Advanced Payment on Subcontract Order

Our Contractor is employed under an NEC3 Option A. X14 is not selected.

The Contractor has submitted a revised Activity Schedule with an activity for “Placement of subcontract order” along with a sum of money associated. The Contractor has stated that to obtain a more competitive price they agreed to allow payment of a lump sum on subcontract order. As X14 is not selected this would place the Employer at risk because the amount would be certified with no title passing to the Employer. It is appreciated that a bond could be requested, however it is assumed this cost must be borne by the Employer as it is a change in their requirements.

This presents the following questions:

  1. Is “placement of an order” a valid activity and can the Contractor attach a sum of money against it?
  2. Can the Project Manager withhold acceptance of the Contractor’s Activity Schedule, by virtue of the second bullet point stated in 54.3, if there is such an activity?


My thoughts is based on the assumption that the Activity Schedule was agreed prior to Contract Award and was included in the Contract Data as the activity schedule

My thoughts are as follows

  1. The Activity Schedule is the *activity schedule * in your Contract Data, which should have been agreed prior to Contract Award, If so, if there is an activity in the activity scheudle titled placement of an order, which is aligned to a activity within the Accepted Programme. The Contractor is entitled to apply for this amount.

  2. The Project Manager can withhold acceptance of an Activity Schedule, but this is a REVISED activity schedule, not one that is already included in the Contract Data. Furthermore, this has to be prompted by a change to the planned method of working (54.2).

I’m not sure that X14 is relevant here, as it appears from your question that the Contractor has simply front loaded their activity schedule which appears to not have been challenged during tender.


Thanks for your response, the assumption that the Activity Schedule was included in the contract is not the case. Simply put they are requesting upfront payment after the contract was executed. In this scenario, I assume from your response that the Contractor is not entitled to now claim an activity and sum in the certifcate for this item.

Thanks for clarifying that.

Question, Was there no Activity Schedule referenced in the Contract Data ?

Within the contract (drafted by others) an expression of the Prices was included, but this is not what I would call an Activity Schedule as there were single activities for each trade package.

It sounds as though the Contract Data has not be completed correctly. Contract Data Part 2 has two sections relevant to this question, these are

  • The *activity schedule *is and,
  • The tendered total of the Prices

From what you’ve said, the tendered total of the Prices has a figure, but the ‘Activity Schedule is’ section has been left blank. This is a situation that i have not come across, so hopefully other members of the community can jump in an advise.

In this situation, I would suggest both parties come together and agree an Activity Schedule, any concerns about front loading should be discussed and agreed. I’d suggest that agreeing this Activity Schedule is more in the Contractor’s interest given this is the mechanism for payment…