NEC4 Clause 50.4 If the Contractor does not submit an application

Can anybody explain the logic behind Clause 50.4 in NEC4 ECC?

The addition of Clause 50.4 brings about a huge change in the implications associated with a Contractor not submitting an application on time.

Under NEC3 ECC the Project Manager had an obligation to assess the amount due regardless of whether or not the Contractor had submitted a payment application.

The addition of clause 50.4 in NEC4 removes that obligation and goes even further to state that the amount due as 'the lesser of:

  • the amount the Project Manager assesses as due at the assessment date, assesses as though the Contractor had submitted an application before the assessment date, and
  • the amount due at the previous assessment date’

This means that in the event of a late (submitted after the assessment date) or absent payment application, the amount due will always be equal to or less than zero.

Surely this goes against the principle of the Housing Grants Act and arguably goes against the spirit of mutual trust and cooperation.