Contract nec 3

If we initially consider architect, developer and constructor in the initial phase, having as a base document a preliminary design; we define the Target Cost agreed by all, being transparent the direct and indirect costs and agreeing on how the risk is managed; that is, the positive deviations with respect to the expected target cost of the project, we have what is called at international level Integrated Project Delivery (IPD). (See link).

The detractors of this type of contract comment that the intervention of many agents in the initial phases can lead to a further waste of resources and time. This is true if the meetings are not properly managed, but I will leave this for another post.

They originated in Australia (called Alliance Contracting). Although in the United States they also developed at the beginning of this century (2005) thanks to successful hospital construction projects on the West Coast (Sutter Health). The first contract was called Integrated Form of Agreement (IFOA) and was developed by Will Lichtig.


That is, the most common standardized contracts are listed, but are not limited to those named. Therefore, other contracts, such as the International Chamber of Commerce’s turnkey contracts, or the Institution of Chemical Engineers’ IChemE contracts, could be accommodated.

The award is a “new” tool that companies, law firms, engineers and arbitrators must be familiar with. Not knowing it is a risk, if the risk is unknown to both parties in a dispute, it is indifferent. That is: neither party takes it into account and it will happen if it has to happen. But more and more people are becoming aware of adjudication as an alternative dispute resolution method and not knowing about it ourselves, either as arbitrators (usually the post-award phase), or as engineers (adjudicators are usually engineers), or as lawyers to strategically advise our clients (there is in several countries a legally imposed adjudication that does not give subsequent recourse to arbitration), implies not being prepared for a risk that the other party does know about: we will find ourselves by surprise at a chess table with a game started, where our opponent is waiting for us, seated, with a smile of satisfaction.

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What is a nec contract?

Level 1: known as the Lonely BIM that uses 2D or 3D CAD to describe the roles of the project. It also handles Common Data Environment (CDE) for project models, which functions as a tool for collaboration. However, neither financial nor cost management is integrated.

Level 2: The provision of 3D modeling and data is produced by professionals and contractors, to be later coordinated in what is called Federated Model (FM), which is when each individual model is imported into a piece of software.

Level 3: Modeling at this level aims to demonstrate the best way to develop the BIM capability as it already has an integrated level, because it works on the same model and the compatibilization is in real time.

Alejandra Ulfee is a specialist in Construction Law from the University of Melbourne, Australia and a lawyer from the University of Lima, with experience in Infrastructure and Buildings, Risk Management, Contract Administration and Negotiation Support.

Contract nec3 option f

These are called DABs (Dispute Adjudication Boards) and, together with others such as mediation or arbitration, are an alternative means of dispute resolution. They appear especially in the construction sector, and consist of a body that can be permanent or ad hoc, and that is established to help the parties to avoid or resolve any disagreement or disagreement that may arise during the execution of the project. If it is a permanent DAB, it is appointed at the start of the project, will receive regular updates on the contract and will visit the works regularly, enabling it to address potential disputes as they arise. If they are not permanent, they will be appointed at the time a dispute arises, and that is when their role begins.

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There are several types of dispute boards depending on the objective they pursue. Thus, in addition to the traditional DAB, there are two other types of dispute boards: Dispute Avoidance and Adjudication Boards (DAAB) and Dispute Review Boards (DRB).