On an ECC contract we have an initial programme, however we have since had compensation events for which we believe we have not received adequate particulars covering additional cost or programme alterations. The latest revised programme purely shows a period of time risk allowance having been used up and the effects of the compensation events are still unknown. We consider this programme is not acceptable and therefore can the project manager deduct 25% of the monies owed to the contractor for this, or does this provision apply to the first programme only?
If the initial programme was supplied and referred to in the contract data part two under the heading ‘The programme identified in the contract data is…’, then you cannot apply the 25% retention. This is because clause 50.3 makes it clear that it only applies if no programme is identified in the contract data.
However, if:
- there was a programme issued with the tender that was not referred to in the contract data, and
- the programme you now have is the first one issued for acceptance since the contract came into existence, and
- the programme does not show all of the matters listed in clause 31.2,
then you can apply the 25% retention.
There are though, two other things you need to be aware of. Firstly, this retention does not depend upon the project manager accepting the programme. As long as it has been issued and shows all the information it should, then the retention is not taken even if the project manager thinks it is wrong for some other reason. And secondly this is only a retention, not a deduction, and eventually it will have to be paid back.