Frequently Asked Questions

Question
We are the project manager on an NEC4 Engineering and Construction Contract (ECC) Option A (priced contract with activity schedule). The client wishes to terminate for reason R11 in clause 91.2. According to clause 93.1, the amount of payment due on termination includes release of any amounts retained by the client. Secondary option X16 retention was incorporated in the contract. Should these retention monies be released immediately on issue of the termination certificate, or is the contractor required to wait for 13 weeks until we do a final assessment in accordance with clause 53.1?

Assessments are made as stated in the contract. Their timings are governed by the assessment interval, but that ceases when you issue a termination certificate, see clause 50.1. Therefore, no further assessments or payments are made after that, until the final assessment, which is governed by clause 53. So, the final release of retention is made in that final assessment.

Note that assessment of the final amount due should be made by you no later than 13 weeks, but you could make it earlier if you wish. If the contractor is not happy with your assessment of the final amount due, it would need to instigate dispute resolution procedures within the periods set out in clause 53.3. If it fails to do so, it can no longer dispute your final assessment.

But if you do not make your assessment within 13 weeks, the contractor is entitled to make its own assessment of the final amount due. In that case it will be the client that will have to instigate the dispute resolution procedures within the periods set out in clause 53.3. If the client fails to do so, it can no longer dispute the contractor’s final assessment.

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