We are using ECC Option A (priced contract with activity schedule) for a design and build contract, If there is a defect due to the contractor’s design where its rectification has significant implications for achieving the completion date, how does the project manager take account of this when assessing the amount due at each assessment date if it is related to work contained within a completed activity, Is the project manager entitled to consider its activity as not completed and disregard it in calculating the price for work done to date, as subclause 11,2(27) of the contract?
Answer
It is irrelevant as to whether or not the defect may at a later date delay completion; that is not the test for payment. Subclause 11.2(27) says you pay for , ‘each completed activity’, so that is your starting point. It goes on to define when an activity is considered complete. So, as long as this defect will not delay or be covered by other work, then the activity is complete and the contractor is entitled to be paid for it. If it will delay or be covered by other work then the activity is not complete and the contractor is not entitled to be paid for it.
