NEC4 ECC Contract Drafting Guide: Step-by-Step Options A–F

Comparing NEC4 ECC Main Options (A–F)

One of the first decisions is choosing the appropriate Main Option for your ECC contract. NEC4 ECC provides six Main Options, labeled A through F, which determine the pricing mechanism and risk allocation between the Client and Contractor^[12]. Each option suits different project scenarios.

Why Step 1 comes first

This first step is about agreeing the contracting strategy. You confirm the NEC4 ECC Main Option (A–F) that best fits the project and list the key Secondary Options and any bespoke Z clauses you will need. The choice of pricing option then drives how you set up the Activity Schedule or Bill of Quantities, how you apply Defined Cost and fee, and which parts of the Contract Data you must complete later in the sequence^[34][35].

Goal. Define the project’s NEC4 strategy upfront so that everyone (Client, Contractor, Project Manager, legal team) is working to the same pricing model, risk allocation and amendment set before any detailed drafting starts.

What to do in Step 1

1. Choose the Main Option (A–F). Decide between Options A, B, C, D, E or F based on basic project characteristics such as:
   • Scope clarity – Is the design and Scope fully developed or still evolving?
   • Risk profile – Is the work routine or inherently high-risk/uncertain?
   • Desired cost certainty – Does the Client need a firm lump sum, or can they accept shared/variable cost?
   For example, if the project has a fully designed, well-defined Scope and the Client needs a firm price, Option A (priced contract with Activity Schedule) is often appropriate^[34]. If the project is high-risk or complex, a target cost approach like Option C can be attractive because it shares risk and encourages collaborative cost control^[35]. Once you decide, record the chosen Main Option in Contract Data Part One.
2. Decide the key Secondary Options (X, Y, W). Identify which Secondary Options will support your strategy:
   • X Options – Commercial and risk tools such as: X1 (price adjustment for inflation), X7 (delay damages), X13 (performance bond), etc.
   • Y Options – Country-specific legal requirements. For example, Y(UK)2 implements the UK Housing Grants Act payment regime, which includes a 21-day payment cycle by default^[36].
   • W Options – Dispute resolution structure, including which adjudication and tribunal route (e.g. W1 or W2, adjudicator’s powers, etc.).
   Make sure these options are internally consistent. A common pitfall is selecting options that quietly conflict with each other or forgetting to include a “partner” option that your chosen Main Option assumes will be present. Such inconsistencies can later fuel disputes over interpretation or procedure^[37]. All chosen Secondary Options must be listed accurately in Contract Data Part One.
3. Plan any Z clauses (bespoke conditions). Z clauses are additional amendments the parties add to the standard NEC4 text. The safest approach is to:
   • Use Z clauses sparingly and only where absolutely necessary.
   • Target them at specific legal, risk or policy issues your project must deal with.
   • Draft them clearly and check they do not contradict core NEC principles or other selected options.
   Overloading an NEC4 ECC with poorly drafted Z clauses can undermine NEC’s clarity and collaborative approach, creating confusion and conflict^[38][39]. At this step you do not need the final wording, but you should agree which topics will be covered by Z clauses and who will draft them (often legal counsel). These will then be appended at the end of Contract Data Part One.

Why this order?

Finalising the contract strategy now means that all downstream documents are drafted to fit the same framework. For example:

• If you choose Option A, you know you will prepare an Activity Schedule with price for each activity.
• If you choose Option B, you will instead prepare a Bill of Quantities and build your processes around measured works.
• Choosing a target cost option (C or D) means you will later set target prices, pain/gain share ranges and an open-book cost control procedure.
• Including options like X7 delay damages or X13 performance bond signals that you must gather specific input data (e.g. damage rates, bond amounts) for Contract Data Part One at later steps.

In short: strategy first, documents second. When you know the Main Option and key X/Y/W/Z choices, filling in Contract Data, Scope, pricing schedules and procedures becomes much more consistent and less error-prone.

Tip: lock in the exact NEC4 version

At this same stage, confirm the edition and amendments you will use – for example, “NEC4 ECC (June 2017) including the 2019 amendments”. Make sure everyone is working from the same standard wording and that any clause numbers or guidance notes you rely on match that version. Using an outdated template or mixing versions can lead to mis-numbered clauses, missed changes, or even conflicts with current legislation^[40].

Step 2: Define the Scope of Work (Draft the Scope Document)

Goal. Clearly describe what the Contractor is required to do. The Scope document (called Works Information in earlier NEC terminology) is arguably the most important part of the contract because it sets out the technical requirements, work descriptions, specifications, drawings and any constraints on how the work is to be carried out.

What to do

1. Gather technical information.
   Start by compiling all existing documents that describe the works:
   • Drawings and models (plans, sections, details, BIM models).
   • Specifications and design criteria (materials, standards, performance levels).
   • Work sections (e.g. civil, M&E, finishes) and method constraints if already defined.
   Check that these documents are accurate, coordinated and up to date. If drawings and specifications contradict each other, that conflict will flow straight into the NEC contract and later turn into compensation events or disputes.
2. Write the Scope in a structured way.
   The Scope should tell the Contractor what they must provide, not just repeat raw technical data. A simple, workable structure might include:
   • Project summary and objectives – a short description of the project, its location and what success looks like (e.g. “new clinic fully operational by date X”).
   • Scope of works – inclusions and exclusions. Clearly state what is in and out of the Contractor’s scope. For example, who provides utilities connections, existing surveys, or specialist equipment.
   • Technical specifications and standards. List the design codes, standards and performance criteria to be followed (e.g. structural codes, fire standards, local regulations).
   • Drawings and reference documents. Provide a referenced list of drawings, schedules and reports that form part of the Scope and either attach them or make sure they are clearly identified for inclusion.
   • Constraints on methods or sequence. Where it really matters, describe working hours, phasing, interface with other contractors, access limitations, shutdown windows, etc.
   • Contractor’s design responsibilities. If the Contractor is responsible for any design, describe:
     • Which elements are Contractor-designed vs Client-designed.
     • Design submission/review procedures to align with clause 21.2 (design approvals and responsibilities)^[41].
   • Health, safety and environmental (HSE) requirements. Include site rules, local HSE regulations, induction requirements, PPE standards, and any project-specific environmental conditions.
   • Quality management expectations. Note any specific quality plans, inspection and test plans, hold points, or accreditation requirements you expect from the Contractor.
   • Other project-specific requirements. For example, BIM protocol obligations, particular materials or proprietary systems, key supplier requirements, or coordination duties.
3. Make the Scope clear and unambiguous.
   NEC4 clause 20.1 obligates the Contractor to “Provide the Works in accordance with the Scope”^[3]. That means:
   • If something important is missing from the Scope, it may later appear as a change/compensation event.
   • If wording is vague, each party may interpret it differently – again leading to time and cost disputes.
   Aim for plain language, short sentences and consistent use of defined NEC terms. Avoid over-specifying construction methods unless a particular method is critical for safety, third-party approvals or performance. NEC contracts are designed to let the Contractor choose their own means and methods where possible.

Also cross-check the Scope against the rest of the contract. If the Scope refers to specific standards, drawings or systems, make sure those items are correctly listed in Contract Data Part One and physically included in the contract pack.

Why Step 2 comes early

The Scope is drafted early because many other parts of the contract depend on it:

• Pricing and risk allocation – whatever is “in Scope” must be priced and is generally at the Contractor’s risk (subject to compensation events).
• Contract Data Part One – you will list the documents forming the Scope, and also record constraints such as working hours or site access arrangements.
• Communications and procedures – if you define the communication system (for example, a specific project platform) this is referenced in Contract Data and supports the notification rules in clause 13.2^[42].

A well-prepared Scope allows bidders to price the work more accurately, reduces the need for assumptions, and supports smoother contract administration once the project starts.

Tip: Structure and signposting matter

Organise the Scope with clear headings and a logical flow (e.g. “General”, “Description of Works”, “Technical Requirements”, “Constraints”, “Design Responsibilities”, “HSE”, “Quality”, “BIM/Information”). NEC guidance notes and any available Scope templates can be a useful starting point.

A clearly structured and well-referenced Scope “strengthens the contract and benefits those in the supply chain” – contractors are more confident and responsive when the documentation is easy to follow, which often leads to better tenders and fewer misunderstandings down the line^[43].

Step 3: Compile Site Information

Goal. Provide factual information about the site and its surroundings so that the Contractor is aware of conditions and constraints they will encounter. Site Information is a separate contract document containing details of the physical site, existing structures, geotechnical data, environmental conditions and similar information.

What to do

1. Describe the Site and location.
   Start by clearly describing where the site is and how far it extends:
   • State the project address or general location.
   • Attach a location plan and a site boundary plan.
   • Describe any off-site areas the Contractor can use (laydown, access roads, compounds).
   The contract usually requires the site boundaries to be shown on a drawing and that drawing to be referenced in Contract Data Part One^[44]. Getting this right is critical: access, possession dates and many practical duties depend on what is (and is not) inside the defined Site.
2. Include all relevant data the Client holds.
   Gather all available information the Client has about the site, for example:
   • Ground condition reports – soil investigations, borehole logs, contamination surveys.
   • Existing utilities and underground services – route maps, depths, capacities.
   • As-built drawings of existing structures or adjacent facilities.
   • Historical / archaeological reports if relevant to excavation or protection duties.
   • Topographical surveys, hydrology and flood risk data.
   • Climate or weather data specific to the site – e.g. high winds, extreme temperatures or tidal effects that could impact working methods.
   • Site access constraints – weight limits on roads, low bridges, turning space limits, restricted delivery times.
   • Known hazards – asbestos locations, contaminated ground, unexploded ordnance surveys, overhead power lines.
   • Security and neighbour constraints – restricted working hours, noise limits, vibration limits, shared access rules.
   • Environmental protections – protected species, tree preservation orders, watercourse protections, etc.
   The aim is to give the Contractor a realistic picture of the environment they will be working in, so they can plan and price accordingly.
3. Keep Site Information factual, not prescriptive.
   Site Information should be facts about the site, not instructions:
   • A Site Information statement might say: “Groundwater level is approximately 2.5 m below ground level per report ABC.”
   • The Scope (requirements) would say: “The Contractor shall dewater to maintain a dry excavation.”
   In other words, Site Info tells you “what is there”; Scope tells you “what you must do”. Keep this separation clear. Requirements, methods and performance obligations belong in the Scope (Step 2), not in the Site Information.
4. Cross-reference Site Information in the Contract Data.
   In Contract Data Part One, list each document that makes up the Site Information pack:
   • Give each report or drawing a unique reference and title.
   • Check that what you list actually exists and is included in the contract bundle.
   • Align dates and revision numbers so there is no confusion about which version applies.
   Certain site risks may link directly into the early warning process or the Compensation Event machinery. For example, NEC4 ECC clause 60.1(12) covers unforeseen physical conditions; what is “foreseeable” depends heavily on the Site Information provided and on what an experienced contractor would reasonably expect to find.

Why this step comes now

Drafting Site Information alongside the Scope (Step 2) means all technical documents are ready before you finalise the Contract Data and invite tenders. Site conditions can significantly affect:

• Pricing – difficult ground or access will increase cost.
• Programme – restrictions on working hours or logistics may extend durations.
• Risk allocation – some risks may be retained by the Client, others priced by the Contractor.

Providing Site Information early leads to more accurate tenders and helps Contractors plan for site-specific challenges. It also supports the Client’s duty to share what they know: if real conditions differ materially from what was reasonably foreseeable from the Site Information and other data, the Contractor may be entitled to a compensation event. Trying to “hide” known problems to get a cheaper price often backfires as larger claims later.

Tip: transparency on site conditions protects everyone

Do not omit or downplay known site issues. Under NEC4 ECC, if the Contractor encounters a physical condition that is more adverse than an experienced contractor could reasonably have foreseen from the Site Information and other available information, it may become a compensation event (e.g. under clause 60.1(12)). Sharing comprehensive Site Information:

• Allows bidders to price risk realistically instead of adding a high “unknowns” contingency.
• Reduces arguments about who “should have known” about a condition.
• Supports collaborative behaviours and early warnings around ground risk and access constraints.

In short, honest Site Information is in the Client’s own interest: it helps allocate risk fairly, reduces surprises and makes the NEC4 compensation event mechanism work as intended rather than as a battlefield.

Step 4: Complete Contract Data Part One (Employer’s Data)

Goal. Fill in Contract Data Part One, which is the Client’s portion of the contract data. This section lists all the choices and project-specific values for the contract’s variables. It essentially “configures” the standard NEC4 ECC to your project.

What to do

1. General information – who is who.
   Start with the basics:
   • Names and roles of the parties (Client, Contractor, Project Manager, Supervisor).
   • Project title and short description of the works.
   • Any reference numbers or project codes your organisation requires.
   This seems simple, but it is surprising how often role titles are inconsistent with how the project is actually run. Make sure the individuals and entities named here match your internal appointment letters and organisational chart.
2. Contract details – form, options and documents.
   Record your high-level strategy decisions from Steps 1–3:
   • State the accepted form of contract: “NEC4 Engineering and Construction Contract (ECC), Option A” (or B, C, D, E, F) together with the chosen Secondary Options (X, Y, W, etc.) decided at Step 1.
   • List all Contract Documents here, including:
     • Scope document(s) from Step 2.
     • Site Information documents from Step 3.
     • Other key attachments such as drawings schedules or specifications lists.
   • For each document, clearly identify the title, reference and date so there is no ambiguity about which version applies^[44].
   This section is like an index for the contract pack; if documents change after tender, remember to update the references so everyone is working from the same set.
3. Timeframes – dates, Key Dates and defects period.
   Next, complete all the time-related entries:
   • Starting Date – when the contract obligations start.
   • Access Date – when the Contractor can start work on Site.
   • Completion Date for the whole of the works, or a reference to how this date is determined.
   • Key Dates – specific milestones by which parts of the works must meet a certain condition (used where sectional delivery is important).
   • Defects Date / defects correction period – the time after Completion during which defects must be corrected. If you do not specify a different period, the default 52 weeks will apply automatically^[45].
   Take care to align these dates with any programme assumptions and external constraints (e.g. access from third parties, shutdown windows).
4. Payment details – how and when money flows.
   Define the mechanics of payment:
   • Set the assessment interval for payments (e.g. monthly) or, in some jurisdictions, confirm any statutory pattern such as the UK Option Y(UK)2 default 21-day payment cycle unless you have agreed an alternative^[36].
   • Confirm which pricing mechanism applies:
     • Options A/B – Activity Schedule or BoQ will drive the payment items.
     • Options C–F – identify which Schedule of Cost Components applies for Defined Cost.
   • If using Secondary Option X16 (retention), fill in the retention percentage and any thresholds.
   • If using X14 (advance payment), enter the advance payment amount, repayment method and timing.
   These fields turn your commercial strategy into actual numbers the Project Manager will use in each assessment.
5. Liabilities and insurance – caps and cover.
   Populate the risk-related entries:
   • Amounts of insurance cover required, e.g.: employer’s liability, public liability, professional indemnity (if design is involved), contractors all-risk, etc.
   • Any insurances the Employer is providing directly (e.g. project-wide policies).
   • Limits of liability or caps if Secondary Option X18 (limitation of liability) is chosen.
   Make sure these align with your insurance advisor’s recommendations and any legal or funding requirements – changing them later can be very difficult.
6. Bonuses, damages and performance-related fields.
   If you are using:
   • X7 (delay damages) – specify the daily rate (or rates) of delay damages for late Completion of the whole works or Key Dates.
   • X6 (bonus for early completion) – specify how any bonus is calculated (amount or rate).
   These figures should be commercially realistic and consistent with the overall project economics – too low and they have no effect, too high and they may be unenforceable or push tenderers to price in large risk premiums.
7. Dispute resolution details.
   Where Y (country) options or W options apply, fill in the required details:
   • Adjudicator nominating body (for adjudication under W1 or W2).
   • Arbitration institution, seat and procedural rules if arbitration is chosen.
   • Any mandatory statutory references required by local law.
   Be consistent: for example, do not name an adjudicator body that assumes one W Option while your intention was to use another^[37].
8. Optional: additional compensation events.
   NEC4 ECC clause 60.1 already lists the standard compensation events (21 in total). If you want to add project-specific events:
   • List those extra compensation events in Contract Data Part One, clearly and narrowly drafted.
   • Example: adding a compensation event if asbestos is discovered in a particular area of the site where the Employer retains the risk^[4].
   Draft these carefully so that they are legally robust and not open to multiple interpretations, otherwise you may create more disputes than you solve^[46].
9. Z clauses – only where truly needed.
   Finally, if bespoke clauses are needed (as flagged in Step 1):
   • Append them at the end of Contract Data Part One as Z1, Z2, Z3 ….
   • Write each Z clause precisely, preferably with legal review.
   • Use as few Z clauses as possible – over-customising can undermine the clarity of NEC4 and lead to conflicts^[38].
   Each Z clause potentially shifts risk or obligations; treat this section as surgery, not decoration.

Why this order?

Contract Data Part One pulls together the inputs from the previous steps. By this stage:

• You have chosen your Main and Secondary Options (Step 1).
• You have structured the Scope (Step 2) and Site Information (Step 3).
• You know the intended timeframes, risk approach and commercial strategy.

Completing Part One now ensures all those decisions are recorded in one place. It underpins the whole contract because many ECC clauses cross-refer directly to entries in the Contract Data.

A classic pitfall is selecting an Option in name but not filling in its details – for example:

• Choosing X13 (performance bond) but not specifying the bond amount or form.
• Choosing X7 (delay damages) but leaving the damages rate blank.
• Choosing a W Option for dispute resolution but mis-aligning the adjudicator/arbitration fields.

Another trap is forgetting about NEC4’s default values. For example, if you leave the defects correction period blank, the default 52 weeks applies whether you intended that or not. It is safer to fill in every line deliberately or consciously accept the default.

Tip: use the official NEC preparation guide as a checklist

If you have access to NEC Preparing an Engineering and Construction Contract (Guidance Volume 2), use it as a detailed checklist for each Contract Data item – it explains what each field is for and typical ranges or choices^[47]. Combine that guidance with your own internal templates so you do not miss items.

Before you move on, do one slow “consistency pass”: confirm that the Main Option, all Secondary Options and every Contract Data entry form a coherent set – no contradictions, no blanks where a value is needed, and no forgotten knock-on settings from Steps 1–3^[37].

Step 5: Prepare the Pricing Documents (Activity Schedule or Bill of Quantities)

Goal. Create the document that will be used for the Contractor’s pricing and ongoing payment assessments, consistent with the chosen Main Option. In NEC4 ECC, the pricing mechanism is implemented through either an Activity Schedule (for Options A and C) or a Bill of Quantities (BoQ) (for Options B and D). For Options E and F (cost-reimbursable), the Contractor does not tender a fixed total price but will still provide fee percentages, rates and forecasts.

If Option A or C: build an Activity Schedule

For Options A and C, you must develop an Activity Schedule that lists all significant activities or work items the Contractor must complete, with a price against each. Under Option A, these activity prices should sum up to the “tendered total of the Prices” (the lump sum)^[48]. Under Option C (target), the Activity Schedule similarly provides a breakdown of the target cost.

When drafting the Activity Schedule:

• Cover the full Scope. Every part of the Scope should be covered by at least one activity – nothing important should be “free of charge” or omitted.
• Choose the right level of detail. Break down activities to a reasonable level:
  • Too coarse: hard to value partially done work or understand progress.
  • Too fine: admin-heavy and difficult to manage during assessments.
• Use clear descriptions tied to the Scope. Activity descriptions should match the Scope wording so there is no doubt what each activity entails. Avoid overlapping or ambiguous items that could cause double counting or gaps.
• Think about payment timing. Under Option A, completed activities = payment – the Contractor will not be paid for an activity until it is finished^[13][49]. Define activities so they can realistically be completed during normal payment periods and in a logical sequence.

Under Option C, payment is based on Defined Cost, but the Activity Schedule is still important for forecasting, early warning discussion and assessing progress against the target.

If Option B or D: prepare a Bill of Quantities (BoQ)

For Options B and D, you will produce a Bill of Quantities (BoQ) in accordance with a standard method of measurement (if applicable) or a clear breakdown of work quantities. The BoQ lists items (typically by work section or element) with quantities and units; the Contractor inserts rates and amounts.

• Measure quantities carefully. Calculate quantities from the design documents with care. Errors here flow directly into the Contract Sum or target cost.
• Align descriptions with the Scope. Item descriptions should match the work required under the Scope. If the Scope says “construct 10km of pipeline” but the BoQ only has 8km, you are building in a dispute.
• Use provisional sums only where justified. Include provisional sums or contingency items only for genuinely undefined work. NEC prefers to manage risk via compensation events rather than heavy reliance on provisional sums.

For Option B (priced contract with BoQ), the total of the BoQ items equals the Contract Sum, and the Contractor is paid for actual work done as measured – re-measurement is straightforward if work differs from the estimate.

For Option D (target with BoQ), the BoQ is used to establish the target price and to measure work done, but final payment will include sharing of any over/under-run under the agreed pain/gain mechanism.

If Option E or F: cost-reimbursable / management structure

For Options E and F, you normally will not have a single predefined Activity Schedule or BoQ in the same way. However, it is still good practice to prepare:

• A cost estimate or forecast for budgeting and approvals, based on the Scope and Site Information.
• A schedule of key rates – e.g. staff rates or equipment rates that the Contractor proposes, where required.
• Clear agreement on the Fee percentage(s), which will be entered by the Contractor in Contract Data Part Two. Some contracts split fee for subcontract vs direct work; make sure this is clearly understood and negotiated, because all Defined Cost will have this fee added in payment^[50].

Options E and F are open-book: the Contractor is reimbursed Defined Cost plus fee. That means the quality of your Schedule of Cost Components references (and your cost monitoring systems) matters just as much as any Activity Schedule or BoQ.

Cost Components: make sure the right schedule is referenced

If the contract uses the Short Schedule of Cost Components (typically for Options A & B) or the full Schedule of Cost Components (for Options C–F) to define cost reimbursement, confirm that:

• The correct schedule is selected in the Contract Data.
• The Contractor understands which categories they must use when building up their costs.
• Your project team knows which schedule to use when assessing compensation events and Defined Cost.

Why this order?

The pricing document is prepared after defining the Scope and Site Information but before finalising Contractor submissions. If you are the Employer, you will usually include a blank or indicative Activity Schedule/BoQ with the tender documents for bidders to complete.

Doing Step 5 at this stage allows you to:

• Cross-check the pricing document against the Scope so nothing is left unpriced.
• Confirm that the format fits the chosen Main Option (A–F).
• Feed the structure into Contract Data Part Two, which the Contractor will complete.

Tip: watch for front-loading, measurement traps and mismatches

For priced contracts (Options A and B), try to anticipate how Contractors will spread their price:

• Under Option A, contractors may front-load or back-load activities to influence cash flow. Clear, balanced activities help the Project Manager spot and challenge extreme front-loading, and they make compensation events easier to assess (each activity has a clear value)^[51].
• Under Option B, be careful with BoQ item phrasing. Ambiguous measurement rules are a common source of dispute. Referencing a standard method of measurement or including a preamble that explains measurement rules can reduce arguments later.

Above all, maintain consistency between the Scope and pricing document. If the Scope says “construct 10km of pipeline” but the BoQ has 8km, there is a problem waiting to happen. Always double-check that work descriptions and quantities match the Scope deliverables – this is one of the quickest quality checks you can run before releasing tender documents.

A good pricing document does not just “add up” – it helps you administer the NEC4 ECC smoothly for the next several years: valuing work done, pricing compensation events, and tracking cost against the target or budget.

Step 6: Contractors’ Offer – Complete Contract Data Part Two

Goal. Understand and incorporate the Contractor’s submitted information in Contract Data Part Two. While Part Two is primarily completed by the Contractor with their proposal or tender, the party drafting the contract should set out clearly what must be provided and make sure it is properly integrated. From the Contractor’s perspective, completing Part Two accurately is equally important – it is their formal offer.

What’s in Contract Data Part Two?

Contract Data Part Two will typically include the following blocks of information:

• Contractor’s Key Personnel.
  A list of the individuals the Contractor proposes for key roles (for example, the Project Manager’s counterpart, Site Manager, Design Lead if Contractor-design is involved). CVs or experience summaries may be required. The contract might name certain Key People; replacing them later can require Employer approval, so they should be identified carefully here.
• Contractor’s Programme.
  At contract award, the Contractor must submit an initial programme for the works (clause 31). The programme itself is usually a separate document, not physically printed inside Contract Data, but Part Two may note that a programme is provided or required. Your tender documents should clearly require an outline or detailed programme so that a compliant programme is in place from day one – it will later become the Accepted Programme once approved by the Project Manager.
• Data for Options and Working Areas.
  Under Options C, D, E and F (the cost-based contracts), the Contractor must provide Direct Fee % and, if different, Subcontracted Fee % values, which go straight into the contract.
  The Contractor should also list their Working Areas where Defined Cost will be incurred. Under NEC4, Working Areas can even include remote working locations if agreed, as long as they are clearly defined in the contract^[52]. If a place is not listed as a Working Area, costs incurred there may not be reimbursable – so this list matters a lot for Options C–F.
• Activity Schedule or BoQ pricing.
  The Contractor will complete the Activity Schedule (Options A/C) or Bill of Quantities (Options B/D) you prepared at Step 5. Once agreed, that completed schedule or BoQ becomes part of the final contract (usually appended as a contract document). You should double-check:
  • Arithmetic (do the totals add up?).
  • That no required item is left unpriced or “zero rated”.
  • That the breakdown is practical for payment and administration.
  An unpriced item can lead to disputes – is it deemed included elsewhere, or is it genuinely free?
• Schedule of Cost Components data.
  In some contracts, Part Two requires specifics such as:
  • Contractor’s lists of plant and equipment rates.
  • Any standard staff or labour rate information, if agreed.
  In NEC4 ECC this is lighter than in professional services contracts, but for Options E/F in particular, any such data helps interim payment and audit. Make sure anything referred to in Contract Data (for example particular rate schedules) is actually provided.
• Tendered amendments or clarifications.
  Tenderers often include clarifications or qualifications:
  • Where such changes are accepted, they should be reflected in the Scope or as a formal Z clause – not left lurking in email trails.
  • If the Contractor proposed modifications to the Activity Schedule or stated assumptions, deal with them now. For example, agreed assumptions might be recorded so that if an assumption proves false, it becomes a compensation event under clause 60.1(17).
  Ideally, avoid separate side letters. Incorporate everything into the core contract documents so you have a single source of truth.

What to do – if you are the Employer (Client)

As Employer, you control the tender pack and decide what must be submitted under Contract Data Part Two. A simple approach:

1. Set clear requirements in your Instructions to Tenderers.
   Spell out exactly what bidders must submit for Part Two, such as:
   • Completed Contract Data Part Two form.
   • Named Key Personnel with CVs.
   • Programme (level of detail, format, software, etc.).
   • Fee percentages (and any split between direct and subcontracted work for Options C–F).
   • Proposed Working Areas list (for cost-based options).
   • Completed Activity Schedule or BoQ with all items priced.
2. Check completeness and correctness during tender evaluation.
   When tenders arrive, review each Part Two carefully:
   • Are any required fields blank or marked “TBA”?
   • Are fee percentages reasonable when compared with the market?
   • Does the programme satisfy Key Dates and Completion Dates stated in Part One?
   • Are Working Areas realistic and aligned with where work will actually happen?
   You may need to clarify or negotiate certain entries – for example, an excessively high fee percentage or an unrealistic programme.
3. Lock in the agreed Part Two for the selected Contractor.
   Once you select a Contractor:
   • Update Part Two so it shows the final agreed values and names.
   • Append the completed Activity Schedule or BoQ as an identified contract document.
   • Make sure the contract clearly references these attachments.
   At signature, this agreed Part Two becomes part of the NEC4 ECC; treat it like any other critical schedule.

What to do – if you are the Contractor

From the Contractor’s side, Contract Data Part Two is your binding offer. Treat it with the same discipline you would apply to your technical method statement or price.

1. Provide all requested information fully and clearly.
   Do not leave fields blank or vague. If something truly does not apply, say so explicitly rather than leaving the box empty – otherwise defaults or Employer assumptions may apply.
2. Think carefully about Working Areas and fee percentages.
   Under cost-based options, if you fail to list a Working Area, costs incurred there might not be reimbursable. Similarly, your fee percentages will apply to all Defined Cost for the duration of the project; once the contract is signed they are very hard to change.
3. Align your pricing document with how you plan to build the job.
   For Activity Schedules and BoQs:
   • Make sure the breakdown reflects your actual construction sequence.
   • Check that cash flow under the payment mechanism is workable.
   • Avoid over-complicated structures that will be painful to administer.
   Remember: the same Activity Schedule or BoQ will be used for payments and sometimes for valuing compensation events.
4. Document any assumptions and clarifications properly.
   If your price depends on certain assumptions (for example, specific site access hours or an assumed ground condition), ensure these are either:
   • Reflected in the Scope or Site Information; or
   • Recognised as assumptions that, if later changed, trigger a compensation event under clause 60.1(17).

Why this matters

Contract Data Part Two is effectively the Contractor’s formal offer. When combined with Part One and the core clauses, it completes the contract formation. A contract is only as good as the data inside these parts – missing or incorrect entries create hidden risks.

For example:

• If a Contractor overlooks stating a Defects Correction Period in a place where it is required or expected, a default might apply or conflict with what Part One says.
• If Working Areas are incomplete, some genuine project costs might become non-recoverable under cost-based options.
• If a Key Person is not named, the Employer might have less control over personnel changes later.

Meticulous attention at this stage prevents disputes, improves cost certainty and sets up smoother contract administration for the rest of the project.

Tip: cross-check Part Two against Part One and the Risk Register

Both parties should perform a “dovetail check” before signature:

• If Part One lists a Key Date for a section of work, the Contractor’s programme in Part Two should clearly show that Key Date being met.
• If the Employer listed initial risks in the Early Warning Register (EWR) in Part One, the Contractor may add further risks in Part Two^[6]. These should be discussed early so both sides have the same mental picture of project risk.
• Fee percentages, Working Areas, insurance allocations and payment intervals must all be mutually consistent; otherwise the Project Manager will be trying to administer a contract full of conflicts.

Good communication during the finalisation of Contract Data Part Two sets a cooperative tone for contract management once the project kicks off – exactly in line with NEC4’s emphasis on early warnings, collaboration and proactive risk management.

Step 7: Review the Risk Register / Early Warning Register Setup

Goal. Make sure the initial Risk Register / Early Warning Register is sensibly set up and understood by both parties at contract signing. The register itself is mainly a project management tool, not a static contract schedule, but NEC4 ECC asks you to list certain risks early in the Contract Data. This step is about getting that starting list right and aligning everyone on how early warnings will work in practice.

What to do

1. Compile an initial risk list in Contract Data Part One.
   From the Client’s side, list known project risks in the section for “risks that the Client will list in the Early Warning Register.” Typical examples:
   • Risk that key permits or approvals are delayed beyond a target date.
   • Potential contamination at a particular location on site.
   • Interfaces with third parties (utility diversions, railway possessions, etc.).
   These entries do not automatically make the Client liable – they simply flag issues that both sides must watch and manage together.
   The Contractor can also add to this list in Contract Data Part Two with extra risks they see from their perspective (for example, specialist supply chain constraints or access risks)^[6].
2. Confirm understanding of the Early Warning process.
   Make sure everyone on the project team understands the basic cycle:
   • Under NEC4 ECC clause 15, either party must give an early warning as soon as they become aware of a matter that could increase cost, delay Completion or impair performance^[53].
   • Early warning meetings are required: the parties review the register, discuss new items and agree actions. NEC4 strengthened this by making early warning meetings more explicit.
   • The Project Manager must keep the Early Warning Register up to date and issue the updated register within one week of each early warning meeting^[54].
   This is a procedural improvement in NEC4 compared with earlier editions – it pushes the team to treat risk management as a regular, structured activity, not a one-off workshop.
3. Make it clear: the EWR does not reallocate risk.
   It is vital to avoid a common misunderstanding: putting something into the Early Warning Register does not change who carries contractual risk for it. The register is about transparency and cooperation:
   • The underlying contract (core clauses and compensation event rules) still decides who pays for time and cost if the risk event happens.
   • The Early Warning Register is a shared log to make sure those risks are spotted early and mitigated where possible – not a side agreement about liability^[4].
   This is exactly why NEC4 renamed the “Risk Register” to “Early Warning Register” – to signal that the focus is on early action, not on re-writing risk allocation^[4].
4. Plan initial mitigation actions for key risks.
   For each listed risk, think about practical mitigation steps and, where appropriate, note them in the register. Many Early Warning Register templates include columns such as:
   • Risk description.
   • Potential impact (time, cost, quality, safety).
   • Mitigation actions.
   • Owner (who will do what, by when?)^[55].
   While this is more contract administration than drafting, running a short risk / early warning workshop with the preferred Contractor right after award is highly effective. It creates a shared picture of “what might go wrong” and how you will respond.

Why this matters

The Early Warning Register is not technically a fixed contract schedule – it will evolve as the project progresses. But initializing it properly at contract setup delivers several benefits:

• Aligned expectations. Both parties see the same list of “top-of-mind” risks from day one. There are fewer surprises when issues arise later, because they were already on the radar.
• Better tenders and more realistic programmes. If you share meaningful risks in the Contract Data, Contractors can price and programme more accurately. Hiding known risks tends to backfire because unforeseen issues often become compensation events anyway.
• Evidence of diligence. A contract with no early warnings listed at all may signal that nobody has really thought about project risk. In reality, every project carries risk, so it makes sense to show that you have considered it.

Above all, good early warning practice supports NEC’s core requirement that the parties act “in a spirit of mutual trust and co-operation” under clause 10.2^[56]. You are not promising to remove all risks – you are promising to share information early and work together to reduce impact.

Tip: keep the Early Warning Register “alive”

Once the project starts, the Early Warning Register should be treated as a living document, not something you fill in once and forget:

• Update it whenever a new early warning is raised or when an existing risk is closed, reduced or transformed.
• Use each early warning meeting to review the highest-impact items and agree new actions – not just to “read out” the list.
• Connect the register with the programme and Compensation Events: good early warning practice often leads to fewer surprises and more manageable CEs.

The more disciplined you are with early warnings and the register, the fewer “sudden” crises you will see in the project. Problems rarely appear out of nowhere – they usually show up first as small signals on this shared radar.

Step 8: Finalize and Assemble the Contract Documents

Goal. Bring all the pieces together into the final NEC4 ECC contract package, ready for signature. That means you prepare (or check) the form of agreement, attach all NEC4 conditions and option clauses, and make sure the Scope, Site Information, Contract Data and pricing documents are complete, consistent and clearly referenced.

What to do

1. Prepare the form of agreement.
   Depending on your organisation and jurisdiction, you may:
   • Use a separate Agreement document (often a short, lawyer-friendly front sheet).
   • Or rely on the signed NEC contract bundle (including Contract Data) as the binding agreement.
   In either case, make sure:
   • The correct legal names of the Client and Contractor are used (company numbers if needed).
   • The person signing for each party has authority (director / authorised signatory).
   • The agreement clearly mentions the contract title, brief scope of works, and confirms that the NEC4 ECC General Conditions (with chosen Main and Secondary Options) are incorporated by reference.
2. Attach all parts in a logical order.
   A common NEC4 ECC assembly sequence looks like:
   • 1. Form of Agreement (or Offer and Acceptance, if you are using the printed NEC forms).
   • 2. Conditions of Contract – NEC4 ECC core clauses plus:
     • Chosen Main Option text (A–F).
     • The selected Secondary Options (X, Y, W Options).
     • Any agreed Z clauses (additional bespoke conditions).
   • 3. Contract Data Part One (Employer’s/Client’s data).
   • 4. Contract Data Part Two (Contractor’s data and offer).
   • 5. Scope document(s) – the technical and procedural requirements you drafted in Step 2.
   • 6. Site Information document(s) – factual site data from Step 3.
   • 7. Pricing document:
     • Activity Schedule for Options A and C.
     • Bill of Quantities for Options B and D.
     • For Options E and F, any agreed price lists, fee percentages and cost schedules, even though the contract is cost-reimbursable.
   • 8. Other appendices as needed, for example:
     • Full Schedule of Cost Components, if not in the standard booklet.
     • Forms of performance bond, parent company guarantee or collateral warranties.
     • Any agreed protocols (e.g. BIM protocol) referenced in the Scope.
3. Cross-check for consistency and conflicts.
   This is the “slow, careful read” that saves you from future disputes. Work through the documents and check:
   • Terminology. If the Scope calls something “Section 1 – Process Building”, use the same label in Contract Data, Site Information and the pricing documents. Avoid having “Zone A” in one place and “Area 1” in another for the same thing.
   • No contradictions. For example:
     • The Scope might say “liquidated damages $X per day for late completion”, but Contract Data X7 might say “$Y per day”. That kind of conflict is confusing – and Contract Data is usually treated as governing, but it invites argument.
     • A drawing could show one specification while the written Scope says another. Resolve such differences now by editing the documentation.
   • Referenced documents actually exist and are attached. If Contract Data refers to “Appendix 3 – Geotechnical Report dated X”, make sure Appendix 3 is there. If the Scope drawing list includes 50 drawings, verify that all 50 are available and clearly referenced.
   • Option choices match content. If you say “NEC4 ECC Option C with X7, X13, X18”, ensure:
     • The Option C clauses are included.
     • X7, X13 and X18 clauses are present in the conditions.
     • All related data (delay damages rate, bond amount, liability cap) is filled in correctly.

   NEC contracts do not contain a default hierarchy of documents clause – there is no built-in “if there is a conflict, this document wins” provision^[57]. Instead, NEC expects parties to resolve ambiguities cooperatively under clause 17. Because you cannot easily fall back on a hierarchy, clean, consistent drafting is even more critical. (If your organisation insists, you could add a Z clause creating a document priority list – but this moves away from NEC’s philosophy and should be used cautiously^[57].)

4. Consider a final independent review.
   If time and budget allow, ask a colleague or legal adviser who has not been involved in the drafting to:
   • Scan Contract Data Parts One and Two for missing entries or obvious errors.
   • Check that all Z clauses are clear, necessary and not accidentally contradicting core NEC principles.
   • Confirm that the correct contract edition is used (e.g. NEC4 ECC June 2017, with any 2019 amendments).
   Many NEC issues in practice come not from the standard wording but from administrative mistakes in Contract Data or attachments. A fresh set of eyes often spots things the drafting team has “stopped seeing.”
5. Execute the contract properly.
   Once you are satisfied:
   • Arrange for both parties to sign. Commonly two originals are signed so each party holds one.
   • Make sure execution formalities are followed (e.g. witnessed signatures, common seal, or deed formalities where required by local law).
   • After signing, remember that any change should go through the contract mechanisms (Compensation Events, amendments, or supplementary agreements as appropriate) – not via informal emails.

Why this step matters

You can have beautifully drafted Scope, perfectly chosen Options and detailed Contract Data – but until they are assembled into one coherent contract, you are still exposed. Step 8 is where you:

• Turn a stack of separate documents into a single, enforceable package.
• Remove contradictions and gaps that would otherwise only surface during a claim or dispute.
• Make the contract much easier to navigate for your project team – which in turn improves day-to-day contract administration.

A few hours of careful assembly and checking here can prevent months of argument later. Think of Step 8 as your “pre-flight check” before the project takes off.

Tip: Create a contract index and team briefing

NEC4 ECC doesn’t require an index, but adding one is simple and powerful:

• Create a contract index / contents page listing all documents and sections in order (Conditions of Contract, Contract Data, Scope sections, Site Info, pricing schedules, appendices).
• Produce a short contract summary or briefing note for the project team, highlighting:
  • The chosen Main and Secondary Options.
  • Key dates (Starting Date, Access Date, Completion Date, Key Dates).
  • Payment timings and mechanisms (Options A–F, any Y(UK) payment option, retention, etc.).
  • How early warnings and the Early Warning Register will work in practice.
  • Any unusual Z clauses or bespoke risk allocations they must be aware of.

The aim is simple: when the project starts, no-one should be meeting the contract for the first time. They should already know the key moving parts and where to look for detail.