Risk analysis in NEC type B contracts, a case study in Peru (#1927)

Authors

Yuncar Solis, Michael Linder

Noa Ataypoma, Franck

Beltran Leon, Fernando Jose

Tomaylla Bejarano, Adrian Felipe

Huaricallo Vilca, Yvan

Abstract

The study examines risk management in traditional unit price contracts under the State Contracting Law (LCE) in public works on the northern coast of Peru, impacted by natural phenomena such as the El Niño Phenomenon, contrasting them with NEC Option B contracts. 50 contracts were evaluated through official sources such as SEACE and OSCE, in addition to conducting surveys with 30 professionals and interviews with 22 specialists. The findings indicate that the risks associated with natural phenomena, technical failures and social disputes are mainly attributed to contractors, causing disputes, excessive expenses and de-lays. On the other hand, NEC Option B contracts offer fairer risk management, versatility in scope modifications and better contractual relationships, thus reducing conflicts. The study determines that the application of NEC Option B contracts in public infrastructure projects could significantly enhance risk management in Peru. It is advisable to train experts in the industry and make changes to regulations to simplify their implementation. The implementation of this model has the potential to reduce disputes and enhance the effectiveness of projects, guaranteeing their feasibility and long-term sustainability.