One of the most common reasons contractors lose money on NEC projects isn't poor pricing or bad workmanship — it's delaying important commercial conversations.

Whether it's an early warning that isn't discussed, a compensation event quotation that isn't followed up, or a programme that is ignored, many contractors assume these issues can be dealt with once the dust is settled and the facts are known.

Unfortunately, NEC contracts don't work that way.

The NEC suite of contracts are built around proactive contract management. Notifications, time limits and regular communication are not administrative formalities, they are fundamental to how the contract manages risk and establishes entitlement. Waiting until the effects of the issue are known, or in some cases, the end of the project, to resolve commercial issues can have significant commercial consequences.

In many cases, the commercial position itself is not the problem, the issue is that the contractual process was not followed when it should have been.

What should contractors do?

Effective NEC contract management is about dealing with issues as they arise:

• Raise early warnings as soon as they become aware of a matter that could affect time, cost or performance.
• Notify and assess compensation events promptly and in accordance with the contract.
• Keep programmes up to date and submit them for acceptance when required.
• Maintain accurate contemporaneous records that support entitlement throughout the project.
• Address commercial issues early rather than assuming they can be resolved at the end of the works.

Taking timely action protects your contractual position and often prevents relatively small issues from developing into costly disputes.

Practical takeaway

NEC contracts reward proactive contract administration. The contractors who achieve the best commercial outcomes are those who consistently follow the contractual processes throughout it.  If you find yourself saying "we'll sort it out later," it's worth asking whether you're unintentionally putting your entitlement at risk.

If you're concerned that your NEC contract administration could be exposing your business to unnecessary commercial risk, our NEC contract review service provides an independent assessment of your contractual position and identifies practical improvements before they become expensive problems.