Scope: Practical commentary on NEC4 ECC. Check the edition, selected options, Contract Data and amendments used on your project.
The six main options
| Option | Basis | Commercial focus |
|---|---|---|
| A | Priced contract with activity schedule | Activity completion and the contract’s payment definition |
| B | Priced contract with bill of quantities | Measurement, rates and the option’s quantity-change rules |
| C | Target contract with activity schedule | Defined Cost, Fee, target adjustments and Contractor’s share |
| D | Target contract with bill of quantities | Cost records, remeasurement and target administration |
| E | Cost reimbursable contract | Defined Cost, Fee and cost scrutiny |
| F | Management contract | Management and subcontract arrangements under its distinct definitions |
Distinguish pricing risk from other obligations
Options A and B are priced arrangements. Options C and D use a target and a share mechanism. Option E is cost reimbursable, while Option F addresses a management-contract arrangement. Avoid reducing this to “the Client takes all risk” or “the Contractor is guaranteed a fixed price”.
The Scope, selected secondary options, liability provisions and amendments also matter. Design responsibility should be read from the actual contract rather than inferred from the pricing option.
Match the records to the assessment
For an activity schedule, record the evidence needed to establish completion of the relevant activity or group. For a bill of quantities, maintain reliable measurement and references to the work assessed.
For cost-based assessments, connect the applicable cost components to accounts, resource records, subcontract records and other substantiation. Defined Cost is a contractual calculation, not a synonym for every expense in the ledger.
Keep the definitions option-specific
NEC4 ECC Options C, D and E use the Disallowed cost definition at clause 11.2(26). Option F uses different wording at clause 11.2(27). Do not copy the C–E definition into an Option F explanation, or imply the same exclusions are imported unchanged into every Option A or B assessment.
Make the choice with the delivery model in view
Before choosing an option, test the maturity of the Scope, quantity uncertainty, interfaces, market appetite and both organisations’ ability to administer the arrangement. Model cash flow and incentives using the proposed contract terms.
Once appointed, the commercial team needs a clear baseline for Prices, measurements, assessments and changes. Keep forecasts distinct from contractual entitlement and avoid unsupported claims that one option always succeeds or fails for a particular project type.
Sources and further reading
- NEC: ECC pricing provisions
- NEC: Disallowed cost
- NEC101: Early warnings
- GMH Planning/CECA: NEC4 ECC high-level user guide (practical commentary; check the applicable contract and amendments).
Related GMH guidance and discussion
These are practical commentary and discussion. Check the NEC edition and project amendments; older posts may use earlier clause numbering.
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