Dr Stuart Kings, co-author of NEC3/4 Practical Solutions and technical director at Sypro, explores what data from almost 1,000 NEC projects reveals about effective risk management
Contract management has long been a major talking point in construction, and for good reason. When managed effectively, contracts help keep projects on programme, within budget and aligned with the required quality standards. Central to achieving this is the ability to identify and manage risk before it affects delivery – a principle first championed over 30 years ago in Sir Michael Latham’s landmark 1994 report, Constructing the Team.
While Sir Michael called for a clear shift away from traditional, adversarial contracting, putting those principles into practice consistently across live projects has remained an industry challenge.
To understand how close the sector is to achieving genuine commercial resilience, Sypro’s latest benchmark report, From Risk to Resilience: The State of Contract Management in Construction in 2026, analysed anonymised data from nearly 1,000 New Engineering Contracts (NEC) across 2024 and 2025.
The findings examine how early warnings, digital tools and structured collaboration are finally giving delivery teams the real-time visibility needed to strengthen contract performance.
Among the contract suites used across the industry, the NEC stands apart for embedding risk management directly within its processes. Rather than treating risk as something to address after an event has occurred, NEC encourages project teams to identify uncertainty early and work collaboratively to limit its impact.
First introduced in 1993, NEC represented a clear departure from the traditional, often adversarial, contracts that had shaped the industry. NEC4, released in 2017, built on these by further strengthening flexibility, clarity and collaboration.
However, despite three decades of progress, effective risk allocation and management remain recurring themes in industry reviews. Construction understands what needs to change but the challenge is putting those principles into practice consistently across live projects.
The pressures facing project teams are well documented. Cost overruns, inflation, labour shortages, regulatory change and uneven technology adoption continue to affect delivery. Risk cannot be removed from construction, but it can be identified earlier and managed more effectively.
Combining collaborative contracts with digital contract management will help organisations respond to uncertainty and deliver more resilient outcomes.
The early warning advantage
An early warning is a formal notification used under NEC contracts to identify a matter that could affect time, cost or performance. It is one of NEC’s most important collaborative mechanisms, giving teams an opportunity to address emerging risks before they develop.
Analysis of almost 1,000 NEC contracts found that high-performing projects recorded an average of 43 early warnings. As might be expected, activity increased alongside project value and complexity. Projects valued below £1m recorded an average of 15 early warnings, while those worth between £100m and £1bn recorded more than 150.
At first glance, a high number of early warnings could be interpreted as evidence of a troubled project. In reality, it can demonstrate that teams are engaging with the contract’s risk management processes as intended.
Early warnings are not claims, nor are they an admission that something has gone wrong. They are a collaborative tool designed to prevent problems from escalating. The true measure of success is therefore not simply how many compensation events are raised but how many risks are managed before they result in additional time or cost.
When supported by digital contract management systems, this process also creates a transparent record of decisions, actions and responsibilities. It allows teams to monitor and mitigate risks in real time.
Turning contract principles into everyday practice
Combining forward-thinking contract forms such as NEC with purpose-built digital platforms provides a strong foundation for successful project delivery. NEC establishes a clear structure for collaborative risk management, while technology gives teams the visibility and control needed to apply it consistently.
Other contract suites, including JCT, traditionally offer fewer built-in mechanisms for this level of proactive risk management. This does not make them ineffective, but their processes have often placed greater emphasis on responding to events after they occur.
Without robust digital systems, that difference can become more pronounced. The opportunity is not necessarily to replace one contract with another but to use intelligent tools to introduce the same discipline and transparency, regardless of the contract model being used.
Recent updates to JCT demonstrate progress, including greater flexibility and recognition of digital ways of working. However, meaningful transformation will require more than adopting individual features from NEC. Transparency, collaboration, shared responsibility and proactive risk management must become fundamental principles across every contract suite.
The industry already has the tools, data and precedent needed to make this shift. The remaining question is whether organisations are willing to change established behaviours.
It is time to move beyond blame-led contracting and towards a more cohesive model in which technology, collaboration and forward-thinking contracts work together. The data shows that when teams identify risks early and manage them openly, they create better conditions for everyone involved in project delivery.
