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NEC ECC: Should Terminal Float on Sectional Completion impact Terminal Float on Contract Completion?

+2 votes
We have a contract with four Sectional Completions; the 4th Sectional Completion being described as "The Remainder of the Works". We have a CE which is pushing the 2nd Sectional Completion beyond the date of the 4th Sectional Completion. Should the planned Completion date for the 2nd Sectional Completion drive the planned Completion for the 4th Sectional Completion, or should the Terminal Float on the 2nd Sectional Completion drive the planned Completion (and therefore Terminal Float) of the 4th Sectional Completion?
asked Oct 5 in NEC3 and NEC4 Contracts by Hamish Gaunt (150 points)  

1 Answer

+2 votes
Given that all of your sectional completions would be linked to overall planned Completion, the planned Completion will now be at the end of your 2nd planned sectional completion and hence the critical path now on the project.

Terminal float for each sectional Completion and the overall Completion Date is owned by the Contractor - so again programme logic should drive/show the correct answer.

Point of note in your question - this is quite poor drafting as the last sectional completion did not need to be one - it should just have been the overall Completion Date.
answered Oct 5 by Glenn Hide (33,000 points)  
Thanks Glenn.

Just to be clear, I take from your answer that it is possible for TF on both Sectional Completions to run concurrently?

Also should the Contractual Completion milestones for each Sectional Completion be linked to the Contract Completion milestone?
Yes to the first question.

Using the correct terminology to your second question, yes Sectional Completion should be linked to Completion Date (as until each section is complete you will not have met the requirements of Completion). Or to be really specific it should be linked to overall "planned Completion" - and if planned Completion moves due to the effects of a compensation event than Completion Date moves by the same amount once implemented.
I have a contract with X5 sectional completion and X7. The delay damages for section 1 per week are stated. Delay damages for "the remainder of the works" are stated at the same rate per week. The Contractor is in delay for Section 1 and also completion for the whole of the works. Are delay damages applied against the section until sectional completion is certified and then from sectional completion certification until certification of completion of the whole of the works? In other words one doesn't apply both damages (section and whole) i.e. double when both are late?
Potentially yes. If you are late with section 1, in most cases this would also delay the overall Completion of the works so you would be paying the cost of being late for section 1 and then the overall Completion being exceeded as well.
If however section 1 is independent of the rest and everything else had been handed over and put into use, you would have to consider the overall delay damages amount taking into account the benefit the Employer has gained i.e. not just blindly charge both.