NEC3 ECC: Can an Employer withhold monies for defective works from an assessment due once they have terminated for convenience?

Is an Employer entitled to retrospectively withhold monies previously certified and paid within an Activity Schedule when they carry out an assessment due on Termination for Convenience? Would they be required to notify the Contractor via an NCR first or can they only deduct the monies at the end of the 12 week final assessment period?

In short yes, provided that you can justify why the activities that had previously been certified and paid are now not “complete” (ref definition of PWDD at clause 11.2(27).

If the PM has wrongly certified an amount due, it can be corrected by the PM in accordance with clauses 51.1 and there may be entitlement to interest on the overpayment under clause 51.3.

The timing of the final payment is dealt with at clause 90.4, the PM has up to 13 weeks to certify a final payment and within 3 weeks of the final certificate the payment should be made.