We have an NEC3 Engineering and Construction Contract (ECC) option A (priced contract with activity schedule) that incorporates secondary option clauses X7 delay damages and X16 retention. When assessing the amount due, should the project manager deduct retention before or after applying delay damages?
Answer
The amount due at each assessment date is detailed in the three bullets of clause 50.2. It states it is the price for work done to date, plus other amounts to be paid to the contractor, less other amounts to be paid by the contractor. Clause X16.1 makes it clear you deduct retention from the price for work done to date less the retention-free amount. It is not deduced from the other amounts in the other two bullets of clause 50.2. You therefore calculate the price for work done to date, then deduct the retention. After that, the delay damages are deducted under the third bullet of clause 50.2. The project manager therefore deducts retention before applying the delay damages.
