Under an NEC3 ECC contract - Main Option C, when assessing “the amount of payments due to Subcontractors” which of the following are the basis of a proper assessment under the contract:
(1) amounts actually paid to the Subcontractor by the Contractor (accounting for Disallowed Cost under clause 11.2 (25) )
(2) an assessment of the amount which will be due to the Subcontractor for work carried out in the valuation period (regardless of actual payment dates). I.e. Are assessments of a Subcontractor’s account and/or any accruals made for a timing adjustment between the date of the Subcontractors valuation and that of the main contract included?
In essence, (1) means that the Contractor carries the cashflow for the job as payments from the Employer always follow those actually paid whereas (2) enables the Contractor to potentially maintain positive cashflow throughout the contract.