We are a contractor with a subcontractor engaged under a NEC3 Engineering and Construction Subcontract (ECS) Option A (priced subcontract with activity schedule). Our payment notice to the subcontractor excluded any partially completed activities, but the subcontractor says these would have been completed in the same assessment period had they not been affected by a delay caused by us. It has requested partial payment. If we have delayed the works, then a compensation event can be notified and the process followed to conclusion. However, how do we deal with the interim position?
This issue will affect the subcontractor’s cash flow, which means you need to get on and implement the compensation event quickly. What you may need to do is split the current activity delayed by the compensation event into two or more parts to allow those things done and those things to be done to be split up.
No payment can strictly be made until the activity schedule is altered by implemented compensation events, but there is nothing to stop you agreeing something on account via clause 12.3. The better approach is to get on and assess and implement the compensation event as soon as possible.