Relatively minor Defects have arisen on a design and build (cost-reimbursable NEC3) contract:
Clause 11.2(25) states that “the cost of correcting Defects caused by the Contractor not complying with a constraint on how he is to Provide the Works stated in the Works Information” is a Disallowed Cost.
In discussing with the Contractor which corrective actions should/ should not constitute Disallowed Cost, the meaning of ‘constraint’ is being debated. The Contractor’s view is that a constraint is something imposed by the Employer i.e. access routes, hours of work etc.
My view is rather wider and I believe that any requirement contained within the Employer’s Works Information is effectively a constraint. Also, as the Contractor’s design once accepted, forms part of the Works Information this imposes additional/ more detailed constraints.
For example, the drawings/ specification produced by the Contractor states that something is to be constructed in a particular location and out of a particular material. If it is constructed in the wrong location (due to setting out error) or out of a different material (in error) then the correction of the Defect would be a Disallowed Cost.
In terms of Defect correction being an allowable cost, I believe this is limited to situations such as concrete being poured and vibrated to the specification but upon striking of the formwork honeycombing/ voids are present needing to be ‘made good’.
I’d be grateful to know if anyone fundamentally disagrees with this view.