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Term Service Contract Guidance Notes

Introduction
There are some published standard forms of maintenance-type contracts, but these are similar in
nature to traditional forms of construction contracts. Generally, they suffer from the same
disadvantages and frequently result in similar problems. Some organisations have used bespoke
maintenance contracts for many years. Many of these have been adapted from standard forms of
construction contracts which have long been outdated.

As the benefits of the NEC contracts became increasingly understood and accepted in the
changing environment of construction, the demand arose for a Term Service Contract based on
the same principles. In response to this demand, the Institution of Civil Engineers published a
consultative version in May 2002. A number of comments were received and these have been
considered in producing this first edition. Updates in other NEC contracts have also been taken
into consideration and relevant changes incorporated.

Purpose of guidance notes


The purpose of these guidance notes is to explain the background of the Term Service Contract
(TSC), the reasons for some of its provisions and to provide guidance on how to use it. The
guidance notes are not contract documents, neither are they part of the TSC. They should not be
used for legal interpretation of the meaning of the TSC.

When should the TSC be used?


Although at first reading the TSC may appear to be similar to existing standard or bespoke forms
of maintenance-type contracts, to rely on such an impression would be wrong. Most procedures
in the TSC are based on good management practice and often differ from current practice. This is
not a change for the sake of change, since the application of NEC principles in pursuit of its
objectives has left very little of conventional practice to be incorporated unchanged.

Users of the TSC must, therefore, study it carefully as the words are not simply different
expressions of familiar practice. The TSC is drafted in a simple and clear style, but its differences
from current practice mean that some explanation and consideration of how it will work is
necessary when it is first used. That is the purpose of these guidance notes. They are essential
reading for those using the TSC for the first time. They will continue to be useful in training people
coming into the management of service contracts in how to make best use of the TSC.

The TSC is also essentially different from other forms of contract in the NEC family of contracts. It
has been designed for use in a wide variety of situations – not restricted to construction. It is
essentially a contract for a Contractor to provide a service (not limited to a professional or
construction service) to an Employer from a starting date and throughout a service period. It uses
established NEC procedures and wording as much as possible. It is designed for managing and
providing a service – not for managing a project. The service may be provided continuously over
the period of the contract or on a task-bytask call-off basis.

The TSC should not be used for very minor services, such as those provided by a sole trader
involving his or her own work and little technical resource of skill and equipment. The service is
usually provided on the Employer’s premises but may not be. The service may include physical
work, such as cleaning, painting or other maintenance, but may not do. In the public sector, the
TSC is designed to be used for all contracted-out services, whether including a physical content
or not.

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