NEC3 ECC: If uncompleted works are classified as defects, then how does the Contractor get paid?

NEC3 and NEC4 Contracts Payment
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The Contract is in Option C and PM planning to issue a Completion Certificate with uncompleted works which is not going to stop the Employer to use the works. As per the contract that scope will be classified as “defects”. In other hand the defect correction after completion is disallowed cost. Please explain the way to get the payment under the option. With the commence sense the Contractor got to be paid for the works but contract terms it not seems correct

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I can see where you are coming from ! Let us assume there is that really harsh interpretation of the what a Defect is i.e. “a part of the works not in accordance with the Works Information” = work not done.

Under clause 43.2, the Contractor has the defect correction period (dfc) to correct notified Defects and this period starts at Completion for Defects notified before Completion.

Under 11.2(25), 4th main bullet point, Disallowed Cost includes “the cost of - CORRECTING Defects after Completion”. Look up ‘correcting’ as a synonym and you get words such as ‘modifying’, ‘amending’, ‘altering’, ‘adjusting’, ‘fixing’ and ‘rectifying’. All these - as well as the word ‘correcting’ - imply to me that something has been done wrong in the first place to need ‘correcting’ etc., NOT that the work has not been done in the first place.

Given this, I have a high degree of certainty that you should be paid Defined Cost for doing incomplete works after Completion. But note :

  • for your subcontractors under priced based options, the cost of correcting Defects is in their Prices, so does not fall on the main Contractor;
  • in reality, some of your site establishment may need to be there to ‘correct’ Defects and some to finish off incomplete works. Grown up conversations need to be had about which Defined Costs are allocated to which heading and hence reimbursed.