NEC4: how effective assurance could enhance the NEC4 Alliance Contract

Some examples of assurance

The word assurance is not well understood.   To aid this understanding here are some examples from outside the world of construction.

  • If I need help in repairing my roof I gain assurance that the contractor I employ is reliable by visiting, “Trust a trader” or “Check a trade” and reading reviews
  • If I want to know whether a film is suitable for my sensitive daughter I gain assurance from the certificate given by the British Board of Film Classification
  • If a want to know whether the set of accounts I am relying on to aid an investment decision are reliable, I gain assurance by reading the auditor’s opinion
  • If I want to gain assurance that the second hand car I am buying is free from any outstanding debt and hasn’t previously been written off I visit a car check specialist

Assurance is therefore all about enhancing confidence.

Common features of reliable assurance providers

To create enhanced confidence, based on these examples, assurance providers should be:

  • Independent
  • Consistent
  • Expert
  • Able to offer an opinion

Reliable assurance is a valuable asset in an Alliance

The NEC has created a draft Alliance contract for comment where all parties sign up to one agreement. The contract will be performance-based, with risk and reward for achievement of the Alliance Objectives and the members of the Alliance work together as an integrated team.  All Alliance members are engaged on an open-book basis with project-specific incentive arrangements agreed at the outset.  There are no provisions for dispute resolution.

To build the sort of relationship envisaged by the draft NEC Alliance contract, reliable assurance has a role in enhancing confidence and collaboration. It provides an independent third party view to enable issues to be identified and dealt with on a timely basis. This could be achieved, for example by an independent third party assessing compliance with the Contract over:

  • Procurement
  • Early warnings
  • Compensation events
  • Payment
  • Programme

In an Alliance where so much is done based on trust, a third party providing effective assurance would therefore allow all parties enhanced confidence and enhanced collaboration.