,

. interfere with the timing of the service or

. impair the effectiveness of the service.

The Contractor may give an early warning by notifying the Service Manager ofany other matter which could increase his total cost. The Service Managerenters early warning matters in the Risk Register. Early warning of a matterfor which a compensation event has previously been notified is not required.

16.2 Either the Service Manager or the Contractor may instruct the other to attenda risk reduction meeting. Each may instruct other people to attend if the otheragrees.

16.3 At a risk reduction meeting, those who attend co-operate in

. making and considering proposals for how the effect of the registeredrisks can be avoided or reduced,

. seeking solutions that will bring advantage to all those who will beaffected,

. deciding on the actions which will be taken and who, in accordance withthis contract, will take them and

. deciding which risks have now been avoided or have passed and can beremoved from the Risk Register.

16.4 The Service Manager revises the Risk Register to record the decisions made ateach risk reduction meeting and issues the revised Risk Register to theContractor. If a decision needs a change to the Service Information, the ServiceManager instructs the change at the same time as he issues the revised RiskRegister.

Ambiguities andinconsistencies

1717.1 The Service Manager or the Contractor notifies the other as soon as either

becomes aware of an ambiguity or inconsistency in or between the documentswhich are part of this contract. The Service Manager gives an instructionresolving the ambiguity or inconsistency.

Illegal and impossiblerequirements

1818.1 The Contractor notifies the Service Manager as soon as he considers that the

Service Information requires him to do anything which is illegal or impossible.If the Service Manager agrees, he gives an instruction to change the ServiceInformation appropriately.

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2 The Contractor’s main responsibilities

Providing the Service 2020.1 The Contractor Provides the Service in accordance with the Service Information.

20.2 In Providing the Service, the Contractor minimises the interference caused tothe Affected Property and the activities taking place in it.

The Contractor’s plan 2121.1 If a plan is not identified in the Contract Data, the Contractor submits a first

plan to the Service Manager for acceptance within the period stated in theContract Data.

21.2 The Contractor shows on each plan which he submits for acceptance

. the starting date and the end of the service period,

. the order and timing of the work of the Employer and Others as lastagreed with them by the Contractor or, if not so agreed, as stated in theService Information,

. provisions for

. time risk allowances,

. health and safety requirements and

. the procedures set out in this contract,

. the dates when, in order to Provide the Service in accordance with hisplan, the Contractor will need

. access to the Affected Property as stated in the Service Information,

. acceptances,

. Plant and Materials, equipment and other things to be provided by theEmployer and

. information from Others,

. for each operation, a statement of how the Contractor plans to do thework identifying the principal Equipment and other resources which heplans to use and

. other information which the Service Information requires the Contractorto show on a plan submitted for acceptance.

21.3 Within two weeks of the Contractor submitting a plan to him for acceptance,the Service Manager either accepts the plan or notifies the Contractor of hisreasons for not accepting it. A reason for not accepting a plan is that

. the Contractor’s plans which it shows are not practicable,

. it does not show the information which this contract requires,

. it does not represent the Contractor’s plans realistically or

. it does not comply with the Service Information.

Revising the Contractor’splan

2222.1 The Contractor submits a revised plan to the Service Manager for acceptance

showing the effects of implemented compensation events and other changes.It is submitted

. within the period for reply after the Service Manager has instructed himto and

. when the Contractor chooses to.

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Design of Equipment 2323.1 The Contractor submits particulars of the design of an item of Equipment to

the Service Manager for acceptance if the Service Manager instructs him to. Areason for not accepting is that the design of the item will not allow theContractor to Provide the Service in accordance with

. the Service Information,

. the Accepted Plan or

. the applicable law.

People 2424.1 The Contractor either employs each key person named to do the job stated in

the Contract Data or employs a replacement person who has been acceptedby the Service Manager. The Contractor submits the name, relevant quali-fications and experience of a proposed replacement person to the ServiceManager for acceptance. A reason for not accepting the person is that hisrelevant qualifications and experience are not as good as those of the personwho is to be replaced.

24.2 The Service Manager may, having stated his reasons, instruct the Contractorto remove an employee. The Contractor then arranges that, after one day, theemployee has no further connection with the work included in this contract.

Working with the Employerand Others

2525.1 The Contractor co-operates with Others in obtaining and providing information

which they need in connection with the service. He co-operates with Others andshares the Affected Property with them as stated in the Service Information.

25.2 The Employer and the Contractor provide facilities and other things as statedin the Service Information. Any cost incurred by the Employer as a result ofthe Contractor not providing the facilities and other things he is to provide isassessed by the Service Manager and paid by the Contractor.

Subcontracting 2626.1 If the Contractor subcontracts work, he is responsible for Providing the Service

as if he had not subcontracted. This contract applies as if a Subcontractor’semployees and equipment were the Contractor’s.

26.2 The Contractor submits the name of each proposed Subcontractor to theService Manager for acceptance. A reason for not accepting the Subcontractoris that his appointment will not allow the Contractor to Provide the Service.The Contractor does not appoint a proposed Subcontractor until the ServiceManager has accepted him.

26.3 The Contractor submits the proposed conditions of contract for each subcon-tract to the Service Manager for acceptance unless

. an NEC contract is proposed or

. the Service Manager has agreed that no submission is required.

The Contractor does not appoint a Subcontractor on the proposed subcontractconditions submitted until the Service Manager has accepted them. A reasonfor not accepting them is that

. they will not allow the Contractor to Provide the Service or

. they do not include a statement that the parties to the subcontract shallact in a spirit of mutual trust and co-operation.

Other responsibilities 2727.1 The Contractor obtains approval from Others where necessary.

27.2 The Contractor provides access to work being done and to Plant and Materialsbeing stored for this contract for the Service Manager and Others notified tohim by the Service Manager.

27.3 The Contractor obeys an instruction which is in accordance with this contractand is given to him by the Service Manager.

27.4 The Contractor acts in accordance with the health and safety requirementsstated in the Service Information.

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3 Time

Starting and theservice period

3030.1 The Contractor does not start work until the starting date and Provides the

Service throughout the service period.

Access 3131.1 The Employer allows the Contractor access to the Affected Property as shown

on the Accepted Plan.

Instructions to stop or notto start work

3232.1 The Service Manager may instruct the Contractor to stop or not to start any

work and may later instruct him that he may re-start or start it.

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4 Testing and Defects

Tests and inspections 4040.1 This clause only applies to tests and inspections required by the Service Infor-

mation or the applicable law.

40.2 The Contractor and the Employer provide materials, facilities and samples fortests and inspections as stated in the Service Information.

40.3 The Contractor and the Service Manager each notifies the other of each of histests and inspections before it starts and afterwards notifies the other of itsresults. The Contractor notifies the Service Manager in time for a test orinspection to be arranged and done before doing work which would obstructthe test or inspection. The Service Manager may watch any test done by theContractor.

40.4 If a test or inspection shows that any work has a Defect, the Contractorrepeats the work if possible and the test or inspection is repeated.

40.5 The Service Manager does his tests and inspections without causing unneces-sary delay to the work.

40.6 The Service Manager assesses the cost incurred by the Employer in repeatinga test or inspection after a Defect is found. The Contractor pays the amountassessed.

Testing and inspectionbefore delivery

4141.1 The Contractor does not deliver those Plant and Materials which the Service

Information states are to be tested or inspected before delivery until theService Manager has notified the Contractor that they have passed the test orinspection.

Notifying andcorrecting Defects

4242.1 Until the end of the service period, the Service Manager notifies the Contractor

of each Defect as soon as he finds it and the Contractor notifies the ServiceManager of each Defect as soon as he finds it. The Contractor corrects aDefect whether or not the Service Manager notifies him of it.

42.2 The Contractor corrects notified Defects within a time which minimises theadverse effect on the Employer or Others. If the Contractor does not correct aDefect within the time required by this contract, the Service Managerassesses the cost to the Employer of having the Defect corrected by otherpeople and the Contractor pays this amount.

42.3 The Service Manager arranges for the Employer to allow the Contractor accessif it is needed for correcting a Defect.

Accepting Defects 4343.1 The Contractor and the Service Manager may each propose to the other that

the Service Information should be changed so that a Defect does not have tobe corrected. If the Contractor and the Service Manager are prepared toconsider the change, the Contractor submits a quotation for reduced Prices tothe Service Manager for acceptance. If the Service Manager accepts thequotation, he gives an instruction to change the Service Information and thePrices accordingly.

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5 Payment

Assessing the amount due 5050.1 The Service Manager assesses the amount due at each assessment date. The

first assessment date is decided by the Service Manager to suit the pro-cedures of the Parties and is not later than the assessment interval after thestarting date. Later assessment dates occur at the end of each assessmentinterval until four weeks after the end of the service period.

50.2 The amount due is. the Price for Services Provided to Date,. plus other amounts to be paid to the Contractor,. less amounts to be paid by or retained from the Contractor.

Any tax which the law requires the Employer to pay to the Contractor isincluded in the amount due.

50.3 If no plan is identified in the Contract Data, one quarter of the Price forServices Provided to Date is retained in assessments of the amount dueuntil the Contractor has submitted a first plan to the Service Manager foracceptance showing the information which this contract requires.

50.4 In assessing the amount due, the Service Manager considers any applicationfor payment the Contractor has submitted on or before the assessment date.The Service Manager gives the Contractor details of how the amount due hasbeen assessed.

50.5 The Service Manager corrects any wrongly assessed amount due in a laterpayment certificate.

Payment 5151.1 The Service Manager certifies a payment within one week of each assessment

date. The first payment is the amount due. Other payments are the change inthe amount due since the last payment certificate. A payment is made by theContractor to the Employer if the change reduces the amount due. Otherpayments are made by the Employer to the Contractor. Payments are in thecurrency of this contract unless otherwise stated in this contract.

51.2 Each certified payment is made within three weeks of the assessment date or,if a different period is stated in the Contract Data, within the period stated. Ifa certified payment is late, or if a payment is late because the ServiceManager does not issue a certificate which he should issue, interest is paidon the late payment. Interest is assessed from the date by which the latepayment should have been made until the date when the late payment ismade, and is included in the first assessment after the late payment is made.

51.3 If an amount due is corrected in a later certificate either

. by the Service Manager in relation to a mistake or a compensation eventor

. following a decision of the Adjudicator or the tribunal,

interest on the correcting amount is paid. Interest is assessed from the datewhen the incorrect amount was certified until the date when the correctingamount is certified and is included in the assessment which includes thecorrecting amount.

51.4 Interest is calculated on a daily basis at the interest rate and is compoundedannually.

Defined Cost 5252.1 All the Contractor’s costs which are not included in the Defined Cost are

treated as included in the Fee. Amounts included in Defined Cost are at openmarket or competitively tendered prices with deductions for all discounts,rebates and taxes which can be recovered.

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6 Compensation events

Compensation events 6060.1 The following are compensation events.

(1) The Service Manager gives an instruction changing the Service Informa-tion except

. a change made in order to accept a Defect or

. a change to the Service Information provided by the Contractor for hisplan which is made either at his request or to comply with other ServiceInformation provided by the Employer.

(2) The Employer does not provide the right of access to the Affected Propertyin accordance with the Accepted Plan.

(3) The Employer does not provide something which he is to provide as statedin the Service Information in accordance with the Accepted Plan.

(4) The Service Manager gives an instruction to stop or not to start any work.

(5) The Employer or Others do not work in accordance with the Accepted Planor within the conditions stated in the Service Information.

(6) The Service Manager does not reply to a communication from theContractor within the period required by this contract.

(7) The Service Manager changes a decision which he has previously commu-nicated to the Contractor.

(8) The Service Manager withholds an acceptance (other than acceptance ofa quotation for not correcting a Defect) for a reason not stated in thiscontract.

(9) A test or inspection done by the Service Manager causes unnecessarydelay.

(10) A change to the Affected Property other than a change as a result ofProviding the Service.

(11) The Employer does not provide materials, facilities and samples for testsand inspections as stated in the Service Information.

(12) An event which is an Employer’s risk in this contract.

(13) The Service Manager notifies a correction to an assumption which hehas stated about a compensation event.

(14) A breach of contract by the Employer which is not one of the othercompensation events in this contract.

Notifying compensationevents

6161.1 For compensation events which arise from the Service Manager giving an

instruction, changing an earlier decision or correcting an assumption, theService Manager notifies the Contractor of the compensation event at the timeof that communication. He also instructs the Contractor to submit quotations,unless the event arises from a fault of the Contractor or quotations havealready been submitted. The Contractor puts the instruction or changeddecision into effect.

61.2 The Service Manager may instruct the Contractor to submit quotations for aproposed instruction or a proposed changed decision. The Contractor does notput a proposed instruction or a proposed changed decision into effect.

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61.3 The Contractor notifies the Service Manager of an event which has happenedor which he expects to happen as a compensation event if

. the Contractor believes that the event is a compensation event and

. the Service Manager has not notified the event to the Contractor.

If the Contractor does not notify a compensation event within eight weeks ofbecoming aware of the event, he is not entitled to a change in the Pricesunless the event arises from the Service Manager giving an instruction,changing an earlier decision or correcting an assumption.

61.4 If the Service Manager decides that an event notified by the Contractor

. arises from a fault of the Contractor,

. has not happened and is not expected to happen,

. has no effect upon Defined Cost or

. is not one of the compensation events stated in this contract

he notifies the Contractor of his decision that the Prices are not to bechanged. If the Service Manager decides otherwise, he notifies the Contractoraccordingly and instructs him to submit quotations.

The Service Manager notifies his decision to the Contractor and, if his decisionis that the Prices are to be changed, instructs him to submit quotationsbefore the end of either

. one week after the Contractor’s notification or

. a longer period to which the Contractor has agreed.

If the Service Manager does not notify his decision, the Contractor may notifythe Service Manager of his failure. A failure by the Service Manager to replywithin two weeks of this notification is treated as acceptance by the ServiceManager that the event is a compensation event and an instruction to submitquotations.

61.5 If the Service Manager decides that the Contractor did not give an earlywarning of the event which an experienced contractor could have given, henotifies this decision to the Contractor when he instructs him to submit quota-tions.

61.6 If the Service Manager decides that the effects of a compensation event aretoo uncertain to be forecast reasonably, he states assumptions about theevent in his instruction to the Contractor to submit quotations. Assessment ofthe event is based on these assumptions. If any of them is later found to havebeen wrong, the Service Manager notifies a correction.

61.7 A compensation event is not notified after the end of the service period.

Quotations forcompensation events

6262.1 After discussing with the Contractor different ways of dealing with the

compensation event which are practicable, the Service Manager may instructthe Contractor to submit alternative quotations. The Contractor submits therequired quotations to the Service Manager and may submit quotations forother methods of dealing with the compensation event which he considerspracticable.

62.2 Quotations for compensation events comprise proposed changes to the Pricesassessed by the Contractor. The Contractor submits details of his assessmentwith each quotation. If the plan for remaining work is altered by the compen-sation event, the Contractor includes the alterations to the Accepted Plan inhis quotation.

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62.3 The Contractor submits quotations within three weeks of being instructed todo so by the Service Manager. The Service Manager replies within two weeksof the submission. His reply is

. an instruction to submit a revised quotation,

. an acceptance of a quotation,

. a notification that a proposed instruction will not be given or a proposedchanged decision will not be made or

. a notification that he will be making his own assessment.

62.4 The Service Manager instructs the Contractor to submit a revised quotationonly after explaining his reasons for doing so to the Contractor. The Contractorsubmits the revised quotation within three weeks of being instructed to do so.

62.5 The Service Manager extends the time allowed for

. the Contractor to submit quotations for a compensation event and

. the Service Manager to reply to a quotation

if the Service Manager and the Contractor agree to the extension before thesubmission or reply is due. The Service Manager notifies the extension thathas been agreed to the Contractor.

62.6 If the Service Manager does not reply to a quotation within the time allowed,the Contractor may notify the Service Manager of his failure. If the Contractorsubmitted more than one quotation for the compensation event, he states inhis notification which quotation he proposes is to be accepted. If the ServiceManager does not reply to the notification within two weeks, and unless thequotation is for a proposed instruction or a proposed changed decision,the Contractor’s notification is treated as acceptance of the quotation by theService Manager.

Assessing compensationevents

6363.1 For a compensation event which only affects the quantities of work shown in

the Price List, the change to the Prices is assessed by multiplying thechanged quantities of work by the appropriate rates in the Price List.

63.2 For other compensation events, the changes to the Prices are assessed asthe effect of the compensation event upon

. the actual Defined Cost of the work already done,

. the forecast Defined Cost of the work not yet done and

. the resulting Fee.

If the compensation event arose from the Service Manager giving an instruc-tion, changing an earlier decision or correcting an assumption, the date whichdivides the work already done from the work not yet done is the date of thatcommunication. In all other cases, the date is the date of the notification ofthe compensation event.

Effects on the Defined Cost are assessed separately for

. people who are employed by the Contractor,

. Plant and Materials,

. work subcontracted by the Contractor and

. Equipment.

The Contractor shows how each of these effects is built up in each quotationfor a compensation event.

63.3 If the Service Manager and the Contractor agree, rates and Prices in the PriceList may be used as a basis for assessment instead of Defined Cost and theresulting Fee.

63.4 If the effect of a compensation event is to reduce the total Defined Cost, thePrices are not reduced except as stated in this contract.

63.5 The rights of the Employer and the Contractor to changes to the Prices aretheir only rights in respect of a compensation event.

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63.6 If the Service Manager has notified the Contractor of his decision that theContractor did not give an early warning of a compensation event which anexperienced contractor could have given, the event is assessed as if theContractor had given early warning.

63.7 Assessment of the effect of a compensation event includes risk allowancesfor cost for matters which have a significant chance of occurring and are atthe Contractor’s risk under this contract.

63.8 Assessments are based upon the assumptions that the Contractor reactscompetently and promptly to the compensation event, that any Defined Costdue to the event is reasonably incurred and that the Accepted Plan can bechanged.

63.9 A compensation event which is an instruction to change the Service Informa-tion in order to resolve an ambiguity or inconsistency is assessed as if thePrices were for the interpretation most favourable to the Party which did notprovide the Service Information.

The Service Manager’sassessments

6464.1 The Service Manager assesses a compensation event

. if the Contractor has not submitted a quotation and details of his assess-ment within the time allowed,

. if the Service Manager decides that the Contractor has not assessed thecompensation event correctly in a quotation and he does not instruct theContractor to submit a revised quotation,

. if, when the Contractor submits quotations for a compensation event, hehas not submitted a plan or alterations to a plan which this contractrequires him to submit or

. if, when the Contractor submits quotations for a compensation event, theService Manager has not accepted the Contractor’s latest plan for one ofthe reasons stated in this contract.

64.2 The Service Manager notifies the Contractor of his assessment of a compen-sation event and gives him details of it within the period allowed for theContractor’s submission of his quotation for the same event. This periodstarts when the need for the Service Manager’s assessment becomesapparent.

64.3 If the Service Manager does not assess a compensation event within the timeallowed, the Contractor may notify the Service Manager of his failure. If theContractor submitted more than one quotation for the compensation event, hestates in his notification which quotation he proposes is to be accepted. If theService Manager does not reply within two weeks of this notification the notifi-cation is treated as acceptance of the Contractor’s quotation by the ServiceManager.

Implementingcompensation events

6565.1 A compensation event is implemented when

. the Service Manager notifies his acceptance of the Contractor’s quota-tion,

. the Service Manager notifies the Contractor of his own assessment or

. a Contractor’s quotation is treated as having been accepted by theService Manager.

65.2 The assessment of a compensation event is not revised if a forecast uponwhich it is based is shown by later recorded information to have been wrong.

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7 Use of equipment, Plant and Materials

The Parties’ use ofequipment, Plant and

Materials

7070.1 The Contractor has the right to use equipment, Plant and Materials provided

by the Employer only to Provide the Service.

70.2 At the end of the service period the Contractor

. returns to the Employer, equipment and surplus Plant and Materialsprovided by the Employer,

. provides items of Equipment for the Employer’s use as stated in theService Information and

. provides information and other things as stated in the Service Information.

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8 Risks and insurance

Employer’s risks 8080.1 The following are Employer’s risks.

. Claims, proceedings, compensation and costs payable which are due to

. the unavoidable result of the service or of Providing the Service,

. negligence, breach of statutory duty or interference with any legal rightby the Employer or by any person employed by or contracted to himexcept the Contractor or

. a fault of the Employer or a fault in his design.

. Loss of or damage to Plant and Materials supplied to the Contractor bythe Employer, or by Others on the Employer’s behalf, until the Contractorhas received and accepted them.

. Loss of or damage to the Affected Property, Plant and Materials due to

. war, civil war, rebellion, revolution, insurrection, military or usurpedpower,

. strikes, riots and civil commotion not confined to the Contractor’semployees or

. radioactive contamination.

. Loss of or wear or damage to any Equipment, Plant and Materialsretained by the Employer after a termination, except loss, wear ordamage due to the activities of the Contractor after the termination.

. Additional Employer’s risks stated in the Contract Data.

The Contractor’s risks 8181.1 From the starting date until the end of the service period, the risks which are

not carried by the Employer are carried by the Contractor.

Indemnity 8282.1 Each Party indemnifies the other against claims, proceedings, compensation

and costs due to an event which is at his risk.

82.2 The liability of each Party to indemnify the other is reduced if events at theother Party’s risk contributed to the claims, proceedings, compensation andcosts. The reduction is in proportion to the extent that events which were atthe other Party’s risk contributed, taking into account each Party’s responsibil-ities under this contract.

Insurance cover 8383.1 The Contractor provides the insurances stated in the Insurance Table except

any insurance which the Employer is to provide as stated in the Contract Data.The Contractor provides additional insurances as stated in the Contract Data.

83.2 The insurances are in the joint names of the Parties and provide cover forevents which are at the Contractor’s risk from the starting date until the endof the service period or a termination certificate has been issued.

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INSURANCE TABLE

Insurance against Minimum amount of cover orminimum limit of indemnity

Loss of or damage caused by theContractor to the Employer’s property

The amount stated in theContract Data

Loss of or damage to Plant and Materials The replacement cost, includingthe amount stated in the ContractData for the replacement of anyPlant and Materials provided bythe Employer

Loss of or damage to Equipment The replacement cost

The Contractor’s liability for loss of ordamage to property (except theEmployer’s property, Plant and Materialsand Equipment) and liability for bodilyinjury to or death of a person (not anemployee of the Contractor) arising fromor in connection with the Contractor’sProviding the Service

The amount stated in theContract Data for any one eventwith cross liability so that theinsurance applies to the Partiesseparately

Liability for death of or bodily injury toemployees of the Contractor arising outof and in the course of their employmentin connection with this contract

The greater of the amountrequired by the applicable lawand the amount stated in theContract Data for any one event

Insurance policies 8484.1 Before the starting date and on each renewal of the insurance policy, the

Contractor submits to the Service Manager for acceptance certificates whichstate that the insurance required by this contract is in force. The certificatesare signed by the Contractor’s insurer or insurance broker. A reason for notaccepting the certificates is that they do not comply with this contract.

84.2 Insurance policies include a waiver by the insurers of their subrogation rightsagainst directors and other employees of every insured except where there isfraud.

84.3 The Parties comply with the terms and conditions of the insurance policies.

84.4 Any amount not recovered from an insurer is borne by the Employer for eventswhich are at his risk and by the Contractor for events which are at his risk.

If the Contractor doesnot insure

8585.1 The Employer may insure a risk which this contract requires the Contractor to

insure if the Contractor does not submit a required certificate. The cost of thisinsurance to the Employer is paid by the Contractor.

Insurance by the Employer 8686.1 The Service Manager submits policies and certificates for insurances provided

by the Employer to the Contractor for acceptance before the starting date andafterwards as the Contractor instructs. The Contractor accepts the policiesand certificates if they comply with this contract.

86.2 The Contractor’s acceptance of an insurance policy or certificate provided bythe Employer does not change the responsibility of the Employer to providethe insurances stated in the Contract Data.

86.3 The Contractor may insure a risk which this contract requires the Employer toinsure if the Employer does not submit a required policy or certificate. Thecost of this insurance to the Contractor is paid by the Employer.

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9 Termination

Termination 9090.1 If either Party wishes to terminate the Contractor’s obligation to Provide the

Service, he notifies the Service Manager and the other Party giving details ofhis reason for terminating. The Service Manager issues a termination certifi-cate to both Parties promptly if the reason complies with this contract.

90.2 The Contractor may terminate only for a reason identified in the TerminationTable. The Employer may terminate for any reason. The procedures followed andthe amounts due on termination are in accordance with the Termination Table.

TERMINATION TABLE

Terminating Party Reason Procedure Amount due

The Employer A reason otherthan R1–R21

R1–R15 or R18

R17 or R20

R21

P1, P2 and P4

P1, P2, P3 and P4

P1 and P4

P1, P3 and P4

A1, A2 and A4

A1, A2 and A3

A1 and A2

A1 and A2

The Contractor R1–R10, R16 orR19

R17 or R20

P1, P2 and P4

P1, P2 and P4

A1, A2 and A4

A1 and A2

90.3 The procedures for termination are implemented immediately after the ServiceManager has issued a termination certificate.

90.4 Within thirteen weeks of termination, the Service Manager certifies a finalpayment to or from the Contractor which is the Service Manager’s assessmentof the amount due on termination less the total of previous payments.Payment is made within three weeks of the Service Manager’s certificate.

90.5 After a termination certificate has been issued, the Contractor does no furtherwork necessary to Provide the Service.

Reasons for termination 9191.1 Either Party may terminate if the other Party has done one of the following or

its equivalent.

. If the other Party is an individual and has

. presented his petition for bankruptcy (R1),

. had a bankruptcy order made against him (R2),

. had a receiver appointed over his assets (R3) or

. made an arrangement with his creditors (R4).

. If the other Party is a company or partnership and has

. had a winding-up order made against it (R5),

. had a provisional liquidator appointed to it (R6),

. passed a resolution for winding-up (other than in order to amalgamateor reconstruct) (R7),

. had an administration order made against it (R8),

. had a receiver, receiver and manager, or administrative receiverappointed over the whole or a substantial part of its undertaking orassets (R9) or

. made an arrangement with its creditors (R10).

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91.2 The Employer may terminate if the Service Manager has notified that theContractor has defaulted in one of the following ways and not put the defaultright within four weeks of the notification.

. Substantially failed to Provide the Service (R11).

. Not provided a bond or guarantee which this contract requires (R12).

. Appointed a Subcontractor for substantial work before the ServiceManager has accepted the Subcontractor (R13).

91.3 The Employer may terminate if the Service Manager has notified that theContractor has defaulted in one of the following ways and not stoppeddefaulting within four weeks of the notification.

. Substantially hindered the Employer or Others (R14).

. Substantially broken a health or safety regulation (R15).

91.4 The Contractor may terminate if the Employer has not paid an amount dueunder the contract within eleven weeks of the date that it should have beenpaid (R16).

91.5 Either Party may terminate if the Parties have been released under the lawfrom further performance of the whole of this contract (R17).

91.6 If the Service Manager has instructed the Contractor to stop or not to startany substantial work or all work and an instruction allowing the work to re-start or start has not been given within thirteen weeks,

. the Employer may terminate if the instruction was due to a default by theContractor (R18),

. the Contractor may terminate if the instruction was due to a default bythe Employer (R19) and

. either Party may terminate if the instruction was due to any other reason(R20).

91.7 The Employer may terminate if an event which the Parties could not reason-ably prevent has substantially affected the Contractor’s work for a continuousperiod of more than thirteen weeks (R21).

Procedures on termination 9292.1 On termination, the Employer may complete the service and may use any

Plant and Materials provided by the Contractor (P1).

92.2 The procedure on termination also includes one or more of the following asset out in the Termination Table.

P2 The Employer may instruct the Contractor to remove any Equipment,Plant and Materials and assign the benefit of any subcontract or othercontract related to performance of this contract to the Employer.

P3 The Employer may use any Equipment to which the Contractor has title tocomplete the service. The Contractor promptly removes the Equipmentwhen the Service Manager notifies him that the Employer no longerrequires it to complete the service.

P4 The Contractor provides to the Employer information and other thingswhich the Service Information states he is to provide at the end of theservice period.

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Payment on termination 9393.1 The amount due on termination includes (A1)

. an amount due assessed as for normal payments,

. the Defined Cost for Plant and Materials

. which have been delivered and retained by the Employer or

. which the Employer owns and of which the Contractor has to acceptdelivery,

. other Defined Cost reasonably incurred in expectation of completing thewhole of the service and

. any amounts retained by the Employer.

93.2 The amount due on termination also includes one or more of the following asset out in the Termination Table.

A2 The forecast Defined Cost of removing the Equipment.

A3 A deduction of the forecast of the additional cost to the Employer ofcompleting the whole of the service.

A4 The direct fee percentage applied to

. for Options A and C, any excess of the total of the Prices at the ContractDate over the Price for Services Provided to Date or

. for Option E, any excess of the first forecast of the Defined Cost for theservice over the Price for Services Provided to Date less the Fee.

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MAIN OPTION CLAUSES

Option A: Priced contract with price list


1111.2 (17) The Price for Services Provided to Date is the total of

. the Price for each lump sum item in the Price List which the Contractorhas completed and

. where a quantity is stated for an item in the Price List, an amount calcu-lated by multiplying the quantity which the Contractor has completed bythe rate.

(19) The Prices are the amounts stated in the Price column of the Price List.Where a quantity is stated for an item in the Price List, the Price is calculatedby multiplying the quantity by the rate.

Providing the Service 2020.5 The Contractor prepares forecasts of the final total of the Prices for the whole

of the service in consultation with the Service Manager and submits them tothe Service Manager. Forecasts are prepared at the intervals stated in theContract Data from the starting date until the end of the service period. Anexplanation of the changes made since the previous forecast is submittedwith each forecast.

The Contractor’s plan 2121.4 The Contractor provides information which shows how each item description

on the Price List relates to the operations on each plan which he submits foracceptance.

The Price List 5454.1 Information in the Price List is not Service Information.

54.2 If the Contractor changes a planned method of working at his discretion sothat the item descriptions on the Price List do not relate to the operations onthe Accepted Plan, he submits a revision of the Price List to the ServiceManager for acceptance.

54.3 A reason for not accepting a revision of the Price List is that

. it does not comply with the Accepted Plan,

. any changed Prices are not reasonably distributed between the items inthe Price List or

. the total of the Prices is changed.


6363.10 If the effect of a compensation event is to reduce the total Defined Cost and

the event is

. a change to the Service Information or

. a correction of an assumption stated by the Service Manager for assessingan earlier compensation event,

the Prices are reduced.

63.12 Assessments for changed Prices for compensation events are in the form ofchanges to the Price List.


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63.13 The cost of preparing quotations for compensation events is not included inthe assessment of compensation events.


6565.3 The changes to the Price List are included in the notification implementing a

compensation event.

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Option C: Target contract with price list


1111.2 (18) The Price for Services Provided to Date is the Defined Cost which the

Contractor has paid plus the Fee.

(20) The Prices are the amounts stated in the Price column of the Price List.Where a quantity is stated for an item in the Price List, the Price is calculatedby multiplying the quantity by the rate.

Providing the Service 2020.3 The Contractor advises the Service Manager on the practical implications of

the Accepted Plan and on subcontracting arrangements.

20.4 The Contractor prepares forecasts of the total Defined Cost for the whole ofthe service in consultation with the Service Manager and submits them to theService Manager. Forecasts are prepared at the intervals stated in theContract Data from the starting date until the end of the service period. Anexplanation of the changes made since the previous forecast is submittedwith each forecast.

The Contractor’s plan 2121.4 The Contractor provides information which shows how each item description

on the Price List relates to the operations on each plan which he submits foracceptance.

Subcontracting 2626.4 The Contractor submits the proposed contract data for each subcontract for

acceptance to the Service Manager if

. an NEC contract is proposed and

. the Service Manager instructs the Contractor to make the submission.

A reason for not accepting the proposed contract data is that its use will notallow the Contractor to Provide the Service.

Tests and inspections 4040.7 When the Service Manager assesses the cost incurred by the Employer in

repeating a test or inspection after a Defect is found, he does not include theContractor’s cost of carrying out the repeat test or inspection.

Assessing the amount due 5050.6 Payments of Defined Cost made by the Contractor in a currency other than the

currency of this contract are included in the amount due as payments to bemade to him in the same currency. Such payments are converted to thecurrency of this contract in order to calculate the Fee and any Contractor’sshare using the exchange rates.

Defined Cost 5252.2 The Contractor keeps these records

. accounts of payments of Defined Cost,

. proof that the payments have been made,

. communications about and assessments of compensation events forSubcontractors and

. other records as stated in the Service Information.

52.3 The Contractor allows the Service Manager to inspect at any time withinworking hours the accounts and records which he is required to keep.

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The Contractor’s share 5353.1 The Service Manager assesses the Contractor’s share of the difference

between the total of the Prices and the Price for Services Provided to Date.The difference is divided into increments falling within each of the shareranges. The limits of a share range are the Price for Services Provided to Datedivided by the total of the Prices, expressed as a percentage. The Contractor’sshare equals the sum of the products of the increment within each sharerange and the corresponding Contractor’s share percentage.

53.2 If the Price for Services Provided to Date is less than the total of the Prices,the Contractor is paid his share of the saving. If the Price for Services Providedto Date is greater than the total of the Prices, the Contractor pays his share ofthe excess.

53.3 At the dates stated in the Contract Data the Service Manager assesses theContractor’s share. This share is included in the next amount due following eachassessment. The Service Manager uses in his assessment the Price for ServicesProvided to Date and the total of the Prices for the work done at the date of theassessment.

The Price List 5454.1 Information in the Price List is not Service Information.

54.2 If the Contractor changes a planned method of working at his discretion sothat the item descriptions on the Price List do not relate to the operations onthe Accepted Plan, he submits a revision of the Price List to the ServiceManager for acceptance.

54.3 A reason for not accepting a revision of the Price List is that

. it does not comply with the Accepted Plan,

. any changed Prices are not reasonably distributed between the items inthe Price List or

. the total of the Prices is changed.


6363.11 If the effect of a compensation event is to reduce the total Defined Cost and

the event is

. a change to the Service Information, other than a change which theContractor proposed and the Service Manager has accepted or

. a correction of an assumption stated by the Service Manager for assessingan earlier compensation event,

the Prices are reduced.

63.12 Assessments for changed Prices for compensation events are in the form ofchanges to the Price List.


6565.3 The changes to the Price List are included in the notification implementing a

compensation event.

Payment on termination 9393.3 If there is a termination, the Service Manager assesses the Contractor’s share

after he has certified termination. His assessment uses, as the Price forServices Provided to Date, the total Defined Cost which the Contractor haspaid and which he is committed to pay for work done before termination. Theassessment uses as the total of the Prices

. the quantity of the work which the Contractor has completed for eachitem on the Price List multiplied by the rate and

. a proportion of each lump sum which is the proportion of the workcovered by the item which the Contractor has completed.

93.4 The Service Manager’s assessment of the Contractor’s share is added to theamount due to the Contractor on termination if there has been a saving ordeducted if there has been an excess.



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Option E: Cost reimbursable contract


1111.2 (18) The Price for Services Provided to Date is the Defined Cost which the

Contractor has paid plus the Fee.

(21) The Prices are the amounts stated in the Price column of the Price List.If no Price List is included, the Prices are the Defined Cost plus the Fee.

Providing the Service 2020.3 The Contractor advises the Service Manager on the practical implications of

the Accepted Plan and on subcontracting arrangements.

20.4 The Contractor prepares forecasts of the total Defined Cost for the whole ofthe service in consultation with the Service Manager and submits them to theService Manager. Forecasts are prepared at the intervals stated in theContract Data from the starting date until the end of the service period. Anexplanation of the changes made since the previous forecast is submittedwith each forecast.

Subcontracting 2626.4 The Contractor submits the proposed contract data for each subcontract for

acceptance to the Service Manager if

. an NEC contract is proposed and

. the Service Manager instructs the Contractor to make the submission.

A reason for not accepting the proposed contract data is that their use will notallow the Contractor to Provide the Service.

Tests and inspections 4040.7 When the Service Manager assesses the cost incurred by the Employer in

repeating a test or inspection after a Defect is found, he does not include theContractor’s cost of carrying out the repeat test or inspection.

Assessing the amount due 5050.7 Payments of Defined Cost made by the Contractor in a currency other than the

currency of this contract are included in the amount due as payments to bemade to him in the same currency. Such payments are converted to thecurrency of this contract in order to calculate the Fee using the exchangerates.

Defined Costs 5252.2 The Contractor keeps these records

. accounts of payments of Defined Cost,

. proof that the payments have been made,

. communications about and assessments of compensation events forSubcontractors and

. other records as stated in the Service Information.

52.3 The Contractor allows the Service Manager to inspect at any time withinworking hours the accounts and records which he is required to keep.


6565.4 The changes to the forecast amount of the Prices are included in the notifica-

tion implementing a compensation event.

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DISPUTE RESOLUTION

Option W1

Dispute resolution procedure (used unless United Kingdom Housing Grants, Construction and Regeneration Act1996 applies).

Dispute resolution W1W1.1 Any dispute arising under or in connection with this contract is referred to and

decided by the Adjudicator.

The Adjudicator W1.2 (1) The Parties appoint the Adjudicator under the NEC Adjudicator’s Contractcurrent at the starting date.

(2) The Adjudicator acts impartially and decides the dispute as an indepen-dent adjudicator and not as an arbitrator.

(3) If the Adjudicator is not identified in the Contract Data or if the Adjudicatorresigns or is unable to act, the Parties choose a new adjudicator jointly. If theParties have not chosen an adjudicator, either Party may ask the Adjudicatornominating body to choose one. The Adjudicator nominating body chooses anadjudicator within four days of the request. The chosen adjudicator becomesthe Adjudicator.

(4) A replacement Adjudicator has the power to decide a dispute referred tohis predecessor but not decided at the time when the predecessor resigned orbecame unable to act. He deals with an undecided dispute as if it had beenreferred to him on the date he was appointed.

(5) The Adjudicator, his employees and agents are not liable to the Parties forany action or failure to take action in an adjudication unless the action orfailure to take action was in bad faith.

The adjudication W1.3 (1) Disputes are notified and referred to the Adjudicator in accordance withthe Adjudication Table.



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ADJUDICATION TABLE

Dispute about Which Party mayrefer it to theAdjudicator?

When may it be referred to theAdjudicator?

An action of theService Manager

The Contractor Between two and four weeks afterthe Contractor’s notification of thedispute to the Employer and theService Manager, the notificationitself being made not more thanfour weeks after the Contractorbecomes aware of the action

The ServiceManager nothaving taken anaction

The Contractor Between two and four weeks afterthe Contractor’s notification of thedispute to the Employer and theService Manager, the notificationitself being made not more thanfour weeks after the Contractorbecomes aware that the action wasnot taken

A quotation for acompensationevent which istreated as havingbeen accepted

The Employer Between two and four weeks afterthe Service Manager’s notification ofthe dispute to the Employer and theContractor, the notification itselfbeing made not more than fourweeks after the quotation wastreated as accepted

Any other matter Either Party Between two and four weeks afternotification of the dispute to theother Party and the Service Manager

(2) The times for notifying and referring a dispute may be extended by theService Manager if the Contractor and the Service Manager agree to theextension before the notice or referral is due. The Service Manager notifiesthe extension that has been agreed to the Contractor. If a disputed matter isnot notified and referred within the times set out in this contract, neither Partymay subsequently refer it to the Adjudicator or the tribunal.

(3) The Party referring the dispute to the Adjudicator includes with his referralinformation to be considered by the Adjudicator. Any more information from aParty to be considered by the Adjudicator is provided within four weeks of thereferral. This period may be extended if the Adjudicator and the Parties agree.

(4) If a matter disputed by the Contractor under or in connection with asubcontract is also a matter disputed under or in connection with this contractand if the subcontract allows, the Contractor may refer the subcontract disputeto the Adjudicator at the same time as the main contract referral. TheAdjudicator then decides on the disputes together and references to the Partiesfor the purposes of the dispute are interpreted as including the Subcontractor.

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(5) The Adjudicator may

. review and revise any action or inaction of the Service Manager related tothe dispute and alter a quotation which has been treated as having beenaccepted,

. take the initiative in ascertaining the facts and the law related to thedispute,

. instruct a Party to provide further information related to the disputewithin a stated time and

. instruct a Party to take any other action which he considers necessary toreach his decision and to do so within a stated time.

(6) A communication between a Party and the Adjudicator is communicated tothe other Party at the same time.

(7) If the Adjudicator’s decision includes assessment of additional cost ordelay caused to the Contractor, he makes his assessment in the same way asa compensation event is assessed.

(8) The Adjudicator decides the dispute and notifies the Parties and theService Manager of his decision and his reasons within four weeks of the endof the period for receiving information. This four week period may be extendedif the Parties agree.

(9) Unless and until the Adjudicator has notified the Parties of his decision,the Parties and the Service Manager proceed as if the matter disputed wasnot disputed.

(10) The Adjudicator’s decision is binding on the Parties unless and untilrevised by the tribunal and is enforceable as a matter of contractual obligationbetween the Parties and not as an arbitral award. The Adjudicator’s decisionis final and binding if neither Party has notified the other within the timesrequired by this contract that he is dissatisfied with a decision of the Adjudi-cator and intends to refer the matter to the tribunal.

(11) The Adjudicator may, within two weeks of giving his decision to theParties, correct any clerical mistake or ambiguity.

Review by the tribunal W1.4 (1) A Party does not refer any dispute under or in connection with thiscontract to the tribunal unless it has first been referred to the Adjudicator inaccordance with this contract.

(2) If, after the Adjudicator notifies his decision a Party is dissatisfied, he maynotify the other Party that he intends to refer it to the tribunal. A Party may notrefer a dispute to the tribunal unless this notification is given within fourweeks of notification of the Adjudicator’s decision.

(3) If the Adjudicator does not notify his decision within the time provided bythis contract, a Party may notify the other Party that he intends to refer thedispute to the tribunal. A Party may not refer a dispute to the tribunal unlessthis notification is given within four weeks of the date by which the Adjudicatorshould have notified his decision.

(4) The tribunal settles the dispute referred to it. The tribunal has the powersto reconsider any decision of the Adjudicator and review and revise any actionor inaction of the Service Manager related to the dispute. A Party is not limitedin the tribunal proceedings to the information, evidence or arguments put tothe Adjudicator.

(5) If the tribunal is arbitration, the arbitration procedure, the place where thearbitration is to be held and the method of choosing the arbitrator are thosestated in the Contract Data.

(6) A Party does not call the Adjudicator as a witness in tribunal proceedings.



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Option W2

Dispute resolution procedure (used in the United Kingdom when the Housing Grants, Construction and RegenerationAct 1996 applies).

Dispute resolution W2W2.1 (1) Any dispute arising under or in connection with this contract is referred to

and decided by the Adjudicator. A Party may refer a dispute to the Adjudicatorat any time.

(2) In this Option, time periods stated in days exclude Christmas Day, GoodFriday and bank holidays.

The Adjudicator W2.2 (1) The Parties appoint the Adjudicator under the NEC Adjudicator’s Contractcurrent at the starting date.

(2) The Adjudicator acts impartially and decides the dispute as an indepen-dent adjudicator and not as an arbitrator.

(3) If the Adjudicator is not identified in the Contract Data or if the Adjudicatorresigns or becomes unable to act

. the Parties may choose an adjudicator jointly or

. a Party may ask the Adjudicator nominating body to choose an adjudi-cator.

The Adjudicator nominating body chooses an adjudicator within four days ofthe request. The chosen adjudicator becomes the Adjudicator.

(4) A replacement Adjudicator has the power to decide a dispute referred tohis predecessor but not decided at the time when his predecessor resigned orbecame unable to act. He deals with an undecided dispute as if it had beenreferred to him on the date he was appointed.

(5) The Adjudicator, his employees and agents are not liable to the Parties forany action or failure to take action in an adjudication unless the action orfailure to take action was in bad faith.

The adjudication W2.3 (1) Before a Party refers a dispute to the Adjudicator, he gives a notice ofadjudication to the other Party with a brief description of the dispute and thedecision which he wishes the Adjudicator to make. If the Adjudicator is namedin the Contract Data, the Party sends a copy of the notice of adjudication tothe Adjudicator when it is issued. Within three days of the receipt of the noticeof adjudication, the Adjudicator notifies the Parties

. that he is able to decide the dispute in accordance with the contract or

. that he is unable to decide the dispute and has resigned.

If the Adjudicator does not so notify within three days of the issue of thenotice of adjudication, either Party may act as if he has resigned.

(2) Within seven days of a Party giving a notice of adjudication he

. refers the dispute to the Adjudicator,

. provides the Adjudicator with the information on which he relies, includingany supporting documents and

. provides a copy of the information and supporting documents he hasprovided to the Adjudicator to the other Party.

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Any further information from a Party to be considered by the Adjudicator isprovided within fourteen days of the referral. This period may be extended ifthe Adjudicator and the Parties agree.

(3) If a matter disputed by the Contractor under or in connection with asubcontract is also a matter disputed under or in connection with thiscontract, the Contractor may, with the consent of the Subcontractor, refer thesubcontract dispute to the Adjudicator at the same time as the main contractreferral. The Adjudicator then decides the disputes together and references tothe Parties for the purposes of the dispute are interpreted as including theSubcontractor.

(4) The Adjudicator may

. review and revise any action or inaction of the Service Manager related tothe dispute and alter a quotation which has been treated as having beenaccepted,

. take the initiative in ascertaining the facts and the law related to thedispute,

. instruct a Party to provide further information related to the disputewithin a stated time and

. instruct a Party to take any other action which he considers necessary toreach his decision and to do so within a stated time.

(5) If a Party does not comply with any instruction within the time stated bythe Adjudicator, the Adjudicator may continue the adjudication and make hisdecision based upon the information and evidence he has received.

(6) A communication between a Party and the Adjudicator is communicated tothe other Party at the same time.

(7) If the Adjudicator’s decision includes assessment of additional cost ordelay caused to the Contractor, he makes his assessment in the same way asa compensation event is assessed. If the Adjudicator’s decision changes anamount notified as due, payment of the sum decided by the Adjudicator is duenot later than seven days from the date of the decision or the final date forpayment of the notified amount, whichever is the later.

(8) The Adjudicator decides the dispute and notifies the Parties and theService Manager of his decision and his reasons within twenty-eight days ofthe dispute being referred to him. This period may be extended by up tofourteen days with the consent of the referring Party or by any other periodagreed by the Parties. The Adjudicator may in his decision allocate his feesand expenses between the Parties.

(9) Unless and until the Adjudicator has notified the Parties of his decision,the Parties and the Service Manager proceed as if the matter disputed wasnot disputed.

(10) If the Adjudicator does not make his decision and notify it to the Partieswithin the time provided by this contract, the Parties and the Adjudicator mayagree to extend the period for making his decision. If they do not agree to anextension, either Party may act as if the Adjudicator has resigned.

(11) The Adjudicator’s decision is binding on the Parties unless and untilrevised by the tribunal and is enforceable as a matter of contractual obligationbetween the Parties and not as an arbitral award. The Adjudicator’s decisionis final and binding if neither Party has notified the other within the timesrequired by this contract that he is dissatisfied with a matter decided by theAdjudicator and intends to refer the matter to the tribunal.

(12) The Adjudicator may, within five days of giving his decision to the Parties,correct the decision to remove a clerical or typographical error arising byaccident or omission.



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Review by the tribunal W2.4 (1) A Party does not refer any dispute under or in connection with thiscontract to the tribunal unless it has first been decided by the Adjudicator inaccordance with this contract.

(2) If, after the Adjudicator notifies his decision a Party is dissatisfied, thatParty may notify the other Party of the matter which he disputes and state thathe intends to refer it to the tribunal. The dispute may not be referred to thetribunal unless this notification is given within four weeks of the notification ofthe Adjudicator’s decision.

(3) The tribunal settles the dispute referred to it. The tribunal has the powersto reconsider any decision of the Adjudicator and to review and revise anyaction or inaction of the Service Manager related to the dispute. A Party isnot limited in tribunal proceedings to the information or evidence put to theAdjudicator.

(4) If the tribunal is arbitration, the arbitration procedure, the place where thearbitration is to be held and the method of choosing the arbitrator are thosestated in the Contract Data.

(5) A Party does not call the Adjudicator as a witness in tribunal proceedings.

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SECONDARY OPTION CLAUSES

Option X1: Price adjustment for inflation (used only with Options A and C)

Defined terms X1X1.1 (a) The Base Date Index (B) is the latest available index before the base date.

(b) The Latest Index (L) is the latest available index before the date ofassessment of an amount due.

(c) The Price Adjustment Factor is the total of the products of each of theproportions stated in the Contract Data multiplied by (L – B)/B for the indexlinked to it.

Price Adjustment Factor X1.2 If an index is changed after it has been used in calculating a Price AdjustmentFactor, the calculation is repeated and a correction included in the nextassessment of the amount due.

Compensation events X1.3 The Defined Cost for compensation events is assessed using the

. Defined Cost current at the time of assessing the compensation eventadjusted to base date by dividing by one plus the Price AdjustmentFactor for the last assessment of the amount due and

. Defined Cost at base date levels for amounts calculated from rates andprices in the Price List.

Price adjustmentOption A

X1.4 Each amount due includes an amount for price adjustment which is the sumof

. the change in the Price for Services Provided to Date since the lastassessment of the amount due multiplied by the Price Adjustment Factorfor the date of the current assessment,

. the amount for price adjustment included in the previous amount dueand

. correcting amounts, not included elsewhere, which arise from changes toindices used for assessing previous amounts for price adjustment.

Price adjustmentOption C

X1.5 Each time the amount due is assessed, an amount for price adjustment isadded to the total of the Prices which is the sum of

. the change in the Price for Services Provided to Date since the lastassessment of the amount due multiplied by (PAF/(1+PAF)) where PAFis the Price Adjustment Factor for the date of the current assessmentand

. correcting amounts, not included elsewhere, which arise from changes toindices used for assessing previous amounts for price adjustment.


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Option X2: Changes in the law

Changes in the law X2X2.1 A change in the law of the country in which the Affected Property is located

is a compensation event if it occurs after the Contract Date. The ServiceManager may notify the Contractor of a compensation event for a change inthe law and instruct him to submit quotations. If the effect of a compensationevent which is a change in the law is to reduce the total Defined Cost, thePrices are reduced.

Option X3: Multiple currencies (used only with Option A)

Multiple currencies X3X3.1 The Contractor is paid in currencies other than the currency of this contract for

the items or activities listed in the Contract Data. The exchange rates areused to convert from the currency of this contract to other currencies.

X3.2 Payments to the Contractor in currencies other than the currency of thiscontract do not exceed the maximum amounts stated in the Contract Data.Any excess is paid in the currency of this contract.

Option X4: Parent company guarantee

Parent companyguarantee

X4X4.1 If a parent company owns the Contractor, the Contractor gives to the Employer

a guarantee by the parent company of the Contractor’s performance in theform set out in the Service Information. If the guarantee was not given by theContract Date, it is given to the Employer within four weeks of the ContractDate.

Option X12: Partnering


X12X12.1 (1) The Partners are those named in the Schedule of Partners. The Client is a

Partner.

(2) An Own Contract is a contract between two Partners which includes thisOption.

(3) The Core Group comprises the Partners listed in the Schedule of CoreGroup Members.

(4) Partnering Information is information which specifies how the Partnerswork together and is either in the documents which the Contract Data statesit is in or in an instruction given in accordance with this contract.

(5) A Key Performance Indicator is an aspect of performance for which atarget is stated in the Schedule of Partners.

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Actions X12.2 (1) Each Partner works with the other Partners to achieve the Client’s objectivestated in the Contract Data and the objectives of every other Partner stated inthe Schedule of Partners.

(2) Each Partner nominates a representative to act for him in dealings withother Partners.

(3) The Core Group acts and takes decisions on behalf of the Partners onthose matters stated in the Partnering Information.

(4) The Partners select the members of the Core Group. The Core Groupdecides how they will work and decides the dates when each member joinsand leaves the Core Group. The Client’s representative leads the Core Groupunless stated otherwise in the Partnering Information.

(5) The Core Group keeps the Schedule of Core Group Members and theSchedule of Partners up to date and issues copies of them to the Partnerseach time either is revised.

(6) This Option does not create a legal partnership between Partners who arenot one of the Parties in this contract.

Working together X12.3 (1) The Partners work together as stated in the Partnering Information and ina spirit of mutual trust and co-operation.

(2) A Partner may ask another Partner to provide information which he needsto carry out the work in his Own Contract and the other Partner provides it.

(3) Each Partner gives an early warning to the other Partners when hebecomes aware of any matter that could affect the achievement of anotherPartner’s objectives stated in the Schedule of Partners.

(4) The Partners use common information systems as set out in the Partner-ing Information.

(5) A Partner implements a decision of the Core Group by issuing instructionsin accordance with its Own Contracts.

(6) The Core Group may give an instruction to the Partners to change thePartnering Information. Each such change to the Partnering Information is acompensation event which may lead to reduced Prices.

(7) The Core Group prepares and maintains a timetable showing the proposedtiming of the contributions of the Partners. The Core Group issues a copy ofthe timetable to the Partners each time it is revised. The Contractor changeshis plan if it is necessary to do so in order to comply with the revised time-table. Each such change is a compensation event which may lead to reducedPrices.

(8) A Partner gives advice, information and opinion to the Core Group and toother Partners when asked to do so by the Core Group. This advice, informa-tion and opinion relates to work that another Partner is to carry out under itsOwn Contract and is given fully, openly and objectively. The Partners showcontingency and risk allowances in information about costs, prices and timingfor future work.

(9) A Partner notifies the Core Group before subcontracting any work.

Incentives X12.4 (1) A Partner is paid the amount stated in the Schedule of Partners if thetarget stated for a Key Performance Indicator is improved upon or achieved.Payment of the amount is due when the target has been improved upon orachieved and is made as part of the amount due in the Partner’s OwnContract.

(2) The Client may add a Key Performance Indicator and associated paymentto the Schedule of Partners but may not delete or reduce a payment stated inthe Schedule of Partners.

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Option X13: Performance bond

Performance bond X13X13.1 The Contractor gives the Employer a performance bond, provided by a bank or

insurer which the Service Manager has accepted, for the amount stated in theContract Data and in the form set out in the Service Information. A reason fornot accepting the bank or insurer is that its commercial position is not strongenough to carry the bond. If the bond was not given by the Contract Date, it isgiven to the Employer within four weeks of the Contract Date.

Option X17: Low service damages

Low service damages X17X17.1 If a part of the service does not meet the service level stated in the service

level table, the Contractor pays the amount of low service damages stated inthe service level table.

Option X18: Limitation of liability

Limitation of liability X18X18.1 The Contractor’s liability to the Employer for the Employer’s indirect or conse-

quential loss is limited to the amount stated in the Contract Data.

X18.2 For any one event, the liability of the Contractor to the Employer for loss of ordamage to the Employer’s property is limited to the amount stated in theContract Data.

X18.3 The Contractor’s liability to the Employer for Defects due to his design of anitem of Equipment is limited to the amount stated in the Contract Data.

X18.4 The Contractor’s total liability to the Employer for all matters arising under orin connection with this contract, other than the excluded matters, is limited tothe amount stated in the Contract Data and applies in contract, tort or delictand otherwise to the extent allowed under the law of the contract.

The excluded matters are amounts payable by the Contractor as stated in thiscontract for

. loss of or damage to the Employer’s property,

. low service damages if Option X17 applies,

. delay damages if Option X19 applies and

. Contractor’s share if Option C applies.

X18.5 The Contractor is not liable to the Employer for a matter unless it is notified tothe Contractor before the end of liability date.

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Option X19: Task Order


X19X19.1 (1) A Task is work within the service which the Service Manager may instruct

the Contractor to carry out within a stated period of time.

(2) A Task Order is the Service Manager’s instruction to carry out a Task.

(3) Task Completion is when the Contractor has done all the work in the Taskand corrected Defects which would have prevented the Employer or Othersfrom using the Affected Property and Others from doing their work.

(4) Task Completion Date is the date for completion stated in the Task Orderunless later changed in accordance with this contract.

Providing the Service X19.2 A Task Order includes

. a detailed description of the work in the Task,

. a priced list of items of work in the Task in which items taken from thePrice List are identified,

. the starting and completion dates for the Task,

. the amount of delay damages for the late completion of the Task and

. the total of the Prices for the Task when Option A or C is used or theforecast total of the Prices for the Task if Option E is used.

The Service Manager consults the Contractor about the contents of a TaskOrder before he issues it.

When a Task Order is issued

. the priced list of items for the Task is inserted in the Price List, and

. the work involved is added to the Service Information.

An instruction to carry out a Task is not a compensation event.

X19.3 The delay damages in a Task Order, if any, are not more than the estimatedcost to the Employer of late completion of the Task. If Task Completion is laterthan the Task Completion Date, the Contractor pays delay damages at therate stated in the Task Order from the Task Completion Date until TaskCompletion.

The Prices for items in the Task price list which are not taken from the PriceList are assessed in the same way as compensation events.

Time X19.4 The Contractor does not start any work included in the Task until the ServiceManager has instructed him to carry out the Task and does the work so thatTask Completion is on or before the Task Completion Date. No Task Order isissued after the end of the service period.

If Task Completion is after the end of the service period, the service period isextended until Task Completion. The Service Manager does not issue a TaskOrder during this extended period.

The Service Manager may issue an instruction changing a Task Order.

Task Order programme X19.5 The Contractor submits a Task Order programme to the Service Manager foracceptance within the period stated in the Contract Data.



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X19.6 The Contractor shows on each Task Order programme which he submits foracceptance

. the Task starting date and the Task Completion Date,

. planned Task Completion,

. the order and timing of the operations which the Contractor plans to doin order to complete the Task,

. provisions for

. float,

. time risk allowances,

. health and safety requirements and

. the procedures set out in this contract,

. the dates when, in order to Provide the Service in accordance with hisTask Order programme, the Contractor will need

. access to the Affected Property,

. acceptances,

. Plant and Materials, equipment and other things to be provided by theEmployer and

. information from Others,

. for each operation, a statement of how the Contractor plans to do thework identifying the principal Equipment and other resources which heplans to use and

. other information which the Service Information requires the Contractorto show on a Task Order programme submitted for acceptance.

X19.7 Within one week of the Contractor submitting a Task Order programme to himfor acceptance, the Service Manager either accepts the programme or notifiesthe Contractor of his reasons for not accepting it. A reason for not acceptingthe Task Order programme is that

. the Contractor’s plans which it shows are not practicable,

. it does not show the information which this contract requires or

. it does not comply with the Service Information.

Revising the Task Orderprogramme

X19.8 The Contractor shows on each revised Task Order programme

. the actual progress achieved on each operation and its effect upon thetiming of the remaining work,

. the effects of implemented compensation events,

. how the Contractor plans to deal with any delays and to correct notifiedDefects and

. any other changes which the Contractor proposes to make to the TaskOrder programme.

X19.9 The Contractor submits a revised Task Order programme to the ServiceManager for acceptance

. within the period for reply after the Service Manager has instructed himto and

. when the Contractor chooses to.

The latest programme accepted by the Service Manager supersedes previousaccepted programmes.

Compensation events X19.10 The following are compensation events.

(1) The Service Manager gives an instruction changing a Task Order.

(2) The Contractor receives the Task Order after the starting date stated inthe Task Order.

(3) The Employer does not provide the right of access to the Affected Propertyin accordance with the latest accepted Task Order programme.

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(4) The Employer does not provide something which he is to provide as statedin the Service Information in accordance with the latest accepted Task Orderprogramme.

(5) The Employer or Others do not work in accordance with the latestaccepted Task Order programme or within the conditions stated in the ServiceInformation.

(6) An event which

. stops the Contractor completing a Task or

. stops the Contractor completing a Task by the Task Completion Date,

and which

. neither Party could prevent,

. an experienced contractor would have judged at the date of issue of theTask Order to have such a small chance of occurring that it would havebeen unreasonable for him to have allowed for it and

. is not one of the other compensation events stated in this contract.

(7) A Task Completion Date is later than the end of the service period.

X19.11 If, due to the compensation event, planned Task Completion is delayed, thedelay to the Task Completion Date is stated in the Contractor’s quotation for theevent and a programme is submitted with details of the assessment of the delay.

Assessments of delay include time risk allowances and are based on theassumption that the Task Order programme can be changed and that delayswere or will be reasonably incurred.

A delay to the Task Completion Date is assessed as the length of time that,due the compensation event, planned Task Completion is delayed.

The Service Manager may assess the delay if, when the Contractor submitsquotations for a compensation event, the Contractor has not submitted a TaskOrder programme required by this contract.


X19.12 The changes to the calculated total of the Prices for the Task Order and anydelay to the Task Completion Date are included in the Service Manager’snotification implementing a compensation event.

Option X20: Key Performance Indicators (not used with Option X12)

Incentives X20X20.1 A Key Performance Indicator is an aspect of performance by the Contractor for

which a target is stated in the Incentive Schedule. The Incentive Schedule isthe incentive schedule unless later changed in accordance with this contract.

X20.2 From the starting date until the end of the service period, the Contractor reportsto the Service Manager his performance against each of the Key PerformanceIndicators. Reports are provided at the intervals stated in the Contract Dataand include the forecast final measurement against each indicator.

X20.3 If the Contractor’s forecast final measurement against a Key PerformanceIndicator will not achieve the target stated in the Incentive Schedule, hesubmits to the Service Manager his proposals for improving performance.

X20.4 The Contractor is paid the amount stated in the Incentive Schedule if the targetstated for a Key Performance Indicator is improved upon or achieved. Paymentof the amount is due when the target has been improved upon or achieved.

X20.5 The Employer may add a Key Performance Indicator and associated paymentto the Incentive Schedule but may not delete or reduce a payment stated inthe Incentive Schedule.



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OPTION Y

Option Y(UK)1: Project Bank Account

Definitions Y(UK)1Y1.1 (1) The Authorisation is a document authorising the project bank to make

payments to the Contractor and Named Suppliers.

(2) Named Suppliers are named suppliers and other Suppliers who havesigned the Joining Deed.

(3) Project Bank Account is the account used to receive payments from theEmployer and the Contractor and make payments to the Contractor andNamed Suppliers.

(4) A Supplier is a person or organisation who has a contract to

. provide part of the services,

. provide a service necessary to Provide the Services or

. supply Plant and Materials for the services.

(5) Trust Deed is an agreement in the form set out in the contract whichcontains provisions for administering the Project Bank Account.

(6) Joining Deed is an agreement in the form set out in the contract underwhich the Supplier joins the Trust Deed.

Project Bank Account Y1.2 The Contractor establishes the Project Bank Account with the project bankwithin three weeks of the Contract Date.

Y1.3 Unless stated otherwise in the Contract Data, the Contractor pays any chargesmade and is paid any interest paid by the project bank. The charges andinterest by the project bank are not included in Defined Cost.

Y1.4 The Contractor submits to the Service Manager for acceptance details of thebanking arrangements for the Project Bank Account. A reason for notaccepting the banking arrangements is that they do not provide for paymentsto be made in accordance with this contract. The Contractor provides to theService Manager copies of communications with the project bank in connec-tion with the Project Bank Account.

Named Suppliers Y1.5 The Contractor includes in his contracts with Named Suppliers the arrange-ments in this contract for the operation of the Project Bank Account and TrustDeed. The Contractor notifies the Named Suppliers of the details of the ProjectBank Account and the arrangements for payment of amounts due under theircontracts.

Y1.6 The Contractor submits proposals for adding a Supplier to the NamedSuppliers to the Service Manager for acceptance. A reason for not acceptingis that the addition of the Supplier does not comply with the Works Informa-tion. The Employer, the Contractor and the Supplier sign the Joining Deed afteracceptance.

Payments Y1.7 On or before each assessment date, the Contractor submits to the ServiceManager an application for payment, and shows in the application theamounts due to Named Suppliers in accordance with their contracts.

Y1.8 Within the time set out in the banking arrangements to allow the project bankto make payment to the Contractor and Named Suppliers in accordance withthe contract,

. the Employer makes payment to the Project Bank Account of the amountwhich is due to be paid under the contract and

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. the Contractor makes payment to the Project Bank Account of anyamount which the Employer has notified the Contractor he intends towithhold from the certified amount and which is required to makepayment to Named Suppliers.

Y1.9 The Contractor prepares the Authorisation, setting out the sums due toNamed Suppliers as assessed by the Contractor and to the Contractor for thebalance of the payment due under the contract. After signing the Authorisa-tion, the Contractor submits it to the Service Manager no later than four daysbefore the final date for payment. The Employer signs the Authorisation andsubmits it to the project bank no later than one day before the final date forpayment.

Y1.10 The Contractor and Named Suppliers receive payment from the Project BankAccount of the sums set out in the Authorisation as soon as practicable afterthe Project Bank Account receives payment.

Y1.11 A payment which is due from the Contractor to the Employer is not madethrough the Project Bank Account.

Effect of payment Y1.12 Payments made from the Project Bank Account are treated as payments fromthe Employer to the Contractor in accordance with this contract or from theContractor or Subcontractor to Named Suppliers in accordance with theircontracts as applicable. A delay in payment due to a failure of the Contractorto comply with the requirements of this clause is not treated as late paymentunder this contract.

Trust Deed Y1.13 The Employer, the Contractor and named suppliers sign the Trust Deed beforethe first assessment date.

Termination Y1.14 If the Service Manager issues a termination certificate, no further payment ismade into the Project Bank Account.



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Trust Deed

This agreement is made between the Employer, the Contractor and the NamedSuppliers.

Terms in this deed have the meanings given to them in the contract between. . . . . . . . . . . . . . . . . . . . . and . . . . . . . . . . . . . . . . . . . . . . . . for . . . . . . . . . . . . . . . . . . (the services).

Background

The Employer and the Contractor have entered into a contract for the services.

The Named Suppliers have entered into contracts with the Contractor or a Subcon-tractor in connection with the services.

The Contractor has established a Project Bank Account to make provision for paymentto the Contractor and the Named Suppliers.

Agreement

The parties to this deed agree that

. sums due to the Contractor and Named Suppliers and set out in the Authorisationare held in trust in the Project Bank Account by the Contractor for distribution tothe Contractor and Named Suppliers in accordance with the banking arrangementsapplicable to the Project Bank Account,

. further Named Suppliers may be added as parties to this deed with the agreementof the Employer and Contractor. The agreement of the Employer and Contractor istreated as agreement by the Named Suppliers who are parties to this deed,

. this deed is subject to the law of the contract for the services,

. the benefits under this deed may not be assigned.

Executed as a deed on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

by

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Employer)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Contractor)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Named Suppliers)

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Joining Deed

This agreement is made between the Employer, the Contractor and . . . . . . . . . . . . . . (theAdditional Supplier).

Terms in this deed have the meanings given to them in the contract between. . . . . . . . . . . . . . . . . . . . . and . . . . . . . . . . . . . . . . . . . . . . . . for . . . . . . . . . . . . . . . . . . (the services).

Background

The Employer and the Contractor have entered into a contract for the services.

The Named Suppliers have entered into contracts with the Contractor or a Subcon-tractor in connection with the services.

The Contractor has established a Project Bank Account to make provision for paymentto the Contractor and the Named Suppliers.

The Employer, the Contractor and the Named Suppliers have entered into a deed asset out in Annex 1 (the Trust Deed), and have agreed that the Additional Supplier mayjoin that deed.

Agreement

The Parties to this deed agree that

. the Additional Supplier becomes a party to the Trust Deed from the date set outbelow,

. this deed is subject to the law of the contract for the services,

. the benefits under this deed may not be assigned.

Executed as a deed on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

by

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Employer)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Contractor)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Additional Supplier)



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Option Y(UK)2: The Housing Grants, Construction and Regeneration Act 1996

Definitions Y(UK)2Y2.1 (1) The Act is the Housing Grants, Construction and Regeneration Act 1996

as amended by the Local Democracy, Economic Development and Construc-tion Act 2009.

(2) A period of time stated in days is a period calculated in accordance withSection 116 of the Act.

Dates for payment Y2.2 The date on which a payment becomes due is seven days after the assess-ment date.

The final date for payment is fourteen days or a different period for payment ifstated in the Contract Data after the date on which payment becomes due.

The Service Manager’s certificate is the notice of payment to the Contractorspecifying the amount due at the payment due date (the notified sum) andstating the basis on which the amount was calculated.

Notice of intention topay less

Y2.3 If either Party intends to pay less than the notified sum, he notifies the otherParty not later than seven days (the prescribed period) before the final datefor payment by stating the amount considered to be due and the basis onwhich that sum is calculated. A Party does not withhold payment of anamount due under this contract unless he has notified his intention to payless than the notified sum as required by this contract.

Suspension ofperformance

Y2.4 If the Contractor exercises his right under the Act to suspend performance it isa compensation event.

Option Y(UK)3: The Contracts (Rights of Third Parties) Act 1999

Third party rights Y(UK)3Y3.1 A person or organisation who is not one of the Parties may enforce a term of

this contract under the Contracts (Rights of Third Parties) Act 1999 only ifthe term and the person or organisation are stated in the Contract Data.

Option Z: Additional conditions of contract

Additional conditions ofcontract

Z1Z1.1 The additional conditions of contract stated in the Contract Data are part of

this contract.

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CONTRACT DATA

Part one – Data provided by the Employer

Completion of the data in full, according to the Options chosen, is essential tocreate a complete contract.

Statements given in allcontracts

1 General . The conditions of contract are the core clauses and the clauses for mainOption . . . . . , dispute resolution Option . . . . . and secondary Options . . . . .of the NEC3 Term Service Contract April 2013.

. The service is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The Employer is

Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The Service Manager is

Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The Adjudicator is

Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The Affected Property is

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The Service Information is in

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The language of this contract is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The law of the contract is the law of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The period for reply is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . weeks.

. The Adjudicator nominating body is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The tribunal is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


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. The following matters will be included in the Risk Register

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 Time . The starting date is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The service period is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 Payment . The assessment interval is . . . . . . . . . . . . . . . . . weeks (not more than five).

. The currency of this contract is the . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The interest rate is . . . . . .% per annum (not less than 2) above the . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . rate of the . . . . . . . . . . . . . . . . . . . . . . . bank.

8 Risks and insurance . The minimum amount of cover for insurance against loss of or damagecaused by the Contractor to the Employer’s property is . . . . . . . . . . . . . . . . .

. The minimum amount of cover for insurance in respect of loss of or damageto property (except the Employer’s property, Plant and Materials and Equip-ment) and liability for bodily injury to or death of a person (not an employeeof the Contractor) arising from or in connection with the Contractor’sProviding the Service for any one event is . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The minimum limit of indemnity for insurance in respect of death of orbodily injury to employees of the Contractor arising out of and in thecourse of their employment in connection with this contract for any oneevent is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Optional statements If the tribunal is arbitration

. The arbitration procedure is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The place where the arbitration is to be held is . . . . . . . . . . . . . . . . . . . . . . . .

. The person or organisation who will choose an arbitrator

. if the Parties cannot agree a choice or

. if the arbitration procedure does not state who selects an arbitrator is

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If no plan is identified in part two of the Contract Data

. The Contractor submits a first plan for acceptance within . . . . . . . . . . weeksof the Contract Date.

If the period in which payments are made is not three weeks and Y(UK)2 isnot used

. The period within which payments are made is . . . . . . . . . . . . . . . . . . . . . . . .

If Y(NZ)1 is used and the final date for payment is not 14 days after the datewhen payment is due

. The period for payment is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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If there are additional Employer’s risks

. These are additional Employer’s risks

1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If the Employer is to provide Plant and Materials

. The insurance against loss of or damage to Plant and Materials is toinclude cover for Plant and Materials provided by the Employer for anamount of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If the Employer is to provide any of the insurances stated in the InsuranceTable

. The Employer provides these insurances from the Insurance Table

1. Insurance against . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cover/indemnity is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The deductibles are. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .







If additional insurances are to be provided

. The Employer provides these additional insurances







. The Contractor provides these additional insurances







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If Option A is used

. The Contractor prepares forecasts of the final total of the Prices for thewhole of the service at intervals no longer than . . . . . . . . . . . . . . . . . . weeks.

If Option C is used

. The Contractor’s share percentages and the share ranges are

share range Contractor’s share percentage

less than . . . . . . . . . . . . . . . . . . . % . . . . . . . . . . . . . . . . . . . . . . . . . . . %

from . . . . . . . . . % to . . . . . . . . . % . . . . . . . . . . . . . . . . . . . . . . . . . . . %

from . . . . . . . . . % to . . . . . . . . . % . . . . . . . . . . . . . . . . . . . . . . . . . . . %

greater than . . . . . . . . . . . . . . . . % . . . . . . . . . . . . . . . . . . . . . . . . . . . %

. The Contractor’s share is assessed on (dates)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If Option C or E is used

. The Contractor prepares forecasts of the total Defined Cost for the whole ofthe service at intervals no longer than . . . . . . . . . . . . . . . . . . . . . . . . . weeks.

. The exchange rates are those published in . . . . . . . . . on . . . . . . . . . (date).

If Option X1 is used

. The proportions used to calculate the Price Adjustment Factor are

0. . . . . . . . . . . linked to the index for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0. . . . . . . . . . . non-adjustable———————1.00

. The base date for indices is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The indices are those prepared by . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


. The Employer will pay for the items or activities listed below in the currenciesstated

items and activities other currency total maximum paymentin the currency

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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. The exchange rates are those published in . . . . . . . . . . . . . . . . . . . . . . . . . . .

on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (date).


. The Client is

Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The Client’s objective is

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The Partnering Information is in

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


. The amount of the performance bond is . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


. The service level table is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


. The Contractor’s liability to the Employer for indirect or consequential loss islimited to

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. For any one event, the Contractor’s liability to the Employer for loss of ordamage to the Employer’s property is limited to . . . . . . . . . . . . . . . . . . . . . . .

. The Contractor’s liability for Defects due to his design of an item ofEquipment is limited to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The Contractor’s total liability to the Employer for all matters arising underor in connection with this contract, other than the excluded matters, islimited to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The end of liability date is . . . . . . . years after the end of the service period.


. The Contractor submits a Task Order programme to the Service Managerwithin . . . . . . . . . . . . . . . . days of receiving the Task Order.



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If Option X20 is used (but not if Option X12 is also used)

. The incentive schedule for Key Performance Indicators is in . . . . . . . . . . . . .

. A report of performance against each Key Performance Indicator is providedat intervals of . . . . . . . . . . . . . . . months.

If Option Y(UK)1 is used and the Employer is to pay any charges made and ispaid any interest paid by the project bank

. The Employer is to pay any charges made and is paid any interest paid bythe project bank.

If Option Y(UK)3 is used

. term person or organisation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If Options Y(UK)1 and Y(UK)3 are both used

. term person or organisation

The provisions of Option Y(UK)1 Named Suppliers

If Option Z is used

. The additional conditions of contract are . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Part two – Data provided by the Contractor

Completion of the data in full, according to the Options chosen, is essential tocreate a complete contract.

Statements given in allcontracts

. The Contractor is

Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The direct fee percentage is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %.

. The subcontracted fee percentage is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %.

. The key people are

(1) Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. The following matters will be included in the Risk Register. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Optional statements If the Contractor is to provide Service Information for his plan

. The Service Information for the Contractor’s plan is in . . . . . . . . . . . . . . .

If a plan is identified in the Contract Data

. The plan identified in the Contract Data is . . . . . . . . . . . . . . . . . . . . . . . . . .

If Option A, C or E is used

. The price list is. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If Option A or C is used

. The tendered total of the Prices is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If Option Y(UK)1 is used

. The project bank is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. named suppliers are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



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Index by clause numbers (Option clauses indicated by their letters, main clause heads by bold numbers).Terms in italics are identified in Contract Data, and defined terms have capital initial letters.

acceptanceAccepted Plan 64.1, A54.2conditions of subcontract 26.3contract data for subcontract C26.4, E26.4Contractor’s communication 13.4, 13.8, 14.1Contractor’s plan 21.1�3, C21.4Defects 43, 60.1(1)(8)Equipment design 23.1form of communication 13.1insurance policies/certificates 84.1, 86.1, 86.2quotations 43.1, 60.1(8), 62.3, 65.1reasons for withholding 13.4, 13.8, 21.3, 23.1,

24.1, 26.2�3, 60.1(8), 84.1, 86.1, A54.3,C26.4, E26.4, X13.1

replacement Contractor’s employee 24.1subcontract conditions 26.3Subcontractor 26.2, 91.2Task Order programme X19.6, X19.7

Accepted Plan 62.2and assessment of amount due 50.3changes 63.8, A54.2compensation events 62.2, 64.1Contract Data 11.2(1)Contractor’s 21dates/times 60.1(2)(3)definition 11.2(1)and Price List C21.4, C54.2, C54.3Providing the Service E20.3revised 62.2, A54.2�3Service Manager A54.2

access 15, 27.2, 31, 42.2to Affected Property 15.1, 31.1, 60.1(2), X19.6

accounts and records, Contractor’s C52.2, C52.3,E52.2, E52.3

actions 10, 14risk reduction meeting 16.3

ActsContracts (Rights of Third Parties) (1999) Y(UK)3Housing Grants, Construction and Regeneration

(1996) as amended by the Local Democracy,Economic Development and Construction Act2009 W1, W2, Y(UK)2

additional conditions of contract Z1address for communications 13.2adjudication

dispute resolution W1.3(1�11), W2.3(1�12)timings W1.3(8), W1.3(11), W2.3(2)(8)(11�12)

Adjudication Table W1.3(1)Adjudicator

decisions 51.3dispute resolution W1.2(1�5), W2.2(1�5)nominating body W1.2(3), W2.2(3)not arbitrator W1.2(2), W2.2(2)replacement W1.2(4), W2.2(4)

resignation of W1.2(3)tribunal W1.3(2)(10), W2.3(11)tribunal reviews W1.4(1�4)(6), W2.4(1�3)(5)

administration order 91.1advanced payment 93.1Affected Property

access 15.1, 31.1, 60.1(2), X19.6definition 11.2(2)location X2.1loss/damage/wear 80.1and risks 80.1sharing with Others 25.1starting of work 30.1

agents of Adjudicator W1.2(5), W2.2(5)agreement, Parties/Party 12.4ambiguities 17, 63.9amount due

adjustment for inflation X1.1(b), X1.2, X1.4, X1.5and advanced payment repayment 93.1assessing 50, 51.1, 51.3, 90.4, 93.1, C50.6,

C53.3, E50.7, X1.1(b), X1.2, X1.4correction of assessment 50.5, 51.3, X1.2definition 50.2payment 51.1, 51.3retention in 93.1on termination 90.2, 90.4, 93.1, 93.2

amount retained 50.3applicable law 23.1, 83.2

tests and inspections 40.1approval from Others, Contractor’s responsibility 27.1arbitration procedure W1.4(5), W2.4(4)arrangement with creditors 91.1assessment

Adjudicator W1.3(7), W2.3(7)amount due 50, 51.1, 51.3, 90.4, 93.1, C50.6,

C53.3, E50.7, X1.1(b), X1.2, X1.4, X1.5compensation events 62.2�3, 63, 64, 65.1�2,

A63.10, A63.12, C52.2, C63.11�12, E52.2,X1.3

Contractor’s share C53.1, C53.3, C93.3, C93.4interest 51.2, 51.3tests/inspections cost 40.6

assessment date 50.1, 50.4, 51.1�2assessment interval 50.1assignment of benefit 92.2Authorisation

Project Bank Account Y1.1(1), Y1.9

bank bonds X13.1bankruptcy 91.1base date X1.1(a), X1.3Base Date Index X1.1(a)binding decisions, Adjudicator W1.3(10), W2.3(11)bodily injury 83.1, 83.3



bond(s) 91.2, X13.1breach of contract 60.1(14)breach of statutory duty 80.1

calculationsassessment of compensation events for

Subcontractors C52.2, E52.2Defined Cost 11.2(8), 63.2Fees 11.2(8), 63.2, 93.2, C50.6, E50.7Price Adjustment Factor(s) X1.2Prices/prices 63.1, A11.2(19)

certificate(s)/certificationcommunication of 13.1, 13.6payment 50.5, 51.1�3, 90.4, 91.4termination 90.1, 90.3, 90.5, C93.3

changed decision(s) 60.1(7), 61.1�3change(s) to Affected Property, compensation events

60.1(10)change(s) in forecast Prices due to compensation

events E65.4change(s) in the law X2change(s) to planned method, Price List A54.2change(s) in Price List A65.3, C54.2, C63.12change(s) of Prices due to compensation events 62.2,

63.2, A63.12, C63.11, C65.3change(s) as result of Providing the Service,

compensation events 60.1(10)change(s) in Service Information 14.3, 18.1, 43.1,

60.1(1), 63.9civil commotion/war risks 80.1claims

Employer’s risk 80.1indemnity against 82.1, 82.2

co-operation 25with Others 25.1and trust 10.1, 26.3

communications 13and acceptance of submission 13.4, 13.8, 14.1address to which sent 13.2Adjudicator W1.3(6), W2.3(6)assessment of compensation events for

Subcontractors C52.2, E52.2certificate(s) 13.6form defined 13.1language for 13.1notification(s) 13.7period for reply 13.3, 13.5receipt of 13.2time allowed for reply 13.3, 13.5, 60.1(6)time when effective 13.2

compensationEmployer’s risk 80.1see also indemnity

compensation events 60�5amount due affected by 51.3assessing 62.2�3, 63, 64, 65.1�2, A63.10,

A63.12, C52.2, C63.11�12, E52.2, X1.3assumptions made 60.1(13), 61.6, 63.8, 65.2change(s) to Affected Property 60.1(10)change(s) of Price List A65.3change(s) as result of Providing the Service 60.1(10)Contractor 60.1(1)(7), 61.1�6

and Defined Cost 61.4definitions 13.8, 60.1, X2.1implementing 65, A65.3, C65.3, E65.4notifying 61, A65.3, X2.1

cost of preparing quotations A63.13performance suspension Y2.4Price change notification 61.3Prices affected by 62.2, 63.1�2, A63.10, C65.3,

X2.1Prices not affected by 61.4quotations 61.4, 61.5, 62, 64.1, 64.2�3, 65.1,

X2.1and Service Manager 61.1�6Service Manager’s assessments 64, A63.10

completing whole of service 92.1, 93.2, C20.4, E20.4conditions of contractadditional Z1.1interpretation 12.3for subcontract 26.3

Contract Data/contract dataAccepted Plan 11.2(1)addresses for communications 13.2Adjudicator identified W1.2(3), W2.2(3)conditions of contract Z1.1currencies for payment X3.1, X3.2documents referred to in 11.2(2)Employer’s risks 80.1end of service period A20.5forecasts of Defined Cost E20.4insurance 83.1, 86.2low service damages X17.1named key person 24.1payment period 51.2performance bond X13.1price adjustment for inflation X1.1(c)service level X17.1starting date A20.5for subcontract C26.4, E26.4Task Order programme X19.5terms identified 11.1third party rights Y3.1

Contract Date 11.2(3), X4.1, X13.1Project Bank Account Y1.2

Contractoracceptance of communication/proposal/submission

13.4, 13.8, 14.1, 21.2, 86.2Accepted Plan 50.3, 62.2, 64.1access 27.2, 31.1, 42.2accounts and records C52.2�3, E52.2, E52.3actions 10.1adjudication W1.3(1�2)(4), W2.3(3)(7)advice to Service Manager C20.3, E20.3and ambiguities/inconsistencies 17.1amount due to be paid to 50.2�4, 51.1approval from Others 27.1assessment of compensation events 62.2, 64.1certificates issued to 13.6co-operation 10.1, 25.1�2compensation events 60.1(1), 61.1�6, 62.2costs 52.1, C40.7decisions communicated to 60.1(7)default(s) 91.2, 91.3, 91.6

Index®



Contractor (continued)Defect(s) acceptance/non-correction 43.1Defect(s) correction 42.1�3delivery of Plant and Materials 41.1, 93.1early warning 16.1, 16.2, 63.6Equipment 11.2(7), 92.2facilities and services provided/paid for by 40.2fault 61.1, 61.4forecasts A20.5health and safety 27.4illegal/impossible requirements 18.1implementing compensation events 65.1, E65.4indemnity 82.1instruction(s) 14.3, 24.2, 27.3, 32.1, 61.2,

61.4�6, 62.1, 62.3�4, 86.1, 91.6, C26.4,E26.4, X2.1

insurance 83.1�2, 84.1, 84.3�4, 85.1, 86.1�3Key Performance Indicators X20.1�4leaving Affected Property 92.2liabilities 14.1, 61.4liability limitation X18low service damages X17.1method of working C54.2notification of compensation events 61.1�6, X2.1notified of delegate for Service Manager 14.2notified of replacement for Service Manager 14.4obligations 91.2parent company guarantee X4.1as Party to contract 11.2(10)payment(s) 40.6, 51.1, 85.1, C50.6, C52.2,

E50.7, E52.2, X3.1, X3.2performance bond X13.1period for reply 13.3�5Plant and Materials 27.2, 41.1, 80.1, 92.2, 93.1Price List C54.2proposed instruction/changed-decision 61.2Project Bank Account Y(UK)1providing Employer with information 92.2Providing the Service A20.5, X19.2�4quotations 43.1, 62.1�5, 64.1reaction to compensation event 63.8reply to communication 13.3�5, 60.1(6),

62.3�6responsibilities 14.1, 20�7, A20.5, C20.3�4,

C26.4, E20.3�4, E26.4revising Task Order programme X19.8�9rights to change 63.5Risk Register revision 16.4risks 63.7, 81, 83.2, 84.4Service Information 11.2(15), 14.3starting/stopping work 30.1, 32.1, 91.6subcontract contract data C26.4, E26.4subcontracted work E20.3Subcontractor 11.2(16), 26.1, 26.2take over of service 80.1Task Order programme X19.5�7Task Order programme revision X19.8�9termination 80.1, 90.2, 90.4�5, 91.2, 91.4,

91.6�7tests and inspections 40.2�4, 40.6, 41.1, C40.7use of equipment, Plant and Materials 70.1work termination 91.7

Contractor’s designand Equipment design 23.1liability of Contractor 14.1

Contractor’s employees 24.1insurance 83.1removing 24.2

Contractor’s information, Price List A21.4Contractor’s plan 21, A21

acceptance 21.1�3Price List C21.4revision 22and Service Information 21.2, 60.1(1)submission 21.1, C21.4

Contractor’s share C50.6, C53, C93.3, C93.4Contractor’s share percentage C53.1Contracts (Rights of Third Parties) Act (1999)

Y(UK)3Core Group X12.2(3�5)correcting

assessment of amount due 50.5, 51.3, X1.2assumptions about compensation events 60.1(13),

61.6Defects 40.4, 42

cost allowances 63.7costs

Contractor 52.1, C40.7due to Adjudicator’s/tribunal’s decision 51.3Employer’s risk 80.1indemnity against 82.1, 82.2insurance 85.1, 86.3test/inspection repeat 40.6see also excess costs

creditors, arrangement made with 91.1currency of this contract 51.1, C50.6, E50.7, X3.1,

X3.2

damage(s)Employer’s risk 80.1Equipment, Plant and Materials 80.1insurance against 83.1Plant and Materials 80.1

death insurance 83.1decision(s)

Adjudicator or tribunal 51.3assessment date 50.1and compensation events 60.1(7), 61.1, 61.4�6risk reduction meeting 16.4Service Manager 50.1, 60.1(7), 61.1�2, 61.4�6,

63.6, 64.1default(s)

Contractor’s 91.2, 91.3, 91.6Employer’s 91.6

Defect(s)accepting 43, 60.1(1)(8)Contractor’s liability X18correcting 42definition 11.2(4)liability limitation X18.3notifying 11.2(6), 42.1and tests/inspections 40.4, 40.6uncorrected 43.1, 60.1(8)see also tests/testing

®




Defined Cost 52in amount due on termination 93.1, 93.2and compensation events 61.4, 63.2�4, 63.8,

A63.10, C63.11, X1.3, X2.1definition(s) 11.2(5)and Fee calculation 11.2(8), 63.2forecast C20.4, E20.4payments made by Contractor C50.6, C52.2, E50.7,

E52.2Price for Services Provided to Date C11.2(18)

defined terms 11, X1Delay/delay

damages X19.3early warning to be given 16.1and tests/inspections 40.5, 60.1(9)

delegation by Service Manager 14.2delivery, testing and inspection before 41design

Contractor’s 14.1, 23.1Employer’s 80.1of Equipment 23

determination of contract 91.5Disallowed Cost

Defined Cost 11.2(5)definition(s) 11.2(6)

discounts, deduction from prices 52.1dispute resolution

unless UK Housing Grants, Construction andRegeneration Act (1996) as amended by theLocal Democracy, Economic Development andConstruction Act 2009 applies W1

when UK Housing Grants, Construction andRegeneration Act (1996) as amended by theLocal Democracy, Economic Development andConstruction Act 2009 applies W2

early warning 16effects 16.1responsibility 16.1, 61.5, 63.6Risk Register 16.1, 16.3�4

Effect of paymentProject Bank Account Y1.12

employeesof Adjudicator W1.2(5), W2.2(5)Contractor 24.1, 24.2, 83.1

EmployerAccepted Plan 31.1, 60.1(2)(3)(5)access 42.3access rights 15.1actions 10.1adjudication W1.3(1)Affected Property 11.2(2)allowing access to Affected Property 31.1,

60.1(2)amount due to be paid by 50.2, 51.1at end of service period 70.2breach of contract by 60.1(14)certificates issued to 13.6co-operation 10.1, 25.2compensation events 60.1(1�3)(5)(11)(12)(14),

X19.10(3�5)completion of service on termination 93.1, 93.2

Contractor’s parent company guarantee X4.1dates 60.1(2)(3)default 91.6Defect(s) correction 42.1�2equipment, Plant and Materials at end of service

period 70.2facilities and services provided by 40.2fault 80.1hindered by Contractor 91.3indemnity 82.1insurance 83.1, 84.4, 85.1, 86Key Performance Indicators X20.5as Party to contract 11.2(10)payments by 51.1performance bond X13.1Plant and Materials 80.1Project Bank Account Y1.1(3), Y1.6, Y1.8, Y1.9,

Y1.11, Y1.13providing access 15.1providing things in Service Information 15.2replacement of Service Manager 14.4responsibilities 82.2, 86.2rights of access 15.1rights to change 63.5risks 60.1(12), 80, 81.1, 82.2, 84.4Service Information 60.1(1)(5)(11)take over of service 80.1termination 80.1, 90.2, 91.2�3, 91.6�7, 92.1�2,

93.1�2tests and inspections 40.2, 40.6, C40.7title to Equipment, Plant and Materials 93.1use of service by 11.2(2)working with 25

end of service period A20.5, C20.4Equipment/equipment 70damage 80.1, 83.1definition 11.2(7)design of 23left on Affected Property 80.1liability limitation X18.3loss 80.1, 83.1removal of 92.2, 93.2Task Order programme X19.6termination 92.2title to 92.2use by Employer 92.2wear 80.1, 83.1see also Plant and Materials

errors, Adjudicator W1.3(11)events not preventable, termination 91.7excess costs, Contractor’s share C53.2exchange rates C50.6, E50.7, X3.1experienced contractor, and compensation events

61.5, 63.6extension of time for decision/quotation/reply 13.5,

62.5

facilities and services, for tests/inspections 40.2failure to pay in time, actions to be taken 91.4fault ofContractor 61.1, 61.4Employer or his design 80.1

Index®



Feecalculation(s) 11.2(8), 63.2, 93.2, C50.6, E50.7see also payment(s)

fee percentage 11.2(8), 93.2forecasts 61.6, 63.2, 65.2, 93.2, A20.5, C53.3,

E20.4, E65.4Defined Cost C20.4total of the Prices A20.5

form of communications 13.1fraud, and insurance 84.2

guarantee(s) 91.2, X4.1

health and safetyContractor 27.4regulation(s) 91.3Service Information 27.4

Housing Grants, Construction and Regeneration Act(1996) as amended by the Local Democracy,Economic Development and Construction Act2009 W1, W2, Y(UK)2

identified terms 11illegal requirements 18implementing compensation events 65, A65.3, C65.3,

E65.4impossible requirements 18Incentive Schedule X20.1, X20.3�5incentive schedule X20.1incentives X20.1�5

Partnering X12.4inconsistencies 17, 63.9indemnity 82

see also compensationinformation

later recorded 65.2in Price List A54.1, C54.1provided to Others 25.1see also Service Information

injury insurance 83.1inspection(s) 40, 60.1(9)

before delivery 41Contractor’s cost C40.7

instruction(s)compensation events resulting 60.1(1)(4), 61.1to Contractor 27.3form of communication 13.1insurance 86.1quotation(s) to be submitted 61.1�2, 61.5�6,

62.1, 62.3�4, 64.1, X2.1to remove Contractor’s employee 24.2on resolution of ambiguities and inconsistencies 17.1to stop/not start work 32, 60.1(4), 91.6and termination 91.6, 92.2that change Service Information 14.3, 18.1, 43.1,

60.1(1), 63.9insurance

certificates 84.1, 85.1, 86.1�3cover 83by Employer 83.1, 84.4, 85.1, 86policies 84, 85.1, 86.1�3signatories 84.1

Insurance Table 83.1, 83.3insurer(s) 84.2, 84.4, X13.1

bonds X13.1insurrection, risks due to 80.1interest

assessment of 51.2, 51.3compound calculation 51.4on late payment 51.2and payment certificate(s) 51.3

interest rate 51.4interpretation

compensation event 63.9conditions of contract 12.3legal 12

Key Performance Indicators X20definition X12.1(5)Partnering X12.4(1�2)

key person 24.1

Joining DeedProject Bank Account Y1.1(2), Y1.1(6),

Y1.6

language of communications 13.1language of this contract 13.1late payment(s) 51.2�3later recorded information 65.2Latest Index X1.1(b)law

changes in X2and Defect(s) 11.2(4)interpretation 12release of Party from contract 91.5tax(es) 50.2tests and inspections 40.1see also Acts

law of the contract 12.2liability limitation X18.4

legal rights, interference with 80.1liability

Contractor’s design 14.1and insurance 83.2limitation X18reduction 82.2

liquidator for company/partnership 91.1loss risks 80.1, 83.1low service damages X17lump sum(s) A11.2(17), C93.3

materialsaccess to 27.2tests and inspections 40.2, 41.1see also Plant and Materials

method of working C54.2military power, risks due to 80.1mistake(s), assessment of amount due 51.3multiple currencies X3

named person 24.1named suppliers

Project Bank Account Y1.1(2), Y1.13

®




Named SuppliersProject Bank Account Y(UK)1

NEC contract 26.3, C26.4, E26.4negligence 80.1nominating body, Adjudicator W1.2(3), W2.2(3)notification

acceptance of quotation(s) 62.3, 65.1adjudication W1.3(1�2)(8�9), W2.3(1�2)(8�9)ambiguities/inconsistencies 17.1assessment of compensation event 62.3, 64.2,

65.1change(s) of Price List A65.3communication of 13.1, 13.7compensation events and assumptions 60.1(13),

61Contractor’s default 91.2, 91.3delegate for Service Manager 14.2illegal/impossible requirements 18.1implementing compensation events C65.3, E65.4proposed instruction/changed-decision 61.2,

62.3replacement of Service Manager 14.4Service Manager’s assessment 64.2, 65.1Service Manager’s decision(s) 63.6, 64.1termination 90.1tests and inspections 40.3, 41.1

observing tests 40.3open market prices 52.1Others (other people)

and Accepted Plan 60.1(5)approval by 27.1at risk reduction meeting 16.2co-operation with 25.1definition 11.2(9)hindered by Contractor 91.3Plant and Materials supplied by 80.1and Service Information 60.1(5)working with 25

Own Contract, definition X12.1(2)

parent company guarantee X4Parties/Party

adjudication W2.3(1�2)(4�6)(8�12)Adjudicator’s communications W1.3(6), W2.3(6)Adjudicator’s instructions W1.3(5), W2.3(4)agreement 12.4compensation event assessment 63.9to contract 11.2(10)and determination 91.5indemnity liability 82.1, 82.2insurance 83.2, 84.3Service Information provision 63.9to subcontract 26.3and termination 90.1, 91.1third party rights Y3.1tribunal reviews W1.4(1�4), W2.4(1�3)(5)use of equipment, Plant and Materials 70

Partnering X12actions X12.2change of information X12.3(6)Core Group X12.2(3�5)

defined terms X12.1early warning X12.3(3)incentives X12.4Information X12.1(4), X12.3(1)Key Performance Indicators X12.4(1�2)Own Contract X12.1(2)representatives X12.2(2)subcontracting X12.3(9)timetable X12.3(7)

payment(s) 51advanced 93.1certified 50.5, 51.1�3, 90.4Contractor 40.6, 51.1, 85.1, C50.6, C52.2, E50.7,

E52.2, X3.1�2dates Y2.2Employer’s insurance 86.3Housing Grants, Construction and Regeneration Act

(1996) as amended by the Local Democracy,Economic Development and Construction Act2009 Y2.2�3

interest 51.4late 51.2�3not made 91.4notice of intention Y2.3Project Bank Account Y1.7, Y1.8, Y1.9, Y1.10,

Y1.11, Y1.12taxes 50.2on termination 93, C93.3time to be made 51.2withholding Y2.3

payment certificate 50.5, 51.1, 51.3, 91.4payment clauses, 50�2people 24see also employees; Others

performance bond X13performance impairment see low serviceperformance indicators X20performance reports X20.2performance suspension Y2.4period for reply 13.3�5, X19.9personal injury 83.1see also insurance

plans see Accepted PlanPlant and Materialsaccess to 27.2definition 11.2(11)loss of or damage to 80.1, 83.1not used to Provide the Service 11.2(6)removal of 92.2replacement 83.1Task Order programme X19.6and termination 92.1, 93.1testing/inspection before delivery 41.1title 92.1, 93.1use of 70see also Equipment

Price Adjustment Factor(s) X1assessment of compensation events X1.3calculation of X1.2definition X1.1(c)price adjustment use X1.4, X1.5

price list 11.2(12)

Index®



Price List A54, C54agreeing rates and Prices 63.3as basis for compensation event assessment 63.3,

C63.12change(s) A54.2, A63.12and compensation events 63.1, 63.3, C63.12,

X1.3Contractor’s information A21.4, C21.4definition 11.2(12)information A54.1lump sum(s) A11.2(17)price adjustment for inflation X1.3Providing the Service X19.3quantities of work 63.1reasons for not accepting A54.3revised A54.2�3, C54.2, C54.3

Price for Services Provided to Dateadjustment for inflation X1.4, X1.5and assessment of amount due 50.2, 50.3, 93.2,

C93.3and assessment of Contractor’s share C53.1�3definition(s) A11.2(17), C11.2(18), E11.2(18)

Prices/pricesand Accepted Plan A54.2�3calculation 63.1, A11.2(19)and compensation events 61.4, 62.2, 63.1�5,

A63.10, A63.12, A65.3, C63.12, C65.3,E65.4, X2.1

competitively tendered/open market 52.1Contractor’s share C53.1�3definition(s) A11.2(19), C11.2(20), E11.2(21)early warning of possible increase 16.1if Defect(s) uncorrected/accepted 43.1implementing compensation events X19.12notification of compensation events 61.3Providing the Service X19.3reduction 63.4rights to change 63.5and termination 93.2, C93.3

procedures, termination 90.2, 90.3, 92proceedings

Employer’s risk 80.1indemnity against 82.1, 82.2

Project Bank Account Y(UK)1property, loss or damage 83.1proposal(s)

Defect(s) acceptance/non-correction 43.1form of communication 13.1risk reduction meeting 16.3, 16.4

proposed instruction/changed decision 61.2, 62.3Providing the Service 20, A20

Contractor’s responsibilities 11.2(7)(15), 14.1,20.1, 23.1, 26.3, A20.1, C20.3�4, C26.4,E20.3�4, E26.4

and equipment 11.2(7), 23.1failure 91.2meaning of term 11.2(13)and Service Information 11.2(15), 20.1Task Order X19.2�4

quotationsacceptance of 43.1, 60.1(8), 62.3, 65.1

for compensation events 61.4, 61.5, 62, 64.1�3,65.1, X2.1

if Defect(s) accepted 43.1, 60.1(8)for proposed instruction/changed decision 61.2revised 62.3, 62.4, 64.1

radioactive contamination 80.1rates, in Price List X1.3rebates, deduction from prices 52.1rebellion, risks due to 80.1receipt of communications 13.1receiver over assets 91.1records

Contractor’s C52.2�3, E52.2�3form of communication 13.1risk reduction meeting 16.4Risk Register revision 16.4

referral, adjudication W1.3(1�3), W2.3(1�3)removing

Contractor’s employee 24.2Equipment 92.2, 93.2Plant and Materials 92.2

replacement(s)of Adjudicator W1.2(4), W2.2(4)Contractor’s employee 24.1Equipment 80.1, 83.1Plant and Materials 83.1Service Manager 14.4

replyform of communication 13.1time allowed 13.3�5, 60.1(6), 62.5�6

resignation of Adjudicator W1.2(3), W2.2(3)responsibilities

Contractor 11.2(7)(15), 14.1, 20�7, 82.2,C20.3�4, C26.4, E20.3�4, E26.4

Employer 82.2, 86.2retention 50.3, 93.1reviews, tribunal W1.4(1�6), W2.4(1�5)revisions

Accepted Plan A54.2�3Price List A54.2�3, C54.2, C54.3quotation 62.3, 62.4, 64.1reasons for not accepting A54.3

revolution, risks due to 80.1right of access provision 15, 60.1(2)Rights of Third Parties (Contracts) Act Y(UK)3riot risks 80.1risk reduction meeting

purpose 16.3records 16.4who attends 16.2

Risk RegisterContractor revision 16.4definition 11.2(14)early warning 16.1, 16.3�4records revision 16.4Service Manager revision 16.4

risksContractor’s 63.7, 81, 82.2, 83.2, 84.4Employer’s 60.1(12), 80, 81.1, 82.2, 84.4Service Manager early warning matter

11.2(14)

®




safety see health and safetysamples 40.2, 60.1(11)savings, Contractor’s share C53.2Schedule of Partners X12.1(1)service

completing whole of 92.1, 93.2, C20.4, E20.4definition 11.2(13)early warning of possible delay 16.1information provision 25.1loss of or damage to 80.1, 83.1low service damages X17.1taking over 80.1

Service Informationaccounts and records C52.2, E52.2assessing compensation events A63.10change(s) 14.3, 18.1, 43.1, 60.1(1), 63.9and compensation events 60.1(1), 63.9conditions stated in 25.1, 60.1(5)Contractor’s accounts and records C52.2, E52.2Contractor’s parent company guarantee X4.1Contractor’s plan 21.2, 60.1(1)and Defects 43.1definition 11.2(15)end of service period 92.2health and safety 27.4instructions that change 14.3, 18.1, 43.1, 60.1(1),

63.9part of service not in accordance with 11.2(4)performance bond X13.1and Price List C54.1and Providing the Service 11.2(15), 20.1service period ending 92.2Task Order programme X19.6termination procedures 92.2tests and inspections 40.1�2, 41.1

service level table X17.1Service Manager

acceptance ofcommunication/plan/proposal/submission 13.4,

14.1, 21.1, 21.3, 84.1contract data for subcontract C26.4, E26.4quotation 43.1, 60.1(8), 62.3, 65.1

Accepted Plan 11.2(1), A54.2Adjudicator’s reviews/revisions W1.3(5), W2.3(4)agreeing rates and Prices in Price List 63.3and ambiguities/inconsistencies 17.1assessment date decided by 50.1assessment of

amount due 50.1, 50.4, 50.5compensation events 61.6, 64, A63.10Contractor’s share C53.1, C53.3, C93.3,

C93.4test/inspection cost 40.6

assumptions about compensation events 60.1(13),61.6

certificates 13.6, 51.1�3, 90.1, 90.3�4, C93.3co-operation 25.2compensation events 60.1(1)(4)(6�9)(13),

61.1�6, A63.10, X19.10(1), X19.11Contractor’s

advice C20.3, E20.3default 91.2�3

employees 24.1�2plan 21.1

decisions 50.1, 60.1(7), 61.1�2, 61.4�6, 63.6,64.1

Defect(s) acceptance/non-correction 43.1Defect(s) correction 42.1�2delegation 14.2duties required 10.1, 14early warning 16.1�2, 16.4�5, 63.6Equipment design 23.1forecasts of Defined Cost C20.4, E20.4illegal/impossible requirements 18.1implementing compensation events 65.1inspection of Contractor’s accounts and records

C52.3, E52.3instruction(s) 14.3, 17.1, 18.1, 24.2, 27.3, 32.1,

43.1, 60.1(1)(4), 61.1�2, 61.4, 62.1,62.3�4, 86.1, 91.6, C26.4, E26.4, X2.1

insurance 84.1, 86.1interest on payments 51.3notification of compensation events 61.1�6, X2.1,

X19.12notification of Contractor’s default 91.2, 91.3payment certificates 50.5performance bond X13.1performance indicators X20.3�4Price List C54.2Project Bank Account Y1.4, Y1.7, Y1.14Providing the Service X19.2, X19.4quotations for compensation events 62.1, 62.3�5replacement of 14.4reply to communication 13.3�5, 14.1, 60.1(6),

62.3, 62.5�6revising Task Order programme X19.9Risk Register revision 16.4Service Information 14.3, 18.1, 43.1, 60.1(1)start/stop of work 32.1, 60.1(4), 91.6subcontracting 26.3, C26.4Subcontractor acceptance 26.2, 91.2Task Order programme X19.5�7and termination 90.1, 90.3, 90.4, 91.2tests and inspections 40.3, 40.5�6, 41.1, 60.1(9),

C40.7whole of service A20.5

service periodassessment of amount due 50.1and compensation events 61.7Contractor’s plan 21.1�2end of 92.2, E20.4equipment, Plant and Materials at end 70.2and insurance cover 83.2performance indicators X20.2Providing the Service A20.5Service Information 92.2starting of work 30.1

services see facilities and servicesshare ranges C53.1starting date 30.1, 50.1, 81.1, 83.2, 86.1, C20.4,

E20.4Contract Data A20.5dispute resolution W1.2(1), W2.2(1)insurance 84.1

Index®



starting date (continued)performance indicators X20.2

start(ing)/stopping work 30, 32.1, 60.1(4), 91.6stopping Task completion X19.10(6)strikes, risks due to 80.1subcontract

adjudication W1.3(4), W2.3(3)contract data C26.4, E26.4

subcontracting 26, C26.4, E26.4assignment of benefits 92.2conditions 26.3Providing the Service E20.3

Subcontractoracceptance by Service Manager 26.2, 91.2appointment 26.2, 26.3, 91.2compensation event assessments C52.2, E52.2definition 11.2(16)Project Bank Account Y1.12

submission(s)communications 13.1, 13.4Contractor’s plan 21.1�2Equipment design 23.1forecasts of Defined Cost C20.4, E20.4insurance policies/certificates 84.1, 85.1, 86.1, 86.3non-acceptance of 13.8, 21.3, 23.1, 26.2, 26.3plan 21.1�2, 50.3, 64.1quotations 43.1, 61.4, 62.1, 62.3�6, 64.1, X2.1Subcontractor/subcontract conditions/contract

data 26.2, 26.3, C26.4, E26.4subrogation rights 84.2suppliers 11.2(16)

Project Bank Account Y1.1(2), Y1.1(4), Y1.6

take over of service 80.1Task, identified and defined terms X19.1(1)Task Completion

compensation events X19.11identified and defined terms X19.1(3)

Task Completion Datecompensation events X19.10(6�7)delays to X19.11identified and defined terms X19.1(4)implementing compensation events X19.12

Task Order X19changing X19.4compensation events X19.10(2)identified and defined terms X19.1(1), X19.1(2)Providing the Service X19.2, X19.4time X19.4

Task Order programme X19.5�7compensation events X19.10(3�5), X19.11revision X19.8�9

Task price list, Providing the Service X19.3taxes 52.1

payment 50.2termination 90

amount due on 90.2, 90.4, 93.1�2certification of 83.2, 90.1, 90.3, 90.5, C93.3Contractor’s work 91.7events not preventable 91.7Project Bank Account Y1.14and insurance cover 83.2

loss/damage/wear risks 80.1payment on 93, C93.3procedures 90.2�3, 92reasons for 90.2, 91

Termination Table 90.2, 92.2, 93.2tests/testing 40

before delivery 41compensation events resulting 60.1(9)Contractor’s cost C40.7see also Defect(s)

third party rights, contracts Act Y3.1time, Task Order X19.4time allowed

certification of payment 50.5, 51.1, 90.4compensation events 61.1, 61.3, 61.4, 64.2�3Defect(s) correction 42.2extension(s) agreed 13.5, 62.5payment of amount due 51.2, 91.4reply to communications 13.3, 13.5, 60.1(6)Service Manager not replying 64.3start/restart of work 91.6

time clauses, 30�2time risk allowances 63.7timings, adjudication W1.3(8)(10�11),

W2.3(2)(8)(11�12)title, Equipment, Plant and Materials 92.1, 92.2, 93.1tort X18.4total of the Prices

adjustment for inflation X1.5early warning of possible increase 16.1forecasts A20.5implementing compensation events X19.12payment on termination 93.2, C93.3whole of service A20.5

tribunalAdjudicator W1.3(2)(10), W2.3(11)arbitration W1.4(5), W2.4(4)decisions 51.3reviews W1.4(1�6), W2.4(1�5)

trust and co-operation 10.1, 26.3Trust Deed

Project Bank Account Y1.1(6), Y1.1(5), Y1.5, Y1.13

UK Housing Grants, Construction and Regeneration Act(1996) as amended by the Local Democracy,Economic Development and Construction Act2009 W1, W2

uncorrected Defects 60.1(8)undecided disputes, Adjudicator W1.2(4), W2.2(4)use of equipment, Plant and Materials 70usurped power, risks due to 80.1

waiver by insurers 84.2war risks 80.1watching tests 40.3wear to Equipment, Plant and Materials 80.1whole of service A20.5

completion 92.1, 93.2, C20.4, E20.4Defined Cost C20.4

winding-up order 91.1witnesses, tribunal proceedings W1.4(6), W2.4(5)working with Employer/Others 25

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