NEC 3 Professional Services Contract: Does it work for you?

This article looks at the creation of an NEC3 Professional Services contract (the PSC). The comments are a reflection of issues that I have come across when trying to pull it together. At the risk of being controversial, I have found that completing the PSC can, on some projects, be quite difficult. The reason for this, and it is a broad generalisation, is that getting all the components that make up the PSC together can often be challenging, and take some time to put into place.

First, you need a Scope; a Register and Programme as the starting point for the PSC. Getting a Scope organised may not be straightforward. Aside from specifying the services a consultant needs to provide it may also have to state the constraints under which it provides those services. I have found that identifying the Scope is not always simple, particularly if a consultant is providing a “one-stop-shop” service and has to agree terms with its sub-consultants.

The Scope may be set out in different documents that need to be combined. There may be clashes between the contents of the different documents and checking that they complement each other can be an issue. There is an inherent problem where consultants are being novated because PSC only fits easily with the associated NEC3 construction contracts and not with any other construction contract.

The services proposed by the consultant may well need to be reconciled with a design and build contractor’s expectations of what its consultants are to do. It is common to come across a liability matrix being presented by the contractor to pin down exactly what the consultants are delivering so it can lay off its liabilities onto the consultants it is going to inherit from the client.

Getting a Programme that contains all the elements set out in clause 31.2 can be difficult. The contents of the Programme are remarkably similar for both the PSC form and NEC 3 construction contracts. It can be easier for the contractor to identify float and time risk allowances than for consultants to do so.

The Risk Register is a management tool, and not intended to be a contract document. However it is an essential feature of the PSC. Getting a Risk Register can be difficult because it requires the consultant to analyse where risks are going to arise so that they can be addressed as the project progresses. It is possible that the Risk Register under PSC will look different to that in the construction contract, and if so then it has to be merged if the consultant is novated to a contractor.

Completing the Contract Data may not be a straightforward task. There are references to be put in and optional statements to be included or excluded. The most critical element will be the use of Option Z clauses cross referred back into Contract Data Part One.

We are used to seeing as large number of additional clauses under Option Z, expanding, clarifying and modifying the core terms and secondary Options. Agreeing the additional Z clauses may take a bit of time, but a pattern seems to be emerging that they get agreed, while the Scope, Programme, and the Risk Register are still being finalised to be slotted in to the PSC. We have seen the Programme and Risk Register fall away and not be included if it is deemed too difficult to create them.

There are occasions when you have to wonder whether PSC is the correct form, or whether something more straightforward may be a better way forward.