43.4 - Who pays for the costs of allowing the contractor access for correcting a Defect?

NEC3 and NEC4 Contracts Testing and Defects
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The Client employs Contractor A to provide temporary traffic management.
The Client employs Contractor B to carry out work within the temporary traffic management.
Temporary traffic management is de-mobilised on completion.
Contractor B’s work is later found to include a Defect.
In order to correct the Defect, Contractor A is required to re-establish temporary traffic management.
Question is, can the Client recover the costs incurred with Contractor A from Contractor B under 43.4 of the TSC?

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This is a real-life situation and not an academic question for accreditation. Isn’t this the purpose this forum serves? Do I need to post more details? Can’t really understand what the issue is here.

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My question was hidden because of you obviously, but not for long. If you are not here to assist but criticize, I suggest you spend your time elsewhere. Really sad to see members of this forum accusing people based on assumptions. You could just ask for more details.

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Hi Gio, I also didn’t hide or remove your question, it was removed by the people that run this forum, they won’t have moved it because I spotted it to be an NEC Accredited Project Managers course question, they will have removed it as others have flagged it up as a disingenuous question, in addition to myself.

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I work for a client as an SQS, managing several maintenance projects under the NEC4 TSC. What was described above was a series of events I have never dealt with before. I tried to explain it the best possible way I could. It is a bit complicated and did not want people to get confused, hence used terms like contractor A and B which might indeed sound like an accreditation question but it’s not. I do not want to get into the project’s details inside this forum but I could via PM. What still surprises me is that you insist that this is an APM question. Could you then please point me to that question somehow? I bet you can’t.

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Noone else flagged as disingenuous apart from yourself. I received a message from the admin stating that a member flagged it, so it was pretty obvious.

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Hi Gio, there has many occasions when people have posted NEC APM course questions. Take a look back through the posts or contact Chris Corr directly.

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Hi Gio Firstly apologies for the delay in coming back to you. As explained the post was hidden as it had been flagged as a potential question from the ICO PM Accreditation exam, which has happened a few time in the past. i will look at your question, now and i am sure some of the other contributors will as well.

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14

I assume given the clause reference 43.4 this is a NEC4 Term Service Contract.

The answer to your question will be dependent on some facts that you haven’t provided, but I have set out the key provisions in the contract:-

  • 43.4 requires the SM to arrange for the Client to allow the Contractor access if it is needed for correcting a Defect. This clause doesn’t allow the Client to recover the cost of arranging access. Contractor A traffic management would to my mind broadly fall within this definition.
  • 43.3 requires the… “Contractor to correct a notified Defect within a time which minimises the adverse effect on the Client and Others.” “Others” in this clause refers to Contractor A, but Contractor B can still rely on the Client to organise access. The clause also explains that “If the Contractor does not correct a Defect within the time required by the contract, the Service Manager assess the cost to the Client of having the Defect corrected by other people and the Contractor pays this amount.” This provision would only allow the Client to recover costs from Contractor B if they had failed to correct the Defects (having been given access) within the time required by the contract. From what you have explained, I cannot see this being the case. It is worth noting that this clause talks about the cost of repairing the Defect and not organising access.
  • 81.1, 82.1 and 82.3 are really the clause that are relevant to your question and provide set off and abatement provisions to recover costs that the Client has incurred. I’d suggest you and your Client gets legal advice on whether the Client’s costs fall within the bullet points of 81.1. I am not sure they do and therefore not convinced the Client could recover these costs. The first bullet point seems the most obvious area, but i am not sure the organising access would fall within this point bullet given clause 43.4 requires them to organise access. Check for Z clauses that amend 81.1, as sometimes Client’s solicitors rewriting these provisions, to widen the scope of cost recovery. If they fit within the definitions in the bullet points of clause 81.1 then clause 82.1 allows the Client to recover these costs.

As a side note, if the contract is Option C or E, read clause 11.2(24) which provides limited grounds for disallowing Contractor’s costs for correct Defects when the Contractor hasn’t followed an acceptance procedure. Again this doesn’t cover the Clients costs but would avoid the Client paying for the correction of the Defect under Option C/E. This is often misunderstood provision by SM and Clients. To be clear Option C and E will generally allow the Contractor to recover the cost of correcting a Defect, as well as the Cost of doing in the first place.

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15

@stevencevans and @Barry_Trebes would be curious to get your thoughts on clause 81.1.

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