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NEC ECS: Sub-contractor payment dates

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(Furtehr to previous asked question)

Yes this is NEC 3 and start date was 5th Aug 2019 with assessment interval stated as last Friday of the month.
When I read cls 51.1 in the NEC sub contract it sates the contractor pays within 3 weeks (5 weeks in our case) after the next assessment date which follows receipt of an application for payment by the sub contractor.

What does this mean?? - I am being told - We submit application last Friday of Aug. We then have to wait to the last Friday of Sept for the next assessment date and then receive Aug payment 5 weeks from then.

This leaves Aug payment due 1 Nov and Sept payment due 29th Sept.
To date we have not received any payments and are being told to read the contract
Is this correct??
asked Nov 4, 2019 in Payment by james brown (140 points)  
From the reading of your revised clause 51.1 it depends on the date that you submitted your application as to when payment would be due.  If it was on or after the assessment date of 30 August 2019, then you would use the next assessment date to calculate the final date for payment, which would be 01 November 2019.

The September payment would also be due to be paid on 01 November 2019, provided you submitted your payment application prior to 27 September 2019.

1 Answer

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The (payment) assessment date is the one that all other 'action' dates are determined by under NEC.

There is no obligation under NEC3 for you to submit an application for payment, although the contract may have been amended.  Notwithstanding this, however, the assessment date remains as the last Friday of August.

The assessment date triggers the Contractor's obligation to certify within 2 weeks, which is the 'payment notice' under the 'Construction Act'.  This certified amount is paid within 5 weeks of the assessment date which is 04 October 2019.

If the Contractor does not certify within 2 weeks, then your application for payment becomes the 'default payment notice' under the 'Construction Act' and the Contractor is obliged to pay this unless they give an 'effective' notice to pay less than this amount, which is required to be given by the prescribed period, which under NEC  is 7 days before the final date for payment, see Y(UK)2 Y2.3, although this period of time may have been amended.

If an 'effective' 'pay less' notice has not been given then the Contractor is obliged to pay the amount of your application by 04 October.  If that has not been done then you are also entitled to interest on the 'late' payment.

If the Contractor HAS certified within 2 weeks of the assessment date, which would be on or before 13 September 2019, this would still have to be paid by 04 October 2019.

Note that the final date for payment (5 weeks) is calculated from the assessment date, NOT from the date of the certificate.

Hope this helps.
answered Nov 5, 2019 by Andrew W-I Panel Member (26,300 points)