Under NEC are delay damages applied before or after the pain share calculation?

NEC3 and NEC4 Contracts Payment
1

If a contractor is in a pain position (price for works done to date in excess of the target cost) and in delay (with X7 delay damages), do you:

Calculate the pain share using the price for works done to date including the delay damages deduction?
Or;

Calculate the pain share using the price for works done to date excluding any delay damages. Deduct the generated pain sum from the price for works done to date. Then as a separate exercise, further deduct delay damages.

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2

In brief, it is the latter as damages are not part of Defined Cost and hence the Price for Work Done to Date against which the pain / gain is assessed under the clauses in 53 of option C.

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