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NEC ECC: Option E - Defined Cost (Delay)

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I'm a Contractor working with my Subcontractor on an Option A ECS. The contract with my client is an ECC Option E.

We have caused our subcontractor delay due to not providing documentation / RAM approval in the time stated in the programme. This has caused works to be pushed back as the subcontractor cannot commence until they have received approval.

The reason for this delay is not the fault of the subcontractor but the Contactor (Long governance processes)

Is the CE for prolongation from the subcontract recoverable by the Contractor to the client ?
asked Jul 5, 2018 in Payment by QS007 (450 points)  

1 Answer

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Yes the additional costs paid to the Subcontactor can be recovered as Defined Cost from the Employer provided the subcontract compensation event is valid (sounds like a clause 60.1(3) for the documentation and a 60.1(5) for the approval) and that it has been assessed correctly under clause 63. If either of these tests is failed then you risk having some or all of the cost disallowed as it could be argued that the cost "should not have been paid to a Subcontractor ... in accordance with his contract" - clause 11.2(25) second bullet point. There could be a similar outcome if you did not give an early warning and should have - third bullet point, same clause.
answered Jul 5, 2018 by Neil Earnshaw (19,120 points)  
edited Jul 5, 2018 by Neil Earnshaw