The challenges of adopting new engineering contract: a Hong Kong study

Purpose

Project delays and cost over-runs are few common major problems arising from conventional contracts. To overcome these issues, the Hong Kong Government has been practicing the use of the New Engineering Contract (NEC) forms in several public works projects. However, despite the successful outcomes and the positive signs of adopting NEC, it appears that NEC forms of contracts are not widely adopted in the Hong Kong construction industry even after 25 years of their first introduction. The purpose of this paper is to identify the challenges and barriers for not implementing NEC widely in Hong Kong.

Design/methodology/approach

Based on a questionnaire survey data collected from 45 senior industry professionals, and six semi-structured interviews, the study evaluated the perceptions of construction professionals as to why NEC is still not popular in the industry and reported the relative importance of challenges in the implementation of NEC in Hong Kong.

Findings

The results reveal that “People are not willing to change,” “Limited number of trained professionals” and “Insufficient case law and adjudication experience” are the most significant challenges and barriers in adopting NEC. These findings are also supported by the opinions of construction professionals through semi-structured interviews.

Practical implications

The findings are relevant and would benefit to the industry stakeholders for adopting NEC contracts by informing them of the most significant challenges so that proper strategies may be devised to overcoming them for early contractors’ involvement, controlling cost and time overruns in infrastructure projects.

Originality/value

The empirical evidence of the study provides an insight into the challenges faced by the construction industry of Hong Kong. NEC form of contract is the way forward in order to create a better working environment conducive for all the parties that would result in better construction project performance and productivity.