Option F: Management contract | NEC Clauses Explained

Reviewed by LazyQS Editorial·Last reviewed: 2026-02-19

Plain English Explanation

Option F is a management contract — the Contractor manages the delivery of the project but sub-lets most (or all) of the physical work to subcontractors. The Contractor is paid their management fee plus the actual cost of subcontracts. The Client retains the financial risk on subcontract packages.

Option F is the NEC equivalent of a traditional management contract. It is appropriate where the Client wants to appoint a professional management team early but retains control over the cost of subcontract packages. The Contractor's value is their management and coordination capability rather than their own workforce or resources.

Under Option F, the Contractor must demonstrate that subcontract costs are properly procured and represent value for money. The Client effectively bears the risk of subcontractor price levels and performance.

Key Takeaway

Under Option F the management contractor has limited financial incentive to fight your CE claims — but also little reason to absorb them. Push for CE entitlements clearly and promptly so they are passed through to the Client.

What This Means for Subcontractors

If you are a subcontractor under an Option F management contract, your contract is likely to be on a priced or target basis (Options A–D). You should understand that the management contractor above you is largely passing cost through to the Client. This can sometimes affect how disputes are handled — the management contractor may be less motivated to absorb your CE entitlements because they can pass them on.

Common Risks & Disputes

1Subcontract procurement processes not being sufficiently competitive, leaving the Client exposed to high costs
2Management contractor's fee being inadequate to cover the true management effort required
3Subcontractor insolvency creating cost and programme risk that flows back to the Client
4Ambiguity about the management contractor's obligations versus subcontractor obligations in the Scope
5Interface management between subcontractors being complex where there is no direct contractual link between them