Digitising contract management at Sydney Water with NEC4 compliance and finao’s digital solutions

Introduction to NEC project management

The New Engineering Contract (NEC) framework is a globally recognised approach to managing projects that emphasises collaboration, transparency, and mutual trust with clear accountabilities. By adopting NEC4, organisations like Sydney Water gain a structured methodology for contract administration, enabling efficient project delivery and a proven methodology for mitigating project delivery risks.

Core elements include:

• Early Warning Mechanisms: Prompt identification and management of risks to avoid project delays or additional costs.
• Accepted Programme: A dynamic, updated project schedule that ensures all stakeholders remain aligned.
• Formalised instructions: Ensuring clear instructions are issued by only delegated authorities
• Compensation Events: A clear, streamlined process for handling project changes, fostering fairness and minimising disputes.
• NEC's focus on proactive problem-solving and risk-sharing aligns perfectly with Sydney Water's strategic goals for sustainable and high-quality infrastructure delivery.

finao’s role in enabling NEC compliance at Sydney Water

To operationalise the NEC4 model, Sydney Water partnered with finao to develop an advanced digital solution within the existing SWDelivery portal, a custom-built digital workflow platform Sydney Water has utilised and evolved for over a decade. This platform empowers both Sydney Water and their contractor project teams to seamlessly comply with NEC4 processes while enhancing transparency and efficiency. finao’s system integrates several purpose-built modules tailored to NEC4 requirements:

1. Compensation event (CE) module:
‍Streamlines the management of project changes affecting cost, schedule, or quality. Offers a multi-stage workflow with clear processes for submission, entitlement assessment, and quotation reviews. Ensures NEC4 compliance through pre-populated clauses and a comprehensive audit trail.

2. Early warning notice (EWN) module:
‍Facilitates timely notifications of potential risks, enabling proactive mitigation. Supports collaborative decision-making with action logs and linked meetings. Integrates with other modules for comprehensive risk management.

3. Payment claim module:‍
Simplifies monthly payment claims with a structured workflow. Enhances accuracy and compliance by supporting both NEC and legacy contracts.

4. Project manager's instruction (PMI) module:
‍Enables efficient issuance of formal instructions compliant with NEC4. Predefined clauses and automated notifications reduce the risk of errors.

5. Programme acceptance (PGA) module:
‍Standardises the review and acceptance of project schedules. Batch processing capabilities improve efficiency, ensuring alignment with payment claims and project progress.

6. Shared purchasing directory (SPD):
‍Centralises supplier, contract, and service information for streamlined procurement. Aligns with Sydney Water’s = Regional Delivery Partnership (RDP) strategy.

Value delivered for Sydney water

finao’s digital NEC4 solution, with phase one first implemented in late 2020 and ever evolving to meet increasing business needs since, has helped to revolutionise contract management at Sydney Water, delivering:

• Efficiency: Automated processes and integrated workflows reduce administrative burdens and processing times by an order of magnitude compared to standard off-the-shelf digital correspondence methods.
• Volume: Enabling effective NEC4 contract management across thousands of infrastructure engineering and construction delivery contracts, with approx. 40,000 workflows across various NEC4 modules performed to date.
• Transparency: Centralised data and audit trails foster accountability and clear communication.
• Compliance: NEC4-aligned modules ensure strict adherence to contract process requirements whilst successfully enabling the iterative nature of some of the NEC4 workflows.
• Collaboration: enhanced coordination between Sydney Water and contractors in a unified digital space, enabling strong and effective partnerships.
• Visibility: Sydney Water has developed their own suite of NEC4 PowerBI dashboards integrated with each SWDelivery Portal NEC4 module, providing unparalleled data insights.

Conclusion

By combining the NEC4 framework with finao’s technology, Sydney Water has set a benchmark in modern project management. This partnership not only ensures the successful delivery of NEC4 engineering and construction contracts but also reinforces Sydney Water’s commitment to innovation, efficiency at scale, and sustainable delivery of complex infrastructure for the benefit of the community.

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