Improving the outcomes of public drainage projects through NEC3-based relational contracting : Hong Kong case study

Abstract

Since its publication in 2005, the New Engineering Contract Version 3 (NEC3) [ICE (2013). New Engineering Contract 3] has increasingly been promoted as a relational contracting instrument for establishing mutual trust and for facilitating interorganizational collaboration. However, only a few empirical studies have documented the use of this contract in practice. Therefore, the current research investigates the initiation, execution, benefits, and critical factors in the implementation of NEC3-based relational practices. The lessons learned from this implementation are compared with those derived from the application of the integrated project delivery (IPD) approach in the United States. This study also analyzes the NEC3 Engineering and Construction Contract (ECC) [ICE (2005). NEC3 Engineering and Construction Contract] through a case study of the first pilot project in Hong Kong to adopt this new contract. Study findings not only reinforce the usefulness of well-established relational components (namely proactive risk mitigation, efficient change management, and transparent cost monitoring) in the NEC3/ECC, but also highlight local experiences (such as early implementation, joint problem solving, interorganizational team development, and regular partnering review) to enhance relational contracting further. Finally, NEC3 implementation is compared with that of the IPD. These results are beneficial to clients and contracting organizations, particularly inexperienced ones, in terms of the proper implementation of NEC3-based relational contracting for future projects.