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NEC ECC: Option X5 and X7 delay damages

0 votes
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My completion date for the whole of the works is 31/10/17.

Delay damages for Completion of the whole of the works are £5,000.00 per day
Under X5 the section 1 completion is 31/10/17 with the amount per day £0.00 (no other sectional completions)

The section completion and completion of the whole of the works are for the same item of works. With the statement (but not if Option X5 is also used) under X7 would the £5k damages be applied or £0?
asked Sep 20 in NEC3 Secondary X, W & Y options by anonymous   1 4
   

2 Answers

0 votes
As the Sectional Completion Date is the same as the Completion Date, delay damages must take this into account, especially as they relate to the same item of work.  This probably explains why delay damages for the Sectional Completion date are £0.00, as it is already included within the amount for 'the whole of the works'.

If you miss one date you also miss the other as well.

I would suggest that delay damages for BOTH would actually apply so you would be charged £5,000.00 (completion date) and £0.00 (sectional completion date).
answered Sep 21 by Andrew WI (3,400 points)  
0 votes
Firstly let’s point out that this is poor drafting/lack of understanding on the part of the Employer. I see this also with Key Dates – where the liability for missing a Key Date is what-ever cost the Employer incurs i.e. undefined/not predetermined, and the Employer states that the Completion Date is a Key Date!

Sectional Completions are meant to be for sub-sections of the work, and then the last element would be called the Completion Date – to which X7 will state what the cost of missing that is.

Despite the poor drafting I think the intent is clear here that the overall Completion has not been met – for which there will be a liability of £5000/day.

Had Sectional Completion been £3000, then unlike Andrew I do NOT believe they would both apply – i.e. £8000/day. It has to be one or the other.

There should be no need what so ever practically or contractually to make the last Sectional Completion the Completion Date – so back to my first point of poor drafting…
answered Sep 22 by Glenn Hide (33,000 points)  
I agree with Glenn's comments about poor drafting, especially the fact that the Sectional Completion Date and Completion Date are the same, which doesn't correctly apply the principle and intent of a Sectional Completion Date.

Normally you would apply Delay Damages according to what date was 'missed', which could be a Sectional Completion Date or 'the whole of the works' for the Completion Date.  The fact that both are the same day means, that as Glenn says, you are likely to be applying Delay Damages which could amount to 'double accounting', that is paying twice for the same assessment.

In this instance, however, it seems that Delay Damages for Sectional Completion have taken account of the 'double accounting' principle and, consequently, you would apply Delay Damages to whatever dates are missed, that is BOTH for the Sectional Completion Date AND the Completion Date.  If, however, as Glenn states, the Delay Damages for Sectional Completion were £3,000 per day then you could probably challenge the application from a 'double accounting' principle.