Chapter 4: Managing Costs Escalation on a Cost Reimbursable Contract

This chapter

• describes both the project management tools that are available and the proactive Client engagement that is promoted within the NEC4 Engineering and Construction Contract (NEC, 2017) in order to avoid unnecessary costs escalation

• compares those provisions against other standard form contracts published by FIDIC (2017) and JCT (2016) 

• describes the guaranteed maximum price, target price and incentive scheme models that have been used on some of the largest recent infrastructure projects to manage costs escalation

• explores the use of early contractor involvement and alliancing arrangements to secure best practice for the project as a whole.