NEC4 Alliance Contract Consultation

Alliance Contract
This contract is designed for use on major projects or programmes of work where longer
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term collaborative ways of working are to be created.
An NEC document
June 2017
Consultative Version
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Consultees may use the contract but must understand that there are aspects that are not
finalised and caution in its use is recommended. It should only be used in consultation with
NEC
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NEC is a division of Thomas Telford Ltd, which is a wholly owned subsidiary of the Institution
of Civil Engineers (ICE), the owner and developer of the NEC.
The NEC is a family of standard contracts, each of which has these characteristics:
• Its use stimulates good management of the relationship between the two parties to the
contract and, hence, of the work included in the contract.
• It can be used in a wide variety of commercial situations, for a wide variety of types of
work and in any location.
• It is a clear and simple document – using language and a structure which are
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straightforward and easily understood.
NEC4 Alliance Contract is one of the NEC suite and is consistent with all other NEC4
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documents. Also available are User Guides and Flow Charts which include guidance and
flowcharts on this contract.
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ISBN (complete box set) 978-0-7277-6303-7
ISBN (this document) 978-0-7277-6220-7
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ISBN (Establishing Procurement and Contract Strategies) 978-0-7277-6223-8

ISBN (Preparing an Alliance Contract) 978-0-7277-6233-7
ISBN (Selecting Suppliers) 978-0-7277-6234-4
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ISBN (Managing an Alliance Contract) 978-0-7277-6244-3

ISBN (Alliance Contract Flow Charts) 978-0-7277-6276-4
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Consultative edition June 2017

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British Library Cataloguing in Publication Data for this publication is available from the British
Library.
© Copyright nec 2017
All rights, including translation, reserved. The owner of this document may reproduce the
Contract Data and forms for the purpose of obtaining tenders, awarding and administering
contracts. Except as permitted by the Copyright, Designs and Patents Act 1988, no part of
this publication may be otherwise reproduced, stored in a retrieval system or transmitted in
any form or by any means, electronic, mechanical, photocopying, recording or otherwise,
without the prior written permission of the NEC Director, Thomas Telford Ltd, One Great
George Street, Westminster, London SW1P 3AA.
Typeset by Manila Typesetting Company
Printed and bound in Great Britain by Bell & Bain Limited, Glasgow, UK
Contents
Contents
Guidance on the Consultation v

Background v
NEC approach v
Option X12 – multiparty collaboration v
Infrastructure Client Group Alliancing Code of Practice vi
Alliance Contract (ALC) vi
Key principles of the ALC vi
Responses to Consultation xi
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Schedule of Options 1
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Core Clauses 3
1 General 3
2 The Alliance’s main responsibilities 9
3 Time 13
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4 Quality management 15
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5 Payment 16
6 Compensation events 19
7 Title 22
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8 Liabilities and insurance 23

9 Termination, resolving and avoiding disputes 25
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Option Clauses 29
Option X2: Changes in the law 29
Option X4: Ultimate holding company guarantee 29
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Option X9: Transfer of rights 29

Option X10: Information modelling 29
Option X18: Limitation of liability 30
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Option Y(UK)2: The Housing Grants, Construction and Regeneration Act 1996 31
Option Y(UK)3: The Contracts (Rights of Third Parties) Act 1999 31
Option Z: Additional conditions of contract 32
Schedule of Cost Components 33
Contract Data 37
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Guidance on the Consultation

BACKGROUND
The NEC4 Alliance Contract (ALC) has been published in a consultative draft form to allow
potential users to identify any matters they would prefer to be dealt with in a different
way, and suggest any additional material which should be included in the contract when
published. This guidance document gives the background to the development of the
contract, highlights some of the key principals of the ALC and notable differences between
the ALC and other NEC contacts. It also explains how responses to the consultation should
be submitted.
This consultative draft of the ACL should not be used to create or engage an Alliance to
undertake any work. The contact will only be finalised and ready for use once any changes
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that result from the consultation have been made.
The convention of using italics for terms which are identified in the Contract Data of the ALC
and capital initials for terms defined in the ALC has been used in this guide.
NEC APPROACH co
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The NEC contracts have always been prepared on the basis of encouraging collaboration
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between the contracting parties. This is aimed at promoting better management of the
contract in order to provide a better end product more consistently and reliably. This was
a driving objective of the first edition of the contract, and has been the focus of many of
the changes introduced in subsequent editions of the contract and this development has
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continued in the new NEC4 issue of the contracts.
This collaboration was initially created through the relationship between client and
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contracting party, but the publication of subcontract forms encouraged the collaborative
approach deeper into the supply chain.
As industry has sought new ways of working, more specific approaches to contract
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management, encouraging collaboration at a greater depth, and have been developed. NEC
contracts have evolved to promote and develop these approaches.
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OPTION X12 – MULTIPARTY COLLABORATION

This option was developed in response to a perceived need in the industry for greater
collaboration between the several contracting parties involved on a major or complex
project. Following the NEC approach of providing flexibility in our contracts, this option was
developed to be used on all contracts to help promote this increased level of collaboration.
The option allowed parties under separate NEC contracts to work together to achieve mutual
objectives on the project. Each contracting party had its own contract with the client, but
each was required to co-operate with other organisations involved on the project, to provide
support when needed and to give an early warning to others involved in the project as well
as to the client.
The option has been provided in all the main NEC contracts and subcontracts, such that
the agreement to collaborate would be entered into by contractors, consultants and key
subcontractors and suppliers. This flexibility allowed those organisations who would have
a significant impact on the success of the project to be included within the collaboration
agreement.
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INFRASTRUCTURE CLIENT GROUP ALLIANCING CODE OF PRACTICE

The UK Infrastructure Client Group – a grouping of major infrastructure clients – published
their Alliancing Code of Practice in 2015. This sets out best practice under four elements of
Alliancing – deciding to Alliance, creating an Alliance, delivering an Alliance and sustaining
an Alliance. The section on creating an Alliance sets out the issues to be addressed in
preparing the terms of the Alliance agreement. It was recognised that NEC contracts were
the appropriate forms of contract to be used as the basis for this Alliance.
NEC published a document giving guidance on how to create an alliancing contract as

recommended by the code of practice using NEC forms. This was based on standard NEC
contracts, incorporating the multiparty collaboration option X12. Guidance was given on
how to create the Contract Data, including suggested additional contract conditions. It made
recommendations for material to be included in the Partnering Information – the document
setting out how the collaborative relationship between the various parties involved the
project would operate.
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ALLIANCE CONTRACT (ALC)
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In the development stage of NEC4, it was concluded that a new standard form for alliancing
should be published. This was to be a single standalone contract, which all parties in the
Alliance would join. It would follow the principles in the Infrastructure Client Group Code
of Practice, but would take the development of the Alliance one stage further to enable all
parties to share in the success of the project by forming a fully integrated team. The team
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would work on an entirely “best for project” basis, with no individual party able to gain a
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commercial benefit at the expense of any other.
This has now been published in a consultative draft, to allow potential users to consider
how well it would meet their needs and to provide feedback on the approach taken by the
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drafting team to key aspects of the operation of the Alliance contract. Following this, final
modifications will be made, reflecting industry requirements, before being published for use.
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KEY PRINCIPLES OF THE ALC

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When should the ALC be used
The ALC is designed for use on major projects or programmes of work where longer term
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collaborative ways of working are to be created. Due to the nature of the relationships in the
ALC and the time investment that will be needed pre-contract to create an alliance it is not
envisaged that it will be used for low risk, low complexity projects.
The ALC has been designed to be used in the following situations.
• Single stage engagement – a single stage major project in which a sufficient level
of Scope development has taken place to allow a Budget, a Completion Date and
performance targets to be set at the commencement of the contract.
• Two stage engagement – by using the optional early involvement clauses an alliance is
created to deliver Stage One and develop detailed proposals for Stage Two including any
required updated to the Scope, Budget, Completion Date and Performance Table. The
Client has the option to not proceed to Stage Two and to remove this Scope from the
contract. This option can also be used to develop a programme of work through the use
of a number of separate Stage Two work packages.
The Alliance
The Alliance contract is a multi-party agreement to carry out work aimed at meeting the
Alliance Objectives set by the Client, under which each party to the Alliance (the Partners)
shares in the benefits of achieving those objectives and shares in the risk of failure. The
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Alliance Objectives will form the basis of the performance targets set in the Performance
Table against which the alliance will be incentivised. The objectives will be for the Client to
determine based on what areas of performance are important to them and that they want
the alliance to achieve.
Membership of the Alliance
It is for the Client initially to decide the members of the alliance dependent upon the nature
of the work, the parties likely to be involved and the levels of the supply chain (contractors
normally appointed as subcontractors, suppliers) that it wishes to bring in to membership of
the alliance.
It would also be sensible to engage with the proposed members of the alliance during the
pre-contract stage to get their views on who else should form part of the alliance and to
ensure that the proposed participants will be able to work together.
Once the ALC is in place the Alliance Board has the power to add any additional Partners
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they decide are necessary or helpful to achieve the Alliance Objectives and the Scope.
Structure of the Alliance
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The Alliance Board is the key decision making body for the Alliance and each party that
makes up the Alliance has an alliance board representative. The Client is a member of the
Alliance Board. The decisions of the Alliance Board have to be unanimous and bind all the
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parties that make up the Alliance - the Alliance Board will make decisions as a collaborative
team.
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The Alliance Manager leads the Alliance Delivery team and undertakes many of the functions
associated with the Project Manager under the ECC, however, the Alliance Manager reports
to and is managed by the Alliance Board.
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The Client appoints a Client Representative to undertake a number of functions retained by

the Client. These functions are limited to those issues over which the Client as opposed to
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the Alliance Board is to make decisions, such as the addition or removal of work from the
Scope or the certification of payment.
Members of the Alliance work together as an integrated team. The selection of people
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and organisations to undertake work is made on a best for project basis as opposed to the
individual commercial drivers of the members of the Alliance.
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No blame / claim
The members of the Alliance agree not to raise any claims or legal action against each other
and submit all disputes for resolution by the Alliance Board. In the UK and certain other
jurisdictions it is not possible to exclude certain rights such as the right to adjudication,
however, the contract does not contain provisions for this and so any such actions would
have to be undertaken under the statues that gives rise to these rights rather than the
contract. The view is that if the members of the Alliance cannot resolve a matter between
them then the Alliance is no longer operational and the only recourse would be to bring the
Alliance to an end.
Changes to the Scope
The Scope can be changed by the Client’s Representative acting on behalf of the Client.
This allows the Client to issue changes to the Scope without the need for agreement from
the other members of the Alliance providing the Client with the ability to change the Scope
to meet their needs and the works progress. The scope can also be changed by agreement
of the Alliance Board. A change to the Scope instructed by the Client’s Representative is
grounds for a compensation event, whilst a change made by the Alliance Board is only a
compensation event if the change made is taken to avoid or reduce an event, following the
early warning process, which would be a compensation event under the contract.
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Early Involvement
Optional clauses have been included to apply if selected in the Contract Data, to allow for
early involvement of the Alliance in a two stage engagement model.
Quality Management
Under the ALC all a Defect must be corrected by the Alliance and the cost of the correction
forms part of Defined Cost. However, if a Defect is a failure to achieve an Alliance Objective
for which a payment is set out in the Performance Table the Alliance does not correct the
Defect and instead suffers the performance incentive stated in the Performance Table.
Payment
The basis of payment is Defined Cost plus Fee on the same basis as Option E of the NEC4
ECC.
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Payment is made through a Project Bank Account set up by the Alliance and to which Named
Suppliers can be added.
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The Alliance Manager assess the amount due, which is the sum of the Defined Cost plus Fee
of the Partners together with other amounts due to or from the Partners, and submits this to
the Client’s Representative. The Client’s Representative checks the amounts being claimed for
payment and informs the Alliance Manager of any corrections that are required. The Alliance
manager makes the correction and resubmits the application.
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The Performance Table will contain an incentive based on achieving a saving and avoiding
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an overspend against the Budget. The saving or overspend is measured by comparing the
Budget and the Total of the Price for Work Done to Date. This will be shared between the
members of the Alliance in accordance with the Performance Table. The amount of any
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saving or overspend will have an effect on the payment for the achievement of other targets
in the Performance Table. The Performance Table may also have additional amounts the
Alliance members will pay if they do not achieve a performance target whether or not a
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saving or overspend has been created.
Budget is the term used to describe the target cost for the works (Prices in the ECC) and
includes both the Partner’s Defined Cost plus Fee and Clients Costs.
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Client Costs are costs which the Client incurs as a member of the Alliance and which are
included in both the Budget and the Total Price for Work Done to Date. What constitutes
these costs has not been defined and it has been left flexible for the Client to determine
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which of their cost should be included.
Total of the Price for Work Done to Date is a combination of the Partners Defined Cost plus
Fee and the Client Costs. This allows the Client Costs to form part of the Alliance costs and
be factored into the assessment of any savings or overspends used to assess payment for
performance against the Budget.
Compensation events
Under the ALC the Alliance Manager manages the compensation event process with
acceptance of the quotation for the effects of a compensation event being an action of the
Alliance Board. There is not separate acceptance requirement by the Client’s Representative
as the Client is a member of the Alliance Board and so will agree the effects of the
compensation event as one of the Alliance Board. Compensation effects can lead to changes
to the Budget, the Completion Date and the Performance Table.
Liabilities and Insurance
The Partners’ only individual liability is for wilful default.
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The Client carries liability for claims from Others. The risk of such claims would normally be
included as a Client Cost and form part of the Budget. The cost of any claims made by the
client would be included in the Total Price for Work Done to Date.
All risks other than third party claims or wilful default by a Partner are shared by the Alliance.
In reality this means the Client will pay the direct cost of risk events occurring as part of
Defined Cost or (if a third party claim) as Client Costs, and the Partners will share in their
effect as part of the incentive mechanism as these events will not increase the Budget. This
also reflected in the limited number of compensation events in the contract and reduced
grounds for Disallowed Cost.
The default position under the ALC is that the Client provides the insurances in the insurance
table and will need to demonstrate that such insurances are in place. This can though be
changed in the Contract Data.
Termination
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The termination provisions allow for termination by the Client a Partner or the Alliance
Board. The Client and a Partner can terminate for any reason, reflecting the consensual,
collaborative nature of the alliance, however, costs will flow from such a termination. The
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termination provisions also allow for the Alliance Board to remove a member of the Alliance,
even if that member does not agree with the termination.
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Schedule of Cost Components (SoCC)
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The SoCC is based on the ECC and assumes that the majority of the Alliance members will
be co-located within the Woking Area. As such the provisions for costs incurred in providing
design outside the Working Area are simplistic and based on agreed hourly rates.
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Contract Data
There is a single Contract Data for the ALC as opposed to a part one and part two. This is
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because the ALC will be created through negotiation with the members of the Alliance as
opposed to a formal invitation to tender process. The Contract Data will include the data
agreed to by all the Members of the Alliance
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Responses to Consultation
Responses to Consultation
It would be helpful if the responses to consultation could be structured in the following way.
As far as possible, brief explanations should be provided with the comments.
• Overall impression of the contract – about right/ too restrictive/ too flexible etc.
• Provisions within the contract which are welcomed and are considered to be best
practice for an Alliance.
• Provisions within the contract which are unduly restrictive and may prevent best practice
being achieved.
• Provisions within the contract which would be difficult to implement as they stand.
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• Further provisions which should be added to the contract to enable promote a successful
Alliance.
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• Other comments on the draft contract.
The contract can be downloaded by registering your interest with the NEC at the website
neccontracts.com. Access will then be provided to a copy of the contract for consultation.
All responses to the consultation should be made electronically using the feedback form to
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allow collation of comments.
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Any queries on the documents or the process should be referred to

alliance@neccontract.com by 30 November 2017.
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We look forward to hearing your views.

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Schedule of Options
Schedule of Options
OPTIONS The following Options should be considered. It is not neccasry to use any of them. Any
combination can be used.
Option X2 Changes in the law
Option X4 Ultimate holding company guarantee
Option X9 Transfer of rights
Option X10 Information modelling
Option X18 Limitation of liability
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The following Options dealing with national legislation should be included if required.
Option Y(UK)2 The Housing Grants, Construction and Regeneration Act 1996
Option Y(UK)3 The Contracts (Rights of Third Parties) Act 1999
Option Z Additional conditions of contract

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Note Options X1, X3, X5–X8 and X11–X17 are not used
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Core Clauses
Core Clauses
1. GENERAL
CORE CLAUSES
Actions 10
10.1 The Alliance, the Client’s Representative and the Alliance Manager shall act as stated in the
contract.
10.2 The Alliance, the Client’s Representative and the Alliance Manager act in a spirit of mutual
trust and co-operation.
Identified and 11
defined terms 11.1 In these conditions of contract, terms identified in the Contract Data are in italics and defined
terms have capital initials.
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11.2 (1) The Accepted Programme is the programme identified in the Contract Data or is the
latest programme accepted by the Alliance Manager. The latest programme accepted by the
Alliance Manager supersedes previous Accepted Programmes.
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OPTION CLAUSES
(2) The Alliance is the Client and the Partners. A reference to a member of the Alliance is a
reference to the Client or one of the Partners.
(3) The Alliance Board comprises the alliance board representatives unless later changed in
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accordance with the contract.
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(4) The Alliance Manager is the person appointed by the Alliance Board to lead and manage
the Alliance Management Team.
(5) The Alliance Delivery Team is the team appointed by the Alliance Board to deliver the
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works.
(6) An Alliance Objective is an aspect of performance by the Alliance which is in the

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document the stated in the Contract Data and for which a performance target is stated.
(7) The Budget is the items and amounts stated in the budget information unless later
COST COMPONENTS
changed in accordance with the contract.
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(8) The Client’s Costs are costs the Client incurs as a member of the Alliance and which are
calculated using the rates and prices contained in the Client’s cost schedule.
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(9) Completion is when the Alliance has
• done all the work which the Scope states is to be done by the Completion Date and
• corrected notified Defects which would have prevented the Client from using the works
or Others from doing their work.
If the work which the Alliance is to do by the Completion Date is not stated in the Scope,
Completion is when the Alliance has done all the work necessary for the Client to use the
works and for Others to do their work.
(10) The Completion Date is the completion date unless later changed in accordance with the
contract.
CONTRACT DATA
(11) The Contract Date is the date when the contract came into existence.
(12) A Corrupt Act is
• the offering, promising, giving, accepting or soliciting of an advantage as an inducement

for an action which is illegal, unethical or a breach of trust or
• abusing any entrusted power for private gain

Core Clauses
in connection with the contract or any other contract with the Client. This includes any
commission paid as an inducement which was not declared to the Client before the Contract
Date.
(13) A Defect is
CORE CLAUSES
• a part of the works which is not in accordance with the Scope or
• a part of the works designed by the Alliance which is not in accordance with the
applicable law or the Alliance’s design which the Client’s Representative has accepted.
(14) The Defects Certificate is either a list of Defects that the Client’s Representative has
notified before the defects date which the Alliance has not corrected or, if there are no such
Defects, a statement that there are none.
(15) Defined Cost is the cost of the components in the Schedule of Cost Components less
Disallowed Cost.
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(16) Disallowed Cost is cost which
• is not justified by the Partner’s accounts and records or
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OPTION CLAUSES
• should not have been paid to a Subcontractor or supplier in accordance with its contract.
(17) The Early Warning Register is a register of matters which are

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• listed in the Contract Data for inclusion and
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• notified by the Alliance as early warning matters.
It includes a description of the matter and the way in which the effects of the matter are to
be avoided or reduced.
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(18) Equipment is items provided and used by the Alliance to Provide the Works and which
the Scope does not require the Alliance to include in the works.
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(19) The Fee is the amount calculated by applying the fee percentage to the amount of
Defined Cost.
COST COMPONENTS
(20) An Insolvency Event is one of the following or its equivalent.

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• If a member of the Alliance is an individual and has
–– presented an application for bankruptcy,

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–– had a bankruptcy order made against it,
–– had a receiver appointed over its assets or
–– made an arrangement with its creditors.
• If a member of the Alliance is a company or partnership and has
–– had a winding-up order made against it,
–– had a provisional liquidator appointed to it,

CONTRACT DATA
–– passed a resolution for winding-up (other than in order to amalgamate or

reconstruct),
–– had an administration order made against it or had an administrator appointed over

it,
–– had a receiver, receiver and manager, or administrative receiver appointed over the
whole or a substantial part of its undertaking or assets or
–– made an arrangement with its creditors.
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Core Clauses
(21) Others are people or organisations who are not the Client, the Client’s Representative,
the Alliance Manager, a Partner or any employee, Subcontractor or supplier of a member of
the Alliance.
(22) The Partners are the partners unless later changed in accordance with the contract.
CORE CLAUSES
(23) The Performance Table includes the targets for performance stated for the Alliance
Objectives, sets out the adjustment to payment if a measured performance is higher or
lower than the target and sets out how the adjustments are shared between the Partners.
The Performance Table is the performance table unless later changed in accordance with the
contract.
(24) Plant and Materials are items intended to be included in the works.
(25) The Price for Work Done to Date is the total Defined Cost which the Alliance Manager
forecasts will have been paid by the Partners before the next assessment date plus the Fee.
(26) To Provide the Works means to do the work necessary to complete the works in
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accordance with the contract and all incidental work, services and actions which the contract
requires.
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(27) Scope is information which
OPTION CLAUSES
• specifies and describes the works or
• states any constraints on how the Alliance Provides the Works

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and is either
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• in the documents which the Contract Data states it is in or
• in an instruction given in accordance with the contract.

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(28) The Site is the area within the boundaries of the site and the volumes above and below
it which are affected by work included in the contract.
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(29) A Subcontractor is a person or organisation who has a contract with a Partner to
• construct or install part of the works,
COST COMPONENTS
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• design all or part of the works, except the design of Plant and Materials carried out by
the supplier or
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• provide a service in the Working Areas which is necessary to Provide the Works, except
for the
–– hire of Equipment or
–– supply of people paid for by a Partner according to the time they work.
(30) The Total Price for Work Done to Date is the sum of the Price for Work Done to Date and
the Client’s Costs.
(31) The Working Areas are the Site and areas provided by the Alliance which are
• necessary for Providing the Works and

CONTRACT DATA
• used only for work in the contract.
Interpretation and 12
the law 12.1 In the contract, except where the context shows otherwise words in the singular also mean
in the plural and the other way round.
12.2 The contract is governed by the law of the contract.
12.3 No change to the contract, unless provided for by these conditions of contract, has effect
unless it has been agreed, confirmed in writing and signed by the Alliance.

Core Clauses
12.4 The contract is the entire agreement between the Alliance.
Communications 13
13.1 Each communication which the contract requires is communicated in a form which can be
read, copied and recorded. Writing is in the language of the contract.
CORE CLAUSES
13.2 If the Scope specifies the use of a communication system, a communication has effect when
it is communicated through the communication system specified in the Scope.
If the Scope does not specify a communication system, a communication has effect when
it is received at the last address notified by the recipient for receiving communications or, if
none is notified, at the address of the recipient stated in the Contract Data.
13.3 If the contract requires the Client’s Representative, the Alliance Manager or the Alliance
Board to reply to a communication, unless otherwise stated in these conditions of contract,
they reply within the period for reply.
13.4 The Client’s Representative replies to a communication submitted or resubmitted by the
Alliance Manager for acceptance. If the reply is not acceptance, the Client’s Representative
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states the reasons in sufficient detail to enable the Alliance Manager to correct the matter.
The Alliance Manager resubmits the communication within the period for reply taking
account of these reasons.
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13.5 The Client’s Representative may extend the period for reply to a communication if the
OPTION CLAUSES
Client’s Representative and the Alliance Manager agree to the extension before the reply is
due. The Client’s Representative informs the Alliance Manager of the extension which has
been agreed.
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13.6 The Client’s Representative issues certificates to the Alliance Board and the Alliance Manager.
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13.7 A notification or certificate which the contract requires is communicated separately from
other communications.
The Client’s 14
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Representative 14.1 The Client’s Representative acceptance of a communication from the Alliance Board or
Alliance Manager or acceptance of the work does not change the Alliance’s responsibility to
Provide the Works or liability for its design.
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14.2 The Client’s Representative, after notifying the Alliance Board and Alliance Manager, may
delegate any of its actions and may cancel any delegation. The notification contains the
name of the delegate and details of the actions being delegated or any cancellation of
COST COMPONENTS
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delegation. A reference to an action of the Client’s Representative in the contract includes an

action by its delegate. The Client’s Representative may take an action which it has delegated.
14.3 The Client’s Representative may give an instruction to the Alliance Board which changes the
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Scope.
14.4 The Client may replace the Client’s Representative after notifying the Alliance Board and
Alliance Manager of the name of the replacement.
Early warning 15
15.1 A member of the Alliance gives an early warning by notifying the Alliance Manager as soon
as they become aware of any matter which could
• delay Completion,
• impair the performance of the works in use or
• increase the Alliance’s total cost.

CONTRACT DATA
The Alliance Manager enters early warning matters in the Early Warning Register and issues
a copy of the updated Early Warning Register to the Alliance. Early warning of a matter for
which a compensation event has previously been notified is not required.

Core Clauses
15.2 The Alliance Manager prepares a first Early Warning Register and issues it to the Alliance
within one week of the starting date. The Alliance Manager holds a first early warning
meeting within two weeks of the starting date.
Later early warning meetings are held
CORE CLAUSES
• if the Alliance Manager or any member of the Alliance instructs an early warning
meeting, and, in any case,
• at no longer interval than the interval stated in the Contract Data until Completion of
the whole of the works.
The Alliance Manager decides on the attendees for an early warning meeting in consultation
with the Alliance.
The Client’s Representative may attend an early warning meeting.
A Subcontractor attends an early warning meeting if their attendance would assist in
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deciding the actions to be taken.
15.3 At an early warning meeting, those who attend co-operate in
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• making and considering proposals for how the effects of each matter in the Early
OPTION CLAUSES
Warning Register can be avoided or reduced,
• seeking solutions that will bring advantage to all those who will be affected,
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• deciding on the actions which will be taken and who, in accordance with the contract,
will take them,
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• deciding which matters can be removed from the Early Warning Register and
• reviewing actions recorded in the Early Warning Register and deciding if different actions
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need to be taken and who, in accordance with the contract, will take them.
15.4 The Alliance Manager revises the Early Warning Register to record the decisions made at
each early warning meeting and issues the revised Early Warning Register to the Alliance
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within one week of the early warning meeting. If a decision needs a change to the Scope,
the Alliance Manager notifies the Alliance Board at the same time as the revised Early
COST COMPONENTS
Warning Register is issued.
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Requirements for 16
instructions 16.1 If the Alliance becomes aware of an ambiguity or inconsistency in or between the documents
which are part of the contract it refers the matter to the Alliance Board who determine how
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the ambiguity or inconsistency should be resolved.

16.2 If the Alliance becomes aware that the Scope includes an illegal or impossible requirement
it notifies the Client’s Representative. If the Scope does include an illegal or impossible
requirement, the Client’s Representative gives an instruction to change the Scope
appropriately.
Corrupt Acts 17
17.1 The Alliance do not do a Corrupt Act.
17.2 The Alliance take action to stop a Corrupt Act of a Subcontractor or supplier of which they
are, or should be, aware.
17.3 The Alliance include equivalent provisions to these in subcontracts and contracts for the
CONTRACT DATA
supply of Plant and Materials and Equipment.

Core Clauses
Prevention 18
18.1 If an event occurs which
• stops the Alliance completing the whole of the works or
• stops the Alliance completing the whole of the works by the date for planned
CORE CLAUSES
Completion shown on the Accepted Programme,
and which
• the Alliance could not prevent and
• people or organisations experienced in works similar to the works would have judged
at the Contract Date to have such a small chance of occurring that it would have been
unreasonable to have allowed for it,
the Client’s Representative gives an instruction to the Alliance stating how the event is to be
dealt with.
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OPTION CLAUSES
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COST COMPONENTS
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CONTRACT DATA

Core Clauses
2. THE ALLIANCE’S MAIN RESPONSIBILITIES
The Alliance and 20

the Alliance Board 20.1 The Alliance
• collaborate with each other to achieve the Alliance Objectives and the objectives of
CORE CLAUSES
every other Partner,
• work collectively to support the delivery of the contract on a best for project basis,
• develop and use common interface systems as set out in the Scope,
• give advice, information and opinion to the Alliance Board and to the other members
of the Alliance when asked to do so by the Alliance Board, this advice, information and
opinion is given fully, openly and objectively and
• establish an integrated alliance delivery team based on a best for project basis and
supporting the sharing of knowledge, information, and best practice.
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20.2 The Alliance Board is responsible for managing the Alliance on behalf of the Alliance and any
action, decision, instruction, notification or submission made by the Alliance Board binds all
the Alliance.
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OPTION CLAUSES
20.3 A member of the Alliance may replace their alliance board representative after notifying the
others of the name of the replacement.
20.4 The Alliance Board meets
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• when an Alliance members requires a meeting, and, in any case,
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• at no longer interval than the interval stated in the Contract Data from the starting date
until Completion of the whole of the works.
20.5 An Alliance Board meeting is adjourned if there is not a quorum of alliance board
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representatives present. The number of alliance board representatives to constitute a quorum

is stated in the Contract Data.
20.6 Unless otherwise stated in these conditions of contract a decision of the Alliance Board must
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be a unanimous decision of the alliance board representatives attending an Alliance Board

Meeting.
COST COMPONENTS
20.7 The Alliance Board appoints a person to lead each Alliance Board meeting.
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20.8 The Alliance Board acts in accordance with the contract and
• manages the Alliance,

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• allocates work between the Alliance,
• makes decisions as stated in the contract,
• appoints and instructs the Alliance Manager,
• appoints the Alliance Delivery Team,
• decides if an item of Equipment needs acceptance and accepts that Equipment and
• resolves disputes within the Alliance.

20.9 If the Alliance Board decides to change the Scope or the Performance Table it instructs the
CONTRACT DATA
Alliance Manager who changes the Scope or Performance Table accordingly.

20.10 The Alliance Board may add a Partner to the Alliance. An additional Partner is added to the
Contract Data.
20.11 The Alliance Board may instruct other people to attend an Alliance Board meeting. These
other people do not have a right to vote in any decision made by the Alliance Board.

Core Clauses
20.12 The Alliance Board may delegate any of its actions to the Alliance Manager by notifying the
Client’s Representative. The notification contains details of the actions being delegated or
any cancellation of delegation. A reference to an action of the Alliance Board in the contract
includes an action delegated to the Alliance Manager. The Alliance Board may take an action
which it has delegated.
CORE CLAUSES
The Alliance 21
Manager and 21.1 The Alliance Manager leads the Alliance Delivery Team. The Alliance Manager complies with
Alliance Delivery any instructions given by the Alliance Board.
Team
21.2 The Alliance Manager issues certificates to the Alliance Board and the Client’s Representative.
21.3 The Alliance Manager maintains a record of changes to the Scope instructed by the Client’s
Representative and the Alliance Board
21.4 The Alliance Delivery Team arranges for the work necessary to Provide the Works to be
carried out. The Alliance Delivery team act in accordance with the Scope and any instructions
given by the Alliance Board or Alliance Manager.
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Providing the 22
Works 22.1 The Alliance Provides the Works in accordance with the Scope and the Alliance Objectives.
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22.2 The Alliance Manager prepares forecasts of the total Defined Cost for the whole of the
OPTION CLAUSES
works and submits them to the Alliance Board. A copy of the forecast is issued to the Client’s
Representative. Forecasts are prepared at the intervals stated in the Contract Data from the
starting date until Completion of the whole of the works. An explanation of the changes
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made since the previous forecast is submitted with each forecast.
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The Alliance’s 23
design 23.1 The Alliance carries out the design necessary to Provide the Works.
23.2 The Alliance Manager submits the particulars of its design as the Scope requires to the
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Client’s Representative for acceptance.
The Alliance does not proceed with the relevant work until the Client’s Representative has
accepted its design.
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23.3 The Alliance may submit its design for acceptance in parts if the design of each part can be
assessed fully.
COST COMPONENTS
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23.4 The Partners may use the material provided by them under the contract for other work
unless
• the ownership of the material has been given to the Client or

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• it is stated otherwise in the Scope.

23.5 The Alliance retain copies of drawings, specifications, reports and other documents which
record the Alliance’s design for the period for retention. The copies are retained in the form
stated in the Scope.
23.6 The Client may use and copy the Alliance’s design for any purpose connected with
construction, use, alteration or demolition of the works unless otherwise stated in the
Alliance Objectives and for other purposes as stated in the contract. The Partners obtain from
Subcontractors equivalent rights for the Client to use material prepared by the Subcontractor.
People 24
24.1 The Partners either provide each key person named to do the job stated in the Contract Data
CONTRACT DATA
or provide a replacement person who has been accepted by the Alliance Manager.
The Partner submits the name, relevant qualifications and experience of a proposed
replacement person to the Alliance Manager for acceptance.
Working with the 25

Client and Others 25.1 The Alliance co-operates with Others, including in obtaining and providing information
which they need in connection with the works. The Alliance shares the Working Areas with
Others as stated in the Scope.

Core Clauses
25.2 The Alliance provides services and other things as stated in the Scope.
Subcontracting 26
26.1 If a Partner intends to subcontract a part of the works it provides
• details of the work to be undertaken by the Subcontractor,
CORE CLAUSES
• the name and details of the proposed Subcontractor,
• the proposed subcontract documents, including any pricing information
to the Alliance Board for acceptance. A Partner does not appoint a proposed Subcontractor
until the Alliance Board has accepted it.
26.2 A Partner is responsible for participating in Providing the Works as if it had not
subcontracted. The contract applies as if a Subcontractor’s employees and equipment were
the Partner’s.
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Other 27
responsibilities 27.1 The Alliance obtains approval of its design from Others where necessary.
27.2 The Alliance provides access to work being done and to Plant and Materials being stored for
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the contract for
OPTION CLAUSES
• the Client’s Representative and
• Others as instructed by the Client’s Representative.

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27.3 The Alliance obeys an instruction which is in accordance with the contract and is given by the
Client’s Representative, the Alliance Board or the Alliance Manager.
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27.4 The Alliance acts in accordance with the health and safety requirements stated in the Scope.
Assignment and 28
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disclosure 28.1 A member of the Alliance notifies the other members of the Alliance if it intends to transfer
the benefit of the contract or any rights under it. The Client does not transfer a benefit or
right if the party receiving the benefit or rights does not intend to act in a spirit of mutual
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trust and co-operation.

28.2 The Alliance does not disclose information obtained in connection with the works except
when necessary to carry out their duties under the contract
COST COMPONENTS
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28.3 The Alliance may publicise the works only with the agreement of the Alliance Board.
Early involvement 29
29.1 The following provisions apply if stated in the Contract Data.
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29.2 Stage One and Stage Two have the meanings given to them in the Scope.
29.3 Pricing Information is information which specifies how the Alliance prepares its assessment of
the Budget for Stage Two, and is in the document which the Contract Data states it is in.
29.4 The Alliance Manager prepares forecasts of the Budget for Stage Two and submits them to
the Alliance Board. A copy of the forecast is issued to the Client’s Representative. Forecasts
are prepared at the intervals stated in the Contract Data from the starting date until the issue
of a notice to proceed to Stage Two.
29.5 The Alliance Manager submits its design proposals for Stage Two to the Client’s
Representative for acceptance in accordance with the submission procedure stated in the
Scope.
CONTRACT DATA
The submission includes the Alliance’s forecast of the effect of the design proposal on the
Budget, the Performance Table and the Accepted Programme.
29.6 If the submission is not accepted, the Client’s Representative gives reasons.
29.7 The Alliance Manager makes a revised submission taking account of the Client’s
Representative’s reasons.
29.8 The Budget for Stage Two is assessed by the Alliance Manager using the Pricing Information
stated in the Contract Data.

Core Clauses
29.9 The Alliance completes any outstanding design during Stage Two.
29.10 The Client’s Representative issues a notice to proceed to Stage Two when
• the Alliance has obtained approvals and consents from Others as stated in the Scope,
• changes to the Budget, the Completion Date and the Performance Table have been
CORE CLAUSES
agreed by the Client’s Representative,
• the Client’s Representative has confirmed the works are to proceed.

29.11 If a notice to proceed to Stage Two is not issued for any reason, the Client’s Representative
issues an instruction that the work required in Stage Two is removed from the Scope and,
in consultation with the Alliance Manager, changes the Budget and the Performance Table
accordingly. This instruction is not a compensation event.
29.12 If the Client’s Representative does not issue a notice to proceed to Stage Two because the
Client’s Representative and the Alliance have not agreed the changes to the Budget, the
Completion Date and the Performance Table the Client may appoint another organisation to
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complete the Stage Two works.
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OPTION CLAUSES
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COST COMPONENTS
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CONTRACT DATA

Core Clauses
3. TIME
Starting and 30
Completion 30.1 The Alliance does not start work on the Site until the first access date and does the work so
that Completion is on or before the Completion Date.
CORE CLAUSES
30.2 The Alliance Manager decides the date of Completion and certifies it within one week of the
date.
The programme 31
31.1 If a programme is not identified in the Contract Data, the Alliance Manager submits a first
programme to the Alliance Board for acceptance within the period stated in the Contract
Data.
31.2 The members of the Alliance coordinate their work programmes for the benefit of the
project and to support the creation and updating of the programme by the Alliance
Manager. The members of the Alliance provide information and make changes to their work
programmes as required by the Alliance Manager.
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31.3 The Alliance Manager shows on each programme submitted for acceptance
• the starting date, access dates and Completion Date,
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OPTION CLAUSES
• planned Completion,
• the order and timing of the operations which the Alliance plans to do in order to Provide
the Works,
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• the order and timing of the work of Others as last agreed with them by the Alliance or, if
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not so agreed, as stated in the Scope,
• the dates when the Alliance plans to complete other work needed to allow the Others to
do their work,
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• provisions for
–– float,
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–– time risk allowances,
COST COMPONENTS
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–– health and safety requirements and
–– the procedures set out in the contract,

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• the dates when, in order to Provide the Works in accordance with the programme, the
Alliance will need
–– access to a part of the Site if later than its access date,
–– acceptances and
–– information from Others,
• for each operation, a statement of how the Alliance plans to do the work identifying the
principal Equipment and other resources which will be used and
• other information which the Scope requires the Alliance to show on a programme
CONTRACT DATA
submitted for acceptance.
A programme issued for acceptance is in the form stated in Scope.

31.4 Within two weeks of the Alliance Manager submitting a programme for acceptance, the
Alliance Board notifies the Alliance Manager of the acceptance of the programme or the
reasons for not accepting it and stating changes required to make it acceptable. The Alliance
manager makes these changes to the programme and resubmits it to the Alliance Board.

Core Clauses
Revising the 32
programme 32.1 The Alliance Manager shows on each revised programme
• the actual progress achieved on each operation and its effect upon the timing of the
remaining work,
CORE CLAUSES
• how the Alliance plans to deal with any delays and to correct notified Defects and
• any other changes which the Alliance Manager proposes to make to the Accepted
Programme.
32.2 The Alliance Manager submits a revised programme to the Alliance Board for acceptance
• within the period for reply after the Alliance Board has instructed the Alliance Manager
to,
• when the Alliance Manager chooses to and, in any case,
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• at no longer interval than the interval stated in the Contract Data from the starting date
until Completion of the whole of the works.
Access to and use 33
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of the Site 33.1 The Client allows access to and use of each part of the Site to the Alliance which is necessary
OPTION CLAUSES
for the work included in the contract. Access and use is allowed on or before the later of its
access date and the date for access shown on the Accepted Programme.
Instructions to stop 34
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or not to start work 34.1 The Client’s Representative may instruct the Alliance to stop or not start any work. The
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Client’s Representative subsequently gives an instruction to the Alliance to
• re-start or start the work or

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• remove the work from the Scope.
Take over 35
35.1 The Client may take over and use any part of the works before Completion has been
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certified.
35.2 The Client’s Representative certifies the date upon which the Client takes over any part of the
COST COMPONENTS
works and its extent within one week of the date.

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CONTRACT DATA

Core Clauses
4. QUALITY MANAGEMENT
Quality 40
management 40.1 The Alliance operates a quality management system which complies with the requirements
system stated in the Scope.
CORE CLAUSES
40.2 Within the period stated in the Contract Data, the Alliance Manager provides the Alliance
Board with a quality policy statement and a quality plan for acceptance.
If any changes are made to the quality plan, the Alliance Manger provides the Alliance Board
with the changed quality plan for acceptance.
40.3 The members of the Alliance support the creation and updating of the quality policy
statement and quality plan by the Alliance Manager. The members of the Alliance comply
with the Alliance quality management system.
Tests and 41
inspections 41.1 This clause only applies to tests and inspections required by the Scope or the applicable law.
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41.2 The Alliance Manager and the Client’s Representative informs the other of each of their
tests and inspections before the test or inspection starts and afterwards informs the other
of the results. The Alliance Manager informs the Client’s Representative in time for a test or
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inspection to be arranged and done before doing work which would obstruct the test or
OPTION CLAUSES
inspection. The Client’s Representative may watch any test done by the Alliance.
41.3 If a test or inspection shows that any work has a Defect, the Alliance corrects the Defect and
the test or inspection is repeated.
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Searching for and 42
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notifying Defects 42.1 Until the defects date, the Client’s Representative may instruct the Alliance Manager to
search for a Defect. The Client’s Representative gives reasons for the search with the
instruction. Searching may include
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• uncovering, dismantling, re-covering and re-erecting work,
• providing facilities, materials and samples for tests and inspections done by the Client’s
Representative and
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• doing tests and inspections which the Scope does not require.
COST COMPONENTS
42.2 Until the defects date the Client’s Representative and the Alliance Manager notifies the other
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as soon as they become aware of a Defect.
Correcting Defects 43
43.1 If the Defect is a failure to achieve an Alliance Objective for which a payment is set out in the
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Performance Table, the Alliance does not correct the Defect. For other Defects, the Alliance
corrects a Defect whether or not the Client’s Representative has notified it.
43.2 If the Alliance is required to correct a notified Defect it corrects the Defect within a time
which minimises the adverse effect on Others.
43.3 The Client’s Representative issues the Defects Certificate at the defects date if there are no
notified Defects, or otherwise at the earlier of
• the end of the last defect correction period and
• the date when all notified Defects have been corrected.

CONTRACT DATA
The Client’s rights in respect of a Defect which the Client’s Representative has not found or
notified are not affected by the issue of the Defects Certificate.
43.4 The Client’s Representative arranges for the Client to allow the Alliance access to and use of
a part of the works which has been taken over if it is needed for correcting a Defect.
Accepting Defects 44
44.1 The Alliance Board may change the Scope so that a Defect does not have to be corrected.

Core Clauses
5. PAYMENT
Project Bank 50
Account 50.1 (1) The Authorisation is a document authorising the project bank to make payments to the
Partners and Named Suppliers.
CORE CLAUSES
(2) Named Suppliers are named suppliers and other Suppliers who have signed the Joining
Deed.
(3) Project Bank Account is the account used to receive payments from the Client and to
make payments to the Partners and Named Suppliers.
(4) A Supplier is a person or organisation who has a contract with a Partner to
• construct or install part of the works,
• provide a service necessary to Provide the Works or
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• supply Plant and Materials for the works.
(5) Trust Deed is an agreement in the form set out in the Scope which contains provisions for
administering the Project Bank Account.
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OPTION CLAUSES
(6) Joining Deed is an agreement in the form set out in the Scope under which the Supplier
joins the Trust Deed.
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50.2 The Alliance Board establishes the Project Bank Account with the project bank within three
weeks of the Contract Date.
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50.3 The Partners pay any charges made and are paid any interest paid by the project bank.
50.4 The Partners include in contracts with Named Suppliers the arrangements in the contract
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for the operation of the Project Bank Account and Trust Deed. The Partners inform Named
Suppliers of the details of the Project Bank Account and the arrangements for payment of
amounts due under their contracts.
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50.5 A Partner submits proposals for adding a Supplier to the Named Suppliers to the Alliance
Board for acceptance. The Alliance and the Supplier sign the Joining Deed after acceptance.
COST COMPONENTS
Assessing the 51
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amount due 51.1 The Alliance Manager, in consultation with the Partners, assesses the amount due to each
Partner and submits an application for payment to the Client’s Representative before each
assessment date. The first assessment date is decided by the Alliance Board and is not later
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than the assessment interval after the starting date. Later assessment dates occur at the end
of each assessment interval until the final certificate. The Client’s Representative issues the
final certificate
• four weeks after the Client’s Representative issues the Defects Certificate or
• thirteen weeks after the Alliance Manager issues a termination certificate.
The final certificate is conclusive evidence of the final amount due under or in connection
with the contract unless a dispute on the amount is referred to Alliance Board for final
resolution within four weeks of the date of the final certificate.
51.2 The Alliance Manager’s application for payment includes the amount due to the Partners,
details of how the amount has been assessed and is in the form stated in the Scope.
CONTRACT DATA
The Alliance Manager shows in the application for payment the amounts due to Named
Suppliers in accordance with their contracts.

Core Clauses
51.3 The amount due at the assessment date is the total of the Partner’s
• Price for Work Done to Date,
• plus other amounts to be paid to the Partners,
CORE CLAUSES
• less amounts to be paid by or retained from the Partners.
51.4 If the Alliance Manager has incorrectly assessed the amount due in an application made
before the assessment date, the Client’s Representative informs the Alliance Manager of the
error and the Alliance Manager corrects the amount due.
51.5 Payments of Defined Cost made by a Partner in a currency other than the currency of the
contract are included in the amount due as payments to be made to it in the same currency.
Such payments are converted to the currency of the contract in order to calculate the Fee
using the exchange rates.
51.6 The Alliance and named suppliers sign the Trust Deed before the first assessment date.
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Payment 52
52.1 The Client’s Representative certifies a payment within one week of each assessment date.
The first payment is the amount due. Other payments are the change in the amount due
since the previous assessment. A payment is made by the Partners to the Client if the change
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OPTION CLAUSES
reduces the amount due. Other payments are made by the Client to the Partners. Payments
are in the currency of the contract unless otherwise stated in the contract.
52.2 Each certified payment by the Client is made into the Project Bank Account within the time
set out in the banking arrangements to allow the project bank to make payment to the
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Partners and Named Suppliers within three weeks of the assessment date or, if a different
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period is stated in the Contract Data, within the period stated. If a certified payment is late,
or if a payment is late because the Client’s Representative has not issued a certificate which
should be issued, interest is paid on the late payment. Interest is assessed from the date by
which the late payment should have been made until the date when the late payment is
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made, and is included in the first assessment after the late payment is made.
52.3 Interest is calculated on a daily basis at the interest rate and is compounded annually.
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52.4 Any tax which the law requires a member of the Alliance to pay is added to any payment
made under the contract.
52.5 The Alliance Manager prepares the Authorisation, setting out the sums due to Named
COST COMPONENTS
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Suppliers as assessed by the Alliance Manager and to the Partners for the balance of the
payment due under the contract. The Alliance Manager issues a copy of the Authorisation to
the Client’s Representative and submits it to the project bank no later than four days before
the date for payment.
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52.6 The Partners and Named Suppliers receive payment from the Project Bank Account of the
sums set out in the Authorisation as soon as practicable after the Project Bank Account
receives payment.
52.7 A payment which is due from a Partner to the Client is not made through the Project Bank
Account.
Defined Cost 53
53.1 All the Partners costs which are not included in the Defined Cost are treated as included in
the Fee. Defined Cost includes only amounts calculated using rates and percentages stated in
the Contract Data and other amounts at open market or competitively tendered prices with
deductions for all discounts, rebates and taxes which can be recovered.
CONTRACT DATA
53.2 The Partners keeps these records
• accounts of payments of Defined Cost,
• proof that the payments have been made,
• communications about and assessments of compensation events for Subcontractors and
• other records as stated in the Scope.

Core Clauses
53.3 The Partners allow the Alliance Manager and the Client’s Representative to inspect at any
time within working hours the accounts and records which it is required to keep.
53.4 The Alliance Manager notifies the Alliance Board when a part of Defined Cost has been
finalised, and makes available for inspection the records necessary to demonstrate that it has
been correctly assessed. The Alliance Board reviews the records made available, and no later
CORE CLAUSES
than thirteen weeks after the Alliance Manager’s notification
• accepts that part of Defined Cost as correct,
• notifies the Alliance Manager that further records are needed or
• notifies the Alliance Manager of errors in its assessment.
The Alliance Manager provides any further records requested or advises the correction of the
errors in its assessment within four weeks of the Alliance Board’s notification. The Alliance
Board reviews the records provided, and within four weeks
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• accepts the cost as correct or
• notifies the Alliance Manager of the correct assessment of that part of Defined Cost.
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Performance 54
OPTION CLAUSES
measurements 54.1 From the starting date until Completion of the whole of the works, the Alliance Manager
reports to the Client’s Representative the Alliance’s performance against the Alliance
Objectives. Reports are provided at the intervals stated in the Contract Data and include the
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forecast final measurement against each objective.
54.2 If the Alliance Manager’s forecast final measurement against an Alliance Objective will
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not achieve the performance level stated, the Alliance Manager submits to the Client’s
Representative for acceptance the Alliance’s proposals for improving performance. The
Client’s Representative either accepts the proposals or states that they will not provide the
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improvement in performance needed to achieve the Operational Requirements and provides

the reasons for not accepting the proposals in sufficient detail to enable the Alliance to
correct the matter. The Alliance Manager resubmits the communication within the period for
reply taking account of these reasons.
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54.3 At the dates stated in the Performance Table, the Client’s Representative assesses the
Alliance’s performance in accordance with the Performance Table.
COST COMPONENTS
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At the date stated in Performance Table the Client’s Representative assess the difference
between the Budget and the forecast Total Price for Work Done to Date.
54.4 If the Budget is greater than the forecast Total Price for Work Done to Date a Budget
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saving has been created and the Partners are paid the amount stated in the Performance
Table. If the forecast Total Price for Work Done to Date is greater than the Budget a Budget
overspend has been created and the Partners pay the amount stated in the Performance
Table.
If a part of the works exceeds a target stated for an Alliance Objective, other than a Budget
saving or overspend, and the Client’s Representative forecasts there is sufficient saving
from the Budget to cover the payment, the Partners are paid the amount stated in the
Performance Table assessed by the Client’s Representative.
If a part of the works exceeds a target stated for an Alliance Objective, other than a saving
or overspend, and the Client’s Representative forecasts there will be an overspend, the
CONTRACT DATA
amount the Partners pay towards to the overspend is reduced by the amount stated in the
If a part of the works does not meet a target stated for an Alliance Objective, in addition
to a payment in respect of a saving or overspend the Partners pay the amount stated in the

Core Clauses
6. COMPENSATION EVENTS
Compensation 60
events 60.1 The following are compensation events.
(1) The Client’s Representative gives an instruction changing the Scope.
CORE CLAUSES
(2) The Alliance Board give an instruction changing the Scope in order to avoid or reduce the
effects of a compensation event.
(3) The Client does not allow access to and use of each part of the Site by the later of its
access date and the date for access shown on the Accepted Programme.
(4) The Client’s Representative gives an instruction to stop or not to start any work.
(5) The Client or Others carry out work on the Site that is not stated in the Scope.
(6) The Client’s Representative certifies take over of a part of the works before both
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Completion and the Completion Date.
(7) A breach of contract by the Client which is not one of the other compensation events in
the contract.
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OPTION CLAUSES
(8) An event which
• stops the Alliance completing the whole of the works or

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• stops the Alliance completing the whole of the works by the date for planned
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Completion shown on the Accepted Programme,
and which
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• the Alliance could not prevent,
• people or organisations experienced in works similar to the works would have judged
at the Contract Date to have such a small chance of occurring that it would have been
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unreasonable to have allowed for it and
• is not one of the other compensation events stated in the contract.
COST COMPONENTS
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(9) Additional compensation events stated in the Contract Data.
Notifying 61
compensation 61.1 The Alliance notifies the Alliance Manager of an event which has happened or which is
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events expected to happen if it believes the event is a compensation event.

61.4 The Alliance Manager responds to the notification of a compensation event within one
week. If the event
• arises from a fault of the Alliance,
• has not happened and is not expected to happen,
• has no effect upon the Budget, an Alliance Objective or Completion or
• is not one of the compensation events stated in the contract

CONTRACT DATA
the Alliance Manager notifies the Alliance Board that the Budget, Performance Table and the
Completion Date are not to be changed and states the reasons in the notification. Otherwise,
the Alliance Manager produces a quotation.
61.4 A compensation event is not notified by the Alliance after the issue of the Defects Certificate.

Core Clauses
Quotations for 62
compensation 62.1 Quotations for a compensation event comprise proposed changes to the Budget and
events the Performance Table and any delay to the Completion Date assessed by the Alliance
Manager. The Alliance Manage submits details of the assessment with each quotation. If the
programme for remaining work is altered by the compensation event, the Alliance Manager
includes the alterations to the Accepted Programme in the quotation.
CORE CLAUSES
62.2 The Alliance Manager submits quotations to the Alliance Board within three weeks of the
notification.
62.3 The Alliance Board replies to the quotation submitted within two weeks and either
• accepts the quotation or
• instructs the Alliance Manager to submit a revised quotation after stating the reasons for
doing so.
62.4 The Alliance Manager submits a revised quotation within three weeks of being instructed to
do so.
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Assessing 63
compensation 63.1 The change to the Budget is assessed as the effect of the compensation event upon
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events
OPTION CLAUSES
• the actual Defined Cost of the work done by the dividing date,
• the forecast Defined Cost of the work not done by the dividing date and
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• the resulting Fee
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and
• the Client’s Costs

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For a compensation event that arises from the Client’s Representative giving an instruction or
notification, issuing a certificate or changing an earlier decision, the dividing date is the date
of that communication.
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For other compensation events, the dividing date is the date of the notification of the
compensation event.
COST COMPONENTS
63.2 The Alliance Manager and the Alliance Board may agree rates or lump sums to assess the
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change to the Budget.

63.3 If the effect of a compensation event is to reduce the total Defined Cost, the Budget is not
reduced unless otherwise stated in these conditions of contract.
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63.4 If the effect of a compensation event is to reduce the total Defined Cost and the event is a
change to the Scope instructed by the Client’s Representative the Budget is reduced.
63.5 A delay to the Completion Date is assessed as the length of time that, due to the
compensation event, planned Completion is later than planned Completion as shown on the
Accepted Programme current at the dividing date.
When assessing delay only those operations which the Alliance has not completed and which
are affected by the compensation event are changed.
63.6 A change to the Performance Table is assessed as the effect of the compensation event upon
the targets stated in the Performance Table.
63.7 The rights of the Alliance to changes to the Budget, the Performance Table and the
CONTRACT DATA
Completion Date are their only rights in respect of a compensation event.

63.8 The assessment of the effect of a compensation event includes risk allowances for cost and
time for matters which have a significant chance of occurring and are not compensation
events.
63.9 The assessment of the effect of a compensation event is based upon the assumptions that
the Alliance reacts competently and promptly to the event and that any Defined Cost and
time due to the event are reasonably incurred.

Core Clauses
Implementing 64
compensation 64.1 A compensation event is implemented when the Alliance Board accepts the Alliance
events Manager’s quotation.
64.2 When a compensation event is implemented the Budget, the Completion Date and the
Performance Table are changed accordingly
CORE CLAUSES
64.3 The assessment of an implemented compensation event is not revised except as stated in
these conditions of contract.
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OPTION CLAUSES
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COST COMPONENTS
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CONTRACT DATA

Core Clauses
7. TITLE
The Client’s title to 70

Plant and Materials 70.1 Whatever title a Partner has to Plant and Materials which are outside the Working Areas
passes to the Client if the Client’s Representative has marked them as for the contract.
CORE CLAUSES
70.2 Whatever title a Partner has to Plant and Materials passes to the Client if they have been
brought within the Working Areas. The title to Plant and Materials passes back to the Partner
if they are removed from the Working Areas with the Client’s Representative’s permission.
Marking 71
Equipment, Plant 71.1 The Client’s Representative marks Equipment, Plant and Materials which are outside the
and Materials Working Areas if
outside the
Working Areas • the contract identifies them for payment and
• the Alliance has prepared them for marking as the Scope requires.
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Objects and 72
materials within 72.1 The Partners have no title to an object of value or of historical or other interest within the
the Site Site. The Alliance Manager informs the Client’s Representative when such an object is found
and the Client’s Representative instructs the Alliance how to deal with it. The Alliance does
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OPTION CLAUSES
not move the object without instructions.

72.2 The Partners have title to materials from excavation and demolition unless the Scope states
otherwise.
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The Partners use of 73
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material 73.1 The Partners have the right to use material provided by the Client only to Provide the Works.
The Partners may make this right available to a Subcontractor.
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COST COMPONENTS
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CONTRACT DATA

Core Clauses
8. LIABILITIES AND INSURANCE
Client’s liabilities 80
80.1 The following are Client’s liabilities.
• Claims and proceedings from Others and compensation and costs payable to Others that
CORE CLAUSES
are not the liability of a Partner.
Partners’ liabilities 81
81.1 The following are Partners’ liabilities.
• Claims and proceedings from Others and compensation and costs payable to Others which
–– arise from or in connection with a Partner providing a part of the works and
–– are a result of wilful default of the Partner.
• Death or bodily injury to the employees of a Partner.
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Alliance’s liabilities 82
82.1 Liabilities that are not Client or Partner liabilities are liabilities of the Alliance.
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Recovery of costs 83
OPTION CLAUSES
83.1 Any cost which the Client has paid or will pay as a result of an event for which a Partner is
liable is paid by that Partner.
83.2 Any cost which a Partner has paid or will pay to Others as a result of an event for which the
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Client is liable is paid by the Client.
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83.3 The right of the Client or a Partner to recover these costs is reduced if an event for which
they were liable contributed to the costs. The reduction is in proportion to the extent
that the event for which that Party is liable contributed, taking into account each Party’s
responsibilities under the contract.
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Insurance cover 84
84.1 Each member of the Alliance provides insurance against death of or bodily injury to their
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employees arising out of and in the course of their employment in connection with the
contract. The minimum amount of cover is the greater of the amount required by the
applicable law and the amount stated in the Contract Data for any one event.
COST COMPONENTS
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84.2 The Partners provide additional insurances as stated in the Contract Data.
84.2 The Client provides the insurances stated in the Insurance Table except any insurance which
the Partners are to provide as stated in the Contract Data. The Client provides additional
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insurances as stated in the Contract Data.

84.3 The insurances in the Insurance Table are in the joint names of the Alliance. The insurances
provide cover for events which are the Clients and the Alliance’s liability from the starting
date until the Defects Certificate or a termination certificate has been issued.
INSURANCE TABLE
INSURANCE AGAINST MINIMUM AMOUNT OF COVER
Loss of or damage to the works, Plant and The replacement cost

Materials
Loss of or damage to Equipment The replacement cost

CONTRACT DATA
Loss of or damage to property (except the works, The amount stated in the Contract Data for any
Plant and Materials and Equipment) and liability one event with cross liability so that the insurance
for bodily injury to or death of a person (not an applies to each of the members of the Alliance
employee of a member of the Alliance) arising separately
from or in connection with the Alliance Providing
the Works.
Liability arising out of the Alliance’s failure to use The amount stated in the Contract Data
the skill and care normally used by professionals
providing works similar to the works

Core Clauses
Insurance policies 85
85.1 Before the starting date and on each renewal of the insurance policy until the defects date,
the Partners submit to the Client’s Representatives for acceptance certificates which state
that the insurance required by the contract is in force. The certificates are signed by the
Partners’ insurer or insurance broker. The Client’s Representative accepts the certificates if
the insurance complies with the contract and if the insurer’s commercial position is strong
CORE CLAUSES
enough to carry the insured liabilities.

85.2 Insurance policies include a waiver by the insurers of their subrogation rights against the
members of the Alliance and the directors and other employees of every insured except
where there is fraud.
85.3 The Alliance comply with the terms and conditions of the insurance policies to which they are
a party.
If the Partners do 86
not insure 86.1 The Client may insure an event or liability which the contract requires a Partner to insure if
the Partner does not submit a required certificate. The cost of this insurance to the Client is
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paid by the Partner.
Insurance by the 87
Client 87.1 The Client’s Representative submits certificates for insurance provided by the Client to the
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OPTION CLAUSES
Partners for acceptance before the starting date and afterwards as the Partners instruct. The
Partners accept the certificates if the insurance complies with the contract and if the insurer’s
commercial position is strong enough to carry the insured liabilities.
87.2
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The Partners’ acceptance of an insurance certificate provided by the Client does not change
the responsibility of the Client to provide the insurances stated in the Contract Data.
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87.3 The Partners may insure an event or liability which the contract requires the Client to insure
if the Client does not submit a required certificate. The cost of this insurance to the Partner is
paid by the Client.
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COST COMPONENTS
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CONTRACT DATA

Core Clauses
9. TERMINATION, RESOLVING AND AVOIDING DISPUTES
Termination 90
90.1 If the Client or the Alliance Board wishes to terminate the obligation of all Partners to
participate in Providing the Works, it notifies the Alliance Manager and the Partners giving
details of the reason for terminating. The Alliance Manager issues a termination certificate if
CORE CLAUSES
the reason complies with the contract.
90.2 If the Alliance Board wishes to terminate the obligation of a Partner to participate in
Providing the Works, it notifies the Partner, the Alliance Manager, the Client and the
other Partners giving details of the reason for terminating. The Alliance Manager issues a
termination certificate if the reason complies with the contract.
90.3 If a Partner wishes to terminate its obligation to participate in Providing the Works it notifies
the Alliance Manager, the Client and the other Partners giving details of the reason for
terminating. The Alliance Manager issues a termination certificate if the reason complies with
the contract.
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90.4 The Alliance Board, the Client, or a Partner may terminate for a reason identified in the
Termination Table. The procedures followed and the amounts due on termination to
the Partner whose obligation to participate in Providing the Works is terminated are in
accordance with the Termination Table.
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OPTION CLAUSES
TERMINATION TABLE
TERMINATING PARTY REASON PROCEDURE AMOUNT DUE

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The Alliance Board R1–R7, P1, P3 and P5 A1, A3 and A7
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R8 – R10 P2 and P6 A1, A2 and A7
R11 and R12 P2 and P6 A1 and A2

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The Client R13 P2 and P4 A1, A2 and A4
A Partner R16 P1, P2 and P5 A1, A3 and A7

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90.5 The procedures for termination are implemented immediately after the Alliance Manager has
issued a termination certificate.
COST COMPONENTS
90.6 After a termination certificate has been issued, if
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• a Partner has had its obligation to participate in Providing the Works terminated,
• the Alliance has had its obligation to participate in Providing the Works terminated or
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• the Client has had its obligation to participate in Providing the Works terminated,
it does no further work necessary to Provide the Works.
Reasons for 91
termination 91.1 The Alliance Board may terminate the obligation of a Partner to participate in Providing the
Works if all members of the Alliance, other than the Partner subject to the termination agree
and
• the Partner has incurred an insolvency event (R1),
• the Alliance Manager has notified the Alliance Board that the Partner has not put one of
CONTRACT DATA
the following defaults right within four weeks of the date when the Alliance Manager
notified the Partner of the default
–– substantially failed to comply with its obligations (R2) or
–– not provided a bond or guarantee which the contract requires (R3),

Core Clauses
• the Partner has appointed a Subcontractor for substantial work before the Alliance
Board has accepted the Subcontractor (R4),
• the Alliance Manager has notified the Alliance Board that the Partner has not stopped
one of the following defaults within four weeks of the date when the Alliance Manager
notified the Partner of the default
CORE CLAUSES
–– substantially hindered the Alliance or Others (R5) or
–– substantially broken a health or safety regulation (R6),
• the Partner does a Corrupt Act, unless it was done by a Subcontractor or supplier and
the Partner
–– was not and should not have been aware of the Corrupt Act or
–– informed the Client’s Representative of the Corrupt Act and took action to stop it as
soon as the Partner became aware of it (R7).
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91.2 The Alliance Board may terminate the obligation of all the Partners to participate in Providing
the Works if all of the Alliance, other than the Client agree and
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• the Client has incurred an insolvency event (R8),
OPTION CLAUSES
• the Client has not paid an amount due under the contract within thirteen weeks of the
date that it should have been paid (R9) or
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• the Client’s Representative has instructed the Alliance to stop or not to start any
substantial work or all work and an instruction allowing the work to re-start or start or
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removing work from the Scope has not been given within thirteen weeks (R10).
91.3 The Alliance Board may terminate the obligation of all members of the Alliance to participate
in Providing the Works if
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• the Alliance has been released under the law from further performance of the whole of
the contract (R11),
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• an event occurs which
–– stops the Alliance completing the whole of the works or

COST COMPONENTS
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–– stops the Alliance completing the whole of the works by the date for planned
Completion shown on the Accepted Programme and is forecast to delay Completion
of the whole of the works by more than thirteen weeks,
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and which
–– the Alliance could not prevent and
–– people or organisations experienced in works similar to the works would have

judged at the Contract Date to have such a small chance of occurring that it would
have been unreasonable to have allowed for it (R12).
91.4 The Client may terminate the obligation of all Partners to participate in Providing the Works
for any other reason (R13).
91.5 A Partner may terminate its obligation to participate in Providing the Works for any reason
(R14).
CONTRACT DATA

Core Clauses
Procedures on 92
termination 92.1 The procedure on termination is one or more of the following as set out in the Termination
Table.
P1 On termination, the Alliance may complete the works.
CORE CLAUSES
P2 On termination, the Client may complete the works and may use any Plant and
Materials to which it has title.
P3 The Alliance Board may instruct a Partner to leave the Site, remove any Equipment,
Plant and Materials from the Site and assign the benefit of any subcontract or other
contract related to performance of the contract to a Partner.
P4 The Client may instruct all Partners to leave the Site, remove any Equipment, Plant
and Materials from the Site and assign the benefit of any subcontract or other
contract related to performance of the contract to the Client.
P5 The Alliance may use any Equipment to which a Partner has title to complete the
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works. The Partner promptly removes the Equipment from Site when the Alliance
Manager informs the Partner that the Alliance no longer requires it to complete the
works.
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OPTION CLAUSES
P6 The Partners leave the Working Areas and remove Equipment.
P7 The Alliance Board appoint a replacement Partner if necessary.

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Payment on 93
termination 93.1 The amount due on termination includes (A1)
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• an amount due assessed as for normal payments,
• the Defined Cost for Plant and Materials

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–– within the Working Areas or
–– to which the Client has title and of which the Partner has to accept delivery,
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• other Defined Cost reasonably incurred in expectation of completing the whole of the
works and
COST COMPONENTS
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• any amounts retained by the Client.

93.2 The amount due on termination also includes one or more of the following as set out in the
Termination Table.
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A2 The forecast Defined Cost of removing the Equipment.
A3 A deduction of the forecast of the additional cost to the Alliance or Client of

completing the whole of the works.
A4 The fee percentage applied to, any excess of the first forecast of the Defined Cost of
the works over the Price for Work Done to Date less the Fee for that part of the works.
No formal dispute 94
resolution 94.1 The members of the Alliance agree that disputes between them arising out of or in
connection with the contract can only be resolved in accordance with these conditions of
CONTRACT DATA
contract.
Resolving and 95
avoiding disputes 95.1 A dispute between the Alliance arising under or in connection with the contract is referred to
Alliance Board for final resolution.

Core Clauses
95.2 The Alliance Board appoints the Senior Representatives of each member of the Alliance in
dispute to resolve the dispute.
The Senior Representatives attend as many meetings and use any procedure they consider
necessary to try to resolve the dispute over a period of no more than three weeks, or a
longer period to which the Alliance Board agrees. The Senior Representatives report to the
CORE CLAUSES
Alliance Board that they have resolved the dispute or explain why they have been unable to
resolve it.
If the dispute remains unresolved the Alliance Board resolves the issue. It may seek assistance
in resolving the dispute including seeking a third party audit or opinion.
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OPTION CLAUSES
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COST COMPONENTS
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CONTRACT DATA

Option Clauses
Option Clauses
OPTION X2: CHANGES IN THE LAW
CORE CLAUSES
Changes in the law X2
X2.1 A change in the law of the country in which the Site is located is a compensation event if it
occurs after the Contract Date. If the effect of a compensation event which is a change in
the law is to reduce the total Defined Cost, the Budget is reduced.
OPTION X4: ULTIMATE HOLDING COMPANY GUARANTEE
Ultimate holding X4
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company guarantee X4.1 If a Partner is a subsidiary of another company, the Partner gives to the Client a guarantee of
the Partner’s performance from the ultimate holding company of the Partner in the form set
out in the Scope. If the guarantee was not given by the Contract Date, it is given to the Client
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within four weeks of the Contract Date.
OPTION CLAUSES
X4.2 The Partner may propose an alternative guarantor who is also owned by the ultimate holding
company for acceptance by the Client’s Representative.
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OPTION X9: TRANSFER OF RIGHTS
Transfer of rights X9
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X9.1 The Client owns the Partner’s rights over material prepared for the design of the works
except as stated otherwise in the Scope. The Partner obtains other rights for the Client as
stated in the Scope and obtains from a Subcontractor equivalent rights for the Client over the
material prepared by the Subcontractor. The Partner provides to the Client the documents
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which transfer these rights to the Client.
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OPTION X10: INFORMATION MODELLING
Defined terms X10

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X10.1 (1) The Information Execution Plan is the information execution plan or is the latest
Information Execution Plan accepted by the Alliance Board. The latest Information Execution
Plan accepted by the Alliance Board supersedes the previous Information Execution Plan.
(2) Project Information is information provided by the Alliance and other Information
Providers which is used to create or change the Information Model.
(3) The Information Model is the electronic integration of Project information in the form
stated in the Information Model Requirements.
(4) The Information Model Requirements are the requirements identified in the Scope for
creating the Information Model.
CONTRACT DATA
(5) Information Providers are the people or organisations who contribute to the Information
Model and are identified in the Information Model Requirements.
Information Model X10.2 The Alliance creates the Information Model.
Collaboration X10.3 The Alliance collaborates with other Information Providers as stated in the Information Model
Requirements.

Option Clauses
Early warning X10.4 A member of the Alliance gives an early warning by notifying the Alliance Manager as soon
as they become aware of any matter which could adversely affect the creation or use of the
Information Model.
Information X10.5 (1) If an Information Execution Plan is not identified in the Contract Data, the Alliance
Execution Plan Manager submits a first Information Execution Plan to the Alliance Board for acceptance
CORE CLAUSES
within the period stated in the Contract Data.
(2) Within two weeks of the Alliance Manager submitting an Information Execution Plan
for acceptance, the Alliance Board notifies the Alliance Manager of the acceptance of the
Information Execution Plan or the reasons for not accepting it.
(3) The Alliance Manager submits a revised Information Execution Plan to the Alliance Board
for acceptance
• within the period for reply after the Alliance Board has instructed it to and
• when the Alliance Manager chooses to.
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(4) The Alliance provides the Project Information in the form stated in the Information
Requirements and in accordance with the accepted Information Execution Plan.
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OPTION CLAUSES
Compensation X10.6 If the Information Execution Plan is altered by a compensation event, the Alliance Manager
events includes the alterations to the Information Execution Plan in the quotation for the
compensation event.
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Use of the model X10.7 At Completion of the whole of the works, the Alliance gives to the Client the Information
Model and the Partners’ rights over Project Information except as stated otherwise in the
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Information Requirements. The Partners obtain from a Subcontractor equivalent rights for
the Client over information prepared by the Subcontractor. The Partners provide to the Client
the documents which transfer these rights to the Client.
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OPTION X18: LIMITATION OF LIABILITY

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Limitation of X18
liability X18.1 Each of the limits to the Partners’ liability in this clause apply if a limit is stated in the
COST COMPONENTS
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Contract Data.
X18.5 The Partners’ total liability to the Client for all matters arising under or in connection with the
contract, other than
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• a failure to meet and Alliance Objective and
• other payments in the Performance Table,
is limited to the amount stated in the Contract Data and applies in contract, tort or delict and
otherwise to the extent allowed under the law of the contract.
X18.6 The Partners are not liable to the Client for a matter unless details of the matter are notified
to the Contractor before the end of liability date.
CONTRACT DATA

Option Y
Option Y
OPTION Y(UK)2: THE HOUSING GRANTS, CONSTRUCTION AND REGENERATION ACT 1996
CORE CLAUSES
The Housing Y(UK)2
Grants,
Construction and
Regeneration Act
1996
Definitions Y2.1 In this Option, time periods stated in days exclude Christmas Day, Good Friday and bank
holidays.
Dates for Y2.2 The date on which a payment becomes due is seven days after the assessment date. The
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payment date on which the final payment becomes due is
• five weeks after the issue of the Defects Certificate or
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OPTION CLAUSES
• if the Alliance Manager has issued a termination certificate, fourteen weeks after the
issue of the certificate.
The final date for payment is fourteen days after the date on which payment becomes due or
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a different period for payment if stated in the Contract Data.
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The Client’s Representative’s certificate is the notice of payment specifying the amount due
at the payment due date (the notified sum, which may be zero) and stating the basis on
which the amount was calculated.
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Notice of Y2.3 If the Client or the Partners intend to pay less than the notified sum, they notify the other
intention to pay not later than seven days (the prescribed period) before the final date for payment by stating
less the amount considered to be due and the basis on which that sum is calculated. The Client
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or the Partners do not withhold payment of an amount due under the contract unless it has
notified its intention to pay less than the notified sum as required by the contract.
Y2.4 If the Alliance Board terminates for reason R1 and a certified payment has not been made at
COST COMPONENTS
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the date of the termination certificate, the Client makes the certified payment unless
• it has notified the Alliance Manager in accordance with the contract that it intends to
pay less than the notified sum or
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• the reason for termination occurred after the last date on which it could have notified
the Alliance Manager in accordance with the contract that it intends to pay less than the
notified sum.
Suspension of Y2.5 If a Partner exercises its right under the Housing Grants, Construction and Regeneration Act
performance 1996 as amended by the Local Democracy, Economic Development and Construction Act
2009 to suspend performance, it is a compensation event.
OPTION Y(UK)3: THE CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

CONTRACT DATA
Third party rights Y(UK)3

Y3.1 A beneficiary may enforce the terms of the contract stated in the Contract Data under the
Contracts (Rights of Third Parties) Act 1999.
Y3.2 Other than the members of the Alliance or a beneficiary, no person can enforce any of the
terms of the contract under the Contracts (Rights of Third Parties) Act 1999.
Y3.3 If a beneficiary is identified by class or description and not as a named person or
organisation, the Client notifies the Alliance of the name of the beneficiary once they have
been identified.

Option Y
OPTION Z: ADDITIONAL CONDITIONS OF CONTRACT
Additional Z1
conditions of Z1.1 The additional conditions of contract stated in the Contract Data are part of the contract.
contract
CORE CLAUSES
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CONTRACT DATA

Schedule of Cost Components
CORE CLAUSES
An amount is included
• only in one cost component, and
• only if it is incurred in order to Provide the Works.
People 1 The following components of
• the cost of people who are directly employed by ta Partner and whose normal place of
working is within the Working Areas and
• the cost of people who are directly employed by a Partner and whose normal place of
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working is not within the Working Areas but who are working in the Working Areas,
proportionate to the time they spend working in the Working Areas.
11 Wages, salaries and amounts paid by the Partner for people paid according to the time
MAIN OPTION CLAUSES

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worked on the contract.
12 Payments related to work on the contract and made to people for
(a) bonuses and incentives

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(b) overtime
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(c) working in special circumstances
(d) special allowances

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(e) absence due to sickness and holidays
(f) severance.
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13 Payments made in relation to people in accordance with their employment contract for
(a) travel
COST COMPONENTS
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(b) subsistence and lodging
(c) relocation
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(d) medical examinations
(e) passports and visas
(f) travel insurance
(g) items (a) to (f) for dependants
(h) protective clothing
(i) contributions, levies or taxes imposed by law

COST COMPONENTS
(j) pensions and life assurance
(k) death benefit
(l) occupational accident benefits
(m) medical aid and health insurance
(n) a vehicle
(o) safety training.

14 The following components of the cost of people who are not directly employed by a Partner
but are paid for by the Partner according to the time worked while they are within the
Working Areas.
Amounts paid by the Partner.

CORE CLAUSES
Equipment 2 The following components of the cost of Equipment which is used within the Working Areas.
21 Payments for the hire or rent of Equipment not owned by
• a Partner,
• the Partner’s ultimate holding company or
• a company with the same ultimate holding company
at the hire or rental rate multiplied by the time for which the Equipment is required.
22 Payments for Equipment which is not listed in the Contract Data but is
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• owned by a Partner,
• purchased by a Partner under a hire purchase or lease agreement or
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OPTION CLAUSES
• hired by a Partner from the Partner’s ultimate holding company or from a company with
the same ultimate holding company
at open market rates, multiplied by the time for which the Equipment is required.
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23 Payments for Equipment purchased for work included in the contract listed with a time-
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related on cost charge, in the Contract Data, of
• the change in value over the period for which the Equipment is required and
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• the time-related on cost charge stated in the Contract Data for the period for which the
Equipment is required.
The change in value is the difference between the purchase price and either the sale price
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or the open market sale price at the end of the period for which the Equipment is required.
Interim payments of the change in value are made at each assessment date. A final payment
COST COMPONENTS
is made in the next assessment after the change in value has been determined.
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If the Alliance Manager agrees, an additional item of Equipment may be assessed as if it had
been listed in the Contract Data.
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24 Payments for special Equipment listed in the Contract Data. These amounts are the rates
stated in the Contract Data multiplied by the time for which the Equipment is required.
If the Alliance Manager agrees, an additional item of special Equipment may be assessed as if
it had been listed in the Contract Data.
25 Payments for the purchase price of Equipment which is consumed.
26 Unless included in the hire or rental rates, payments for
• transporting Equipment to and from the Working Areas other than for repair and
maintenance,
• erecting and dismantling Equipment and

CONTRACT DATA
• constructing, fabricating or modifying Equipment as a result of a compensation event.

27 Payments for purchase of materials used to construct or fabricate Equipment.
28 Unless included in the hire rates, the cost of operatives is included in the cost of people.
Plant and Materials 3 The following components of the cost of Plant and Materials.

31 Payments for
• purchasing Plant and Materials,
• delivery to and removal from the Working Areas,
CORE CLAUSES
• providing and removing packaging and
• samples and tests.

32 Cost is credited with payments received for disposal of Plant and Materials unless the cost is
disallowed.
Subcontractors 4 The following components of the cost of Subcontractors.

41 Payments to Subcontractors for work which is subcontracted without taking into account any
amounts paid to or retained from the Subcontractor by the Partner, which would result in the
Client paying or retaining the amount twice.
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Charges 5 The following components of the cost of charges paid or received by a Partner.
51 Payments for the provision and use in the Working Areas of
MAIN OPTION CLAUSES

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• water,
• gas,
• electricity,
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• telephone and
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• internet.
52 Payments to public authorities and other properly constituted authorities of charges which
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they are authorised to make in respect of the works.

53 Payments made and received for
(a) cancellation charges arising from a compensation event

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(b) buying or leasing land or buildings within the Working Area
COST COMPONENTS
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(c) compensation for loss of crops or buildings
(d) royalties
(e) inspection certificates

C
(f) charges for access to the Working Areas
(g) facilities for visits to the Working Areas by Others
(h) any charges made and any interest paid by the project bank
54 Payments made and received by a Partner for the removal from Site and disposal or sale of
materials from excavation and demolition
Manufacture and 6 The following components of the cost of manufacture and fabrication of Plant and Materials
fabrication which are
COST COMPONENTS
• wholly or partly designed specifically for the works and
• manufactured or fabricated outside the Working Areas.

61 The total of the hours worked by employees multiplied by the hourly rates stated in the
Contract Data for the categories of employees listed.
Design 7 The following components of the cost of design of the works and Equipment done outside
the Working Areas.

71 The total of the hours worked by employees multiplied by the hourly rates stated in the
Contract Data for the categories of employees listed.
72 The cost of travel to and from the Working Areas for the categories of design employees
listed in the Contract Data.
CORE CLAUSES
Insurance 8 The following are deducted from cost
• the cost of events for which the contract requires the Partner to insure and
• other costs paid to the Partner by insurers.
py
co
OPTION CLAUSES
n
tio
lta
su
COST COMPONENTS
on
C
CONTRACT DATA

Contract Data
Contract Data
Completion of the data in full, according to the Options chosen, is essential to create a
CORE CLAUSES
complete contract.
1 General
The conditions of contract are the core clauses and the clauses for the following Options of
the NEC4 Alliance Contract June 2017
Options
py
The works are
co
OPTION CLAUSES
The Client is
Name
n
Address for communications
tio

lta
Address for electronic communications

su
The Client’s Representative is
COST COMPONENTS
Name
on

C
The partners are
Name (1)
CONTRACT DATA

Contract Data
Name (2)

CORE CLAUSES
Name (3)
py

co
OPTION CLAUSES
Name (4)

n
tio

lta
The alliance board representatives are

su
Client
COST COMPONENTS
Name
on

C
partner
Name

CONTRACT DATA

Contract Data
partner
Name
CORE CLAUSES

partner
Name
py
co

OPTION CLAUSES
n
partner
tio
Name

lta

su
COST COMPONENTS
on
The key persons are
Name (1)
C
Job
Responsibilities
Qualifications
Experience
Name (2)
CONTRACT DATA
Job
Responsibilities
Qualifications
Experience

Contract Data
Name (3)
Job
Responsibilities
CORE CLAUSES
Qualifications
Experience
Name (4)
Job
Responsibilities
py
Qualifications
Experience
co
OPTION CLAUSES
The Alliance Objectives are in

n
The Scope is in
tio
The boundaries of the site are

lta
The language of the contract is

su
COST COMPONENTS
The law of the contract is the law of

on
The period for reply is except that

C
• The period for reply for is
• The period for reply for is
The following matters will be included in the Early Warning Register

CONTRACT DATA
Early warning meetings are to be held at intervals no longer than

Contract Data
2 The Alliance’s main responsibilities

Alliance Board meetings are to be held at intervals no longer
than
CORE CLAUSES
The number of alliance board representatives to constitute a
quorum is
The period for retention following Completion of the whole

of the works or earlier termination is
The Alliance Manager prepares forecasts of the total Defined
py
Cost for the whole of the works at intervals no longer than
co
Early involvement The provisions for early involvement apply/do not apply (delete as applicable)
OPTION CLAUSES
The Alliance Manager prepares forecasts of the Budget for
Stage Two at intervals no longer than
n
tio
The Pricing Information is in

lta
3 Time
su
The starting date is
The access dates are
COST COMPONENTS
on
part of the Site date
(1)
C
(2)
(3)
The Alliance Manager submits revised programmes at intervals

no longer than
The completion date for the works is

CONTRACT DATA
If a programme is to be The programme identified in the Contract Data is

identified in the Contract
Data

Contract Data
If no programme is identified The period after the Contract Date within which the Alliance
in the Contract Data Manager is to submit a first programme for acceptance is
4 Quality management
CORE CLAUSES
The period after the Contract Date within which the Alliance
Manager is to submit a quality policy statement and quality
plan is
The period between Completion of the whole of the works

and the defects date is
5 Payment
py
The project bank is
named suppliers are
co
OPTION CLAUSES
The budget information is
The Client’s cost schedule is

n
The performance table is
tio
The interval for reports by the

Alliance Manager on the Alliance’s
performance against the
lta
Operational Requirements is
The currency of the contract is the

su
The assessment interval is

COST COMPONENTS
on
The interest rate is % per annum (not less than 2) above the
rate of the bank

C
If the period in which The period within which payments are made is
payments are made is not
three weeks and Y(UK)2
is not used
The exchange rates are those published in
on (date)
CONTRACT DATA
The fee percentages are
partner
fee percentage
%
%
%
%

Contract Data
6 Compensation events
If there are additional These are additional compensation events
compensation events
CORE CLAUSES

8 Liabilities and insurance
py
The minimum amount of cover for insurance against death of or bodily injury to employees
of a member of the Alliance arising out of and in the course of their employment in
connection with the contract for any one event is
co
The minimum amount of cover for insurance against loss of or damage to property (except
OPTION CLAUSES
the works, Plant and Materials and Equipment) and liability for bodily injury to or death of a
person (not an employee of a member of the Alliance) arising from or in connection with the
Alliance Providing the Works for any one event is
n
The minimum amount of cover for insurance against liability arising out the Alliance’s failure
tio
to use the skill and care normally used by professionals providing works similar to the works
for any one claim is
lta
the Partners are to provide

If The Partners provide these insurances from the Insurance Table
any of the insurances stated
(1) Insurance against
su
in the Insurance Table

Minimum amount of cover is
COST COMPONENTS
on
The deductibles are

C
The deductibles are
The deductibles are
The
If additional insurances are Client provides these additional insurances
to be provided
CONTRACT DATA
The deductibles are

Contract Data
The deductibles are

CORE CLAUSES
The deductibles are
The Partners provide these additional insurances
py
The deductibles are
co
OPTION CLAUSES
The deductibles are

n
tio
The deductibles are

lta
9 Termination, resolving and avoiding disputes

su
The Senior Representatives are

COST COMPONENTS
Client
on
Name (1)

C
Name (2)

CONTRACT DATA

Contract Data
partner
Name (1)
CORE CLAUSES

Name (2)
py

co
OPTION CLAUSES
partner
n
Name (1)
tio

lta

su
COST COMPONENTS
Name (2)
on

C
partner
Name (1)

CONTRACT DATA

Contract Data
Name (2)

CORE CLAUSES
partner
Name (1)
py

co
OPTION CLAUSES
Name (2)
n
tio

lta

su
Data for the Schedule of Cost Components

COST COMPONENTS
The listed items of Equipment purchased for work on the contract, with an on cost charge,
on
are
Equipment time-related on cost charge per time period

C
The rates for special Equipment are
Equipment rate

CONTRACT DATA

Contract Data
The rates for Defined Cost of manufacture and fabrication outside the Working Areas by the
Partners is
category of person rate
CORE CLAUSES

The rates for Defined Cost of design outside the Working Areas is
category of person rate
py

co

OPTION CLAUSES
The categories of design employees whose travelling expenses to and from the Working
Areas are included as a cost of design of the works and Equipment done outside the
n
Working Areas are
tio
lta
su
COST COMPONENTS
on
X10: Information modelling

If Option X10 is used
C
an information execution
If The information execution plan identified in the Contract
plan
is to be identified in the Data is
Contract Data
no information execution
If The period after the Contract Date within which the Alliance
plan is identified in the Manager is to submit a first Information Execution Plan for
Contract Data acceptance is
CONTRACT DATA
X18: Limitation of liability

If Option X18 is used The Partners’ total liability to the Client for all matters arising
under or in connection with the contract, other than a failure
to meet an Alliance Objective and other payments in the
Performance Table, is limited to
The end of liability date is years after the Completion of the whole of the works

Contract Data
Y(UK)2: The Housing Grants, Construction and Regeneration Act 1996
If Y(UK)2 is used and the The period for payment is days after the date on which payment become due
final date for payment is not
fourteen days after the date
on which payment becomes
CORE CLAUSES
due
Y(UK)3: The Contracts (Rights of Third Parties) Act 1999

If Option Y(UK)3 is used term beneficiary
py

co
OPTION CLAUSES
Z: Additional conditions of contract

If Option Z is used The additional conditions of contract are
n
tio
lta
su
COST COMPONENTS
on
C
CONTRACT DATA

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Alliance Contract

ISBN (Establishing Procurement and Contract Strategies) 978-0-7277-6223-8

ISBN (Managing an Alliance Contract) 978-0-7277-6244-3

Consultative edition June 2017

© Copyright nec 2017

Typeset by Manila Typesetting Company

Guidance on the Consultation v

8 Liabilities and insurance 23

Option X9: Transfer of rights 29

Option Z: Additional conditions of contract 32

Schedule of Cost Components 33

© nec 2017 neccontract.com Alliance Contract iii

Guidance on the Consultation

continued in the new NEC4 issue of the contracts.

OPTION X12 – MULTIPARTY COLLABORATION

© nec 2017 neccontract.com Alliance Contract v

INFRASTRUCTURE CLIENT GROUP ALLIANCING CODE OF PRACTICE

NEC published a document giving guidance on how to create an alliancing contract as

KEY PRINCIPLES OF THE ALC

When should the ALC be used

The ALC has been designed to be used in the following situations.

vi Alliance Contract neccontract.com © nec 2017

Membership of the Alliance

Structure of the Alliance

The Client appoints a Client Representative to undertake a number of functions retained by

Changes to the Scope

© nec 2017 neccontract.com Alliance Contract vii

saving or overspend has been created.

which of their cost should be included.

Liabilities and Insurance

The Partners’ only individual liability is for wilful default.

viii Alliance Contract neccontract.com © nec 2017

© nec 2017 neccontract.com Alliance Contract ix

Any queries on the documents or the process should be referred to

We look forward to hearing your views.

© nec 2017 neccontract.com Alliance Contract xi

Option Z Additional conditions of contract

© nec 2017 neccontract.com Alliance Contract 1

(6) An Alliance Objective is an aspect of performance by the Alliance which is in the

(9) Completion is when the Alliance has

(12) A Corrupt Act is

• the offering, promising, giving, accepting or soliciting of an advantage as an inducement

• abusing any entrusted power for private gain

© nec 2017 neccontract.com Alliance Contract 3

• a part of the works which is not in accordance with the Scope or

• is not justified by the Partner’s accounts and records or

(17) The Early Warning Register is a register of matters which are

(20) An Insolvency Event is one of the following or its equivalent.

• If a member of the Alliance is an individual and has

–– presented an application for bankruptcy,

–– had a bankruptcy order made against it,

–– had a receiver appointed over its assets or

–– made an arrangement with its creditors.

• If a member of the Alliance is a company or partnership and has

–– had a winding-up order made against it,

–– had a provisional liquidator appointed to it,

–– passed a resolution for winding-up (other than in order to amalgamate or

–– had an administration order made against it or had an administrator appointed over

–– made an arrangement with its creditors.

4 Alliance Contract neccontract.com © nec 2017