NEC ECC: Amount to withhold for defects and when to charge contractor defects to be corrected by others?

We are operating under a an NEC3 ECC option B contract. My question is two-fold.

We have a large list of defects which the Contractor is being extremely slow in rectifying. How much are we entitled to withhold under Option B (i.e if in the BoQ there is 100m2 of brickwork and 10m2 is defective, do I withhold the value for 10% only?), and where will I find this clause? Perhaps 11.2(28) but slightly unclear. Or of course case law.

Furthermore, we have had the defects list priced externally so have costs for rectification of defects by others, at what point can these values be deducted from the Contractor? Only when the work has been carried out by others or now as an ‘incentive’ for the Contractor to get on with them? Again, a nod to a clause or case law would be very helpful.

Firstly the issue of correcting Defects is different before Completion, as the ‘defect correction period’ begins at Completion for Defects notified before then. After Completion the time to correct a Defect from notification is whatever the ‘defect correction period’ length of time is stated in Contract Data Part 1 (typically 2 or 4 weeks).

You are not entitled, therefore, to get somebody else to correct any notified Defects before Completion, as the Contractor is still within their prescribed time limits. After Completion this option is available after the ‘defects correction period’ if any Defects remain uncorrected, the calculation of cost to get others to correct them depends upon whether (reasonable) access was given.

I am not sure what clause 28 is but it is an ‘additional conditions of contract’ z-clause as the standard NEC3 ECC main Option B doesn’t have this.

For payment you assess the ‘value of work done’ according to the definition of Price For Work Done to Date, which includes any completed quantity of work which is without Defects, so out of the 100m2 of brickwork you would certify the payment of 90m2. To be clear, however, the defective part (10m2) should be formally notified as a Defect to allow this assessment to be made.

You don’t say whether Completion has been certified, this is a key factor in determining the answer to your question.

I think the ref to clause 28 is 11.2(28) defining the PWDD. The definition of PWDD does include a direction that “completed work is work without Defects which would either delay or be covered by immediately following work”. Would that change your view.

I think it would depend on the nature and extent of the Defect and if it (the Defect) meant the work was not measurable/quantifiable to be a quantity of the work completed eg (an extreme) the wrong type of bricks had been used.

Yes. Completion has now been certified and the defect correction period (of 4 weeks) is now up.

Thank you very much. This is very helpful.

Completion has been certified and the defects correction period is now up. Clause 28 as I put earlier incorrectly should have read 11.2(28). So the PWDD would be for “work without Defects which would either delay or be covered by immediately following work”. So yes I agree that the defective portion of the work should be not be assessed for payment once it has been notified as a defect.

In that case you can proceed as indicated in Clause 45 - in fact, the clause doesn’t use the word ‘may’, so the Project Manager is REQUIRED to assess the cost of having the Defect corrected by other people, and the Contractor is required to pay that amount - this would usually be by a deduction from retention.

Depending on your specific circumstances it may however be prudent to notify the Contractor of your intention to do this, in case there are any issues with regard to gaining access.