NEC3 ECS Option B - Contra charges

NEC3 and NEC4 Contracts Payment
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Hello! Firstly apologies if this is a stupid question or something that has a very simple answer that i am not quite grasping.

I have been in the industry for 3 years now and something that is commonly thrown around is the concept of contra charging or setting off.

In a very simple example if the main contractor was down to provide craneage to the subcontractor. The subcontractor encountered delays due to their own fault, which meant the crane was required for longer. The Contractor would then incur extra costs for the additional duration of crane hire and could charge for this under clause 25.3.

I have seen these agreed before especially when it is very clear like the above. A Subcontractor would agree “yes it was our fault, we will have to pay for that” and everyone is happy etc.

My question is though, is there actually contract mechanism in the NEC3 ECS to enforce that? It seems to split opinion, some say that the Contractor would raise a negative CE but i dont believe this is the correct way either?

Obviously some would say this is what you have option X7 in for. However, this would not cover some events, for example if a Contractor provided scissor lifts and the Subcontractor damaged them. Would the Contractor be within rights to claim this back?

Thanks,

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There is no (obvious) compensation event for this that springs to mind. Consequently, the Prices in the Bill of Quantities do not change as per NEC3 option B clause 63.13.

Consequently, apart from delayed payment to the Subcontractor for work done, there is no change in the Price for Work Done to Date.

Under clause 50.2, "the amount due is

  • the Price for Work Done to Date,
  • plus amounts … … ,
  • less amounts to be paid by or retained from the Contractor."

So this reduction would, if anything fall under the last bullet. However, except if the circumstance was tied into a Key Date - e.g. complete of works requiring the crane by >date< - as stated in the Contract Data, there is no express contract provision which allows this deduction through the contract mechanisms.

However, as a Contractor, I would argue that this is a breach of contract and therefore under contract law, I could deduct monies for that breach and then use the contract mechanisms to do so.

Delay damages would only come into the equation if the Subcontractor achieved late (sectional) Completion(s) compared with (sectional) Completion Dates(s) as adjusted by compensation events.