NEC Valuations Flashcards
Who is responsible for assessing the amount due under NEC4?
Project manager assesses the amount due - contractor submits application.
What if the contractor does not issue their application for payment within the timeframe?
Within NEC4, if the contractor does not issue their application for payment before the assessment date:
The amount due could essentially be zero as the PM would assess the amount due from last assessment date (making it zero)
How is PWDD valued under option A?
PWDD (price for work done to date less amounts to be retained from or paid by contractor).
It is valued by the total of the prices for groups of activities that have been completed and the completed activity must be free of defects.
How does the MC receive payment for preliminaries under NEC4 option A? How does the MC receive payment for materials on site under NEC4 option A?
All included as seprate activities within the activity schedule e.g. delivery of materials
Is there an option under NEC4 for fluctuations?
Options X1 (secondary option) - provisions for price inflation.
For fixed price and target contract options.
By selecting this secondary option, the client will assume the risk for any price inflation that occurs over the duration of the project.
What is the shorter schedule of cost components used for under NEC4?
Used for option A & B.
Only used to assess compensation events.
How would you advise the employer on what the implications are of submitting a late payment to a contractor under NEC4?
Performance of part of the works may be suspended if payment in full has not been made.
Compensation events can occur.
Explain what would happen if the PM did not meet the final assessment date?
The contractor can issue an assessment of the final amount due to the client, not the PM. Must give details of how the amount has been calculated.
When does a PM make the final amount due assessment?
No later than:
4 weeks after the Supervisor issues the defect certificate
13 weeks after PM issues termination certificate
What are the optional X clauses in relation to payments that can be used?
X1 - price adjustment for inflation
X14 - advanced payment to the contractor
X16 - retention
Explain how JCT and NEC4 differ in relation to negative interim valuations and why?
JCT there is no right or obligation on the contractor to make an interim payment to the employer where there is negative interim certificate - unlike with NEC.
