So we know “Defined Cost is the amount of payments due to Subcontractors for work which is subcontracted”
So are “payments due to Subcontractors” simply what the Contractor has assessed and certified, and is thereby due to the Subcontractor?
As the Employer, what happens if you don’t agree with that assessment? Can you make your own assessment of the Contractor’s certified sum to his Subcontractor?
From your question I can assume that you are using NEC3 and have a Main Option C, D or E, because of the definition of Defined Cost.
Payments to Subcontractors should be made in accordance with the terms and conditions of the Subcontract. Where this is not the case then this is a Disallowed Cost under the 2nd bullet point of clause 11.2 (25).
Any Disallowed Cost is valued by the Project Manager when assessing an amount due under core clause 5.
I would argue that no you could not do your own assessment of the assessment. However, and I assume that the subcontract is also an NEC contract, the basis on which you can disallow any Subcontractor’s costs where an implemented CE in that subcontract is concerned can be boiled down to 3 questions:
Is the event a genuine CE?
Has it been assessed in accordance with the contract i.e. are all costs defined as a Defined Cost, was the Accepted Programme used for the assessment etc…?
Are the rates used, the same as the ones that may be listed in the contract data?
If the answer to any of those questions are no then there is a genuine remit under 11.2 (25) that would allow you to disallow those costs. however, if the answer is yes to all of those questions then there is no remit under 11.2 (25) that would allow you to disallow those costs.
It is a dangerous tactic to use your own opinion on what that assessment should have been as the contract has no opinion clauses in it. Also, having worked on the tools for over 20 years in the construction industry before heading in to QS duties. I can assure you that the assessment of a cost of work will always be different from one person to the next. Always best to have these agreed as a collective when the assessments are being carried out.