NEC4 Option C clause 11.2(26) states that a disallowed cost is a cost which should not have been paid to a Subcontractor or supplier in accordance with its contract.
If a contractor should have levied LADs against a sub-contractor, but has not, is this grounds to disallow the correct value of LAD calculation from the Project Manager’s Assessment of the contractor’s AfP?
Rather than treating as a Disallowed Cost I suggest you refer to the Schedule of Cost Components for the Subcontractor component. If you are deducting LADs from the Contractor for the same delay then the Subcontractor Defined Cost should not be reduced
Hi Dave, thanks for the reply. I always refer our payment assessment to the SCC to guide me. In this instance we are not levying LADs to the Contractor, they are not in late (yet), only a particular sub-contractor for a particular section of work.
Hi ok so you would not be doubling up by making the deduction