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Can X20 under NEC3 ECC be used to deduct money for poor performance under a KPI?

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It has been suggested by the Employer's quantity surveyor that they may withhold payment from our latest application for a KPI under X20 which we have failed to met. From my reading of X20 this doesn't appear to be permitted. Your thoughts?
asked Jun 14, 2013 in Secondary X, W and Y options by anonymous   7 45 62

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The standard wording of X20 provides for payment to encourage good performance (when the Contractor mets or exceeds the KPI) but doesn't allow the Employer to deduct monies for poor performance; X20 serves as a carrot to incentivise performance and not a stick.

It is however possible but the Employer would need to have amended the standard wording in X20.4 with a Z clause to achieve this. I'd suggest you chek to see if such provisions have been included in your agreement. The damages would also probably need to pass the test as to whether they are a reasonable pre-estimate or a penalty.

Hope that helps.
answered Jun 14, 2013 by Chris Corr (9,380 points)