Frequently Asked Questions

Question
We are the client on an NEC3 Engineering and Construction Contract (ECC) Option A (priced contract with activity schedule). We are thinking of amending the payment clauses so that percentages of activities could form the basis of calculating the price for work done to date. Is this a good idea?

You can amend the contract as you wish via secondary option Z additional conditions of contract. In ECC Option A it was decided not to allow for part-payment of activities on a percentage-completed basis. This was to avoid any disagreements over how the percentage complete was to be assessed, for example value completed or amount of physical works completed.

Instead, the intent is for the contractor to provide an activity schedule at tender stage that breaks down its lump-sum price into small enough activities to allow for regular payment to be made based on completed activities. This also has the benefit of requiring the contractor to complete an activity before it moves onto other activities rather than do the easier parts of an activity and leave the more difficult elements to do later.

In addition, the reference to completed activities being free of defects which would delay follow-on work encourages the contractor to rectify defects as the works progress, as opposed to leaving them to be left until the end of the contract.

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