What can we expect from the new NEC4 DBO Contract?
The new NEC4 suite promises much and at this stage promises are all we have in advance of seeing the new documents. NEC has trailed the major changes and we will be looking at each of these over the next few days and weeks.
The new NEC4 Design Build Operate (DBO) Contract is aimed at situations which require an “integrated whole life delivery solution”. NEC has said that the “F” word won’t be used here in that this new contract is not designed to be used where the provision of finance sits alongside the wider engineering obligations.
DBO contracts work well in industries where the defined output of a service or asset can be specified and where the client wants to combine the construction and operational obligations into one contract and consequently one point of responsibility. This creates the advantage that the contractor needs to consider lifecycle obligations during design and construction and not just the cheapest possible solution.
NEC tells us that the new contract will be able to include range of different services to be provided before, during and after engineering and construction works.
Whilst this contract will not be applicable to privately financed projects as a main contract it may have value in first or second tier subcontracts in such projects. It might also be relevant in projects that involve lease finance such as railway rolling stock provision. A good proportion of Bowdon’s non-NEC workload is in DBO projects with and without finance so we will be interested to see how this contract is used.
Time will tell on the take-up of this new contract and we will be reporting further once the document is published, hopefully in June this year.