August 2026
The contract is changing
Are we ready?
Consult Australia members have spent years asking government clients to change the way they contract. Now more clients are adopting NEC4, and the next move is ours.
When TasWater recently adopted the NEC4 contracting suite, Kristy Eulenstein saw it as a sign that the shift to more collaborative contracting is gaining ground.
“We’ve been advocating for TasWater to try different approach to contracting for many years, so this felt like a real milestone,” Consult Australia’s Head of Policy and Government Relations says.
TasWater is not alone, as it followed Sydney Water’s adoption of NEC4 in late 2019 as its standard procurement route for its Partnering for Success program. NEC4 is a suite of engineering and construction contracts designed to support more collaborative project delivery. Main Roads Western Australia and the Square Kilometre Array Observatory have also used NEC4.
This is good news. But are we ready for what we’ve been asking for?
A different way to manage risk
Australia has a contracting culture that too often ends in dispute. Consult Australia’s 2025 Unravelling Risk report points to an entrenched “design, construct and litigate” cycle.
“Government clients understand reputational risk and public accountability very well. But procurement also requires a sophisticated understanding of commercial and project risk, and who is actually best placed to manage it,” Kristy says.
“If the party carrying a risk can’t control it, the risk isn’t managed. It’s simply pushed further down the chain.”
The problem starts well before the contract is signed. Consult Australia’s 2026 Protecting Cost Certainty report found risk is too often left until contract stage rather than considered during project planning.
“We often hear, ‘It’s in the contract, there’s nothing I can do about it’. But lawyers don’t set procurement policy. They draft to the commercial position they’re given,” Kristy says.
NEC4 takes a different approach. Rather than simply transferring risk, it is designed to make risk visible so the parties can manage it together. Early warnings bring problems into the open before they escalate, while compensation events provide a structured way to manage changes to cost and time.
The contract can’t do it alone
Infrastructure Australia’s 2025 Market Capacity Report calls for “moving beyond transactional contracting to models that foster collaboration, transparency and shared accountability”.
A new contracting approach can create the conditions for collaboration. But it can’t create the capability to deliver it.
“Advocacy and capability have to move together,” Kristy says. “We can’t ask clients to change the way they contract and then find ourselves unprepared when they do.”
There is a clear capability gap to close. Almost one in four businesses surveyed for Consult Australia’s 2026 Market Conditions Report identified commercial and contract management as a skills gap.
NEC4 training does more than teach people how to read contract clauses. It helps teams understand how to use a contract’s collaborative mechanisms in practice to managing issues as they emerge.
Consult Australia’s partnership with NEC Contracts gives members access to NEC contracts and discounted training, including role-based accreditation, virtual learning and tailored in-house programs.
“Understanding NEC4 before it appears in the tender inbox means our members can be ready to make the most of that change,” Kristy concludes.
Want more information? Read our Essential Insight on Training Capability and the Future of Collaborative Delivery. Find out about NEC4 training. Or head to Consult Australia’s Centre for Contracting & Risk.