New Plymouth Infrastructure Partnership, New Zealand

New Plymouth District Council in North Island, New Zealand is using NEC to procure NZ$160 million (£75 million) of minor infrastructure works over 10 years. The council let an NEC4 Term Service Contract (TSC) Option C (target contract with activity schedule) to Downer NZ in April 2019 for road maintenance, minor road improvements and water main and sewer renewals. The council is the NEC service manager.

Known as the New Plymouth Infrastructure Partnership, the contract replaced 20 previous term contracts resulting in significant procurement and staff cost savings. It covers urban and rural road maintenance and resealing, road line marking, road sweeping and street cleaning, central business district cleaning, bus shelter cleaning, emptying bins, water and wastewater renewals and small-to-medium bridge maintenance. 

Individual works projects are let as NEC4 TSC task orders with a target cost estimate. The contract also includes a workforce development plan comprising apprenticeships, succession planning and a Māori and Pasifika development framework. 

Efficient delivery

Matt Richardson, infrastructure delivery lead at the council, says the benefit of NEC4 TSC Option C is that the price list is already set up with a schedule of rates, which avoids having to tender each project separately. ‘Furthermore, financial risks are shared between the client and the contractor through the pain/gain mechanism. This motivates all parties to plan and deliver the works in the most efficient way.’

He says the NEC requirement to act in a ‘spirit of mutual trust and co-operation’ ensured the project team adopted a collaborative approach with joint decision making, which has improved efficiency.  ‘Strong working relationships between the council and Downer staff have a built a culture of trust for timely and efficient delivery.’ 

Richardson says that NEC’s early warning process ensures changes are dealt with in an efficient manner and issues are mitigated without delay. ‘We use the early warning register on each task order to initiate discussions around potential changes to budget, scope, quality and time. Compensation events are raised when changes came to fruition.’ 

He cites the recent Belair Avenue and Bayly Road walking and cycling improvements, which were completed on time and budget between April and June 2024 under an NZ$1.8 million (£0.9 million) task order (pictured). ‘There were significant time pressures on this project due to New Zealand Transport Authority funding restrictions. The collaborative nature of NEC supported this delivery in a fast, open, efficient and safe manner, with just five compensation events.’

According to Carey Davis, NPDC portfolio manager at Downer, ‘The New Plymouth Infrastructure Partnership is arguably the best example of a truly collaborative, co-operative contract I have had the pleasure of working in throughout my career. The client having several staff in the contractor’s office holding key positions within the contract team is testament to the focus on continuous improvement and collaborative delivery. Improved efficiencies, greater communication, harmonious relationships, and a true “team” ethos are all by-products of the NEC4 collaborative contract and is something I know both parties enjoy and want to see continued.’

Experienced NEC user

Andrew Barron, manager infrastructure projects at the council, says NEC-procured projects now account for over 90% of the council’s annual NZ$100 million (£50 million) infrastructure spend. ‘We started using NEC3 Professional Services Contract in 2016 for a seven-year consultancy contract with WSP and have since rolled out a variety of NEC3 and NEC4 works and term contracts for everything from minor works to major civil engineering schemes.’

One of the first NEC4 Engineering and Construction (ECC) contracts was for the first phase of a water main renewals in the town of Inglewood. The NZ$2 million (£0.9 million) contract was let to Fulton Hogan in November 2018 using NEC4 ECC Option B (target contract with bill of quantities). One of the largest individual contracts to date is an NZ$19 million (£9 million) NEC4 ECC Option C let to Downer in December 2019 for new water reservoirs at Mountain Road and Henwood Road. These were completed on time and below budget in 2022.

Together with Downer’s 10-year TSC, the NEC-based procurement approach resulted in the council being highly commended for the 2023 NEC Client of the Year Award. Downer also won the Excellence in the Maintenance and Management of Assets Award in the 2021 Civil Contractors New Zealand Hirepool Excellence Awards for its work on the TSC (see video below).

Project highlight video

Benefits of using NEC

• NEC4 TSC Option C price list is already set up with a schedule of rates, which avoids having to tender each project separately. 
• NEC pain/gain mechanism means financial risks are shared between the client and the contractor, which has motivated all parties to plan and deliver the works in the most efficient way.
• NEC requirement to act in a ‘spirit of mutual trust and co-operation’ ensured the project team adopted a collaborative approach with joint decision making, which has improved efficiency.
• NEC’s early warning process has ensured changes are dealt with in efficiently and issues are mitigated without delay.