NEC4 Option A CL46 queries

NEC3 and NEC4 Contracts Testing and Defects
1

We’re working under NEC4 ECS form of contract with option A main clauses.

There are ongoing discussions over a defect. The client hasn’t followed any due process to notifying defect and carried out part of the works themselves without giving us opportunity but trying to pass cost on to ourselves

CL46 is unamended in the contract

We have no design liability on the contract

The client is trying to pass all cost on to ourselves - Traffic management, design time for defect query and resolution and all their subcontract costs with associated fees.

Query:

Clause 46.1 was not enacted by the client as part of the works was carried by the both parties and in line with the defects correction period.

The client is now trying to utilise clause 46.2 to re-coup cost:
46.2 If the Contractor is not given access in order to correct a notified Defect before the defects
date, the Project Manager assesses the cost to the Contractor of correcting the Defect and
the Contractor pays this amount. The Scope is treated as having been changed to accept the
Defect

Is the client able to recover costs through this clause and if so are they able to apply all the applicable fees percentages associated with their subcontractors carrying out works (tarmac, waterproofing, kerbing…). Can they claim for design costs and traffic management when client is responsible for the design and providing access to correct the defect.

2

@Barry_Trebes @Neil_Earnshaw thoughts on above question?

3

The Contractor can only trigger the right to assess costs under clause 46.2 if the Subcontractor is not given access before the defects date. The defects date is usually at least 52 weeks after Completion but you’d need to check your Subcontract Data to know what it is in your subcontract. The point is that this is a long stop that kicks in right at the end so if you haven’t passed the defects date then the Contractor does not have the right to assess costs.

The clause also clarifies what costs can be included in the assessment, its “the cost to the Subcontractor” not the cost to the Contractor i.e. how much it would have cost you, not how much it would have cost them. So they are limited as to what they can recover and certainly I’d suggest some of the elements they’re trying to recover do not seem to be covered by this but exactly which ones would depend on a deeper understanding of the subcontract.

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