Is the contractor entitled to payment of staff after the project manager has certified the practical completion certificate on and option C contract. Whilst the works are complete, time is stu being exhausted on closing out subcontract accounts and preparing the final account. The challenge has come that once the works information has been completed, this is the stage in which all costs should stop being charged against the project. Can you please advise what the correct position is.
1 Like
I am aware of only one clause which specifically disallows Defined Cost incurred after Completion and that is in option C clause 11.2 (25) which defines what is Disallowed Cost. To cout out the irrelevant text (for our purposes) it says âDisallowed Cost is ⌠⌠the cost of - correcting Defects after Completionâ with a Defect being defined in core clause 11.2 (5) as âa part of the works not in accordance with the Works Informationâ.
So if the staff are on within the Working Areas and involved in managing the correction of Defects then the time spent doing this should be disallowed. However, from how you have described it the time is âbeing exhausted on closing out subcontract accounts and preparing the final account.â That does not fit my understanding of a Defect so, in my opinion, you are allowed this cost.
Firstly, let me indulge my pedantic nature by giving a small correction : under the ECC, the Contractor achieves âCompletionâ as defined by clause 11.2 (2), not âpractical completionâ.
I am aware of only one clause which specifically disallows Defined Cost incurred after Completion and that is in option C clause 11.2 (25) which defines what is Disallowed Cost. To cout out the irrelevant text (for our purposes) it says âDisallowed Cost is ⌠⌠the cost of - correcting Defects after Completionâ with a Defect being defined in core clause 11.2 (5) as âa part of the works not in accordance with the Works Informationâ.
So if the staff are on within the Working Areas and involved in managing the correction of Defects then the time spent doing this should be disallowed. However, from how you have described it the time is âbeing exhausted on closing out subcontract accounts and preparing the final account.â That does not fit my understanding of a Defect so, in my opinion, you are allowed this cost.
Costs properly incurred to Provide the Works are payable after Completion