I have inherited a Procure and Build contract which is an NEC4 Option E, where we are the Contractor, with a subcontractor carrying out the works on our behalf. The design for that build is being done by our subcontractor, but under a different contract with a different Client. There has been a delay to the provision of the design by Design Client, due to late submission of equipment specifications which falls under the Construction contract. The subcontractor is claiming a CE for the delay to Construction, due to designs not being issued, however our Client is rejecting our CE under ‘fault of the Contractor’ due to the equipment specifications being late which is part of the subcontract we have let. Am I right in saying that this is allowable under NEC4 as they are two separate contracts, albeit with the same entity acting as Contractor/Subcontractor? It feels at odds with 10.2 but contractually I’m not sure where we stand.
Hi ZAW,
Clause 10.2 isn’t a “get out of jail” clause to override risk allocation, it’s more an obligation on the parties to deal with emerging issues together. However, it does not displace contractual liability.
The fact the same subcontractor is involved in both design and construction does not merge the contracts into a single legal arrangement.
However, the consequences of delays under one contract can bleed into the other, and the NEC contract requires you to look at the cause of the delay and who bears the risk under the main contract.