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The Hong Kong Polytechnic University

Department of Building and Real Estate

BRE581 – International Construction Projects (2021-2022)

ASSESSMENT FORM FOR TAKE-HOME ASSIGNMENT (SECTION B)

Programme Name Student Name Student ID No

MSc/PgD in Project Management Wang Tat 19012107G

Question No: 
 Q3 Overall Grade : ______________
A+ Exceptionally B+ Very Good C+ Wholly D+ Barely Adequate
Outstanding Satisfactory
A Outstanding B Good C Satisfactory D Weak
A- Excellent B- Wholly C- Barely Satisfactory F Inadequate
Good

Assessment Criteria for Take-home Assignment

Relevant focus and depth Irrelevant & superficial

Effective use of theory Ineffective or none
Good analysis of practice Poor or none
Creative Thought Lacks originality
Wide range of sources Restricted scope
Appropriate length Inappropriate length
Competent Communication Incompetent
communication
Sources accurately cited Plagiarism
Correct referencing Incorrect or none

Comments:

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BRE581
BRE581 International Construction Projects
Take Home Assignment Section B
Student: WANG Tat (Hugo) Student ID: 19012107G

In this essay, I am a professional consultant in NEC and I have been commissioned as

the Facilitator to launch a full-day NEC workshop to convey the essential principle and
practices of NEC to the project team members, who will be involved in a cross-city high
speed railway development project in a Belt and Road Initiative (BRI) country. Compared to
the normal duration of NEC ECC Project Manager Accreditation course, which has to spend
four full days on mastering the skill of execution of NEC ECC contract as a role of Project
Manager, I have only one full day to handle the workshop, therefore I cannot fully brief all
the terms of NEC ECC clauses to the participants of the workshop. To provide a meaningful
workshop for NEC to the partitioners, I would have to provide the most important and
essential information and issues on application and execution of NEC to the workshop
participants.
In my workshop plan, I will divide the workshop into two sessions, the first session is
the information session, which is to be conducted in 09:00 to 15:30 (except the lunch break in
around 13:00 to 14:00, depends on the progress of briefing) and group discussion forum,
which is to be conducted in 15:30 to 17:00.
In the information session, I will firstly conduct ice-breaking activity in around half
hour (around 09:00 to 09:30). I will ask the workshop participants to self-introduce
themselves including the company they are serving for, the position they are in the company,
what the role they expected to be in the development of BRI, do their company implement
NEC contract to their projects already and any formal training they have been taken for NEC
contract administration and execution. As they are already the project team members of a
cross-city high speed railway development in BRI country, I expect more than half of them
have taken the NEC ECC Project Manager Accreditation course already, as NEC is already
one of most famous contract forms in international projects, besides of FIDIC Contract.
According to the ratio of participants who have formal NEC training, I may minor adjust the
content of information session of the workshop.
After the ice-breaking activity, I planned to have an introduction session of NEC
contract for participants who have not yet conduct any formal training on NEC, in around
half hour (around 09:30 to 10:00). I will briefly provide them the background of NEC
contract, which was a contract promoted by United Kingdom, and introduce the mostly
adopted version of NEC forms, which is the NEC3 contracts, and introduce the latest version
of NEC forms, which is the NEC4 contracts. I will explain the intention of promoting the
NEC contracts, which is aim on providing flexibility of use of contracts, contracting in simple
and clear wording, and providing various procurement approach, to meet the suitable
procurement strategy in different situation in a systematic format. The participants can
therefore understand NEC contracts can meet their different needs in procurement of projects
in BRI countries. In overall, I would like to let the participants who are not familiar to the
NEC contracts, to understand their spirit.
After taking a short break (around 10:00 to 10:10), for taking a rest by the participants
and for a fast Q&A for the introduction session, I will spend twenty minutes (around 10:10 to
10:30) to briefly introduce the NEC4 Family of Contracts, including the Engineering and
Construction Contract (ECC), Engineering and Construction Subcontract (ECSC),
Engineering and Construction Short Contract (ECSC), Engineering and Construction Short
Subcontract (ECSS), Professional Services Contract (PSC), Dispute Resolution Service
Contract (DRSC), Term Services Contract (TSC), Design, Build and Operate (DBO)
Contract, Alliance Contract (ALC), Supply Contract, Contractor’s Design-and-Build (D&B)

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BRE581 International Construction Projects
Take Home Assignment Section B
Student: WANG Tat (Hugo) Student ID: 19012107G

Option, and Early Contractor Involvement (ECI), so that the participants of the workshop can
quickly overview and have a preliminary idea on which form of contract in NEC contracts
can meet their intended procurement strategy. It is important to the participants to understand
the corresponding NEC contract to meet their procurement approach, as I understood that the
companies which the participants is working for, have not yet sublet most of their works,
especially the subletting of supplying of fabricated material for civil works of high-speed rail
and contracting of civil works, which can be contracted with local companies. They might not
aware the Supply Contract might be suitable for them to sublet their material supplying
contract, and ECSC might be suitable for them to sublet the general civil works to local
companies. This workshop should be a suitable time for them to revisit the NEC contract
forms, for their coming procurement tasks, as early determination of appropriate procurement
strategy and approach is one of the key factors leading to project success.
After that, I will spend around half hour (around 10:30 to 11:00) to introduce the
options available of ECC, including Option A – priced contract with activity schedule,
Option B – priced contract with bill of quantities, Option C – target contract with activity
schedule, Option D, target contract with bill of quantities, Option E, cost reimbursable
contract, and Option F – management contract. I will explain that the different Option will
change the ratio of financial risk between Employer and Contractor, that in Option A and B,
the Contractor bears the most of financial risk, in Option E and F, the Employer bears the
most financial risk. In between of the Options, I will focus on explaining the target cost
mechanism in Option C and D, and the philosophy of “share gain, share pain” behind
between Employer and Contractor, that the mechanism is most suitable for the partnering
culture and motivation of cost saving by both Employer and Contractor, which is the trendiest
relationship contracting approach nowadays. It should be the most suitable contracting forms
for international construction project like the speed rail infrastructure works to be handled by
the workshop participant, which always have tremendous risks on financing and pressure of
cost saving.
After taking another short break (around 11:00 to 11:10) for taking a rest by the
participants and for a fast Q&A for the last sessions, I will spend around fifty minutes
(around 11:10 to 12:00) to introduce the core clauses of NEC. As some of the participants are
familiar with FIDIC but not familiar with NEC, my introduction will focus on the major
differences between them, including the Contractor’s main responsibilities, time constrain of
contractual procedures, the mechanism on testing and defect, and the situation might cause
contract termination, for their ease of understanding the different approaches on
administration on NEC, instead of FIDIC. I will explain the ECC Core Clause 10.1 –
Contractual Partnering in detail, as mutual trust and co-operation is the most important spirit
of NEC.
After taking another short break (around 12:00 to 12:10) for taking a rest by the
participants and for a fast Q&A for the last sessions, I will spend around fifty minutes
(around (12:10 to 13:00) to introduce major secondary optional clauses of NEC ECC. The
optional clauses include X1 – price adjustment for inflation, X2 – changes in the law, X3 –
multiple currencies, X4 – parent company guarantee, X5 – sectional completion, X6 – bonus
for early completion, X7 – delay damages, X12 – partnering, and X13 – performance bond,
X14 – advanced payment to the Contractor, X15 – limitation of the Contractor’s liability for
his design to reasonable skill and care, X16 – retention, X17 – low performance damages,
X18 – limitation of liability, X20 – Key performance indicators. These secondary clauses are
important to be introduced as the participants can make their own decision whether to include

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BRE581 International Construction Projects
Take Home Assignment Section B
Student: WANG Tat (Hugo) Student ID: 19012107G

these clauses or not when making use of NEC and therefore, they must have clear ideas on
which situation it is suitable to include the clauses in the contracts. I would highlight that
clause X1, X2, X3 is suitable to include in the international construction projects like they are
working for, that the risk on changing of the external environment is high for having
construction project in BRI countries, and these clauses can secure them from the risks. I
would also highlight clause X4, X5, X6, X7, X13, X14, X15, X16, X17, X18 and X20 as
they would be important clauses on administration of large-scale infrastructure works as what
they are working for. The last and not the least, I would highlight the clause X12 which is the
clause for partnering, and I will recommend the participants to adopt it in their sublet
contracts.
After the lunch break (around 13:00 to 14:00), I will focus on the practical skill on
administration and execution of NEC. I will spend around half hour (around 14:00 to 14:30)
to explain the Early Warning Notification mechanism and the skills on handling Risk
Reduction Meeting in Risk Management (Core Clause 16). Then I will spend half an hour
(around 14:30 to 15:00) to explain the time frame and requirement on Time Management
(Core Clause 31.2 and 32.2). After that, I will spend another half an hour (15:00 to 15:30) to
explain the mechanism on Change Management (Core Clause 60) and the skills to handle
Compensation Events. I will focus these parts as those are the most frequent activities in
administration of NEC during construction period, and in NEC, all of time limit of
procedures to handle these contractual activities, are stated in the Contract. Therefore, I need
to let the participants to be aware on it, and prepare sufficient manpower to handle the
Contract, during construction period. Compared to traditional contracts, NEC demands fast
response to changes, therefore the demand of manpower to handle NEC procedures on time,
will be much higher than traditional contracts.
After taking a break (15:30 to 15:40) for taking a rest by the participants and for Q&A
for the last sessions, I will ask the participants to form groups to have a discussion forum on
case study of adoption of NEC contracts, and discuss their success factors, and any areas
have to be improved, on application of NEC. I will give three cases to them including the
Road P2, Tseung Kwan O, cross rail in UK and Segment 10, Manila North Expressway,
Philippines. Road P2, Tseung Kwan O is chosen for the case study as it is a local civil works
that the participants may be familiar with and therefore, they are possible to discuss the
success factors and areas of improvement in depth. Crossrail in UK is chosen for the case
study as it is the most similar infrastructure in engineering nature to the project they are
working for, which adopted NEC. Segment 10, Manila North Expressway, Philippines is
chosen for the case study as the external environment of the project is similar to the BRI
countries. After the case study, I will ask each group to present their findings.
It is common that by the discussion forum of the cases, the participants can observe
the critical success factors of NEC, including mutual trust and efficient communication of
project team, acceptance to cultural / mindset change through collaborative partnering spirit,
proactive risk management, regular update of “practicable’ programme and timely agreement
of compensation events. The understanding of the critical successful factors will be benefit to
their own execution of NEC. And they are common to observe the potential difficulties of
NEC, including unfamiliar or misunderstanding of NEC and overusing of Z clause, which
might harming the execution of NEC, and the difficulties on developing mutual trust and
understanding between different parties involved in the NEC, which they should be mentally
well prepared to overcome these difficulties during the execution of NEC.

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BRE581 International Construction Projects
Take Home Assignment Section B
Student: WANG Tat (Hugo) Student ID: 19012107G

It is expected the discussion forum will spend around one hour for discussion and
twenty minutes for presentation, therefore the workshop can be finished in 17:00.

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BRE581 International Construction Projects
Take Home Assignment Section B
Student: WANG Tat (Hugo) Student ID: 19012107G

References
1. Gerrard, R. (2005). Relational contracts—NEC in perspective. Lean Construction
Journal, 2(1), 80-86.
2. Klee, L. (2018). International construction contract law. John Wiley & Sons.
3. Siu, M. F. F., Leung, W. Y. J., & Chan, W. M. D. (2018). A Data-driven approach to
identify-quantify-analyse construction risk for Hong Kong NEC projects. Journal of
Civil Engineering and Management, 24(8), 592-606.
4. NEC Contracts, NEC4 ECC Project Manager Accreditation, retrieved on 1 May 2022,
https://www.neccontract.com/products/training/nec4-ecc-project-manager-
accreditation?_cur=HKD
5. NEC Contracts, Delegate Handbook, retrieved on 1 May 2022,
https://www.cic.hk/files/page/10315/NEC4-Delegate-Handbook-v2-1_Jan2019.pdf

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