The NEC pitch

Eight out of ten projects use JCT. It's the market leader, a household name that people trust. The construction industry believes in it: that's why it stays brand loyal.

But for how long? Robert Gerrard, NEC consultant and secretary of the contracts body's users' group, is here to persuade you to use a different document on your construction projects: New Engineering Contracts. They make jobs smarter, faster, cheaper. Or so the pitch goes.

In the public sector it's a must-have, says Gerrard, because its teamwork ethos makes a welcome change from the messy "adversarial" approach of the Joint Contracts Tribunal.

"I won't work with any other form of contract, in any destructive relationships," he says. "I think we have a positive role in society, not a negative one, and I want a positive glow around the industry."

It's 2.15pm on 3 April, the day of the group's annual seminar. Gerrard's had a busy day so far but, sitting in the entrance hall of RIBA's Portland Place building, he still talks passionately about the benefits of NEC for the industry.

"I don't think there's any rocket science in the NEC," he says. "I spent a decade using traditional forms of contracts and traditional ways of working. I think it's a good educational process but absolutely hopeless for serving society."

Set up in 1986 by Martin Barnes, now Association for Project Management president, the NEC was originally created to promote flexibility, simplicity and stimulate good project management.

Now, some 20 years on, the government has caught on: the Office of Government Commerce and the National Audit Office both back the use of NEC contracts for public construction work. In the NEC's latest coup, the Olympic Delivery Authority is to use the NEC3 suite of contracts for London 2012 building.

Ray Payne, ODA head of procurement, said after the announcement: "It wasn't a decision that was taken lightly. We have to get Olympics construction right. It has to be ready and everything has to be working."

You or I wouldn’t enter into a contract without knowing precisely where we stood

Peter Hibberd, JCT secretary general

The decision shows how far the NEC is gaining ground, although the ODA's choice wasn't a big surprise. NEC was the basis of the T5 agreement and has been used for work under the Decent Homes initiative and also for NHS projects under Procure 21. And with central government endorsement now filtering through to local authority work, there's a very real chance that the construction industry is on the verge of a contract revolution.

Okay, so we're still some way off that yet. JCT still monopolises the market, with around 80% of construction projects done under its contracts. Even if NEC made up the whole of that leftover 20%, that would still leave it a quarter of the size of the JCT. And that's ignoring the use of GC/Works, ICE, IchemE, PPC2000 and so on. Even so, NEC is becoming thought of as more mainstream.

But Gerrard was there 10 years ago, after turning his back on traditional ‘adversarial' contracts in 1996. He said it was a school project in Yorkshire that showed him the old approach was "absolutely rubbish".

There was a discrepancy centering on whether the final account for the school was to be £10m or £15m. He says: "The client said to me: ‘Look, I've got X number of kids here waiting for a school to be built. We won't build the school until we know whether it's £10m or £15m, because if it costs us £15m, we can't afford the school.'"

Gerrard says that's when he decided that traditional practises can have a detrimental effect on both construction and society as a whole: "It put into perspective that it was absolutely rubbish. He can't build his school for these kids because we can't sort out a price for this job."

Persuading the rest of the industry of the need for change over the 10 years since has not been easy. But now he thinks the young people entering the industry will help drive the change.

"I find now with training graduates they say, ‘Well, how else do you work other than collaboratively?' and they have a laugh," says Gerrard.

Patrick Holmes, partner in the construction group at law firm Macfarlanes, agrees that industry conservatism hinders the uptake of NEC, as well as JCT 2005. However, he sees another big obstacle to the widespread use of NEC: its lack of case history.

There’s virtually nothing on NEC case law, so if there’s any ambiguity in wording, you don’t know which way it’ll go

Patrick Holmes, partner, Macfarlanes

"I think a lot of lawyers are cautious about NEC because it doesn't have any real body of law behind it," says Holmes. "There's virtually nothing on NEC case law, so if there's any ambiguity in wording, you don't know which way it'll go."

Supporters would say this proves the contracts are working, others would say it needs to be widely used for this case history to build up. Either way, it's still an issue.

And then there are more fundamental objections to the NEC from Peter Hibberd, the JCT secretary general. He says while JCT pins down risk early on - which in NEC terms makes it ‘adversarial' - at least that keeps things clearer.

"When it comes down to it, people want to get into a contract and they want to tie these things down," he says. "You or I wouldn't enter into a contract without knowing precisely where we stood."

Hibberd also says he doesn't see the need for a second contracting body: "JCT was set up to try to represent the whole view. If NEC's given us a kick up the behind to say, ‘well, you've not been doing that very well' then fine."

Potentially this is more than just a kick up the behind for JCT: it's an ideological battle that looks set to become ferocious. On one side there is the traditional JCT approach that plans for things going wrong, and on the other there is NEC partnering to stop things going wrong in the first place.

And the NEC brand is gathering momentum. There are people switching to it, including Rudi Klein, chief executive of the Specialist Engineering Contractors' Group, barrister and new NEC users' group chairman. He worked eight years in JCT but switched a couple of years back.

"In JCT I spent a long time trying to think of the ‘what if?' clause," he explains. "What if something doesn't happen? What else are you going to rely on? It tends to be that the approach has always tended to be negative rather than positive."

In JCT I spent a long time thinking of the ‘what if?’ clause. It tends to be negative

Rudi Klein, chairman, NEC Users’ Group

Klein argues that if the government is responsible for 40% of UK construction and NEC is the favoured approach for that, then the body's future looks bright.

"Old baggage takes a long time to evaporate but there could come a time in the future where this could be the standard approach, and that would be welcomed by many I'd have thought. I think that would be excellent," he says.

But he adds that no contract will help if procurement decisions and design teams are wrong at the start.

"You should never blame your tool, should you? We have to put these things in perspective. The contract itself is a contract. It's miniscule in terms of the significance of getting successful projects," he says.

But according to Klein and Gerrard, NEC promotes the sort of teamwork that can increase the chances of a project being successful. If this is borne out in people's everyday experiences then we could see a revolution. And if Heathrow Terminal 5 work passes off without major problems it could raise the NEC's profile further.

There's still a lot to do before we see a major industry shift. But with the NEC gaining momentum, is Gerrard excited about the prsopect of a widespread brand switch?

"It's more like relief," he says. "I'm relieved to hear that the penny has dropped. I don't think we're anything near a world-class industry but we can be because we're full of absolutely brilliant people. The industry needs a culture change, but it's the only barrier to us being absolutely brilliant."

Yes, Gerrard is a persuasive salesman for NEC, but only because he believes in the product. It remains to be seen whether the rest of the industry agrees.