Contractor assessment of application unreasonable - NEC3 Option C

NEC3 and NEC4 Contracts Payment
1

Hi,

What recourse does a subcontractor have, contractually, if the assessment / certificate received from the contractor is unreasonable and not line with the administration of the NEC3 option C payment clauses.

For example, the contractor has received an application for payment for the PWDD. There are no accruals as the works completed over a month ago.

The contractor has decided to ‘disallow’ the following:
£500k based on costs that require further substantiation
£400k based on ‘expected’ further disallowed costs to appear following an audit (that has not taken place yet)
£300k for a person they ‘assumed’ would be covered by the Fee yet was shown on the org chart, working in the working area and until completion of the works, the persons costs were being certified.

As cl 50.2 states what ‘The amount due is’, I was wondering how definitive is the 3rd bullet point:
‘less amounts to be paid by or retained from the Subcontractor’ as I do not feel the above deductions are fair and reasonable.

However, aside from have the discussion with the Contractor, I cannot see any contractual mechanism in place to ensure the contractor does not do this again.

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2

Himmet. The short answer to your question would be to adjudicate your differences with the Contractor. If there are costs that require substantiation then before commencing the adjudication you would be best providing the same; and further costs to be audited sounds like guesswork on their part. Regards Mike

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Thanks Mike. I also concluded adjudicating was the only contractual recourse but wanted to ensure I wasn’t missing any other way of contractually dealing with the situation.

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4

Plus your interest at 8% over base due under the Late Payment of Commercial Debts (Interest) Act

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Would you get your 8% interest? Presumably because the value has not been certified it’s not become due and is therefore not yet a debt?