NEC ECC: Defects and Contractor warranties

NEC3 and NEC4 Contracts Testing and Defects
1

I’m currently drafting a set of NEC4 (ECC, ECSC, among others) contracts for a number of different construction frameworks, and wanted to seek some advice on how best to treat Defects and warranties.

Historically, we’ve drafted the defects liability period to be the period that we want a warranty for Plant and Materials, not just Defects, (varying across the nature of the Plant and Materials - from 5 to 10 years). I’m arguing the case for bringing the defects liability period down to a more reasonable 2 years, but drafting the Scope to include for any additional warranty requirement(s) (duration dependent on the Plant and Materials in question).

Is this a logical approach to take, or is it 6 of one and half a dozen of another?

I’m working on the assumption that by doing so, the Contractor will be sitting on less liability (by a duration of 3-8 years) which would in turn reduce the Fee due to the reduced financial liability to the Contractor on their bottom line, further compounded by the reduced risk to them of any retention or bonds in place through to the Defects Date. Of course, we would pay for these additional warranties within the Prices instead, but I assume at a much lower total cost, and being able to get through project closure much sooner.

I hope this makes sense!

2

That seems to be a sensible approach for two reasons:

  • the equivalent of the defects liability period in NEC in the defects date. Broadly speaking, provided the Contractor has corrected notified Defects, that is when any final retention will be certified to be paid back. So for example, having an 8 years defects date would mean 8 years before it is paid back which would be unacceptable to most contractors and, let’s be honest, what would be passed down the supply chain;

  • the NEC definition of a ‘Defect’ - general term - might not align to the specifics of what is required in a warranty for a specific bit of Plant.