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NEC ECC: Administering delayed damages

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The first instance I have had to deal with delay damages under X7. They are included within the contract, the Contractor has run over from the last accepted programme by 160 days. What is the next process? Do the delayed damages get recovered at the next payment certificate by the Contractor producing a negative sum back to the Client?
asked Nov 22, 2018 in Z clauses by RAW1985 (760 points)  

1 Answer

+1 vote
When you say they have over run the last accepted programme - I assume you mean their planned Completion has exceeded Completion Date by that amount. As soon as you are in a period where the Completion Date has been exceeded then from that period you can start withholding in each application the delay damages at the amount stated in contract data part 1. They should take it off in their application, but if they don't do that (and I doubt frankly they will offer it) you can make your own assessment to reduce their payment by the delay damage amount (and tell them why in your assessment).

This is assuming that none of this delay is down to compensation events that have yet been finalised. If it is know that Completion Date WILL be entitled to be moved once the compensation events have been assessed then not worth withholding the money at that point as you will only have to pay it back later (and with interest).
answered Nov 22, 2018 by Glenn Hide Panel Members (74,860 points)  
Just to add to Glenn's answer, any calculated amount for delay damages is applied or certified as a negative sum in the assessment of an amount due, see the 3rd bullet point under clause 50.2 (NEC3) or 50.3 (NEC4).

Consequently you do not need to give a 'payless notice' under s111 of the 'Construction Act' / NEC Y2.3, unless this sum was not included in the payment certificate and the Employer/Client wishes to include an amount for delay damages in the amount paid.