NEC3: Supply Contract Guidance Notes

The purpose of these guidance notes is to explain the background of the NEC3 Supply Contract, the reasons for its provisions and to provide clear yet comprehensive guidance on how to use it.
 
OGC endorsement of NEC3;
 
Construction Clients' Board endorsement of NEC3
 
The Construction Clients' Board (formerly Public Sector Clients' Forum) recommends that public sector organisations use the NEC3 contracts when procuring construction.
 
Standardising use of this comprehensive suite of contracts should help to deliver efficiencies across the public sector and promote behaviours in line with the principles of Achieving Excellence in Construction.

 

Contents

Chapter 1

• Introduction
• Background
• Purpose of these Guidance Notes
• NEC Objectives

Chapter 2

• Introduction to the Supply Contract
• When should the Supply Contract be used?
• Application of the Supply Contract
• Some features of the Supply Contract
• Key terminology in the Supply Contract
• Arrangement of the Supply Contract
• Subcontracts
• Clause numbering
• Roles of the parties
• The Supply Manager
• The Adjudicator
• The contract strategy
• The Options
• The Price Schedule

Chapter 3

• Procedure for preparing a Supply Contract
• Preparing the tender documents
• Contract Data part one
• Goods Information
• Contract Data part two
• The Price Schedule
• Inviting tenders
• Preparing a tender
• Assessing tenders
• Creating the contract

Chapter 4

• Supply Requirements
• Introduction
• Preparing the Supply Requirements
• Preparing Supply Requirements when using Incoterms
 
Chapter 5

Explanatory notes on the clauses of the Supply Contract

• 1 General
• 2 The Supplier's main responsibilities
• 3 Time
• 4 Testing and Defects
• 5 Payment
• 6 Compensation events
• 7 Title
• 8 Risks, liabilities, indemnities and insurance
• 9 Termination and dispute resolution
• Option clauses
• X1 Price adjustment for inflation
• X2 Changes in the law
• X3 Multiple currencies
• X4 Parent company guarantee
• X7 Delay damages
• X12 Partnering
• X13 Performance bond
• X14 Advanced payment to the Supplier
• X17 Low performance damages
• X20 Key Performance Indicators
• Y(UK)3 The Contracts (Rights of Third Parties) Act 1999
• Z Additional conditions of contract

Appendices

• 1 Clause numbering system
• 2 Sample form of tender
• 3 Sample form of agreement
• 4 Use of the SC as a subcontract
• 5 Price Schedule
• 6 Contract Data - worked example