Peace, love and understanding

The first edition of the NEC partnering option (secondary option X12) was published in June. The introduction to the guidance notes has an interesting first sentence: "A partnering contract, between two parties only, is achieved by using a standard NEC contract." The authors feel, presumably, that the requirement that the parties work together in a spirit of mutual trust and co-operation, together with the general approach taken in the contract itself, is sufficient to allow a full partnering relationship to develop. They may be right, although it would be interesting to compare the NEC in this regard with, say, the PPC 2000.

I digress. The point is that the NEC partnering option is designed to create the equivalent of a multiparty partnering agreement. I use this word "equivalent" because, as the guidance notes say, the partnering option does not of itself create a multiparty contract but is incorporated into all the NEC contracts used on a project (or a number of projects) to create a common framework for the parties involved. Much of this is focused on the creation of a core group, which oversees the partnering arrangements.

The option is structured as follows:

• The first section (X12.1) sets out the actions each partner is expected to undertake, including working together to achieve the client's objectives, the formation of the core group and some of its duties.

• The second section deals with identified and defined terms.

• The central section, X12.3, details how the partners work together and the core group's duties. The core group organises meetings and distributes records of them that include agreed actions. Instructions from the core group are issued through each partner's own contract. Not all the partners are necessarily members of the core group. A decision should be made at the outset about who will be invited to enter into the partnering arrangement and whether this would include, for example, subcontractors.

• The final section deals with the provision of key performance indicators.

In common with other options in the NEC, X12 comprises the clauses briefly described previously, together with data and information to be added to the contract itself.

The partners are required to provide the partnering information, which includes any requirements for the use of common information systems, sharing of offices, attendance at partners' and core group meetings, participation in partnering workshops, arrangements for joint design development, value engineering and value management, risk management and other matters that the core group manages. As each partner is added by virtue of entering into an NEC contract with option X12, they join the partnering arrangement.

The option does not include direct remedies between non-contracting partners to recover losses. Such remedies as they have will be found in their own contract, but the final sanction against any partner that fails to act as stated in the option is for it not to be invited to partner again.

This highlights a simple fact about partnering agreements: it is difficult to see how an arrangement can give rise to a contractual right that can be enforced by a court or arbitrator. This is not of itself a bad thing; neither do I subscribe to the view that it is not possible to recommend the use of any such provision until the courts have had a go at it. At the very least, the incorporation of partnering-type contractual arrangements demonstrates the parties' willingness to adopt a less confrontational and more constructive attitude.

Does it work? It remains to be seen. In common with NEC drafting generally, it reads clearly and will probably be appreciated more by practitioners in the field than lawyers who like their drafting to be more traditionally structured. The NEC is, to some degree, a self-fulfilling prophecy. It is used by parties sufficiently sophisticated to understand how it works and to have the resources available to operate it correctly.

It will be interesting to see whether those clients who already use the NEC with a partnering charter now turn to option X12. instead.