As the NEC4 now incorporates “Subcontractors” as a heading in the SCC, does this mean for CE’s the Project Manager has to accept what is proposed by the Contractor if they state their Subcontractor has provided a quote for £x? The removal of clause 11.2(22) from NEC4 appears to corroborate this view.
My concern lies in two scenarios: the case of poor management by the Contractor, who fails to challenge what is presented by their Subcontractor; or where the validity of a proposed subcontractor cost is questionable. The latter is more relevant to option A contracts where this is no power of audit.
Yes this is correct however note that the contract states that the Contractor is entitled to “payments to Subcontractors” so it would be reasonable to ask to see proof of payment rather than just relying on a quote. Remember that the Contractor has to justify the amounts claimed. Also clause 52.1 states that “Defined Cost includes … other amounts at open market or competitively tendered prices with deductions for all discounts, rebates and taxes which can be recovered”. Ultimately if the PM is not happy with the Contractor’s CE quote they have the right to assess it themselves.
An interesting twist on this is if the quotation is based on a forecast - as at this point no payment has been made.
As Neil highlights you will still want to see justification that the payment to the Subcontractor is in accordance with its Subcontract and if an Nec Subcontract you would want to see how it has been built up