Is the NEC Really a Fairer Contract, or a Consultant’s Headache?
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The New Engineering Contract (NEC) has gained significant traction in Hong Kong’s construction industry, often promoted as a framework built on “mutual trust and co-operation”, that is supposed to outperform the adversarial character of traditional contracts. While the intent of NEC may sound constructive, we must carefully evaluate its impact, particularly on the roles and responsibilities of consultants and contractors.
Does NEC Truly Address Collaboration?
Traditional contract conditions inherently allow for problem-solving and collaboration. Consultants, as contract administrators, have long been able to manage construction matters with reference to their planning and the progress of works, while contractors have the option to issue Notices of Delay (NOD) as an early-warning mechanism to address risks that may impact timelines. These established practices already support a spirit of cooperation without sacrificing administrative discipline.
The NEC system, however, fundamentally alters this balance. It encourages contractors to focus on real-time problem-solving in a way that strips consultants of the ability to prioritise issues according to professional judgement and project needs. Responses are instead dictated by rigid and short time limits, with problem-solving calls initiated by contractors at their discretion.
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Construction contracts are inherently complex. Any professional with genuine project experience knows that the volume of contractor queries and unforeseen site conditions requiring revisions can easily run into the thousands—especially on building projects involving dozens of sub-consultants and suppliers. Formalising contractors’ unrestricted freedom to submit every query as an “early warning” at any moment means consultants are effectively surrendering control over project administration, which in turn, lead to more opportunities for abuse.
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Consultants form an essential part of the project team and must collaborate with contractors toward successful completion. At the same time, they serve by nature as gatekeepers, protecting the client from unreasonable claims by claim-conscious contractors. This dual responsibility is fundamental to safeguarding both public and private investments.
A Cautious Approach
While NEC has its merits, the benefits of this system must not be over-emphasised. Our Government should remain alert to any policy that appears contractor-conscious, particularly when the public already holds a widespread perception that government projects routinely overrun budgets due to enormous variations. True fairness in contracting requires that professional control and accountability are preserved, not surrendered.
By focusing on balanced reform, Hong Kong can protect the integrity of its construction industry and the professionals who deliver it.
– Thomas
