Key Dates vs Sectional Completion

NEC3 and NEC4 Contracts
1

We are in a bespoke ECS contract. The project manager has specified a subcontract completion date and no sectional completion applies to the works. There has been a series of quoted events that have materialised in to instructed CE’s. Upon release of the CE’s, a new subcontract completion date is specified and additional key dates have been added. The key dates are not feasible and we EW’ed them to get it highlighted as we’ve faced some real supply chain pressure. The question I have is:

  1. Can LD’s be applied to missing key dates? my understanding is they can’t and are only applicable from any delay to the subcontract completion date which we are confident we will achieve.

  2. What is the worst penalty that could happen if we miss key dates?

2

I have understood your question to relate to the actions of the Contractor’s project manager.

A Key Date is stated in the Subcontract Date (see clause 11.2(9) so the introduction of additional key dates would require a change to the subcontract and such change would need to be by agreement. The additional key dates could alter your risk profile and therefore may require financial consideration for acceptance.

In answer to your questions:

  1. Delay damages for missing key dates are at larger and not liquidated damages.
  2. in the standard subcontract, damages are uncapped.
3

LeroyS, the answer to your second question about penalties relating to missing Key Dates is, the Contractor assess the consequential losses it may suffer as a result of the Sub not meeting the Key Date and the Sub pays this amount to the Contractor - see clause 25.3

4

Hi,

The sub pays these damages without question or do these damages need to be assessed by a court?

5

Hi leroys, the Contractor assesses the costs and the subcontractor is obliged to pay them - clause 25.3. If the subcontractor believes the contractor is wrong their remedy is to refer a dispute to adjudication.

6

Thanks. This Forum is fantastic. Breath of fresh air to the industry.

7

@leroyS you may be interested in reading my article on this subject, you can find it on our website in the resources section:

https://www.neconsult.co.uk/resources/

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8

Champion. I’ll have a read. Great stuff.

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