Under an ECC Contract Option C the Supervisor has notified the Contractor of a defect a few days before the defects date. The nature of the defect means that the 4 weeks defect correction period will not provide the Contractor enough time to correct the defect. There is a Retention Bond in place which the Contractor is keen to have released so is pushing for issue of the Defects Certificate with a list of Defects at the end of the last defect correction period. This would leave the Client with uncorrected defects and no incentive for the Contractor to correct them. Does the PM have to issue the Defects Certificate with a list of Defects or can the PM at this point invoke clause 45.1 and assess the cost of having defects corrected by others and draw upon the Bond (on-demand) for payment to others. It would appear that the PM has to delay issuing the Defects Certificate to maintain the bond, is this correct?
Unfortunately, I cannot answer your question as having a retention bond is not a standard NEC3 ECC secondary option and I do not know the specific wording, either in the amendments made to the contract or the terms of the retention bond. However, it is likely that you can enact clause 45.1 and do as you say.
An alternative option for both Parties - i.e. Contractor and Employer (as the PM does not have authority) - would be to agree a simple Supplementary Agreement where the cost of correcting the specific Defect is taken out of returned retention payment and then paid once it is corrected.
Another alternative if appropriate could be to propose an acceptance of a notified Defect clause 44?
Clause 43.2 the defect correction period begins at Completion for Defects notified before Completion and the Supervisor issues the Defects Certificate at the later of the last defect correction period. So the Defects Certificate should be issued by the Supervisor on the due date (the end of the last defect correction period). The purpose to provide a definitive close out point. On the due date the Defects Certificate either list the uncorrected Defects or state that their is none.
Any uncorrected Defects on the Defects Certificate will need to be assessed by the PM on the basis that access was given or not given (45.1 and 45.2) and those monies are paid by the Contractor.
The Supervisor has no leeway not to issue the Defects Certificate at the end of the last defect correction period. So Jon’s suggestion for the Parties to have a Supplemental Agreement (12.3) is very sensible.