NEC Term Service Contract

We are opertaing under an NEC 4 Term Service Short Contract providing Facilities Management services. As part of the Contract Data, there was an adjustment to be made on an agreed plant schedule, to which we applied a -20%. At the time of tender no schedule was provided even though we asked. Post tender we asked if CECA was permissible, and the Clients Quantitiy Surveyor, agreed and said, for all Plant and equipment, they were happy for us to provide ad hoc works that are not covered under the contract using a build up to include Plant from CECA.

We provided a number of quotations for additional works, the clients representatives have committed the works orders via their order management system for us to proceed. We have then delivered the works, and submitted the invoice for same in keeping with the CECA agreement. The clients representatives are now refusing to pay for the CECA related items, with the approach of " it was not me who agreed this, it was someone who used to be the QS, therefore we are not paying for this equipment"

What contractual mechanism is there now under the NEC4 family to address this if at all any?

We have all confirmation of prior agreements in writing to proceed as agreed with CECA.


The Client is wrong to refuse to pay for Equipment provided you can prove that it was necessary to “Provide the Service”, see clauses 20.1 and 11.2(10). So the question isn’t whether it should be paid for or not, but how it should be paid for?

Clause 14.7 requires the pricing for Task Orders to be assessed in the same way as for compensation events i.e. Defined Cost plus Fee (clause 63.2) or agreed rates and lump sums (clause 63.3). Agreement takes place on a Task Order by Task Order basis, agreement once or twice does not constitute agreement for the whole contract.

It looks like with the Client’s QS you agreed to do the latter. The term Defined Cost is found at clause 11.2(3) which explains how the cost of Equipment is assessed i.e. rates from published list +/- adjustment percentage or open market or competitively tendered rates.

You included the - 20% adjustment percentage in the Contract Data, so the question is which published list was intended? As they didn’t state one, unless you can get the Client to agree to CECA and include it in the contract via a contract amendment, you will have to use open market or competitively tendered rates or agree rates on a Task Order by Task Order basis under clause 63.3.