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Engineering and Construction

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Subcontract

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This contract should be used for the appointment of a subcontractor for engineering and
construction work including any level of design responsibility where the contractor has been

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appointed under an NEC4 main contract

An NEC document
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June 2017
(with amendments January 2019)
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The Government Construction Board, Cabinet Office UK

The Government Construction Board (formerly Construction Clients’ Board) recommends
that public sector organisations use the NEC contracts and in particular the NEC4 contracts
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where appropriate, when procuring construction. Standardising use of this comprehensive

suite of contracts should help to deliver efficiencies across the public sector and promote
behaviours in line with the principles of the Government Construction Strategy.

The Development Bureau, HKSAR Government

The Development Bureau recommends the progressive transition from NEC3 to NEC4 in public
works projects in Hong Kong. With suitable amendments to adapt to the Hong Kong local
environment, NEC4 is expected to further enhance collaborative partnering, unlock innovations
and achieve better cost management and value for money in public works projects.

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NEC is a division of Thomas Telford Ltd, which is a wholly owned subsidiary of the Institution

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of Civil Engineers (ICE), the owner and developer of the NEC.

The NEC is a suite of standard contracts, each of which has these characteristics:

• Its use stimulates good management of the relationship between the two parties to the

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contract and, hence, of the work included in the contract.

• It can be used in a wide variety of commercial situations, for a wide variety of types of

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work and in any location.

• It is a clear and simple document – using language and a structure which are
straightforward and easily understood.

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NEC4 Engineering and Construction Subcontract is one of the NEC suite and is consistent
with all other NEC4 documents. Also available are the Engineering and Construction

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Contract User Guides and Flow Charts which include guidance and flowcharts on this
subcontract.
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ISBN (complete box set) 978-0-7277-6391-4
ISBN (this document) 978-0-7277-6211-5
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ISBN (Establishing a Procurement and Contract Strategy) 978-0-7277-6223-8

ISBN (Preparing an Engineering and Construction Contract) 978-0-7277-6224-5
ISBN (Selecting a Supplier) 978-0-7277-6234-4
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ISBN (Managing an Engineering and Construction Contract) 978-0-7277-6235-1

ISBN (Engineering and Construction Contract Flow Charts) 978-0-7277-6267-2
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Consultative edition 1991

First edition 1993
Second edition 1995
Third edition 2005, Reprinted with amendments 2013
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Fourth edition June 2017

Reprinted with amendments January 2019
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British Library Cataloguing in Publication Data for this publication is available from the
British Library.
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© Copyright nec 2017

All rights, including translation, reserved. The owner of this document may reproduce
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the Subcontract Data and forms for the purpose of obtaining tenders, awarding and
administering contracts. Except as permitted by the Copyright, Designs and Patents Act
1988, no part of this publication may be otherwise reproduced, stored in a retrieval system
or transmitted in any form or by any means, electronic, mechanical, photocopying, recording
or otherwise, without the prior written permission of the NEC Director, Thomas Telford Ltd,
One Great George Street, Westminster, London SW1P 3AA.

Typeset by Manila Typesetting Company

Printed and bound in Great Britain by Bell & Bain Limited, Glasgow, UK

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 Contents

Contents

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Foreword v

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Preface vii

Acknowledgements ix

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Amendments January 2019 x

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Schedule of Options 1

Core Clauses 3

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1 General 3
2 The Subcontractor’s main responsibilities 8
3 Time 10
4
5
6
Quality management
Payment
Compensation events
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15
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7 Title 23
8 Liabilities and insurance 24
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9 Termination 27

Main Option Clauses 30

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Option A: Priced subcontract with activity schedule 30

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Option B: Priced subcontract with bill of quantities 32

Option C: Target subcontract with activity schedule 34
Option D: Target subcontract with bill of quantities 37
Option E: Cost reimbursable subcontract 41
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Resolving and Avoiding Disputes 43

Option W1 43
Option W2 46
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Secondary Option Clauses 49

Option X1: Price adjustment for inflation (used only with Options A, B, C and D) 49
Option X2: Changes in the law 49
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Option X3: Multiple currencies (used only with Options A and B) 49

Option X4: Ultimate holding company guarantee 50
Option X5: Sectional Completion 50
Option X6: Bonus for early Completion 50
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Option X7: Delay damages 50

Option X8: Undertakings to the Client or Others 51
Option X9: Transfer of rights 51
Option X10: Information modelling 51
Option X11: Termination by the Contractor 52
Option X12: Multiparty collaboration (not used with Option X20) 52
Option X13: Performance bond 54
Option X14: Advanced payment to the Subcontractor 54

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 Contents

Option X15: The Subcontractor’s design 54

Option X16: Retention 55
Option X17: Low performance damages 56
Option X18: Limitation of liability 56

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Option X20: Key Performance Indicators (not used with Option X12) 56
Option X21: Whole life cost 57

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Option Y(UK)1: Project Bank Account 58
Option Y(UK)2: The Housing Grants, Construction and Regeneration Act 1996 60
Option Y(UK)3: The Contracts (Rights of Third Parties) Act 1999 61

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Option Z: Additional conditions of subcontract 61

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Schedule of Cost Components 62

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Short Schedule of Cost Components 66

Subcontract Data 69

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Part one – Data provided by the Contractor
Part two – Data provided by the Subcontractor
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Index 87
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 Foreword

Foreword

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Continuous improvement in project delivery is required to build confidence in the UK
construction sector so that we can attract more investment. The Infrastructure and Projects

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Authority (IPA) is the government’s centre of expertise for infrastructure and major projects.
We sit at the heart of government, reporting to the Cabinet Office and HM Treasury.

The application of the right contract is central to the success of the overall project delivery
system. The NEC suite of contracts has been in existence for over the 20 years and has linked

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the projects, people and processes together to create the correct environment for successful
delivery.

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This new and updated NEC4 contract embraces the digital changes that are happening in the
construction industry, especially around BIM, which I believe will be central to creating a step
change in performance. Whilst looking forward it also builds on the fundamentals required

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for an effective contract.

The use of NEC4 on public sector projects will help to deliver the Government Construction

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Strategy as we seek to improve central government’s capability as a construction client to
deliver further savings in the order of £1.7bn across the Government estate. The IPA looks
forward to collaborating with industry to make the delivery of projects more efficient and
effective.
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Tony Meggs, Chief Executive, Infrastructure and Projects Authority
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Reporting to Cabinet Office

and HM Treasury
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 Preface

Preface

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NEC was first published as a new and innovative way of managing construction contracts in
1993 – some 24 years ago. It was designed to facilitate and encourage good management of

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risks and uncertainties, using clear and simple language.

The NEC approach to managing contracts was endorsed in “Constructing the team – The
Latham Report”, which was a government/industry review of procurement and contractual
arrangements in the UK construction industry. This led to a second edition in 1995

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incorporating the further recommendations of that review. This contract was used increasingly
in the UK and overseas, and a major revision was made with the third edition in 2005.

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NEC has played a part in helping the industry do things differently and better. It has done
so by introducing effective project management procedures into the contract itself. These
require pro-active management of risk and change, and the day-to-day use of an up-to-date

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programme. The range of pricing options has given Clients flexibility in the allocation of risk
and the ability to share risk and manage it, collaboratively.

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The NEC suite has evolved over three decades, embedding consultation responses and user
feedback, and reflecting industry development, including new procurement approaches and
management techniques such as alliances, management of information (BIM) and supply
chain engagement. This feedback and the new procurement approaches formed the driver
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for the development of the next generation contracts and the launch of NEC4.

There were three key objectives in drafting NEC4:

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• provide greater stimulus to good management

• support new approaches to procurement which improve contract management and

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• inspire increased use of NEC in new markets and sectors.

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It was to be evolution, not revolution.

Some features of NEC4 include:

• a new design build and operate contract to allow flexibility between construction and
operational requirements in timing and extent
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• a new multi-party alliance contract based upon an integrated risk and reward model

• new forms of subcontract to improve integration of the supply chain.

Further enhancements include:

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• finalising cost elements during the contract

• incorporating a party-led dispute avoidance process into the adjudication process

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• increasing standardisation between contracts and

• providing enhanced guidance to give greater practical advice to users.

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NEC has always been known for its innovative approach to contract management, and this
revision continues that approach. No other contract suite has had such a transformative effect
on the built environment industry as NEC. It has put the collaborative sharing of risk and
reward at the heart of modern procurement. It is also unique in providing a complete, back-to-
back procurement solution for all works, services and supplies in any sector and any country.

NEC4 continues to set the benchmark for best practice procurement worldwide.

Peter Higgins BSc (Hons), CEng, FICE

Chair of NEC4 Contract Board

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 Acknowledgements

Acknowledgements

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The original NEC was designed and drafted by Dr Martin Barnes then of Coopers and
Lybrand with the assistance of Professor J. G. Perry then of the University of Birmingham,

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T. W. Weddell then of Travers Morgan Management, T. H. Nicholson, Consultant to the
Institution of Civil Engineers, A. Norman then of the University of Manchester Institute of
Science and Technology and P. A. Baird, then Corporate Contracts Consultant, Eskom, South
Africa.

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This fourth edition of the NEC suite was produced by the Institution of Civil Engineers
through its NEC4 Contract Board.

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The NEC4 Contract Board is:

P. Higgins, BSc (Hons), CEng, FICE (Chair)

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P. T. Cousins, BEng (Tech), DipArb, CEng, MICE, FCIArb
I. Heaphy, BSc (Hons), FRICS, FCIArb, MCInstCES, MACostE
J. N. Hughes-D’Aeth, BA (Hons), MA (Cantab)

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S. Rowsell, BSc, CEng, FCIHT, FICE, MCIPS

The NEC4 drafting team consisted of:

M. Garratt, BSc (Hons), MRICS, FCIArb

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R. Gerrard, BSc (Hons), FRICS, FCIArb, FCInstCES
R. Hayes, BSc (Hons), MEng, CEng, MICE, MAPM
S. Kings, BSc (Hons), MRICS, MCIPS, PhD
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T. Knee-Robinson, BEng (Hons), CEng, MICE, MAPM, MCIHT

J. J. Lofty, MRICS
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R. Patterson, BA, MBA, CEng, MICE

B. Trebes, BSc (Hons), MSc, FRICS, FInstCES, FAPM
B. Walker, BSc (Hons), GMICE, ACIArb
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Proofreading by:

P. Waterhouse, BEng (Hons), MBA, CEng, FICE, FCIArb, FCInstCES, FCMI

The Institution of Civil Engineers acknowledges the help in preparing the fourth edition
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given by the NEC4 Contract Board and NEC4 drafting team and the support of the following
organisations in releasing their staff:

Anthony Collins Solicitors LLP

Berwin Leighton Paisner LLP
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CEMAR
Costain plc
Mott MacDonald Ltd
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Amendments January 2019

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The following amendments have been made to the June 2017 edition.

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Page Clause/location Amendments

9 28.1 Clause amended

21 63.5 Clause amended

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27 90.2 Clause amended

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35, 38, 42 50.9 Clause amended

43 W1.1(1) Clause amended

46 W2.1(1) Clause amended

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55 X15.6 Clause added

58

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Y1.1(5)

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Clause amended

Clause amended
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59 Y1.10 Clause amended

59 Y1.11 Clause amended

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65 SCC Clause amended

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68 SSCC Clause amended

69 Subcontract Preamble amended

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Data Part one:

General

81 Subcontract Additional entry for Y(UK)1: Project Bank Account

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81 Subcontract Entry amended

Data part
one: Option Z
additional
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83 Subcontract Entry amended

Data part two:
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Section 3 time

85 Subcontract Last entry amended

Data part
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two: Data for

the Schedule
of Cost
Components

Trust Deed Trust Deed deleted

Joining Deed Joining Deed deleted

Full details of these amendments can be found at www.neccontract.com.

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 Schedule of Options

Schedule of Options

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MAIN OPTIONS The strategy for choosing the form of contract starts with a decision between six main

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Options, one of which must be chosen.
Option A Priced subcontract with activity schedule
Option B Priced subcontract with bill of quantities

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Option C Target subcontract with activity schedule
Option D Target subcontract with bill of quantities

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Option E Cost reimbursable subcontract

RESOLVING AND One of the following procedures for resolving and avoiding disputes must be selected to

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AVOIDING DISPUTES complete the chosen main Option.
Option W1 Used when the United Kingdom Housing Grants, Construction and Regeneration Act 1996

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does not apply
Option W2 Used when the United Kingdom Housing Grants, Construction and Regeneration Act 1996
applies
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SECONDARY OPTIONS The following secondary Options should then be considered. It is not necessary to use any of
them. Any combination other than those stated may be used.
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Option X1 Price adjustment for inflation (used only with Options A, B, C and D)
Option X2 Changes in the law
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Option X3 Multiple currencies (used only with Options A and B)

Option X4 Ultimate holding company guarantee
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Option X5 Sectional Completion

Option X6 Bonus for early Completion
Option X7 Delay damages
Option X8 Undertakings to the Client or Others
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Option X9 Transfer of rights

Option X10 Information modelling
Option X11 Termination by the Contractor
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Option X12 Multiparty collaboration (not used with X20)

Option X13 Performance bond
Option X14 Advanced payment to the Subcontractor
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Option X15 The Subcontractor’s design

Option X16 Retention
Option X17 Low performance damages
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Option X18 Limitation of liability

Option X20 Key Performance Indicators (not used with Option X12)
Option X21 Whole life cost

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 SCHEDULE OF OPTIONS

The following Options dealing with national legislation should be included if required.
Option Y(UK)1 Project Bank Account
Option Y(UK)2 The Housing Grants, Construction and Regeneration Act 1996

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Option Y(UK)3 The Contracts (Rights of Third Parties) Act 1999

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Option Z Additional conditions of subcontract
Note Option X19 is not used

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 Core Clauses

Core Clauses

CORE CLAUSES
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1. GENERAL

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Actions 10
10.1 The Parties shall act as stated in this subcontract.
10.2 The Parties act in a spirit of mutual trust and co-operation.

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Identified and 11
defined terms 11.1 In these conditions of subcontract, terms identified in the Subcontract Data are in italics and
defined terms have capital initials.

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MAIN OPTION CLAUSES

11.2 (1) The Accepted Programme is the programme identified in the Subcontract Data or is
the latest programme accepted by the Contractor. The latest programme accepted by the
Contractor supersedes previous Accepted Programmes.

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(2) Completion is when the Subcontractor has

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• done all the work which the Subcontract Scope states is to be done by the Subcontract
Completion Date and

• corrected notified Defects which would have prevented the Client or the Contractor
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from using the subcontract works and Others from doing their work.

If the work which the Subcontractor is to do by the Subcontract Completion Date is not

SECONDARY OPTION CLAUSES

stated in the Subcontract Scope, Completion is when the Subcontractor has done all the
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work necessary for the Client or the Contractor to use the subcontract works or for Others to
do their work.
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(3) A Corrupt Act is

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• the offering, promising, giving, accepting or soliciting of an advantage as an inducement

for an action which is illegal, unethical or a breach of trust or

• abusing any entrusted power for private gain

in connection with this subcontract or any other contract with the Contractor. This includes
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any commission paid as an inducement which was not declared to the Contractor before the
Subcontract Date.

COST COMPONENTS
(4) A Defect is
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• a part of the subcontract works which is not in accordance with the Subcontract Scope
or

• a part of the subcontract works designed by the Subcontractor which is not in

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accordance with the applicable law or the Subcontractor’s design which the Contractor
has accepted.

(5) The Defects Certificate is either a list of Defects that the Contractor has notified before
the defects date which the Subcontractor has not corrected or, if there are no such Defects,
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a statement that there are none.

SUBCONTRACT DATA

(6) The Early Warning Register is a register of matters which are

• listed in the Subcontract Data for inclusion and

• notified by the Contractor or the Subcontractor as early warning matters.

It includes a description of the matter and the way in which the effects of the matter are to
be avoided or reduced.

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 Core Clauses

(7) Equipment is items provided and used by the Subcontractor to Provide the Subcontract
Works and which the Subcontract Scope does not require the Subcontractor to include in the
subcontract works.
CORE CLAUSES

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(8) The Fee is the amount calculated by applying the fee percentage to the amount of
Defined Cost.

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(9) A Key Date is the date by which work is to meet the Condition stated. The Key Date is
the key date stated in the Subcontract Data and the Condition is the condition stated in the
Subcontract Data unless later changed in accordance with the subcontract.

(10) Others are people or organisations who are not the Client, the Project Manager,

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the Supervisor, the Adjudicator, the Contractor, Subcontractor or any employee,
Subsubcontractor or supplier of the Subcontractor.

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(11) The Parties are the Contractor and the Subcontractor.
MAIN OPTION CLAUSES

(12) Plant and Materials are items intended to be included in the subcontract works.

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(13) To Provide the Subcontract Works means to do the work necessary to complete the
subcontract works in accordance with the subcontract and all incidental work, services and
actions which the subcontract requires.

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(14) The Site is the area within the boundaries of the site and the volumes above and below it
which are affected by work included in the subcontract.
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(15) Site Information is information which
SECONDARY OPTION CLAUSES

• describes the Site and its surroundings and

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• is in the documents which the Subcontract Data states it is in.

(16) The Subcontract Completion Date is the subcontract completion date unless later
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changed in accordance with the subcontract.

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(17) The Subcontract Date is the date when the subcontract came into existence.

(18) Subcontract Scope is information which

• specifies and describes the subcontract works or

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• states any constraints on how the Subcontractor Provides the Subcontract Works

and is either
COST COMPONENTS

• in the documents which the Subcontract Data states it is in or

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• in an instruction given in accordance with the subcontract.

(19) A Subsubcontractor is a person or organisation who has a contract with the

Subcontractor to
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• construct or install part of the subcontract works,

• design all or part of the subcontract works, except the design of Plant and Materials
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carried out by their supplier or

• provide a service in the Working Areas which is necessary to Provide the Subcontract
SUBCONTRACT DATA

Works, except for the

–– hire of Equipment or

–– supply of people paid for by the Subcontractor according to the time they work.

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 Core Clauses

(20) The Working Areas are the Site and those parts of the subcontract working areas which
are

• necessary for Providing the Subcontract Works and

CORE CLAUSES
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• used only for work in the subcontract

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unless later changed in accordance with the subcontract.

Interpretation and 12
the law 12.1 In the subcontract, except where the context shows otherwise, words in the singular also
mean in the plural and the other way round.

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12.2 The subcontract is governed by the law of the subcontract.
12.3 No change to the subcontract, unless provided for by these conditions of subcontract, has

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effect unless it is has been agreed and confirmed in writing and signed by the Parties.

MAIN OPTION CLAUSES

12.4 The subcontract is the entire agreement between the Parties

Communications 13

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13.1 Each communication which the subcontract requires is communicated in a form which can
be read, copied and recorded. Writing is in the language of the subcontract.
13.2

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If the Subcontract Scope specifies the use of a communication system, a communication
has effect when it is communicated through the communication system specified in the
Subcontract Scope.
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If the Subcontract Scope does not specify a communication system, a communication
has effect when it is received at the last address notified by the recipient for receiving

SECONDARY OPTION CLAUSES

communications or, if none is notified, at the address of the recipient stated in the
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Subcontract Data.
13.3 If the subcontract requires the Contractor or the Subcontractor to reply to a communication,
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unless otherwise stated in these conditions of subcontract, they reply within the period for
reply.
13.4 The Contractor replies to a communication submitted or resubmitted by the Subcontractor
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for acceptance. If the reply is not acceptance, the Contractor states the reasons in sufficient
detail to enable the Subcontractor to correct the matter. The Subcontractor resubmits
the communication within the period for reply taking account of these reasons. A reason
for withholding acceptance is that more information is needed in order to assess the
Subcontractor’s submission fully.
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13.5 The Contractor may extend the period for reply to a communication if the Contractor and
the Subcontractor agree to the extension before the reply is due. The Contractor informs the

COST COMPONENTS
Subcontractor of the extension which has been agreed.
13.6 The Contractor issues certificates to the Subcontractor.
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13.7 A notification or certificate which the subcontract requires is communicated separately from
other communications.
13.8 The Contractor may withhold acceptance of a submission by the Subcontractor. Withholding
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acceptance for a reason stated in these conditions of subcontract is not a compensation

event.

The Contractor 14
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14.1 The Contractor’s acceptance of a communication from the Subcontractor or acceptance

of the work does not change the Subcontractor’s responsibility to Provide the Subcontract
SUBCONTRACT DATA

Works or liability for its design.

14.2 The Contractor, after notifying the Subcontractor, may delegate any of its actions and may
cancel any delegation. The notification contains the name of the delegate and details of the
actions being delegated or any cancellation of delegation. A reference to an action of the
Contractor in the subcontract includes an action by their delegate. The Contractor may take
an action which they have delegated.
14.3 The Contractor may give an instruction to the Subcontractor which changes the Subcontract
Scope or a Key Date.

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 Core Clauses

Early warning 15
15.1 The Subcontractor and the Contractor give an early warning by notifying the other as soon
as either becomes aware of any matter which could
CORE CLAUSES

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• increase the total of the Prices,

• delay Completion,

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• delay meeting a Key Date or

• impair the performance of the subcontract works in use.

The Contractor or Subcontractor may give an early warning by notifying the other of any

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other matter which could increase the Subcontractor’s total cost. The Contractor enters
early warning matters in the Early Warning Register. Early warning of a matter for which a

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compensation event has previously been notified is not required.
MAIN OPTION CLAUSES

15.2 The Contractor prepares a first Early Warning Register and issues it to the Subcontractor
within one week of the subcontract starting date. The Contractor instructs the Subcontractor
to attend a first early warning meeting within two weeks of the subcontract starting date.

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Later early warning meetings are held

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meeting, and, in any case,
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if either the Contractor or Subcontractor instructs the other to attend an early warning

at no longer interval than the interval stated in the Subcontract Data until Completion of
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the whole of the subcontract works.
SECONDARY OPTION CLAUSES

The Contractor or Subcontractor may instruct other people to attend an early warning
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meeting if the other agrees.

The Contractor may instruct the Subcontractor to attend an early warning meeting between
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the Project Manager and the Contractor if the early warning matter under the main contract
also affects the subcontract.
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15.3 At an early warning meeting, those who attend co-operate in

• making and considering proposals for how the effects of each matter in the Early
Warning Register can be avoided or reduced,

• seeking solutions that will bring advantage to all those who will be affected,
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• deciding on the actions which will be taken and who, in accordance with the
subcontract, will take them,
COST COMPONENTS

• deciding which matters can be removed from the Early Warning Register and
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• reviewing actions recorded in the Early Warning Register and deciding if different actions
need to be taken and who, in accordance with the subcontract, will take them.
15.4 The Contractor revises the Early Warning Register to record the decisions made at each early
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warning meeting and issues the revised Early Warning Register to the Subcontractor within
one week of the early warning meeting. If a decision needs a change to the Subcontract
Scope, the Contractor instructs the change at the same time as the revised Early Warning
Register is issued.
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Subcontractor’s 16
SUBCONTRACT DATA

proposals 16.1 The Subcontractor may propose to the Contractor that the Subcontract Scope provided
by the Contractor is changed in order to reduce the amount the Contractor pays to the
Subcontractor for Providing the Subcontract Works. The Contractor consults with the Project
Manager, Client and the Subcontractor about the change.

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16.2 Within five weeks of the Subcontractor making the proposal the Contractor

• accepts the Subcontractor’s proposal and issues an instruction changing the Subcontract
Scope,

CORE CLAUSES
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• informs the Subcontractor that the Contractor or Client is considering the proposal and
instructs the Subcontractor to submit a quotation for a proposed instruction to change

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the Subcontract Scope or

• informs the Subcontractor that the proposal is not accepted.

The Contractor may give any reason for not accepting the proposal.

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16.3 The Subcontractor may submit a proposal for adding an area to the Working Areas to the
Contractor for acceptance. A reason for not accepting is that the proposed area is

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• not necessary for Providing the Subcontract Works or

MAIN OPTION CLAUSES

• used for work not in the subcontract.

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Requirements for 17
instructions 17.1 The Contractor or the Subcontractor notifies the other as soon as either becomes aware
of an ambiguity or inconsistency in or between the documents which are part of the

17.2
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subcontract. The Contractor states how the ambiguity or inconsistency should be resolved.

The Contractor or the Subcontractor notifies the other as soon as either becomes aware that
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the Subcontract Scope includes an illegal or impossible requirement. If the Subcontract Scope
does include an illegal or impossible requirement, the Contractor gives an instruction to

SECONDARY OPTION CLAUSES

change the Subcontract Scope appropriately.
O

Corrupt Acts 18
18.1 The Subcontractor does not do a Corrupt Act.
C

18.2 The Subcontractor takes action to stop a Corrupt Act of a Subsubcontractor or supplier of
which it is, or should be, aware.
AE

18.3 The Subcontractor includes equivalent provisions to these in subsubcontracts and contracts
for the supply of Plant and Materials and Equipment.

Prevention 19
19.1 If an event occurs which
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• stops the Subcontractor completing the whole of the subcontract works or

COST COMPONENTS
• stops the Subcontractor completing the whole of the subcontract works by the date for
planned Completion shown on the Accepted Programme,
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and which

• neither Party could prevent and

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• an experienced subcontractor would have judged at the Subcontract Date to have such a
small chance of occurring that it would have been unreasonable to have allowed for it,

the Contractor gives an instruction to the Subcontractor stating how the event is to be dealt
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with.
SUBCONTRACT DATA

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2. THE SUBCONTRACTOR’S MAIN RESPONSIBILITIES

Providing the 20
Subcontract Works 20.1 The Subcontractor Provides the Subcontract Works in accordance with the Subcontract
CORE CLAUSES

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Scope.

The 21

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Subcontractor’s 21.1 The Subcontractor designs the parts of the subcontract works which the Subcontract Scope
design states the Subcontractor is to design.
21.2 The Subcontractor submits the particulars of its design as the Subcontract Scope requires to
the Contractor for acceptance. A reason for not accepting the Subcontractor’s design is that

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it does not comply with either the Subcontract Scope or the applicable law.

The Subcontractor does not proceed with the relevant work until the Contractor has

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accepted its design.
MAIN OPTION CLAUSES

21.3 The Subcontractor may submit its design for acceptance in parts if the design of each part
can be assessed fully.

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Using the 22
Subcontractor’s 22.1 The Client and the Contractor may use and copy the Subcontractor’s design for any
design purpose connected with construction, use, alteration or demolition of the subcontract

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works or the works in the main contract, unless otherwise stated in the Subcontract Scope
and for other purposes as stated in the subcontract. The Subcontractor obtains from a
Subsubcontractor equivalent rights for the Contractor and Client to use material prepared by
the Subsubcontractor.
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Design of 23
SECONDARY OPTION CLAUSES

Equipment 23.1 The Subcontractor submits particulars of the design of an item of Equipment to the
O

Contractor for acceptance if the Contractor instructs the Subcontractor to. A reason for
not accepting is that the design of the item will not allow the Subcontractor to Provide the
C

Subcontract Works in accordance with

• the Subcontract Scope,

AE

• the Subcontractor’s design which the Contractor has accepted or

• the applicable law.

People 24
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24.1 The Subcontractor either provides each key person named to do the job stated in the
Subcontract Data or provides a replacement person who has been accepted by the
COST COMPONENTS

Contractor.

The Subcontractor submits the name, relevant qualifications and experience of a proposed
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replacement person to the Contractor for acceptance. A reason for not accepting the person
is that their relevant qualifications and experience are not as good as those of the person
who is to be replaced.
24.2
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The Contractor may, having stated the reasons, instruct the Subcontractor to remove a
person. The Subcontractor then arranges that, after one day, the person has no further
connection with the work included in the subcontract.

Working with the 25

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Contractor and 25.1 The Subcontractor co-operates with Others including in obtaining and providing information
Others which they need in connection with the subcontract works. The Subcontractor shares the
SUBCONTRACT DATA

Working Areas with Others as stated in the Subcontract Scope.

25.2 The Contractor and the Subcontractor provide services and other things as stated in the
Subcontract Scope. Any cost incurred by the Contractor as a result of the Subcontractor not
providing the services and other things which it is to provide is assessed by the Contractor
and paid by the Subcontractor.
25.3 If the Contractor decides that the work does not meet the Condition stated for a Key Date by
the date stated and, as a result, the Contractor incurs additional cost either

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• in carrying out work or

• by paying an additional amount to the Client or Others in carrying out work

CORE CLAUSES
on the same project, the additional cost which Contractor has paid or will incur is paid by

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the Subcontractor. The Contractor assesses the additional cost within five weeks of the date
when the Condition for the Key Date is met. The Contractor’s right to recover the additional

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cost is its only right in these circumstances.

Subsubcontracting 26
26.1 If the Subcontractor subsubcontracts work, it is responsible for Providing the Subcontract
Works as if it had not subsubcontracted. The subcontract applies as if a Subsubcontractor’s

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employees and equipment were the Subcontractor’s.
26.2 The Subcontractor submits the name of each proposed Subsubcontractor to the Contractor

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for acceptance. A reason for not accepting the Subsubcontractor is that the appointment will

MAIN OPTION CLAUSES

not allow the Subcontractor to Provide the Subcontract Works. The Subcontractor does not
appoint a proposed Subsubcontractor until the Contractor has

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• accepted the Subsubcontractor and, to the extent these conditions of subcontract require,

• accepted the subsubcontract documents.

26.3

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The Subcontractor submits the proposed subsubcontract documents, except any pricing
information, for each subsubcontract to the Contractor for acceptance unless

• the proposed subsubcontract is an NEC contract which has not been amended other
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than in accordance with the additional conditions of subcontract or

SECONDARY OPTION CLAUSES

• the Contractor has agreed that no submission is required.
O

A reason for not accepting the subsubcontract documents is that

C

• their use will not allow the Subcontractor to Provide the Subcontract Works or

• they do not include a statement that the parties to the subsubcontract shall act in a spirit
AE

of mutual trust and co-operation.

Other 27
responsibilities 27.1 The Subcontractor obtains approval of its design from Others where necessary.
27.2 The Subcontractor provides access to work being done and to Plant and Materials being
on

stored for the subcontract for

• the Contractor,

COST COMPONENTS
• the Project Manager,
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• the Supervisor and

• Others as named by the Contractor.

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27.3 The Subcontractor obeys an instruction which is in accordance with the subcontract and is
given by the Contractor.
27.4 The Subcontractor acts in accordance with the health and safety requirements stated in the
Subcontract Scope.
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Assignment 28
SUBCONTRACT DATA

28.1 Either Party notifies the other Party if they intend to transfer the benefit of the subcontract
or any rights under it. The Contractor does not transfer a benefit or any rights if the party
receiving the benefit or right does not intend to act in a spirit of mutual trust and co-operation.

Disclosure 29
29.1 The Parties do not disclose information obtained in connection with the subcontract works
except when necessary to carry out their duties under the subcontract.
29.2 The Subcontractor may publicise the subcontract works only with the Contractor’s
agreement.

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3. TIME

Starting, 30
Completion and 30.1 The Subcontractor does not start work on the Site until the first subcontract access date and
CORE CLAUSES

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Key Dates does the work so that Completion is on or before the Subcontract Completion Date.
30.2 The Contractor decides the date of Completion and certifies it within one week of the date.

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30.3 The Subcontractor does the work so that the Condition stated for each Key Date is met by
the Key Date.

The programme 31
31.1 If a programme is not identified in the Subcontract Data, the Subcontractor submits a first

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programme to the Contractor for acceptance within the period stated in the Subcontract
Data.

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31.2 The Subcontractor shows on each programme submitted for acceptance
MAIN OPTION CLAUSES

• the subcontract starting date, subcontract access dates, Key Dates and Subcontract
Completion Date,

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• planned Completion,

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• the order and timing of the operations which the Subcontractor plans to do in order to
Provide the Subcontract Works,

• the order and timing of the work of the Client, the Contractor and Others as last agreed
with them by the Subcontractor or, if not so agreed, as stated in the Subcontract Scope,
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• the dates when the Subcontractor plans to meet each Condition stated for the Key Dates
SECONDARY OPTION CLAUSES

and to complete other work needed to allow the Client, the Contractor and Others to do
O

their work,

• provisions for
C

–– float,
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–– time risk allowances,

–– health and safety requirements and

–– the procedures set out in the subcontract,

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• the dates when, in order to Provide the Subcontract Works in accordance with the
programme, the Subcontractor will need
COST COMPONENTS

–– access to a part of the Site if later than its subcontract access date,
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–– acceptances,

–– Plant and Materials and other things to be provided by the Client and the Contractor
and
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–– information from Others,

• for each operation, a statement of how the Subcontractor plans to do the work
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identifying the principal Equipment and other resources which will be used and

• other information which the Subcontract Scope requires the Subcontractor to show on a
SUBCONTRACT DATA

programme submitted for acceptance.

A programme issued for acceptance is in the form stated in the Subcontract Scope.

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31.3 Within three weeks of the Subcontractor submitting a programme for acceptance, the
Contractor notifies the Subcontractor of the acceptance of the programme or the reasons for
not accepting it. A reason for not accepting a programme is that

CORE CLAUSES
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• the Subcontractor’s plans which it shows are not practicable,

• it does not show the information which the subcontract requires,

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• it does not represent the Subcontractor’s plans realistically or

• it does not comply with the Subcontract Scope.

If the Contractor does not notify acceptance or non-acceptance within the time allowed,

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the Subcontractor may notify the Contractor of that failure. If the failure continues for a
further two weeks after the Subcontractor’s notification, it is treated as acceptance by the

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Contractor of the programme.

MAIN OPTION CLAUSES

Revising the 32
programme 32.1 The Subcontractor shows on each revised programme

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• the actual progress achieved on each operation and its effect upon the timing of the
remaining work,

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how the Subcontractor plans to deal with any delays and to correct notified Defects and

any other changes which the Subcontractor proposes to make to the Accepted
Programme.
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32.2 The Subcontractor submits a revised programme to the Contractor for acceptance

SECONDARY OPTION CLAUSES

O

• within the period for reply after the Contractor has instructed the Subcontractor to,

• when the Subcontractor chooses to and, in any case,

C

• at no longer interval than the interval stated in the Subcontract Data from the
subcontract starting date until Completion of the whole of the subcontract works.
AE

Access to and use 33

of the Site 33.1 The Contractor allows access to and use of each part of the Site to the Subcontractor which
is necessary for the work included in the subcontract. Access and use is allowed on or before
the later of its subcontract access date and the date for access shown on the Accepted
Programme.
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Instructions to stop 34

COST COMPONENTS
or not to start work 34.1 The Contractor may instruct the Subcontractor to stop or not to start any work. The
Contractor subsequently gives an instruction to the Subcontractor to
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• re-start or start the work or

• remove the work from the Subcontract Scope.

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Take over 35
35.1 The Contractor need not take over the subcontract works before the Subcontract
Completion Date if the Subcontract Data states it is not willing to do so. Otherwise the
Contractor takes over the subcontract works not later than two weeks after Completion.
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35.2 The Client or the Contractor may use any part of the subcontract works before Completion
has been certified. The Contractor takes over the part of the subcontract works when the
SUBCONTRACT DATA

Client or the Contractor begins to use it except if the use is

• for a reason stated in the Subcontract Scope or

• to suit the Subcontractor’s method of working.

35.3 The Contractor certifies the date upon which the Contractor takes over any part of the
subcontract works and its extent within one week of the date.

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Acceleration 36
36.1 The Subcontractor and the Contractor may propose to the other an acceleration to achieve
Completion before the Subcontract Completion Date. If the Contractor and Subcontractor
are prepared to consider the proposed change, the Contractor instructs the Subcontractor
CORE CLAUSES

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to provide a quotation. The instruction states changes to the Key Dates to be included in the
quotation. The Subcontractor provides a quotation within two weeks of the instruction to do
so. The Contractor replies to the quotation within four weeks. The reply is

on
• a notification that the quotation is accepted or

• a notification that the quotation is not accepted and that the Subcontract Completion
Dates and Key Dates are not changed.

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36.2 A quotation for an acceleration comprises proposed changes to the Prices and a revised
programme showing the earlier Subcontract Completion Date and the changed Key Dates.

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The Subcontractor submits details of the assessment with each quotation.
MAIN OPTION CLAUSES

36.3 When a quotation for an acceleration is accepted, the Contractor changes the Prices,
the Subcontract Completion Date and the Key Dates accordingly and accepts the revised

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programme.

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SECONDARY OPTION CLAUSES

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C
AE
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COST COMPONENTS

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SUBCONTRACT DATA

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4. QUALITY MANAGEMENT

Quality 40
management 40.1 The Subcontractor operates a quality management system which complies with the

CORE CLAUSES
ly
system requirements stated in the Subcontract Scope.
40.2 Within the period stated in the Subcontract Data, the Subcontractor provides the Contractor

on
with a quality policy statement and a quality plan for acceptance. A reason for not accepting
a quality policy statement or quality plan is that it does not allow the Subcontractor to
Provide the Subcontract Works.

If any changes are made to the quality plan, the Subcontractor provides the Contractor with

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the changed quality plan for acceptance.
40.3 The Contractor may instruct the Subcontractor to correct a failure to comply with the quality
plan. This instruction is not a compensation event.

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MAIN OPTION CLAUSES

Tests and 41
inspections 41.1 This clause only applies to tests and inspections required by the Subcontract Scope or the
applicable law.

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41.2 The Subcontractor and the Contractor provide materials, facilities and samples for tests and
inspections as stated in the Subcontract Scope.
41.3

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The Subcontractor and the Contractor informs the other of each of their tests and
inspections before the test or inspection starts and afterwards informs the other of the
results. The Subcontractor informs the Contractor in time for a test or inspection to be
arranged and done before doing work which would obstruct the test or inspection. The
M
Contractor and the Supervisor may watch any test done by the Subcontractor.

SECONDARY OPTION CLAUSES

41.4 If a test or inspection shows that any work has a Defect, the Subcontractor corrects the
O

Defect and the test or inspection is repeated.

41.5 The Contractor does tests and inspections without causing unnecessary delay to the work
C

or to a payment which is conditional upon a test or inspection being successful. A payment

which is conditional upon a Contractor’s or Supervisor’s test or inspection being successful
becomes due at the later of the defects date and the end of the last defect correction period
AE

if

• the Contractor or the Supervisor has not done the test or inspection and

• the delay to the test or inspection is not the Subcontractor’s fault.

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41.6 The Contractor assesses the cost incurred by it in repeating a test or inspection after a Defect
is found. The Subcontractor pays the amount assessed.

COST COMPONENTS
Testing and 42
inspection before 42.1 The Subcontractor does not bring to the Working Areas those Plant and Materials which the
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delivery Subcontract Scope states are to be tested or inspected before delivery until the Contractor
has notified the Subcontractor that they have passed the test or inspection.

Searching for and 43

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notifying Defects 43.1 Until the defects date, the Contractor may instruct the Subcontractor to search for a Defect.
The Contractor gives reason for the search with the instruction. Searching may include

• uncovering, dismantling, re-covering and re-erecting work,

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• providing facilities, materials and samples for tests and inspections done by the
Contractor or the Supervisor and
SUBCONTRACT DATA

• doing tests and inspections which the Subcontract Scope does not require.
43.2 Until the defects date the Contractor and Subcontractor notifies the other as soon as they
become aware of a Defect.

Correcting Defects 44
44.1 The Subcontractor corrects a Defect whether or not the Contractor has notified it.

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44.2 The Subcontractor corrects a notified Defect before the end of the defect correction period.
The defect correction period begins at Completion for Defects notified before Completion
and when the Defect is notified for other Defects.
44.3 The Contractor issues the Defects Certificate at the defects date if there are no notified
CORE CLAUSES

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Defects, or otherwise at the earlier of

• on the end of the last defect correction period and

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• the date when all notified Defects have been corrected.

The Client’s or the Contractor’s rights in respect of a Defect which the Contractor has not
found or notified are not affected by the issue of the Defects Certificate.

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44.4 The Contractor arranges for the Client and the Contractor to allow the Subcontractor access
to and use of a part of the subcontract works which has been taken over if it is needed for

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correcting a Defect. In this case the defect correction period begins when the necessary
MAIN OPTION CLAUSES

access and use have been provided.

Accepting Defects 45

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45.1 The Subcontractor and the Contractor may each propose to the other that the Subcontract
Scope should be changed so that a Defect does not have to be corrected.

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45.2 If the Subcontractor and the Contractor are prepared to consider the change, the
Subcontractor submits a quotation for reduced Prices or an earlier Subcontract Completion
Date or both to the Contractor for acceptance. If the quotation is accepted, the Contractor
changes the Subcontract Scope, the Prices and the Subcontract Completion Date accordingly
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and accepts the revised programme.
SECONDARY OPTION CLAUSES

Uncorrected 46
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Defects 46.1 If the Subcontractor is given access in order to correct a notified Defect but the Defect is
not corrected within its defect correction period, the Contractor assesses the cost to it of
having the Defect corrected by other people and the Subcontractor pays this amount. The
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Subcontract Scope is treated as having been changed to accept the Defect.

46.2 If the Subcontractor is not given access in order to correct a notified Defect before the
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defects date, the Contractor assesses the cost to the Subcontractor of correcting the Defect
and the Subcontractor pays this amount. The Subcontract Scope is treated as having been
changed to accept the Defect.
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COST COMPONENTS

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SUBCONTRACT DATA

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5. PAYMENT

Assessing the 50
amount due 50.1 The Contractor assesses the amount due at each assessment date. The first assessment date

CORE CLAUSES
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is decided by the Contractor to suit the procedures of the Parties and is not later than the
assessment interval after the subcontract starting date. Later assessment dates occur at the
end of each assessment interval until

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• the Contractor issues the Defects Certificate or

• the Contractor issues a termination certificate.

50.2 The Subcontractor submits an application for payment to the Contractor before each

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assessment date setting out the amount the Subcontractor considers is due at the
assessment date. The Subcontractor’s application for payment includes details of how the

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amount has been assessed and is in the form stated in the Subcontract Scope.

MAIN OPTION CLAUSES

In assessing the amount due, the Contractor considers an application for payment submitted
by the Subcontractor before the assessment date.

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50.3 If the Subcontractor submits an application for payment before the assessment date, the
amount due at the assessment date is

•
the Price for Work Done to Date,

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plus other amounts to be paid to the Subcontractor,
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• less amounts to be paid by or retained from the Subcontractor.
50.4 If the Subcontractor does not submit an application for payment before the assessment date,

SECONDARY OPTION CLAUSES

the amount due at the assessment date is the lesser of
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• the amount the Contractor assesses as due at the assessment date, assessed as though
the Subcontractor had submitted an application before the assessment date, and
C

• the amount due at the previous assessment date.

AE

50.5 If no programme is identified in the Subcontract Data, one quarter of the Price for Work
Done to Date is retained in assessments of the amount due until the Subcontractor has
submitted a first programme to the Contractor for acceptance showing the information
which the subcontract requires.
50.6 The Contractor corrects any incorrectly assessed amount due in a later payment certificate.
on

Payment 51
51.1 The Contractor certifies a payment within two weeks of each assessment date. The

COST COMPONENTS
Contractor’s certificate includes details of how the amount due has been assessed. The
first payment is the amount due. Other payments are the change in the amount due since
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the previous assessment. A payment is made by the Subcontractor to the Contractor if

the change reduces the amount due. Other payments are made by the Contractor to the
Subcontractor. Payments are in the currency of the subcontract unless otherwise stated in
the subcontract.
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51.2 Each certified payment is made within four weeks of the assessment date or, if a different
period is stated in the Subcontract Data, within the period stated. If a certified payment is
late, or if a payment is late because the Contractor has not issued a certificate which should
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be issued, interest is paid on the late payment. Interest is assessed from the date by which
the late payment should have been made until the date when the late payment is made, and
SUBCONTRACT DATA

is included in the first assessment after the late payment is made.

51.3 If an amount due is corrected in a later certificate

• in relation to a mistake or a compensation event,

• because a payment was delayed by an unnecessary delay to a test or inspection done by

the Contractor or

• following a decision of the Adjudicator or the tribunal,

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interest on the correcting amount is paid. Interest is assessed from the date when the
incorrect amount was certified until the date when the changed amount is certified and is
included in the assessment which includes the changed amount.
51.4 Interest is calculated on a daily basis at the interest rate and is compounded annually.
CORE CLAUSES

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51.5 Any tax which the law requires a Party to pay to the other Party is added to any payment
made under the subcontract.

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Defined Cost 52
52.1 All the Subcontractor’s costs which are not included in the Defined Cost are treated as included
in the Fee. Defined Cost includes only amounts calculated using rates and percentages stated in
the Subcontract Data and other amounts at open market or competitively tendered prices with

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deductions for all discounts, rebates and taxes which can be recovered.

Final assessment 53

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53.1 The Contractor makes an assessment of the final amount due and certifies a final payment, if
MAIN OPTION CLAUSES

any is due, no later than

• four weeks after the Contractor issues the Defects Certificate or

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• fourteen weeks after the Contractor issues a termination certificate.

53.2
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The Contractor gives the Subcontractor details of how the amount due has been assessed.
The final payment is made within three weeks of the assessment or, if a different period is
stated in the Subcontract Data, within the period stated.
If the Contractor does not make this assessment within the time allowed, the Subcontractor
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may issue to the Contractor an assessment of the final amount due, giving details of how the
final amount due has been assessed. If the Contractor agrees with this assessment, a final
SECONDARY OPTION CLAUSES

payment is made within three weeks of the assessment or, if a different period is stated in
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the Subcontract Data, within the period stated.

53.3 An assessment of the final amount due issued within the time stated in the subcontract is
C

conclusive evidence of the final amount due under or in connection with the subcontract
unless a Party takes the following actions.
AE

If the subcontract includes Option W1, a Party

• refers a dispute about the assessment of the final amount due to the Senior
Representatives within four weeks of the assessment being issued,

• refers any issues not agreed by the Senior Representatives to the Adjudicator within
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three weeks of the list of the issues not agreed being produced or when it should have
been produced and
COST COMPONENTS

• refers to the tribunal its dissatisfaction with a decision of the Adjudicator as to the final
assessment of the amount due within four weeks of the decision being made.
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If the subcontract includes Option W2, a Party

• refers a dispute about the assessment of the final amount due to the Senior
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Representatives or to the Adjudicator within four weeks of the assessment being issued,

• refers any issues referred to but not agreed by the Senior Representatives to the
Adjudicator within three weeks of the list of issues not agreed being produced or when
it should have been produced and
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• refers to the tribunal its dissatisfaction with a decision of the Adjudicator as to the final
SUBCONTRACT DATA

assessment of the amount due within four weeks of the decision being made.
53.4 The assessment of the final amount due is changed to include

• any agreement the Parties reach and

• a decision of the Adjudicator which has not been referred to the tribunal within four
weeks of that decision.

A changed assessment becomes conclusive evidence of the final amount due under or in
connection with the subcontract.

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6. COMPENSATION EVENTS

Compensation 60
events 60.1 The following events are compensation events.

CORE CLAUSES
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(1) The Contractor gives an instruction changing the Subcontract Scope except

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• a change made in order to accept a Defect or

• a change to the Subcontract Scope provided by the Subcontractor for its design which is
made

–– at the Subcontractor’s request or

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–– in order to comply with the Subcontract Scope provided by the Contractor.

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(2) The Contractor does not allow access to and use of each part of the Site by the later of its

MAIN OPTION CLAUSES

subcontract access date and the date for access shown on the Accepted Programme.

(3) The Contractor does not provide something which it is to provide by the date shown on

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the Accepted Programme.

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(4) The Contractor gives an instruction to stop or not to start any work or to change a Key
Date.

(5) The Client, the Contractor or Others

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• do not work within the times shown on the Accepted Programme,

SECONDARY OPTION CLAUSES

• do not work within the conditions stated in the Subcontract Scope or
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• carry out work on the Site that is not stated in the Subcontract Scope.
C

(6) The Contractor does not reply to a communication from the Subcontractor within the
period required by the subcontract.
AE

(7) The Contractor gives an instruction for dealing with an object of value or of historical or
other interest found within the Site.

(8) The Contractor changes a decision which it has previously communicated to the
Subcontractor.
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(9) The Contractor withholds an acceptance (other than acceptance of a quotation for
acceleration or for not correcting a Defect) for a reason not stated in the subcontract.

COST COMPONENTS
(10) The Contractor instructs the Subcontractor to search for a Defect and no Defect is found
unless the search is needed only because the Subcontractor gave insufficient notice of doing
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work obstructing a required test or inspection.

(11) A test or inspection done by the Contractor or the Supervisor causes unnecessary delay.
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(12) The Subcontractor encounters physical conditions which

• are within the Site,

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• are not weather conditions and

• an experienced subcontractor would have judged at the Subcontract Date to have such
SUBCONTRACT DATA

a small chance of occurring that it would have been unreasonable to have allowed for
them.

Only the difference between the physical conditions encountered and those for which
it would have been reasonable to have allowed is taken into account in assessing a
compensation event.

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(13) A weather measurement is recorded

• within a calendar month,

CORE CLAUSES

• before the Subcontract Completion Date for the whole of the subcontract works and

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• at the place stated in the Subcontract Data

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the value of which, by comparison with the weather data, is shown to occur on average less
frequently than once in ten years.

Only the difference between the weather measurement and the weather which the weather
data show to occur on average less frequently than once in ten years is taken into account in

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assessing a compensation event.

(14) An event occurs for which the Contractor or Client is liable as stated in these conditions

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MAIN OPTION CLAUSES

of subcontract.

(15) The Contractor certifies take over of a part of the subcontract works before both

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Completion and the Subcontract Completion Date.

(16) The Contractor does not provide materials, facilities and samples for tests and

pr
inspections as stated in the Subcontract Scope.

(17) The Contractor notifies the Subcontractor of a correction to an assumption which the
Contractor stated about a compensation event.
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(18) A breach of contract by the Contractor which is not one of the other compensation
events in the subcontract.
SECONDARY OPTION CLAUSES

(19) An event which

• stops the Subcontractor completing the whole of the subcontract works or

C

• stops the Subcontractor completing the whole of the subcontract works by the date for
AE

planned Completion shown on the Accepted Programme,

and which

• neither Party could prevent,

• an experienced subcontractor would have judged at the Subcontract Date to have such
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a small chance of occurring that it would have been unreasonable to have allowed for it
and
COST COMPONENTS

• is not one of the other compensation events stated in the subcontract.

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(20) The Contractor notifies the Subcontractor that a quotation for a proposed instruction is
not accepted.

(21) Additional compensation events stated in Subcontract Data part one.

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60.2 In judging the physical conditions for the purpose of assessing a compensation event, the
Subcontractor is assumed to have taken into account

• the Site Information,

Fo

• publicly available information referred to in the Site Information,

SUBCONTRACT DATA

• information obtainable from a visual inspection of the Site and

• other information which an experienced subcontractor could reasonably be expected to

have or to obtain.
60.3 If there is an ambiguity or inconsistency within the Site Information (including the
information referred to in it), the Subcontractor is assumed to have taken into account the
physical conditions more favourable to doing the work.

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Notifying 61
compensation 61.1 For a compensation event which arises from the Contractor giving an instruction or
events notification, issuing a certificate or changing an earlier decision, the Contractor notifies the
Subcontractor of the compensation event at the time of that communication.

CORE CLAUSES
ly
61.2 The Contractor includes in the notification of a compensation event an instruction to the
Subcontractor to submit quotations unless

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• the event arises from a fault of the Subcontractor or

• the event has no effect upon Defined Cost, Completion or meeting a Key Date.
61.3 The Subcontractor notifies the Contractor of an event which has happened or which is

ts
expected to happen as a compensation event if

• the Subcontractor believes that the event is a compensation event and

ec

MAIN OPTION CLAUSES

• the Contractor has not notified the event to the Subcontractor.

If the Subcontractor does not notify a compensation event within seven weeks of becoming

oj
aware that the event has happened, the Prices, the Subcontract Completion Date or a Key
Date are not changed unless the event arises from the Contractor giving an instruction or
notification, issuing a certificate or changing an earlier decision.
61.4

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The Contractor replies to the Subcontractor’s notification of a compensation event within

• two weeks after the Subcontractor’s notification or

M
• a longer period to which the Subcontractor has agreed.

SECONDARY OPTION CLAUSES

If the event
O

• arises from a fault of the Subcontractor,

C

• has not happened and is not expected to happen,

• has not been notified within the timescales set out in these conditions of subcontract,
AE

• has no effect upon Defined Cost, Completion or meeting a Key Date or

• is not one of the compensation events stated in the subcontract

the Contractor notifies the Subcontractor that the Prices, the Subcontract Completion
on

Date and the Key Dates are not to be changed and states the reasons in the notification.
Otherwise, the Contractor notifies the Subcontractor that the event is a compensation event

COST COMPONENTS
and includes in the notification an instruction to the Subcontractor to submit quotations.

If the Contractor fails to reply to the Subcontractor’s notification of a compensation event

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within the time allowed, the Subcontractor may notify the Contractor of that failure. If the
failure continues for a further three weeks after the Subcontractor’s notification it is treated
as acceptance by the Contractor that the event is a compensation event and an instruction to
submit quotations.
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61.5 If the Contractor decides that the Subcontractor did not give an early warning of the event
which an experienced subcontractor could have given, the Contractor states this in the
instruction to the Subcontractor to submit quotations.
Fo

61.6 If the effects of a compensation event are too uncertain to be forecast reasonably, the
Contractor states assumptions about the compensation event in the instruction to the
SUBCONTRACT DATA

Subcontractor to submit quotations. Assessment of the event is based on these assumptions.

If any of them is later found to have been wrong, the Contractor notifies a correction.
61.7 A compensation event is not notified by the Contractor or the Subcontractor after the issue
of the Defects Certificate.

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Quotations for 62
compensation 62.1 After discussing with the Subcontractor different ways of dealing with the compensation
events event which are practicable, the Contractor may instruct the Subcontractor to submit
alternative quotations. The Subcontractor submits the required quotations to the Contractor
CORE CLAUSES

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and may submit quotations for other methods of dealing with the compensation event which
it considers practicable.

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62.2 Quotations for a compensation event comprise proposed changes to the Prices and any
delay to the Subcontract Completion Date and Key Dates assessed by the Subcontractor.
The Subcontractor submits details of the assessment with each quotation. If the programme
for remaining work is altered by the compensation event, the Subcontractor includes the
alterations to the Accepted Programme in the quotation.

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62.3 The Subcontractor submits quotations within two weeks of being instructed to do so by the
Contractor. The Contractor replies within four weeks of the submission. The reply is

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• a notification of acceptance of the quotation,
MAIN OPTION CLAUSES

• an instruction to submit a revised quotation or

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• that the Contractor will be making the assessment.
62.4 The Contractor instructs the Subcontractor to submit a revised quotation only after

62.5 pr
explaining the reasons for doing so to the Subcontractor. The Subcontractor submits the
revised quotation within two weeks of being instructed to do so.
The Contractor extends the time allowed for
M
• the Subcontractor to submit quotations for a compensation event and
SECONDARY OPTION CLAUSES

• the Contractor to reply to a quotation

O

if the Contractor and the Subcontractor agree to the extension before the submission or
reply is due. The Contractor informs the Subcontractor of the extension which has been
C

agreed.
62.6 If the Contractor does not reply to a quotation within the time allowed, the Subcontractor
AE

may notify the Contractor of that failure. If the Subcontractor submitted more than
one quotation for the compensation event, the notification states which quotation the
Subcontractor proposes is to be used. If the failure continues for a further three weeks
after the Subcontractor’s notification it is treated as acceptance by the Contractor of the
quotation.
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Assessing 63
compensation 63.1 The change to the Prices is assessed as the effect of the compensation event upon
COST COMPONENTS

events
• the actual Defined Cost of the work done by the dividing date,
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• the forecast Defined Cost of the work not done by the dividing date and

• the resulting Fee.

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For a compensation event that arises from the Contractor giving an instruction or
notification, issuing a certificate or changing an earlier decision, the dividing date is the date
of that communication.
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For other compensation events, the dividing date is the date of the notification of the
compensation event.
SUBCONTRACT DATA

63.2 The Contractor and the Subcontractor may agree rates or lump sums to assess the change to
the Prices.
63.3 If the effect of a compensation event is to reduce the total Defined Cost, the Prices are not
reduced unless otherwise stated in these conditions of subcontract.

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63.4 If the effect of a compensation event is to reduce the total Defined Cost and the event is

• a change to the Subcontract Scope other than a change to the Subcontract Scope
provided by the Contractor, which the Subcontractor proposed and the Contractor

CORE CLAUSES
ly
accepted or

• a correction to an assumption stated by the Contractor for assessing an earlier

on
compensation event

the Prices are reduced.

63.5 A delay to the Subcontract Completion Date is assessed as the length of time that, due to
the compensation event, planned Completion is later than planned Completion as shown on

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the Accepted Programme current at the dividing date.

A delay to a Key Date is assessed as the length of time that, due to the compensation event,

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the planned date when the Condition stated for a Key Date will be met is later than the date

MAIN OPTION CLAUSES

shown on the Accepted Programme current at the dividing date.

The assessment takes into account

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• any delay caused by the compensation event already in the Accepted Programme and

63.6
•
dividing date.
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events which have happened between the date of the Accepted Programme and the

The rights of the Contractor and the Subcontractor to changes to the Prices, the Subcontract
M
Completion Date and the Key Dates are their only rights in respect of a compensation event.
63.7 If the Contractor has stated in the instruction to submit quotations that the Subcontractor

SECONDARY OPTION CLAUSES

did not give an early warning of the event which an experienced subcontractor could have
O

given, the compensation event is assessed as if the Subcontractor had given the early
warning.
C

63.8 The assessment of the effect of a compensation event includes risk allowances for cost and
time for matters which have a significant chance of occurring and are not compensation
events.
AE

63.9 The assessment of the effect of a compensation event is based upon the assumptions that
the Subcontractor reacts competently and promptly to the event and that any Defined Cost
and time due to the event are reasonably incurred.
63.10 A compensation event which is an instruction to change the Subcontract Scope in order to
on

resolve an ambiguity or inconsistency is assessed as if the Prices, the Subcontract Completion

Date and the Key Dates were for the interpretation most favourable to the Party which did
not provide the Subcontract Scope.

COST COMPONENTS
63.11 If a change to the Subcontract Scope makes the description of the Condition for a Key Date
incorrect, the Contractor corrects the description. This correction is taken into account in
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assessing the compensation event for the change to the Subcontract Scope.

The Contractor’s 64
assessments 64.1 The Contractor assesses a compensation event
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• if the Subcontractor has not submitted the quotation and details of its assessment within
the time allowed,
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• if the Contractor decides that the Subcontractor has not assessed the compensation
event correctly in the quotation and has not instructed the Subcontractor to submit a
SUBCONTRACT DATA

revised quotation,

• if, when the Subcontractor submits quotations for the compensation event, it has not
submitted a programme or alterations to a programme which the subcontract requires it
to submit or

• if, when the Subcontractor submits quotations for the compensation event, the
Contractor has not accepted the Subcontractor’s latest programme for one of the
reasons stated in the subcontract.

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 Core Clauses

64.2 The Contractor assesses the programme for the remaining work and uses it in the assessment
of a compensation event if

• there is no Accepted Programme,

CORE CLAUSES

ly
• the Subcontractor has not submitted a programme or alterations to a programme for
acceptance as required by the subcontract or

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• the Contractor has not accepted the Subcontractor’s latest programme for one of the
reasons stated in the subcontract.
64.3 The Contractor notifies the Subcontractor of the assessment of a compensation event and
gives details of the assessment within the period allowed for the Subcontractor’s submission

ts
of its quotation for the same compensation event. This period starts when the need for the
Contractor’s assessment becomes apparent.

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64.4 If the Contractor does not assess a compensation event within the time allowed, the
MAIN OPTION CLAUSES

Subcontractor may notify the Contractor of that failure. If the Subcontractor submitted more
than one quotation for the compensation event, the notification states which quotation
the Subcontractor proposes is to be used. If the failure continues for a further three weeks

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after the Subcontractor’s notification it is treated as acceptance by the Contractor of the
Subcontractor’s quotation.

Proposed
instructions
65
65.1
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The Contractor may instruct the Subcontractor to submit a quotation for a proposed
instruction. The Contractor states in the instruction the date by which the proposed
instruction may be given. The Subcontractor does not put a proposed instruction into effect.
M
65.2 The Subcontractor submits quotations for a proposed instruction within two weeks of being
SECONDARY OPTION CLAUSES

instructed to do so by the Contractor. The quotation is assessed as a compensation event.

O

The Contractor replies to the Subcontractor’s quotation by the date when the proposed
instruction may be given. The reply is
C

• an instruction to submit a revised quotation including the reasons for doing so,

• the issue of the instruction together with a notification of the instruction as a

AE

compensation event and acceptance of the quotation or

• a notification that the quotation is not accepted.

If the Contractor does not reply to the quotation within the time allowed, the quotation is
not accepted.
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65.3 If the quotation is not accepted, the Contractor may issue the instruction, notify the
instruction as a compensation event and instruct the Subcontractor to submit a quotation.
COST COMPONENTS

Implementing 66
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compensation 66.1 A compensation event is implemented when

events
• the Contractor notifies acceptance of the Subcontractor’s quotation,
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• the Contractor notifies the Subcontractor of an assessment made by the Contractor or

• a Subcontractor’s quotation is treated as having been accepted by the Contractor.

66.2 When a compensation event is implemented the Prices, the Subcontract Completion Date
Fo

and the Key Dates are changed accordingly.

66.3 The assessment of an implemented compensation event is not revised except as stated in
SUBCONTRACT DATA

these conditions of subcontract.

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7. TITLE

The Contractor’s 70
title to Plant and 70.1 Whatever title the Subcontractor has to Plant and Materials which are outside the Working

CORE CLAUSES
ly
Materials Areas passes to the Contractor if the Contractor has marked them as for the subcontract.
70.2 Whatever title the Subcontractor has to Plant and Materials passes to the Contractor if they

on
have been brought within the Working Areas. The title to Plant and Materials passes back
to the Subcontractor if they are removed from the Working Areas with the Contractor’s
permission.

Marking 71

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Equipment, Plant 71.1 The Contractor marks Equipment, Plant and Materials which are outside the Working Areas if
and Materials
outside the • the subcontract identifies them for payment and

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Working Areas
• the Subcontractor has prepared them for marking as the Subcontract Scope requires.

MAIN OPTION CLAUSES

Removing 72

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Equipment 72.1 The Subcontractor removes Equipment from the Site when it is no longer needed unless the
Contractor allows it to be left in the subcontract works.

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Objects and 73
materials within 73.1 The Subcontractor has no title to an object of value or of historical or other interest within
the Site the Site. The Subcontractor informs the Contractor when such an object is found and the
Contractor instructs the Subcontractor how to deal with it. The Subcontractor does not move
M
the object without instructions.
73.2 The Subcontractor has title to materials from excavation and demolition unless the

SECONDARY OPTION CLAUSES

Subcontract Scope states otherwise.
O

The Subcontractor’s 74
use of material 74.1 The Subcontractor has the right to use material provided by the Contractor or the Client
C

only to Provide the Subcontract Works. The Subcontractor may make this right available to a
Subsubcontractor.
AE
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COST COMPONENTS
se
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Fo

SUBCONTRACT DATA

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8. LIABILITIES AND INSURANCE

Client’s and 80
Contractor’s 80.1 The following are Client’s and Contractor’s liabilities.
CORE CLAUSES

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liabilities
• Claims and proceedings from Others and compensation and costs payable to Others
which are due to

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–– use or occupation of the Site by the works or for the purpose of the works which is
the unavoidable result of the works or

–– negligence, breach of statutory duty or interference with any legal right by the

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Client or the Contractor or by any person employed by or contracted to them except
the Subcontractor.

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• A fault of the Client or the Contractor or any person employed by or contracted to them,
MAIN OPTION CLAUSES

except the Subcontractor.

• A fault in the design contained in

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–– the Subcontract Scope provided by the Contractor or

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–– an instruction from the Contractor changing the Subcontract Scope.

• Loss of or damage to Plant and Materials supplied to the Subcontractor by the Client or
Contractor, or by Others on the Client’s or Contractor’s behalf, until the Subcontractor
M
has received and accepted them.

• Loss of or damage to the subcontract works, Plant and Materials due to

SECONDARY OPTION CLAUSES

–– war, civil war, rebellion, revolution, insurrection, military or usurped power,

–– strikes, riots and civil commotion not confined to the Subcontractor’s employees or
C

–– radioactive contamination.
AE

• Loss of or damage to the parts of the subcontract works taken over by the Contractor,
except loss, wear or damage occurring before the issue of the Defects Certificate which
is due to

–– a Defect which existed at take over,

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–– an event occurring before take over which was not itself a Client’s or Contractor’s
liability or
COST COMPONENTS

–– the activities of the Subcontractor on the Site after take over.

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• Loss of or damage to the subcontract works and any Equipment, Plant and Materials
retained on the Site by the Client or Contractor after a termination, except loss or
damage due to the activities of the Subcontractor on the Site after the termination.
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• Loss of or damage to property owned or occupied by the Client or Contractor other than
the subcontract works, unless the loss or damage arises from or in connection with the
Subcontractor Providing the Subcontract Works.
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• Additional Client’s or Contractor’s liabilities stated in the Subcontract Data.

SUBCONTRACT DATA

Subcontractor’s 81
liabilities 81.1 The following are Subcontractor’s liabilities unless they are stated as being Client’s or
Contractor’s liabilities.

• Claims and proceedings from Others and compensation and costs payable to Others
which arise from or in connection with the Subcontractor Providing the Subcontract
Works.

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• Loss of or damage to the subcontract works, Plant and Materials and Equipment.

• Loss of or damage to property owned or occupied by the Client or Contractor other

than the subcontract works, which arises from or in connection with the Subcontractor

CORE CLAUSES
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Providing the Subcontract Works.

• Death or bodily injury to the employees of the Subcontractor.

on
Recovery of costs 82
82.1 Any cost which the Contractor has paid or will pay as a result of an event for which the
Subcontractor is liable is paid by the Subcontractor.
82.2 Any cost which the Subcontractor has paid or will pay to Others as a result of an event for

ts
which the Contractor or the Client is liable is paid by the Contractor.
82.3 The right of a Party to recover these costs is reduced if an event for which it was liable

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contributed to the costs. The reduction is in proportion to the extent that the event for which

MAIN OPTION CLAUSES

that Party is liable contributed, taking into account each Party’s responsibilities under the
subcontract.

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Insurance cover 83
83.1 The Client or Contractor provides the insurances which the Client or Contractor are to
provide as stated in the Subcontract Data.
83.2
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The Subcontractor provides the insurances stated in the Insurance Table except any insurance
which the Client or the Contractor is to provide as stated in the Subcontract Data. The
Subcontractor provides additional insurances as stated in the Subcontract Data.
M
83.3 The insurances in the Insurance Table are in the joint names of the Parties except the fourth
insurance stated. The insurances provide cover for events which are the Subcontractor’s

SECONDARY OPTION CLAUSES

liability from the subcontract starting date until the Defects Certificate or a termination
O

certificate has been issued.

INSURANCE TABLE
C

INSURANCE AGAINST MINIMUM AMOUNT OF COVER

AE

Loss of or damage to the subcontract works, The replacement cost, including the amount
Plant and Materials stated in the Subcontract Data for the
replacement of any Plant and Materials provided
by the Client or the Contractor

Loss of or damage to Equipment The replacement cost

on

COST COMPONENTS
Loss of or damage to property (except the The amount stated in the Subcontract Data for
subcontract works, Plant and Materials and any one event with cross liability so that the
Equipment) and liability for bodily injury to or insurance applies to the Parties separately
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death of a person (not an employee of the

Subcontractor) arising from or in connection with
the Subcontractor Providing the Subcontract
Works
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Death of or bodily injury to employees of the The greater of the amount required by the
Subcontractor arising out of and in the course applicable law and the amount stated in the
of their employment in connection with the Subcontract Data for any one event
subcontract
Fo

Insurance policies 84
SUBCONTRACT DATA

84.1 Before the subcontract starting date and on each renewal of the insurance policy until the
defects date, the Subcontractor submits to the Contractor for acceptance certificates which
state that the insurance required by the subcontract is in force. The certificates are signed by
the Subcontractor’s insurer or insurance broker. The Contractor accepts the certificates if the
insurance complies with the subcontract and if the insurer’s commercial position is strong
enough to carry the insured liabilities.

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 Core Clauses

84.2 Insurance policies include a waiver by the insurers of their subrogation rights against the
Parties and the directors and other employees of every insured except where there is fraud.
84.3 The Parties comply with the terms and conditions of the insurance policies to which they are
a party.
CORE CLAUSES

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If the 85
Subcontractor does 85.1 The Contractor may insure an event or liability which the subcontract requires the

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not insure Subcontractor to insure if the Subcontractor does not submit a required certificate. The cost
of this insurance to the Contractor is paid by the Subcontractor.

Insurance by 86
the Client or the 86.1 The Contractor submits certificates for insurances provided by the Client or the Contractor to

ts
Contractor the Subcontractor for acceptance before the subcontract starting date and afterwards as the
Subcontractor instructs. The Subcontractor accepts the certificates if the insurance complies

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with the subcontract and if the insurer’s commercial position is strong enough to carry the
MAIN OPTION CLAUSES

insured liabilities.
86.2 The Subcontractor’s acceptance of an insurance policy or certificate provided by the Client

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or Contractor does not change the responsibility of the Client or Contractor to provide the
insurances stated in the Subcontract Data.
86.3 The Subcontractor may insure an event or liability which the subcontract requires the

pr
Contractor or Client to insure if the Contractor does not submit a required policy or
certificate. The cost of this insurance to the Subcontractor is paid by the Contractor.
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SECONDARY OPTION CLAUSES

O
C
AE
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COST COMPONENTS

se
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SUBCONTRACT DATA

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9. TERMINATION

Termination 90
90.1 If either Party wishes to terminate the Subcontractor’s obligation to Provide the Subcontract

CORE CLAUSES
ly
Works it notifies the other Party giving details of the reason for terminating. The Contractor
issues a termination certificate promptly if the reason complies with the subcontract.

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90.2 A Party may terminate for a reason identified in the Termination Table. The procedures
followed and the amounts due on termination are in accordance with the Termination Table.

TERMINATION TABLE

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TERMINATING PARTY REASON PROCEDURE AMOUNT DUE

The Contractor R1–R15, R18 or R22 P1, P2 and P3 A1 and A3

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R17 or R20 P1 and P4 A1 and A2

MAIN OPTION CLAUSES

R21 P1 and P4 A1 and A2

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R23 P4 A1, A2 and A4

The Subcontractor R1–R10, R16 or R19 P1 and P4 A1, A2 and A4

90.3
R17 or R20

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The procedures for termination are implemented immediately after the Contractor has issued
M
a termination certificate.

SECONDARY OPTION CLAUSES

If the Contractor terminates for one of reasons R1 to R15, R18 or R22 and a certified
O

payment has not been made at the date of the termination certificate, the Contractor need
not make the certified payment unless these conditions of subcontract state otherwise.
90.4 After a termination certificate has been issued, the Subcontractor does no further work
C

necessary to Provide the Subcontract Works.

AE

Reasons for 91
termination 91.1 Either Party may terminate if the other Party has done one of the following or its equivalent.

• If the other Party is an individual and has

–– presented an application for bankruptcy (R1),

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–– had a bankruptcy order made against it (R2),

COST COMPONENTS
–– had a receiver appointed over its assets (R3) or

–– made an arrangement with its creditors (R4).

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• If the other Party is a company or partnership and has

–– had a winding-up order made against it (R5),

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–– had a provisional liquidator appointed to it (R6),

–– passed a resolution for winding-up (other than in order to amalgamate or

Fo

reconstruct) (R7),

–– had an administration order made against it or had an administrator appointed over

SUBCONTRACT DATA

it (R8),

–– had a receiver, receiver and manager, or administrative receiver appointed over the
whole or a substantial part of its undertaking or assets (R9) or

–– made an arrangement with its creditors (R10).

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 Core Clauses

91.2 The Contractor may terminate if it has notified the Subcontractor that the Subcontractor
has not put one of the following defaults right within three weeks of the date when the
Contractor notified the Subcontractor of the default.
CORE CLAUSES

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• Substantially failed to comply with its obligations (R11).

• Not provided a bond or guarantee which the subcontract requires (R12).

on
• Appointed a Subsubcontractor for substantial work before the Contractor has accepted
the Subsubcontractor (R13).
91.3 The Contractor may terminate if it has notified the Subcontractor that the Subcontractor
has not stopped one of the following defaults within three weeks of the date when the

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Contractor notified the Subcontractor of the default.

• Substantially hindered the Client, the Contractor or Others (R14).

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MAIN OPTION CLAUSES

• Substantially broken a health or safety regulation (R15).

91.4 The Subcontractor may terminate if the Contractor has not paid an amount due under the

oj
subcontract within thirteen weeks of the date that it should have been paid (R16).
91.5 Either Party may terminate if the Parties have been released under the law from further

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performance of the whole of the subcontract (R17).
91.6 If the Contractor has instructed the Subcontractor to stop or not to start any substantial work
or all work and an instruction allowing the work to re-start or start or removing work from
the Subcontract Scope has not been given within fourteen weeks,
M
• the Contractor may terminate if the instruction was due to a default by the
SECONDARY OPTION CLAUSES

Subcontractor (R18),
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• the Subcontractor may terminate if the instruction was due to a default by the
Contractor (R19) and
C

• either Party may terminate if the instruction was due to any other reason (R20).
AE

91.7 The Contractor may terminate if an event occurs which

• stops the Subcontractor completing the whole of the subcontract works or

• stops the Subcontractor completing the whole of the subcontract works by the date
for planned Completion shown on the Accepted Programme and is forecast to delay
on

Completion by more than thirteen weeks,

and which
COST COMPONENTS

• neither Party could prevent and

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• an experienced subcontractor would have judged at the Subcontract Date to have such
a small chance of occurring that it would have been unreasonable to have allowed for it
(R21).
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91.8 The Contractor may terminate if the Subcontractor does a Corrupt Act, unless it was done by
a Subsubcontractor or supplier and the Subcontractor

• was not and should not have been aware of the Corrupt Act or
Fo

• informed the Contractor of the Corrupt Act and took action to stop it as soon as the
Subcontractor became aware of it (R22).
SUBCONTRACT DATA

91.9 The Contractor may terminate if its obligation to provide the works in the main contract has
been terminated (R23).

Procedures on 92
termination 92.1 On termination, the Contractor may complete the subcontract works and may use any Plant
and Materials to which it has title (P1).

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92.2 The procedure on termination also includes one or more of the following as set out in the
Termination Table.

P2 The Contractor may instruct the Subcontractor to leave the Site, remove any

CORE CLAUSES
ly
Equipment, Plant and Materials from the Site and assign the benefit of any
subsubcontract or other contract related to performance of the subcontract to the
Contractor.

on
P3 The Contractor may use any Equipment to which the Subcontractor has title
to complete the subcontract works. The Subcontractor promptly removes the
Equipment from Site when the Contractor informs the Subcontractor that the
Contractor no longer requires it to complete the subcontract works.

ts
P4 The Subcontractor leaves the Working Areas and removes the Equipment.

ec
Payment on 93

MAIN OPTION CLAUSES

termination 93.1 The amount due on termination includes (A1)

• an amount due assessed as for normal payments,

oj
• the Defined Cost for Plant and Materials

––

––
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within the Working Areas or

to which the Contractor has title and of which the Subcontractor has to accept
delivery,
M
• other Defined Cost reasonably incurred in expectation of completing the whole of the
subcontract works,

SECONDARY OPTION CLAUSES

O

• any amounts retained by the Contractor and

• a deduction of any un-repaid balance of an advanced payment.

C

93.2 The amount due on termination also includes one or more of the following as set out in the
Termination Table.
AE

A2 The forecast Defined Cost of removing Equipment.

A3 A deduction of the forecast of the additional cost to the Contractor of completing

the whole of the subcontract works.
on

A4 The fee percentage applied to

COST COMPONENTS
• for Options A, B, C and D, any excess of the total of the Prices at the Subcontract Date
over the Price for Work Done to Date or
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• for Option E any excess of the first forecast of the Defined Cost for the subcontract
works over the Price for Work Done to Date less the Fee.
ru
Fo

SUBCONTRACT DATA

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 Main Option Clauses

Main Option Clauses

CORE CLAUSES

ly
OPTION A: PRICED SUBCONTRACT WITH ACTIVITY SCHEDULE

on
Identified and 11
defined terms 11.2 (21) The Activity Schedule is the activity schedule unless later changed in accordance with
these conditions of subcontract.

(23) Defined Cost is the cost of the components in the Short Schedule of Cost Components.

ts
(26) The People Rates are the people rates unless later changed in accordance with the

ec
subcontract.
MAIN OPTION CLAUSES

(27) The Price for Work Done to Date is the total of the Prices for

• each group of completed activities and

oj
• each completed activity which is not in a group.

following work.
pr
A completed activity is one without notified Defects the correction of which will delay

(30) The Prices are the lump sum prices for each of the activities on the Activity Schedule
M
unless later changed in accordance with the subcontract.
SECONDARY OPTION CLAUSES

The programme 31
O

31.4 The Subcontractor provides information which shows how each activity on the Activity
Schedule relates to the operations on each programme submitted for acceptance.
C

The Activity 55
Schedule 55.1 Information in the Activity Schedule is not Subcontract Scope or Site Information. If the
AE

activities on the Activity Schedule do not relate to the Subcontract Scope, the Subcontractor
corrects the Activity Schedule.
55.3 If the Subcontractor

• changes a planned method of working at its discretion so that the activities on the
Activity Schedule do not relate to the operations on the Accepted Programme or
on

• corrects the Activity Schedule so that the activities on the Activity Schedule relate to the
COST COMPONENTS

Subcontract Scope

the Subcontractor submits a revision of the Activity Schedule to the Contractor for
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acceptance.
55.4 A reason for not accepting a revision of the Activity Schedule is that

• it does not relate to the operations on the Accepted Programme,

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• any changed Prices are not reasonably distributed between the activities which are not
completed or
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• the total of the Prices is changed.

SUBCONTRACT DATA

Assessing 63
compensation 63.12 If the effect of a compensation event is to reduce the total Defined Cost and the event is
events a change to the Subcontract Scope provided by the Contractor, which the Subcontractor
proposed and the Contractor accepted, the Prices are reduced by an amount calculated
by multiplying the assessed effect of the compensation event by the value engineering
percentage.
63.14 Assessments for changed Prices for compensation events are in the form of changes to the
Activity Schedule.

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 Main Option Clauses

63.16 If, when assessing a compensation event the People Rates do not include a rate for a
category of person required, the Contractor and Subcontractor may agree a new rate. If they
do not agree the Contractor assesses the rate based upon the People Rates. The agreed or
assessed rate becomes the People Rate for that category of person.

CORE CLAUSES
ly
Payment on 93
termination 93.3 The amount due on termination is assessed without taking grouping of activities into

on
account.

ts
ec

MAIN OPTION CLAUSES

oj
pr
M

SECONDARY OPTION CLAUSES

O
C
AE
on

COST COMPONENTS
se
ru
Fo

SUBCONTRACT DATA

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 Main Option Clauses

OPTION B: PRICED SUBCONTRACT WITH BILL OF QUANTITIES

Identified and 11
defined terms 11.2 (22) The Bill of Quantities is the bill of quantities unless later changed in accordance with
CORE CLAUSES

ly
these conditions of subcontract.

(23) Defined Cost is the cost of the components in the Short Schedule of Cost Components.

on
(26) The People Rates are the people rates unless later changed in accordance with the
subcontract.

(28) The Price for Work Done to Date is the total of

ts
• the quantity of the work which the Subcontractor has completed for each item in the Bill
of Quantities multiplied by the rate and

ec
MAIN OPTION CLAUSES

• a proportion of each lump sum which is the proportion of the work covered by the item
which the Subcontractor has completed.

oj
Completed work is work which is without notified Defects the correction of which will delay
following work.

pr
(31) The Prices are the lump sums and the amounts obtained by multiplying the rates by the
quantities for the items in the Bill of Quantities.

The Bill of 56
M
Quantities 56.1 Information in the Bill of Quantities is not Subcontract Scope or Site Information.

Compensation 60
SECONDARY OPTION CLAUSES

events 60.4 A difference between the final total quantity of work done and the quantity stated for an
O

item in the Bill of Quantities is a compensation event if

C

• the difference does not result from a change to the Subcontract Scope,

• the difference causes the Defined Cost per unit of quantity to change and
AE

• the rate in the Bill of Quantities for the item multiplied by the final total quantity of work
done is more than 0.5% of the total of the Prices at the Subcontract Date.

If the Defined Cost per unit of quantity is reduced, the affected rate is reduced.
60.5 A difference between the final total quantity of work done and the quantity for an item
on

stated in the Bill of Quantities which delays Completion or the meeting of the Condition
stated for a Key Date is a compensation event.
COST COMPONENTS

60.6 The Contractor gives an instruction to correct a mistake in the Bill of Quantities which is
se

• a departure from the rules for item descriptions or division of the work into items in the
method of measurement or

• due to ambiguity or inconsistency.

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Each such correction is a compensation event which may lead to reduced Prices.
60.7 In assessing a compensation event which results from a correction of an inconsistency
between the Bill of Quantities and another document, the Subcontractor is assumed to have
Fo

taken the Bill of Quantities as correct.

SUBCONTRACT DATA

Assessing 63
compensation 63.12 If the effect of a compensation event is to reduce the total Defined Cost and the event is
events a change to the Subcontract Scope provided by the Contractor, which the Subcontractor
proposed and the Contractor accepted, the Prices are reduced by an amount calculated
by multiplying the assessed value of the compensation event by the value engineering
percentage.

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 Main Option Clauses

63.15 Assessments for changed Prices for compensation events are in the form of changes to the
Bill of Quantities.

For the whole or a part of a compensation event for work not yet done and for which there

CORE CLAUSES
ly
is an item in the Bill of Quantities, the changes are

• a changed rate,

on
• a changed quantity or

• a changed lump sum.

For the whole or a part of a compensation event for work not yet done and for which

ts
there is no item in the Bill of Quantities, the change is a new priced item which, unless the
Contractor and the Subcontractor agree otherwise, is compiled in accordance with the

ec
method of measurement.

MAIN OPTION CLAUSES

For the whole or a part of a compensation event for work already done, the change is a new
lump sum item.

oj
63.16 If, when assessing a compensation event the People Rates do not include a rate for a
category of person required, the Contractor and Subcontractor may agree a new rate. If

pr
they do not agree the Contractor assesses the rate based on the People Rates. The agreed or
assessed rate becomes the People Rate for that category of person.
M

SECONDARY OPTION CLAUSES

O
C
AE
on

COST COMPONENTS
se
ru
Fo

SUBCONTRACT DATA

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 Main Option Clauses

OPTION C: TARGET SUBCONTRACT WITH ACTIVITY SCHEDULE

Identified and 11
defined terms 11.2 (21) The Activity Schedule is the activity schedule unless later changed in accordance with
CORE CLAUSES

ly
these conditions of subcontract.

(24) Defined Cost is the cost of the components in the Schedule of Cost Components less

on
Disallowed Cost.

(25) Disallowed Cost is cost which

• is not justified by the Subcontractor’s accounts and records,

ts
• should not have been paid to a Subsubcontractor or supplier in accordance with its
contract,

ec
MAIN OPTION CLAUSES

• was incurred only because the Subcontractor did not

–– follow an acceptance or procurement procedure stated in the Subcontract Scope,

oj
–– give an early warning which the subcontract required it to give or

pr
–– give notification to the Contractor of the preparation for and conduct of an
adjudication or proceedings of a tribunal between the Subcontractor and a
Subsubcontractor or supplier

and the cost of

M
• correcting Defects after Completion,
SECONDARY OPTION CLAUSES

• correcting Defects caused by the Subcontractor not complying with a constraint on how
it is to Provide the Subcontract Works stated in the Subcontract Scope,
C

• Plant and Materials not used to Provide the Subcontract Works (after allowing for
reasonable wastage) unless resulting from a change to the Subcontract Scope,
AE

• resources not used to Provide the Subcontract Works (after allowing for reasonable
availability and utilisation) or not taken away from the Working Areas when the
Contractor requested and

• preparation for and conduct of an adjudication or proceedings of the tribunal between

on

the Parties.

(29) The Price for Work Done to Date is the total Defined Cost which the Contractor forecasts
COST COMPONENTS

will have been paid by the Subcontractor before the next assessment date plus the Fee.

(30) The Prices are the lump sum prices for each of the activities on the Activity Schedule
se

unless later changed in accordance with the subcontract.

Providing the 20
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Subcontract Works 20.2 The Subcontractor advises the Contractor on the practical implications of the design of the
subcontract works and on subsubcontracting arrangements.
20.3 The Subcontractor prepares forecasts of the total Defined Cost for the whole of the
subcontract works in consultation with the Contractor and submits them to the Contractor.
Fo

Forecasts are prepared at the intervals stated in the Subcontract Data from the subcontract
starting date until Completion of the whole of the subcontract works. An explanation of the
SUBCONTRACT DATA

changes made since the previous forecast is submitted with each forecast.

Subsubcontracting 26
26.4 The Subcontractor submits the pricing information in the proposed subsubcontract
documents for each subsubcontract to the Contractor unless the Contractor has agreed that
no submission is required.

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 Main Option Clauses

Tests and 41
inspections 41.7 When the Contractor assesses the cost incurred by it in repeating a test or inspection after a
Defect is found, it does not include the Subcontractor’s cost of carrying out the repeat test
or inspection.

CORE CLAUSES
ly
Assessing the 50
amount due 50.7 Payments of Defined Cost made by the Subcontractor in a currency other than the currency

on
of the subcontract are included in the amount due as payments to be made to it in the
same currency. Such payments are converted to the currency of the subcontract in order to
calculate the Fee and any Subcontractor’s share using the exchange rates.

50.9 The Subcontractor notifies the Contractor when the Defined Cost for a part of the

ts
subcontract works has been finalised, and makes available for inspection the records
necessary to demonstrate that it has been correctly assessed. The Contractor reviews
the records made available, and no later than fourteen weeks after the Subcontractor’s

ec
notification

MAIN OPTION CLAUSES

• accepts that part of Defined Cost as correct,

oj
• notifies the Subcontractor that further records are needed or

• notifies the Subcontractor of errors in its assessment.

pr
The Subcontractor provides any further records requested or advises the correction of the
errors in its assessment within three weeks of the Contractor’s notification. The Contractor
reviews the records provided, and within five weeks
M
• accepts that part of Defined Cost as correct or

SECONDARY OPTION CLAUSES

O

• notifies the Subcontractor of the correct assessment of that part of Defined Cost.

If the Subcontract does not notify a decision on that part of Defined Cost within the time
C

stated, the Subcontractor’s assessment is treated as correct.

Defined Cost 52
AE

52.2 The Subcontractor keeps these records

• accounts of payments of Defined Cost,

• proof that the payments have been made,

on

• communications about and assessments of compensation events for Subsubcontractors

and

COST COMPONENTS
• other records as stated in the Subcontract Scope.
52.3 The Subcontractor allows the Contractor and Project Manager to inspect at any time within
se

working hours the accounts and records which it is required to keep.

The 54
Subcontractor’s 54.1 The Contractor assesses the Subcontractor’s share of the difference between the total of the
ru

share Prices and the Price for Work Done to Date. The difference is divided into increments falling
within each of the share ranges. The limits of a share range are the Price for Work Done
to Date divided by the total of the Prices, expressed as a percentage. The Subcontractor’s
share equals the sum of the products of the increment within each share range and the
Fo

corresponding Subcontractor’s share percentage.

SUBCONTRACT DATA

54.2 If the Price for Work Done to Date is less than the total of the Prices, the Subcontractor is
paid its share of the saving. If the Price for Work Done to Date is greater than the total of the
Prices, the Subcontractor pays its share of the excess.
54.3 The Contractor makes a preliminary assessment of the Subcontractor’s share at Completion
of the whole of the subcontract works using forecasts of the final Price for Work Done to
Date and the final total of the Prices. This share is included in the amount due following
Completion of the whole of the subcontract works.

© nec 2017 neccontract.com This page has been amended in 2019 Engineering and Construction Subcontract 35

Expires 20/11/20
 Main Option Clauses

54.4 The Contractor makes a final assessment of the Subcontractor’s share using the final Price for
Work Done to Date and the final total of the Prices. This share is included in the final amount
due.
CORE CLAUSES

ly
The Activity 55
Schedule 55.2 Information in the Activity Schedule is not Subcontract Scope or Site Information.

on
Assessing 63
compensation 63.13 If the effect of a compensation event is to reduce the total Defined Cost and the event is
events a change to the Subcontract Scope provided by the Contractor, which the Subcontractor
proposed and the Contractor accepted, the Prices are not reduced.
63.14 Assessments for changed Prices for compensation events are in the form of changes to the

ts
Activity Schedule.

ec
Payment on 93
MAIN OPTION CLAUSES

termination 93.4 If there is a termination, the Contractor assesses the Subcontractor’s share after certifying
termination. The assessment uses as the Price for Work Done to Date the total of the Defined
Cost which the Subcontractor has paid and which it is committed to pay for work done

oj
before termination, and uses as the total of the Prices

• the lump sum price for each activity which has been completed and

93.6
•
pr
a proportion of the lump sum price for each incomplete activity which is the proportion
of the work in the activity which has been completed.
The Contractor’s assessment of the Subcontractor’s share is added to the amount due to the
M
Subcontractor on termination if there has been a saving or deducted if there has been an
excess.
SECONDARY OPTION CLAUSES

O
C
AE
on
COST COMPONENTS

se
ru
Fo
SUBCONTRACT DATA

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 Main Option Clauses

OPTION D: TARGET SUBCONTRACT WITH BILL OF QUANTITIES

Identified and 11
defined terms 11.2 (22) The Bill of Quantities is the bill of quantities unless later changed in accordance with

CORE CLAUSES
ly
these conditions of subcontract.

(24) Defined Cost is the cost of the components in the Schedule of Cost Components less

on
Disallowed Cost.

(25) Disallowed Cost is cost which

• is not justified by the Subcontractor’s accounts and records,

ts
• should not have been paid to a Subsubcontractor or supplier in accordance with its
contract,

ec

MAIN OPTION CLAUSES

• was incurred only because the Subcontractor did not

–– follow an acceptance or procurement procedure stated in the Subcontract Scope,

oj
–– give an early warning which the subcontract required it to give or

pr
–– give notification to the Contractor of the preparation for and conduct of an
adjudication or proceedings of a tribunal between the Subcontractor and a
Subsubcontractor or supplier

and the cost of

M
• correcting Defects after Completion,

SECONDARY OPTION CLAUSES

O

• correcting Defects caused by the Subcontractor not complying with a constraint on how
it is to Provide the Subcontract Works stated in the Subcontract Scope,
C

• Plant and Materials not used to Provide the Subcontract Works (after allowing for
reasonable wastage) unless resulting from a change to the Subcontract Scope,
AE

• resources not used to Provide the Subcontract Works (after allowing for reasonable
availability and utilisation) or not taken away from the Working Areas when the
Contractor requested and

• preparation for and conduct of an adjudication or proceedings of the tribunal between

on

the Parties.

(29) The Price for Work Done to Date is the total Defined Cost which the Contractor forecasts

COST COMPONENTS
will have been paid by the Subcontractor before the next assessment date plus the Fee.

(31) The Prices are the lump sums and the amounts obtained by multiplying the rates by the
se

quantities for the items in the Bill of Quantities.

(32) The Total of the Prices is the total of

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• the quantity of the work which the Subcontractor has completed for each item in the Bill
of Quantities multiplied by the rate and

• a proportion of each lump sum which is the proportion of the work covered by the item
Fo

which the Subcontractor has completed.

Completed work is work which is without notified Defects the correction of which will delay
SUBCONTRACT DATA

following work.

Providing the 20
Subcontract Works 20.2 The Subcontractor advises the Contractor on the practical implications of the design of the
subcontract works and on subsubcontracting arrangements.

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 Main Option Clauses

20.3 The Subcontractor prepares forecasts of the total Defined Cost for the whole of the
subcontract works in consultation with the Contractor and submits them to the Contractor.
Forecasts are prepared at the intervals stated in the Subcontract Data from the subcontract
starting date until Completion of the whole of the subcontract works. An explanation of the
CORE CLAUSES

ly
changes made since the previous forecast is submitted with each forecast.

Subsubcontracting 26

on
26.4 The Subcontractor submits the pricing information in the proposed subsubcontract
documents for each subsubcontract to the Contractor unless the Contractor has agreed that
no submission is required.

Tests and 41

ts
inspections 41.7 When the Contractor assesses the cost incurred by it in repeating a test or inspection after a
Defect is found, it does not include the Subcontractor’s cost of carrying out the repeat test
or inspection.

ec
MAIN OPTION CLAUSES

Assessing the 50
amount due 50.7 Payments of Defined Cost made by the Subcontractor in a currency other than the currency

oj
of the subcontract are included in the amount due as payments to be made to it in the
same currency. Such payments are converted to the currency of the subcontract in order to
calculate the Fee and any Subcontractor’s share using the exchange rates.
50.9

pr
The Subcontractor notifies the Contractor when the Defined Cost for a part of the subcontract
works has been finalised, and makes available for inspection the records necessary to
demonstrate that it has been correctly assessed. The Contractor reviews the records made
available, and no later than fourteen weeks after the Subcontractor’s notification
M
• accepts that part of Defined Cost as correct,
SECONDARY OPTION CLAUSES

• notifies the Subcontractor that further records are needed or

• notifies the Subcontractor of errors in its assessment.

C

The Subcontractor provides any further records requested or advises the correction of the
errors in its assessment within three weeks of the Contractor’s notification. The Contractor
AE

reviews the records provided, and within five weeks

• accepts that part of Defined Cost as correct or

• notifies the Subcontractor of the correct assessment of that part of Defined Cost.
on

If the Subcontract does not notify a decision on that part of Defined Cost within the time
stated, the Subcontractor’s assessment is treated as correct.
COST COMPONENTS

Defined Cost 52
52.2 The Subcontractor keeps these records
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• accounts of payments of Defined Cost,

• proof that the payments have been made,

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• communications about and assessments of compensation events for Subsubcontractors

and

• other records as stated in the Subcontract Scope.

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52.3 The Subcontractor allows the Contractor and Project Manager to inspect at any time within
SUBCONTRACT DATA

working hours the accounts and records which it is required to keep.

The 54
Subcontractor’s 54.5 The Contractor assesses the Subcontractor’s share of the difference between the Total of the
share Prices and the Price for Work Done to Date. The difference is divided into increments falling
within each of the share ranges. The limits of a share range are the Price for Work Done
to Date divided by the Total of the Prices, expressed as a percentage. The Subcontractor’s
share equals the sum of the products of the increment within each share range and the
corresponding Subcontractor’s share percentage.

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 Main Option Clauses

54.6 If the Price for Work Done to Date is less than the Total of the Prices, the Subcontractor is
paid its share of the saving. If the Price for Work Done to Date is greater than the Total of the
Prices, the Subcontractor pays its share of the excess.
54.7 The Contractor makes a preliminary assessment of the Subcontractor’s share at Completion

CORE CLAUSES
ly
of the whole of the subcontract works using forecasts of the final Price for Work Done to
Date and the final Total of the Prices. This share is included in the amount due following

on
Completion of the whole of the subcontract works.
54.8 The Contractor makes a final assessment of the Subcontractor’s share using the final Price for
Work Done to Date and the final Total of the Prices. This share is included in the final amount
due.

ts
The Bill of 56
Quantities 56.1 Information in the Bill of Quantities is not Subcontract Scope or Site Information.

ec
Compensation 60

MAIN OPTION CLAUSES

events 60.4 A difference between the final total quantity of work done and the quantity stated for an
item in the Bill of Quantities is a compensation event if

oj
• the difference does not result from a change to the Subcontract Scope,

• the difference causes the Defined Cost per unit of quantity to change and

•
pr
the rate in the Bill of Quantities for the item multiplied by the final total quantity of work
done is more than 0.5% of the total of the Prices at the Subcontract Date.
M
If the Defined Cost per unit of quantity is reduced, the affected rate is reduced.
60.5 A difference between the final total quantity of work done and the quantity for an item

SECONDARY OPTION CLAUSES

stated in the Bill of Quantities which delays Completion or the meeting of the Condition
O

stated for a Key Date is a compensation event.

60.6 The Contractor gives an instruction to correct mistakes in the Bill of Quantities which are
C

• departures from the rules for item descriptions or division of the work into items in the
method of measurement or
AE

• due to ambiguity or inconsistency.

Each such correction is a compensation event which may lead to reduced Prices.
60.7 In assessing a compensation event which results from a correction of an inconsistency
on

between the Bill of Quantities and another document, the Subcontractor is assumed to have
taken the Bill of Quantities as correct.

COST COMPONENTS
Assessing 63
compensation 63.13 If the effect of a compensation event is to reduce the total Defined Cost and the event is
se

events a change to the Subcontract Scope provided by the Contractor, which the Subcontractor
proposed and the Contractor accepted, the Prices are not reduced.
63.15 Assessments for changed Prices for compensation events are in the form of changes to the
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Bill of Quantities.

For the whole or a part of a compensation event for work not yet done and for which there
is an item in the Bill of Quantities, the changes are
Fo

• a changed rate,
SUBCONTRACT DATA

• a changed quantity or

• a changed lump sum.

For the whole or a part of a compensation event for work not yet done and for which
there is no item in the Bill of Quantities, the change is a new priced item which, unless the
Contractor and the Subcontractor agree otherwise, is compiled in accordance with the
method of measurement.

© nec 2017 neccontract.com Engineering and Construction Subcontract 39

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 Main Option Clauses

For the whole or a part of a compensation event for work already done, the change is a new
lump sum item.

Payment on 93
CORE CLAUSES

ly
termination 93.5 If there is a termination, the Contractor assesses the Subcontractor’s share after certifying
termination. The assessment uses, as the Price for Work Done to Date, the total of the
Defined Cost which the Subcontractor has paid and which it is committed to pay for work

on
done before termination.
93.6 The Contractor’s assessment of the Subcontractor’s share is added to the amount due to the
Subcontractor on termination if there has been a saving or deducted if there has been an
excess.

ts
ec
MAIN OPTION CLAUSES

oj
pr
M
SECONDARY OPTION CLAUSES

O
C
AE
on
COST COMPONENTS

se
ru
Fo
SUBCONTRACT DATA

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 Main Option Clauses

OPTION E: COST REIMBURSABLE SUBCONTRACT

Identified and 11
defined terms 11.2 (24) Defined Cost is the cost of the components in the Schedule of Cost Components less

CORE CLAUSES
ly
Disallowed Cost.

(25) Disallowed Cost is cost which

on
• is not justified by the Subcontractor’s accounts and records,

• should not have been paid to a Subsubcontractor or supplier in accordance with its
contract,

ts
• was incurred only because the Subcontractor did not

ec
–– follow an acceptance or procurement procedure stated in the Subcontract Scope,

MAIN OPTION CLAUSES

–– give an early warning which the subcontract required it to give or

–– give notification to the Contractor of the preparation for and conduct of an

oj
adjudication or proceedings of a tribunal between the Subcontractor and a
Subsubcontractor or supplier

and the cost of

• pr
correcting Defects after Completion,
M
• correcting Defects caused by the Subcontractor not complying with a constraint on how
it is to Provide the Subcontract Works stated in the Subcontract Scope,

SECONDARY OPTION CLAUSES

O

• Plant and Materials not used to Provide the Subcontract Works (after allowing for
reasonable wastage) unless resulting from a change to the Subcontract Scope,
C

• resources not used to Provide the Subcontract Works (after allowing for reasonable
availability and utilisation) or not taken away from the Working Areas when the
AE

Contractor requested and

• preparation for and conduct of an adjudication or proceedings of the tribunal between

the Parties.

(29) The Price for Work Done to Date is the total Defined Cost which the Contractor forecasts
on

will have been paid by the Subcontractor before the next assessment date plus the Fee.

(32) The Prices are the forecast of the total Defined Cost for the whole of the subcontract

COST COMPONENTS
works plus the Fee.

Providing the 20
se

Subcontract Works 20.2 The Subcontractor advises the Contractor on the practical implications of the design of the
subcontract works and on subsubcontracting arrangements.
20.3 The Subcontractor prepares forecasts of the total Defined Cost for the whole of the
ru

subcontract works in consultation with the Contractor and submits them to the Contractor.
Forecasts are prepared at the intervals stated in the Subcontract Data from the subcontract
starting date until Completion of the whole of the subcontract works. An explanation of the
changes made since the previous forecast is submitted with each forecast.
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Subsubcontracting 26
SUBCONTRACT DATA

26.4 The Subcontractor submits the pricing information in the proposed subsubcontract
documents for each subsubcontract to the Contractor unless the Contractor has agreed that
no submission is required.

Tests and 41
inspections 41.7 When the Contractor assesses the cost incurred by it in repeating a test or inspection after a
Defect is found, it does not include the Subcontractor’s cost of carrying out the repeat test
or inspection.

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 Main Option Clauses

Assessing the 50
amount due 50.8 Payments of Defined Cost made by the Subcontractor in a currency other than the currency
of the subcontract are included in the amount due as payments to be made to it in the
same currency. Such payments are converted to the currency of the subcontract in order to
CORE CLAUSES

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calculate the Fee using the exchange rates.
50.9 The Subcontractor notifies the Contractor when the Defined Cost for a part of the subcontract

on
works has been finalised, and makes available for inspection the records necessary to
demonstrate that it has been correctly assessed. The Contractor reviews the records made
available, and no later than fourteen weeks after the Subcontractor’s notification

• accepts that part of Defined Cost as correct,

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• notifies the Subcontractor that further records are needed or

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• notifies the Subcontractor of errors in its assessment.
MAIN OPTION CLAUSES

The Subcontractor provides any further records requested or advises the correction of the
errors in its assessment within three weeks of the Contractor’s notification. The Contractor

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reviews the records provided, and within five weeks

• accepts that part of Defined Cost as correct or

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notifies the Subcontractor of the correct assessment of that part of Defined Cost.

If the Subcontract does not notify a decision on that part of Defined Cost within the time
stated, the Subcontractor’s assessment is treated as correct.
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Defined Cost 52
SECONDARY OPTION CLAUSES

52.2 The Subcontractor keeps these records

O

• accounts of payments of Defined Cost,

C

• proof that the payments have been made,

• communications about and assessments of compensation events for Subsubcontractors

AE

and

• other records as stated in the Subcontract Scope.

52.3 The Subcontractor allows the Contractor and Project Manager to inspect at any time within
working hours the accounts and records which it is required to keep.
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COST COMPONENTS

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SUBCONTRACT DATA

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 Resolving and Avoiding Disputes

Resolving and Avoiding Disputes

CORE CLAUSES
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OPTION W1

on
Used when the United Kingdom Housing Grants, Construction and Regeneration Act 1996
does not apply.

Resolving disputes W1
W1.1 (1) A dispute arising under or in connection with the subcontract is referred to the Senior

ts
Representatives in accordance with the Dispute Reference Table. If the dispute is not resolved
by the Senior Representatives, it is referred to and decided by the Adjudicator. A Party

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may replace a Senior Representative after notifying the other Party of the name of the

MAIN OPTION CLAUSES

replacement.

(2) The Party referring a dispute notifies the Senior Representatives and the other Party of the

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nature of the dispute it wishes to resolve. Each Party submits to the other their statement of
case within one week of the notification. Each statement of case is limited to no more than
ten sides of A4 paper together with supporting evidence, unless otherwise agreed by the
Parties.

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(3) The Senior Representatives attend as many meetings and use any procedure they consider
necessary to try to resolve the dispute over a period of no more than three weeks. At the
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end of this period the Senior Representatives produce a list of the issues agreed and issues
not agreed. The Contractor and the Subcontractor put into effect the issues agreed.

SECONDARY OPTION CLAUSES

O

(4) No evidence of the statement of case or discussions is disclosed, used or referred to in any
subsequent proceedings before the Adjudicator or the tribunal.
C

DISPUTE REFERENCE TABLE

AE

DISPUTE ABOUT WHICH PARTY MAY WHEN MAY IT BE

REFER IT TO THE SENIOR REFERRED TO THE SENIOR
REPRESENTATIVES REPRESENTATIVES?

An action or inaction of The Subcontractor Not more than four weeks after
Contractor the Subcontractor becomes
aware of the action or inaction
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A programme, compensation The Contractor Not more than four weeks after
event or quotation for a it was treated as accepted

COST COMPONENTS
compensation event which
is treated as having been
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accepted

An assessment of Defined Cost Either Party Not more than four weeks after
which is treated as correct the assessment was treated as
correct
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Any other matter Either Party When the dispute arises

The Adjudicator W1.2 (1) The Parties appoint the Adjudicator under the NEC Dispute Resolution Service Contract
Fo

current at the subcontract starting date.

SUBCONTRACT DATA

(2) The Adjudicator acts impartially and decides the dispute as an independent adjudicator
and not as an arbitrator.

(3) If the Adjudicator is not identified in the Subcontract Data or if the Adjudicator resigns or
is unable to act, the Parties choose a new adjudicator jointly. If the Parties have not chosen
an adjudicator, either Party may ask the Adjudicator nominating body to choose one. The
Adjudicator nominating body chooses an adjudicator within seven days of the request. The
chosen adjudicator becomes the Adjudicator.

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 Resolving and Avoiding Disputes

(4) A replacement Adjudicator has the power to decide a dispute referred to a predecessor
but not decided at the time when the predecessor resigned or became unable to act.
The Adjudicator deals with an undecided dispute as if it had been referred on the date of
appointment as replacement Adjudicator.
CORE CLAUSES

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(5) The Adjudicator, and the Adjudicator’s employees and agents are not liable to the Parties
for any action or failure to take action in an adjudication unless the action or failure to take

on
action was in bad faith.

The adjudication W1.3 (1) A Party disputing any issue not agreed by the Senior Representatives issues a notice of
adjudication to the other Party within two weeks of the production of the list of agreed
and not agreed issues, or when it should have been produced. The dispute is referred to the

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Adjudicator within two weeks of the notice of adjudication unless the Contractor refers the
dispute to the main contract Adjudicator.

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(2) The times for notifying and referring a dispute may be extended by the Contractor if
MAIN OPTION CLAUSES

the Subcontractor and the Contractor agree to the extension before the notice or referral
is due. The Contractor informs the Subcontractor of the extension that has been agreed. If
a disputed matter is not notified and referred within the times set out in the subcontract,

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neither Party may subsequently refer it to the Adjudicator or the tribunal.

(3) The Party referring the dispute to the Adjudicator includes with its referral information to

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be considered by the Adjudicator. Any more information from a Party to be considered by the
Adjudicator is provided within four weeks of the referral. This period may be extended if the
Adjudicator and the Parties agree.
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(4) If a matter disputed by the Subcontractor under or in connection with a subsubcontract is
also a matter disputed under or in connection with the subcontract and if the subsubcontract
SECONDARY OPTION CLAUSES

allows, the Subcontractor may refer the subsubcontract dispute to the Adjudicator at the
O

same time as the subcontract referral. The Adjudicator then decides the disputes together
and references to the Parties for the purposes of the dispute are interpreted as including the
Subsubcontractor.
C

(5) Within one week of the notification of the dispute by the Subcontractor to the Contractor,
AE

the Contractor notifies the Subcontractor that the matter disputed is a matter disputed under
or in connection with the main contract and that it will be referred to the main contract
Adjudicator.

The Contractor submits the subcontract dispute to the main contract Adjudicator at the
same time as the main contract submission. The Subcontractor becomes a party to the main
on

contract adjudication and the main contract Adjudicator decides the disputes together.

(6) The Adjudicator may

COST COMPONENTS

• review and revise any action or inaction of the Contractor related to the dispute and
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alter a matter which has been treated as accepted or correct,

• take the initiative in ascertaining the facts and the law related to the dispute,
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• instruct a Party to provide further information related to the dispute within a stated time
and

• instruct a Party to take any other action which is considered necessary for the
Adjudicator to reach a decision and to do so within a stated time.
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(7) A communication between a Party and the Adjudicator is communicated to the other
SUBCONTRACT DATA

Party at the same time.

(8) If the Adjudicator’s decision includes assessment of additional cost or delay caused to the
Subcontractor, the assessment is made in the same way as a compensation event is assessed.

(9) The Adjudicator decides the dispute and informs the Parties of the decision and reasons
within four weeks of the end of the period for receiving information. This four week period
may be extended if the Parties agree.

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 Resolving and Avoiding Disputes

(10) Unless and until the Adjudicator has informed the Parties of the decision, the Parties
proceed as if the matter disputed was not disputed.

(11) The Adjudicator’s decision is binding on the Parties unless and until revised by the

CORE CLAUSES
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tribunal and is enforceable as a matter of contractual obligation between the Parties and
not as an arbitral award. The Adjudicator’s decision is final and binding if neither Party has
notified the other within the times required by the subcontract that it is dissatisfied with a

on
decision of the Adjudicator and intends to refer the matter to the tribunal. A Party does not
refer a dispute to the Adjudicator that is the same or substantially the same as one that has
already been referred to the Adjudicator.

(12) The Adjudicator may, within two weeks of giving the decision to the Parties, correct any

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clerical mistake or ambiguity.

The tribunal W1.4 (1) A Party does not refer any dispute under or in connection with the subcontract to

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the tribunal unless it has first been referred to the Adjudicator in accordance with the

MAIN OPTION CLAUSES

subcontract.

(2) If, after being informed of the Adjudicator’s decision, a Party is dissatisfied, that Party may

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notify the other Party of the matter which is disputed and state that it intends to refer the
matter to the tribunal. The dispute is not referred to the tribunal unless this notification is

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given within four weeks of being informed of the Adjudicator’s decision.

(3) If the Adjudicator does not inform the Parties of the decision within the time provided
by the subcontract, a Party may notify the other Party that it intends to refer the dispute to
the tribunal. A Party does not refer a dispute to the tribunal unless this notification is given
M
within four weeks of the date by which the Adjudicator should have informed the Parties of
the decision.

SECONDARY OPTION CLAUSES

O

(4) The tribunal settles the dispute referred to it. The tribunal has the powers to reconsider
any decision of the Adjudicator and review and revise any action or inaction of the
C

Contractor related to the dispute. A Party is not limited in the tribunal proceedings to the
information, evidence or arguments put to the Adjudicator.
AE

(5) If the tribunal is arbitration, the arbitration procedure, the place where the arbitration is to
be held and the method of choosing the arbitrator are those stated in the Subcontract Data.

(6) A Party does not call the Adjudicator as a witness in tribunal proceedings.
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COST COMPONENTS
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SUBCONTRACT DATA

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 Resolving and Avoiding Disputes

OPTION W2
Used when the United Kingdom Housing Grants, Construction and Regeneration Act 1996
applies.
CORE CLAUSES

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Resolving disputes W2
W2.1 (1) If the Parties agree, a dispute arising under or in connection with the subcontract

on
is referred to the Senior Representatives. If the dispute is not resolved by the Senior
Representatives, it is referred to and decided by the Adjudicator. A Party may replace a Senior
Representative after notifying the other Party of the name of the replacement.

(2) The Party referring a dispute notifies the Senior Representatives and the other Party of the

ts
nature of the dispute it wishes to resolve. Each Party submits to the other their statement of
case within one week of the notification. Each statement of case is limited to no more than
ten sides of A4 paper together with supporting evidence, unless otherwise agreed by the

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Parties.
MAIN OPTION CLAUSES

(3) The Senior Representatives attend as many meetings and use any procedure they consider
necessary to try to resolve the dispute over a period of up to three weeks. At the end of this

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period the Senior Representatives produce a list of the issues agreed and issues not agreed.
The Contractor and the Subcontractor put into effect the issues agreed.

The Adjudicator W2.2

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(4) No evidence of the statement of case or discussions is disclosed, used or referred to in any
subsequent proceedings before the Adjudicator or the tribunal.

(1) A dispute arising under or in connection with the subcontract is referred to and decided
M
by the Adjudicator. A Party may refer a dispute to the Adjudicator at any time whether or not
the dispute has been referred to the Senior Representatives.
SECONDARY OPTION CLAUSES

(2) In this Option, time periods stated in days exclude Christmas Day, Good Friday and bank
holidays.
C

(3) The Parties appoint the Adjudicator under the NEC Dispute Resolution Service Contract
current at the subcontract starting date.
AE

(4) The Adjudicator acts impartially and decides the dispute as an independent adjudicator
and not as an arbitrator.

(5) If the Adjudicator is not identified in the Subcontract Data or if the Adjudicator resigns or
becomes unable to act
on

• the Parties may choose an adjudicator jointly or

COST COMPONENTS

• a Party may ask the Adjudicator nominating body to choose an adjudicator.

The Adjudicator nominating body chooses an adjudicator within four days of the request.
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The chosen adjudicator becomes the Adjudicator.

(6) A replacement Adjudicator has the power to decide a dispute referred to a predecessor
but not decided at the time when the predecessor resigned or became unable to act.
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The Adjudicator deals with an undecided dispute as if it had been referred on the date of
appointment as replacement Adjudicator.

(7) A Party does not refer a dispute to the Adjudicator that is the same or substantially the
Fo

same as one that has already been decided by an adjudicator.

SUBCONTRACT DATA

(8) The Adjudicator, and the Adjudicator’s employees and agents are not liable to the Parties
for any action or failure to take action in an adjudication unless the action or failure to take
action was in bad faith.

The adjudication W2.3 (1) Before a Party refers a dispute to the Adjudicator, it gives a notice of adjudication to
the other Party with a brief description of the dispute and the decision which it wishes the
Adjudicator to make. If the Adjudicator is named in the Subcontract Data, the Party sends a
copy of the notice of adjudication to the Adjudicator when it is issued. Within three days of the
receipt of the notice of adjudication, the Adjudicator informs the Parties that the Adjudicator

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 Resolving and Avoiding Disputes

• is able to decide the dispute in accordance with the subcontract or

• is unable to decide the dispute and has resigned.

CORE CLAUSES
If the Adjudicator does not so inform within three days of the issue of the notice of

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adjudication, either Party may act as if the Adjudicator has resigned.

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(2) Within seven days of a Party giving a notice of adjudication it

• refers the dispute to the Adjudicator,

• provides the Adjudicator with the information on which it relies, including any
supporting documents and

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• provides a copy of the information and supporting documents it has provided to the
Adjudicator to the other Party.

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MAIN OPTION CLAUSES

Any further information from a Party to be considered by the Adjudicator is provided within
fourteen days of the referral. This period may be extended if the Adjudicator and the Parties

oj
agree.

(3) If a matter disputed by the Subcontractor under or in connection with a subsubcontract

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is also a matter disputed under or in connection with the subcontract, the Subcontractor
may, with the consent of the Subsubcontractor, refer the subsubcontract dispute to the
Adjudicator at the same time as the subcontract referral. The Adjudicator then decides
the disputes together and references to the Parties for the purposes of the dispute are
M
interpreted as including the Subsubcontractor.

(4) If a matter disputed under the subcontract is a matter disputed under the main contract,

SECONDARY OPTION CLAUSES

O

the Contractor may, with the consent of the Subcontractor, submit the subcontract dispute
to the main contract Adjudicator at the same time as the main contract submission. The
Subcontractor becomes a party to the main contract adjudication and the main contract
C

Adjudicator decides the disputes together.

(5) The Adjudicator may

AE

• review and revise any action or inaction of the Contractor related to the dispute and
alter a matter which has been treated as accepted or correct,

• take the initiative in ascertaining the facts and the law related to the dispute,
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• instruct a Party to provide further information related to the dispute within a stated time
and

COST COMPONENTS
• instruct a Party to take any other action which is considered necessary to reach a
decision and to do so within a stated time.
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(6) If a Party does not comply with any instruction within the time stated by the Adjudicator,
the Adjudicator may continue the adjudication and make a decision based upon the
information and evidence received.
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(7) A communication between a Party and the Adjudicator is communicated to the other
Party at the same time.
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(8) If the Adjudicator’s decision includes assessment of additional cost or delay caused to the
Subcontractor, the assessment is made in the same way as a compensation event is assessed.
SUBCONTRACT DATA

If the Adjudicator’s decision changes an amount notified as due, the date on which payment
of the changed amount becomes due is seven days after the date of the decision.

(9) The Adjudicator decides the dispute and informs the Parties of the decision and reasons
within twenty-eight days of the dispute being referred. This period may be extended by up
to fourteen days with the consent of the referring Party or by any other period agreed by
the Parties. The Adjudicator may in the decision allocate the Adjudicator’s fees and expenses
between the Parties.

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 Resolving and Avoiding Disputes

(10) Unless and until the Adjudicator has informed the Parties of the decision, the Parties
proceed as if the matter disputed was not disputed.

(11) If the Adjudicator does not inform the Parties of the decision within the time provided by
CORE CLAUSES

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the subcontract, the Parties and the Adjudicator may agree to extend the period for making
a decision. If they do not agree to an extension, either Party may act as if the Adjudicator has
resigned.

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(12) The Adjudicator’s decision is binding on the Parties unless and until revised by the
tribunal and is enforceable as a matter of contractual obligation between the Parties and
not as an arbitral award. The Adjudicator’s decision is final and binding if neither Party has
notified the other within the times required by the subcontract that it is dissatisfied with a

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matter decided by the Adjudicator and intends to refer the matter to the tribunal.

(13) The Adjudicator may, within five days of giving the decision to the Parties, correct the

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decision to remove a clerical or typographical error arising by accident or omission.
MAIN OPTION CLAUSES

The tribunal W2.4 (1) A Party does not refer any dispute under or in connection with the subcontract to
the tribunal unless it has first been decided by the Adjudicator in accordance with the

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subcontract.

(2) If, after the Adjudicator makes a decision, a Party is dissatisfied, that Party may notify the

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other Party of the matter which is disputed and state that it intends to refer the disputed
matter to the tribunal. The dispute may not be referred to the tribunal unless this notification
is given within four weeks of the notification of the Adjudicator’s decision.
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(3) The tribunal settles the dispute referred to it. The tribunal has the power to reconsider any
decision of the Adjudicator and to review and revise any action or inaction of the Contractor
SECONDARY OPTION CLAUSES

related to the dispute. A Party is not limited in tribunal proceedings to the information,
O

evidence or arguments put to the Adjudicator.

(4) If the tribunal is arbitration, the arbitration procedure, the place where the arbitration is to
C

be held and the method of choosing the arbitrator are those stated in the Subcontract Data.
AE

(5) A Party does not call the Adjudicator as a witness in tribunal proceedings.
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COST COMPONENTS

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SUBCONTRACT DATA

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 Secondary Option Clauses

Secondary Option Clauses

CORE CLAUSES
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OPTION X1: PRICE ADJUSTMENT FOR INFLATION (USED ONLY WITH OPTIONS A, B, C AND D)

on
Defined terms X1
X1.1 (a) The Base Date Index (B) is the latest available index before the base date.

(b) The Latest Index (L) is the latest available index before the date of assessment of an
amount due.

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(c) The Price Adjustment Factor (PAF) at each date of assessment of an amount due is the

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total of the products of each of the proportions stated in the Subcontract Data multiplied by

MAIN OPTION CLAUSES

(L – B)/B for the index linked to it.

Price Adjustment X1.2 If an index is changed after it has been used in calculating a PAF, the calculation is not

oj
Factor changed. The PAF calculated at the last assessment date before the Subcontract Completion
Date for the whole of the subcontract works is used for calculating an amount for price
adjustment after that date.

Price adjustment
Options A and B
X1.3
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Each amount due includes an amount for price adjustment which is the sum of

• the change in the Price for Work Done to Date since the last assessment of the amount
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due multiplied by the PAF and

• the amount for price adjustment included in the previous amount due.

SECONDARY OPTION CLAUSES

O

Price adjustment X1.4 Each time the amount due is assessed, an amount for price adjustment is added to the
Options C and D total of the Prices which is the change in the Price for Work Done to Date since the last
C

assessment of the amount due multiplied by (PAF/(1+PAF)).

Compensation X1.5 The Defined Cost for compensation events is assessed using the
AE

events
• Defined Cost at base date levels for amounts calculated from rates stated in the
Subcontract Data for people and Equipment and

• Defined Cost current at the dividing date used in assessing the compensation event,
adjusted to the base date by dividing by one plus the PAF for the last assessment of the
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amount due before the dividing date, for other amounts.

COST COMPONENTS
OPTION X2: CHANGES IN THE LAW
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Changes in the law X2

X2.1 A change in the law of the country in which the Site is located is a compensation event if it
occurs after the Subcontract Date. If the effect of a compensation event which is a change in
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the law is to reduce the total Defined Cost, the Prices are reduced.
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OPTION X3: MULTIPLE CURRENCIES (USED ONLY WITH OPTIONS A AND B)

SUBCONTRACT DATA

Multiple currencies X3
X3.1 The Subcontractor is paid in currencies other than the currency of the subcontract for the
items or activities listed in the Subcontract Data. The exchange rates are used to convert
from the currency of the subcontract to other currencies.
X3.2 Payments to the Subcontractor in currencies other than the currency of the subcontract do
not exceed the maximum amounts stated in the Subcontract Data. Any excess is paid in the
currency of the subcontract.

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 Secondary Option Clauses

OPTION X4: ULTIMATE HOLDING COMPANY GUARANTEE

Ultimate holding X4
company guarantee X4.1 If the Subcontractor is a subsidiary of another company, the Subcontractor gives to the
CORE CLAUSES

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Contractor a guarantee of the Subcontractor’s performance from the ultimate holding
company of the Subcontractor in the form set out in the Subcontract Scope. If the guarantee
was not given by the Subcontract Date, it is given to the Contractor within four weeks of the

on
Subcontract Date.
X4.2 The Subcontractor may propose an alternative guarantor who is also owned by the ultimate
holding company for acceptance by the Contractor. A reason for not accepting the guarantor
is that its commercial position is not strong enough to carry the guarantee.

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OPTION X5: SECTIONAL COMPLETION
MAIN OPTION CLAUSES

Sectional X5
Completion X5.1 In these conditions of subcontract, unless stated as the whole of the subcontract works, each

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reference and clause relevant to

• the subcontract works,

•
Completion and

Subcontract Completion Date

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applies, as the case may be, to either the whole of the subcontract works or any section of
SECONDARY OPTION CLAUSES

the subcontract works.

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OPTION X6: BONUS FOR EARLY COMPLETION

C

Bonus for early X6

AE

Completion X6.1 The Subcontractor is paid a bonus calculated at the rate stated in the Subcontract Data for
each day from the earlier of

• Completion and

• the date on which the Contractor takes over the subcontract works
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until the Subcontract Completion Date.

COST COMPONENTS

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OPTION X7: DELAY DAMAGES

Delay damages X7
X7.1 The Subcontractor pays delay damages at the rate stated in the Subcontract Data from the
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Subcontract Completion Date for each day until the earlier of

• Completion and
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• the date on which the Contractor takes over the subcontract works.
X7.2 If the Subcontract Completion Date is changed to a later date after delay damages have
SUBCONTRACT DATA

been paid, the Contractor repays the overpayment of damages with interest. Interest is
assessed from the date of payment to the date of repayment and the date of repayment is
an assessment date.
X7.3 If the Contractor takes over a part of the subcontract works before Completion, the delay
damages are reduced from the date on which the part is taken over. The Contractor assesses
the benefit of taking over the part of the subcontract works as a proportion of the benefit
of taking over the whole of the subcontract works not previously taken over. The delay
damages are reduced in this proportion.

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 Secondary Option Clauses

OPTION X8: UNDERTAKINGS TO THE CLIENT OR OTHERS

Undertakings to X8
the Client or Others X8.1 The Subcontractor gives undertakings to Others and undertakings to the Client as stated in

CORE CLAUSES
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the Subcontract Data.
X8.2 The undertakings to Others and undertakings to the Client are in the form set out in the

on
Subcontract Scope.
X8.3 The Contractor sends the undertakings to the Subcontractor for signature. The Subcontractor
signs the undertakings, and returns them to the Contractor within two weeks.

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OPTION X9: TRANSFER OF RIGHTS

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Transfer of rights X9

MAIN OPTION CLAUSES

X9.1 The Contractor owns the Subcontractor’s rights over material prepared for the design of
the subcontract works except as stated otherwise in the Subcontract Scope. The Contractor

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may transfer these rights to the Client. The Subcontractor obtains other rights for the Client
or Contractor as stated in the Subcontract Scope and obtains from a Subsubcontractor
equivalent rights for the Client or Contractor over the material prepared by the

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Subsubcontractor. The Subcontractor provides to the Contractor or the Client the documents
which transfer these rights to the Contractor or Client.
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OPTION X10: INFORMATION MODELLING

SECONDARY OPTION CLAUSES

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Defined terms X10

X10.1 (1) The Information Execution Plan is the information execution plan or is the latest
Information Execution Plan accepted by the Contractor. The latest Information Execution Plan
C

accepted by the Contractor supersedes the previous Information Execution Plan.

(2) Project Information is information provided by the Subcontractor which is used to create
AE

or change the Information Model.

(3) The Information Model is the electronic integration of Project Information and similar
information provided by the Client, Contractor and other Information Providers and is in the
form stated in the Information Model Requirements.
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(4) The Information Model Requirements are the requirements identified in the Subcontract
Scope for creating or changing the Information Model.

COST COMPONENTS
(5) Information Providers are the people or organisations who contribute to the Information
Model and are identified in the Information Model Requirements.
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Collaboration X10.2 The Subcontractor collaborates with other Information Providers as stated in the Information
Model Requirements.
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Early warning X10.3 The Subcontractor and the Contractor give an early warning by notifying the other as soon
as either becomes aware of any matter which could adversely affect the creation or use of
the Information Model.
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Information X10.4 (1) If an Information Execution Plan is not identified in the Subcontract Data, the
Execution Plan Subcontractor submits a first Information Execution Plan to the Contractor for acceptance
SUBCONTRACT DATA

within the period stated in the Subcontract Data.

(2) Within two weeks of the Subcontractor submitting an Information Execution Plan for
acceptance, the Contractor notifies the Subcontractor of the acceptance of the Information
Execution Plan or the reasons for not accepting it. A reason for not accepting an Information
Execution Plan is that

• it does not comply with the Information Model Requirements or

• it does not allow the Subcontractor to Provide the Subcontract Works.

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 Secondary Option Clauses

If the Contractor does not notify acceptance or non-acceptance within the time allowed, the
Subcontractor may notify the Contractor of that failure. If the failure continues for a further
one week after the Subcontractor’s notification, it is treated as acceptance by the Contractor
of the Information Execution Plan.
CORE CLAUSES

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(3) The Subcontractor submits a revised Information Execution Plan to the Contractor for
acceptance

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• within the period for reply after the Contractor has instructed it to and

• when the Subcontractor chooses to.

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(4) The Subcontractor provides the Project Information in the form stated in the Information
Model Requirements and in accordance with the accepted Information Execution Plan.

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Compensation X10.5 If the Information Execution Plan is altered by a compensation event, the Subcontractor
MAIN OPTION CLAUSES

events includes the alterations to the Information Execution Plan in the quotation for the
compensation event.

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Use of the X10.6 The Client owns the Information Model and the Subcontractor’s rights over Project
Information Model Information except as stated otherwise in the Information Model Requirements. The
Subcontractor obtains from a Subsubcontractor equivalent rights for the Client over

Liability X10.7
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information prepared by the Subsubcontractor. The Subcontractor provides to the Contractor
the documents which transfer these rights to the Client.

(1) The following are Client’s and Contractor’s liabilities.

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• A fault or error in the Information Model other than a Defect in the Project Information.
SECONDARY OPTION CLAUSES

• A fault in information provided by Information Providers other than the Subcontractor.

(2) The Subcontractor is not liable for a fault or error in the Project Information unless it failed
C

to provide the Project Information using the skill and care normally used by professionals
providing information similar to the Project Information.
AE

(3) The Subcontractor provides insurance for claims made against it arising out of its failure
to provide the Project Information using the skill and care normally used by professionals
providing information similar to the Project Information. The minimum amount of this
insurance is as stated in the Subcontract Data. This insurance provides cover from the
subcontract starting date until the end of the period stated in the Subcontract Data.
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COST COMPONENTS

OPTION X11: TERMINATION BY THE CONTRACTOR

Termination by the X11

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Contractor X11.1 The Contractor may terminate the Subcontractor’s obligation to Provide the Subcontract
Works for a reason not identified in the Termination Table by notifying the Subcontractor.
X11.2 If the Contractor terminates for a reason not identified in the Termination Table the
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termination procedures followed are P1 and P2 and the amounts due on termination are A1,
A2 and A4.
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OPTION X12: MULTIPARTY COLLABORATION (NOT USED WITH OPTION X20)

SUBCONTRACT DATA

Identified and X12

defined terms X12.1 (1) Partners are those who have a contract in connection with the subject matter of the
subcontract which includes this multiparty collaboration Option or equivalent. The Promoter
is a Partner.

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 Secondary Option Clauses

(2) The Schedule of Partners is a list of the Partners which is in the document the Subcontract
Data states it is in and Partners subsequently added by agreement of the Partners. It sets out
the objectives of the Partners and includes targets for performance.

CORE CLAUSES
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(2) An Own Contract is a contract between two Partners.

(4) The Core Group comprises the Partners selected to take decisions on behalf of the

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Partners.

(5) The Schedule of Core Group Members is a list of the Partners forming the Core Group.

(4) Partnering Information is information which specifies how the Partners work together and

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is either in the documents which the Subcontract Data states it is in or in an instruction given
in accordance with the subcontract.

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(5) A Key Performance Indicator is an aspect of performance for which a target is stated in

MAIN OPTION CLAUSES

the Schedule of Partners

Actions X12.2 (1) The Partners collaborate with each other to achieve the Promoter’s objective stated in

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the Subcontract Data and the objectives of every other Partner stated in the Schedule of
Partners.

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(2) Each Partner nominates a representative to act for it in dealings with other Partners.

(3) The Core Group acts and takes decisions on behalf of the Partners on those matters
stated in the Partnering Information.
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(4) The Partners select the members of the Core Group. The Core Group decides how they
will work and decides the dates when each member joins and leaves the Core Group. The

SECONDARY OPTION CLAUSES

O

Promoter’s representative leads the Core Group unless stated otherwise in the Partnering
Information.
C

(5) The Core Group keeps the Schedule of Core Group Members and the Schedule of
Partners up to date and issues copies of them to the Partners each time either is revised.
AE

(6) This Option does not create a legal partnership between Partners who are not one of the
Parties in the subcontract.

Working together X12.3 (1) The Partners work together as stated in the Partnering Information and in a spirit of
mutual trust and co-operation.
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(2) A Partner may ask another Partner to provide information which it needs to carry out the
work in its Own Contract and the other Partner provides it.

COST COMPONENTS
(3) Each Partner gives an early warning to the other Partners when it becomes aware of
any matter that could affect the achievement of another Partner’s objectives stated in the
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Schedule of Partners.

(4) The Partners use common information systems as set out in the Partnering Information.
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(5) A Partner implements a decision of the Core Group by issuing instructions in accordance
with its Own Contracts.

(6) The Core Group may give an instruction to the Partners to change the Partnering
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Information. Each such change to the Partnering Information is a compensation event which
may lead to reduced Prices.
SUBCONTRACT DATA

(7) The Core Group prepares and maintains a timetable showing the proposed timing of the
contributions of the Partners. The Core Group issues a copy of the timetable to the Partners
each time it is revised. The Subcontractor changes its programme if it is necessary to do so in
order to comply with the revised timetable. Each such change is a compensation event which
may lead to reduced Prices.

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 Secondary Option Clauses

(8) A Partner gives advice, information and opinion to the Core Group and to other Partners
when asked to do so by the Core Group. This advice, information and opinion relates to work
that another Partner is to carry out under its Own Contract and is given fully, openly and
objectively. The Partners show contingency and risk allowances in information about costs,
CORE CLAUSES

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prices and timing for future work.

(9) A Partner informs the Core Group before subsubcontracting any work.

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Incentives X12.4 (1) A Partner is paid the amount stated in the Schedule of Partners if the target stated for
a Key Performance Indicator is improved upon or achieved. Payment of the amount is due
when the target has been improved upon or achieved and is made as part of the amount
due in the Partner’s Own Contract.

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(2) The Promoter may add a Key Performance Indicator and associated payment to the
Schedule of Partners but may not delete or reduce a payment stated in the Schedule of

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Partners.
MAIN OPTION CLAUSES

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OPTION X13: PERFORMANCE BOND

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Performance bond X13
X13.1 The Subcontractor gives the Contractor a performance bond, provided by a bank or insurer
which the Contractor has accepted, for the amount stated in the Subcontract Data and in the
form set out in the Subcontract Scope. A reason for not accepting the bank or insurer is that
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its commercial position is not strong enough to carry the bond. If the bond was not given
by the Subcontract Date, it is given to the Contractor within four weeks of the Subcontract
SECONDARY OPTION CLAUSES

Date.
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OPTION X14: ADVANCED PAYMENT TO THE SUBCONTRACTOR

C

Advanced X14
AE

payment X14.1 The Contractor makes an advanced payment to the Subcontractor of the amount stated in
the Subcontract Data. The advanced payment is included in the assessment made at the first
assessment date or, if an advanced payment bond is required, at the next assessment date
after the Contractor receives the advanced payment bond.
X14.2 The advanced payment bond is issued by a bank or insurer which the Contractor has
on

accepted. A reason for not accepting the proposed bank or insurer is that its commercial
position is not strong enough to carry the bond. The bond is for the amount of the
COST COMPONENTS

advanced payment which the Subcontractor has not repaid and is in the form set out in
the Subcontract Scope. Delay in making the advanced payment in accordance with the
subcontract is a compensation event.
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X14.3 The advanced payment is repaid to the Contractor by the Subcontractor in instalments of
the amount stated in the Subcontract Data. An instalment is included in each amount due
assessed after the period stated in the Subcontract Data has passed until the advanced
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payment has been repaid.

OPTION X15: THE SUBCONTRACTOR’S DESIGN

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SUBCONTRACT DATA

The X15
Subcontractor’s X15.1 The Subcontractor is not liable for a Defect which arose from its design unless it failed to
design carry out that design using the skill and care normally used by professionals designing works
similar to the subcontract works.
X15.2 If the Subcontractor corrects a Defect for which it is not liable under the subcontract it is a
compensation event.

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 Secondary Option Clauses

X15.3 The Subcontractor may use the material provided by it under the subcontract for other work
unless

• the ownership of the materials has been given to the Contractor or

CORE CLAUSES
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• it is stated otherwise in the Subcontract Scope.
X15.4 The Subcontractor retains copies of drawings, specifications, reports and other documents

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which record the Subcontractor’s design for the period for retention. The copies are retained
in the form stated in the Subcontract Scope.
X15.5 The Subcontractor provides insurance for claims made against it arising out of its failure
to use the skill and care normally used by professionals designing works similar to the

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subcontract works. The minimum amount of this insurance is as stated in the Subcontract
Data. This insurance provides cover from the subcontract starting date until the end of the
period stated in the Subcontract Data.

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MAIN OPTION CLAUSES

X15.6 Before the subcontract starting date and on each renewal of the insurance policy until the
defects date, the Subcontractor submits to the Contractor for acceptance a certificate which
states that the insurance required by this clause is in force.

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After the defects date and on each renewal of the insurance policy until the end of
the period stated in the Subcontract Data for which insurance is to be maintained, the

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Subcontractor submits to the Contractor for acceptance a certificate which states that the
insurance required by this clause is in force. The certificate is signed by the Subcontractor’s
insurer or insurance broker.
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The Contractor accepts the certificate if the insurance complies with this clause and if the
insurer’s commercial position is strong enough to carry the insured liability.

SECONDARY OPTION CLAUSES

O

OPTION X16: RETENTION

C

Retention X16
X16.1 After the Price for Work Done to Date has reached the retention free amount, an amount is
AE

retained in each amount due. Until the earlier of

• Completion of the whole of the subcontract works and

• the date on which the Contractor takes over the whole of the subcontract works
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the amount retained is the retention percentage applied to the excess of the Price for Work
Done to Date above the retention free amount.

COST COMPONENTS
X16.2 The amount retained is halved
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• in the next assessment made after Completion of the whole of the subcontract works or

• in the next assessment after the Contractor has taken over the whole of the subcontract
works if this is before Completion of the whole of the subcontract works.
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The amount retained remains at this amount until the date when the Defects Certificate
is due to be issued. No amount is retained in the assessments made after the Defects
Certificate is due to be issued.
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X16.3 If stated in the Subcontract Data or agreed by the Contractor, the Subcontractor may give
the Contractor a retention bond, provided by a bank or insurer which the Contractor has
SUBCONTRACT DATA

accepted, for the total amount to be retained and in the form set out in the Subcontract
Scope. A reason for not accepting the bank or insurer is that its commercial position is not
strong enough to carry the bond. Any amount retained after the Subcontractor gives the
Contractor a retention bond is paid to the Subcontractor in the next assessment.

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 Secondary Option Clauses

OPTION X17: LOW PERFORMANCE DAMAGES

Low performance X17

damages X17.1 If a Defect included in the Defects Certificate shows low performance with respect to a
CORE CLAUSES

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performance level stated in the Subcontract Data, the Subcontractor pays the amount of low
performance damages stated in the Subcontract Data.

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OPTION X18: LIMITATION OF LIABILITY

Limitation of X18

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liability X18.1 Each of the limits to the Subcontractor’s liability in this clause apply if a limit is stated in the
Subcontract Data.

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X18.2 The Subcontractor’s liability to the Contractor for the Contractor’s indirect or consequential
MAIN OPTION CLAUSES

loss is limited to the amount stated in the Subcontract Data.

X18.3 For any one event, the liability of the Subcontractor to the Contractor for loss of or damage

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to the Client’s or Contractor’s property is limited to the amount stated in the Subcontract
Data.
X18.4 The Subcontractor’s liability to the Contractor for Defects due to its design which are not

X18.5
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listed on the Defects Certificate is limited to the amount stated in the Subcontract Data.
The Subcontractor’s total liability to the Contractor for all matters arising under or in
connection with the subcontract, other than the excluded matters, is limited to the amount
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stated in the Subcontract Data and applies in contract, tort or delict and otherwise to the
extent allowed under the law of the subcontract.
SECONDARY OPTION CLAUSES

The excluded matters are amounts payable by the Subcontractor as stated in the subcontract
for
C

• loss of or damage to the Client’s or the Contractor’s property,

• delay damages if Option X7 applies,

AE

• low performance damages if Option X17 applies and

• Subcontractor’s share if Option C or Option D applies.

X18.6 The Subcontractor is not liable to the Contractor for a matter unless details of the matter are
notified to the Subcontractor before the end of liability date.
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COST COMPONENTS

OPTION X20: KEY PERFORMANCE INDICATORS (NOT USED WITH OPTION X12)
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Incentives X20
X20.1 A Key Performance Indicator is an aspect of performance by the Subcontractor for which a
target is stated in the Incentive Schedule. The Incentive Schedule is the incentive schedule
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unless later changed in accordance with the subcontract.

X20.2 From the subcontract starting date until the Defects Certificate has been issued, the
Subcontractor reports to the Contractor its performance against each of the Key
Performance Indicators. Reports are provided at the intervals stated in the Subcontract Data
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and include the forecast final measurement against each indicator.

X20.3 If the Subcontractor’s forecast final measurement against a Key Performance Indicator will
SUBCONTRACT DATA

not achieve the target stated in the Incentive Schedule, it submits to the Contractor its
proposals for improving performance.
X20.4 The Subcontractor is paid the amount stated in the Incentive Schedule if the target stated for
a Key Performance Indicator is improved upon or achieved. Payment of the amount is due
when the target has been improved upon or achieved.
X20.5 The Contractor may add a Key Performance Indicator and associated payment to the
Incentive Schedule but may not delete or reduce a payment stated in the Incentive Schedule.

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 Secondary Option Clauses

OPTION X21: WHOLE LIFE COST

Whole life cost X21

X21.1 The Subcontractor may propose to the Contractor that the Subcontract Scope is changed in

CORE CLAUSES
ly
order to reduce the cost of operating and maintaining an asset.
X21.2 If the Contractor and Client are prepared to consider the change, the Subcontractor submits

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a quotation which comprises

• a detailed description,

• the forecast cost reduction to the Client of the asset over its whole life,

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• an analysis of the resulting risks to the Client,

• the proposed changes to the Prices and

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MAIN OPTION CLAUSES

• a revised programme showing any changes to the Subcontract Completion Date and Key
Dates.

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X21.3 The Contractor consults with the Client and the Subcontractor about a quotation. The
Contractor replies within the period for reply. The reply is acceptance of the quotation or
the reasons for not accepting it. The Contractor may give any reason for not accepting the

X21.4
quotation.

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The Contractor does not change the Subcontract Scope as proposed by the Subcontractor
unless the Subcontractor’s quotation is accepted.
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X21.5 When a quotation to reduce the costs of operating and maintaining an asset is accepted
the Contractor changes the Subcontract Scope, the Prices, the Subcontract Completion

SECONDARY OPTION CLAUSES

Date and the Key Dates accordingly and accepts the revised programme. The change to the
O

Subcontract Scope is not a compensation event.

C
AE
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COST COMPONENTS
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SUBCONTRACT DATA

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 SECONDARY OPTION CLAUSES

Option Y
CORE CLAUSES

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OPTION Y(UK)1: PROJECT BANK ACCOUNT

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Project Bank Y(UK)1
Account

Definitions Y1.1 (1) The Authorisation is a document authorising the project bank to make payments to the
Contractor, the Subcontractor and Subcontract Named Suppliers.

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(2) Subcontract Named Suppliers are named suppliers and other Suppliers who have signed

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the Joining Deed.
MAIN OPTION CLAUSES

(3) Project Bank Account is the account established by the Contractor and used to make
payments to the Subcontractor and Subcontract Named Suppliers.

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(4) A Supplier is a person or organisation who has a contract to

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• construct or install part of the subcontract works,

• provide a service necessary to Provide the Subcontract Works or

• supply Plant and Materials for the subcontract works.

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(5) Trust Deed is an agreement which contains provisions for administering the Project Bank
SECONDARY OPTION CLAUSES

Account and is in the document which the Subcontract Data states it is in.
O

(6) Joining Deed is an agreement under which the Supplier joins the Trust Deed and is in the
document which the Subcontract Data states it is in.
C

Named Suppliers Y1.2 The Subcontractor includes in its contracts with Subcontract Named Suppliers the
arrangements in the subcontract for the operation of the Project Bank Account and Trust
AE

Deed. The Subcontractor notifies the Subcontract Named Suppliers of the details of the
Project Bank Account and the arrangements for payment of amounts due under their
contracts.
Y1.3 The Subcontractor submits proposals for adding a Supplier to the Subcontract Named
Suppliers to the Contractor for acceptance. A reason for not accepting is that the addition
on

of the Supplier does not comply with the Subcontract Scope. The Contractor, the Client, the
Subcontractor and the Supplier sign the Joining Deed after acceptance.
COST COMPONENTS

Payments Y1.4 The Subcontractor shows in the application for payment the amounts due to Subcontract
Named Suppliers in accordance with their contracts.
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Y1.5 The Contractor prepares the Authorisation, setting out the sums due to Subcontract Named
Suppliers as assessed by the Contractor and to the Subcontractor for the balance of the
payment due under the subcontract. The Contractor notifies the Subcontractor of the sums
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due to the Subcontractor and Subcontract Named Suppliers stated in the Authorisation.
Y1.6 The Client and the Contractor make payment into the project bank of the amount stated in
the Authorisation.
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Y1.7 The Subcontractor and Subcontract Named Suppliers receive payment from the Project Bank
Account of the sums set out in the Authorisation as soon as practicable after the Project
SUBCONTRACT DATA

Bank Account receives payment.

Y1.8 A payment which is due from the Subcontractor to the Contractor is not made through the
Project Bank Account.

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 SECONDARY OPTION CLAUSES

Effect of Y1.9 Payments made from the Project Bank Account are treated as payments from the Contractor
payment to the Subcontractor in accordance with the subcontract or from the Subcontractor or
Subsubcontractor to Subcontract Named Suppliers in accordance with their contracts as
applicable. A delay in payment due to a failure of the Subcontractor to comply with the

CORE CLAUSES
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requirements of this clause is not treated as late payment under the subcontract.

If the Subcontractor is identified as a Named Supplier in the Contract Data for the main

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contract
Trust Deed Y1.10 The Client, the Contractor, the Subcontractor and named suppliers sign the Trust Deed
before the first assessment date in the contract between the Contractor and the Client.

If the Subcontractor is added as a Named Supplier after the Contract Date in the main contract

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Joining Deed Y1.11 The Client, the Contractor, the Subcontractor and the Named Supplier sign the Joining Deed
before the first assessment date.

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MAIN OPTION CLAUSES

Termination Y1.12 If the Contractor issues a termination certificate, no further payment is made into the Project
Bank Account.

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SECONDARY OPTION CLAUSES

O
C
AE
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COST COMPONENTS
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SUBCONTRACT DATA

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 SECONDARY OPTION CLAUSES

OPTION Y(UK)2: THE HOUSING GRANTS, CONSTRUCTION AND REGENERATION ACT 1996

The Housing Y(UK)2

Grants,
CORE CLAUSES

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Construction and
Regeneration Act
1996

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Definitions Y2.1 In this Option, time periods stated in days exclude Christmas Day, Good Friday and bank
holidays.

Dates for Y2.2 The date on which a payment becomes due is fourteen days after the assessment date. The

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payment date on which the final payment becomes due is

• if the Contractor makes an assessment after the issue of a Defect Certificate, five weeks

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after the issue of the Defects Certificate,
MAIN OPTION CLAUSES

• if the Contractor does not make an assessment after the issue of a Defects Certificate,
one week after the Subcontractor issues its assessment or

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• if the Contractor has issued a termination certificate, fourteen weeks after the issue of
the certificate.

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The final date for payment is fourteen days after the date on which payment becomes due or
a different period for payment if stated in the Subcontract Data.
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The Contractor’s certificate is the notice of payment specifying the amount due at the
payment due date (the notified sum, which might be zero) and stating the basis on which the
SECONDARY OPTION CLAUSES

amount was calculated. If the Contractor does not make an assessment after the issue of a
O

Defects Certificate, the Subcontractor’s assessment is the notice of payment.

Notice of Y2.3 If either Party intends to pay less than the notified sum, it notifies the other Party not later
C

intention to pay than seven days (the prescribed period) before the final date for payment by stating the
less amount considered to be due and the basis on which that sum is calculated. A Party does not
AE

withhold payment of an amount due under the subcontract unless it has notified its intention
to pay less than the notified sum as required by the subcontract.
Y2.4 If the Contractor terminates for one of reasons R1 to R15, R18 or R22 and a certified
payment has not been made at the date of the termination certificate, the Contractor makes
the certified payment unless
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• it has notified the Subcontractor in accordance with the subcontract that it intends to
pay less than the notified sum or
COST COMPONENTS

• the termination is for one of reasons R1 to R10 and the reason occurred after the
last date on which it could have notified the Subcontractor in accordance with the
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subcontract that it intends to pay less than the notified sum.

Suspension of Y2.4 If the Subcontractor exercises its right under the Housing Grants, Construction and
performance Regeneration Act 1996 as amended by the Local Democracy, Economic Development and
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Construction Act 2009 to suspend performance, it is a compensation event.

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SUBCONTRACT DATA

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 SECONDARY OPTION CLAUSES

OPTION Y(UK)3: THE CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

Third party rights Y(UK)3

Y3.1 A beneficiary may enforce the terms of the subcontract stated in the Subcontract Data under

CORE CLAUSES
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the Contracts (Rights of Third Parties) Act 1999.
Y3.2 Other than the Parties or a beneficiary, no person can enforce any of the terms of the

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subcontract under the Contracts (Rights of Third Parties) Act 1999.
Y3.3 If a beneficiary is identified by class or description and not as a named person or
organisation, the Contractor notifies the Subcontractor of the name of the beneficiary once
it has been identified.

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OPTION Z: ADDITIONAL CONDITIONS OF SUBCONTRACT

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MAIN OPTION CLAUSES

Additional Z1
conditions of Z1.1 The additional conditions of subcontract stated in the Subcontract Data are part of the

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subcontract subcontract.

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SECONDARY OPTION CLAUSES

O
C
AE
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COST COMPONENTS
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SUBCONTRACT DATA

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 Schedule of Cost Components

Schedule of Cost Components

CORE CLAUSES

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This schedule is part of these conditions of subcontract only when Option C, D or E is used.

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An amount is included

• only in one cost component and

• only if it is incurred in order to Provide the Subcontract Works.

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People 1 The following components of

• the cost of people who are directly employed by the Subcontractor and whose normal

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place of working is within the Working Areas and
MAIN OPTION CLAUSES

• the cost of people who are directly employed by the Subcontractor and whose normal
place of working is not within the Working Areas but who are working in the Working

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Areas, proportionate to the time they spend in the Working Areas.
11 Wages, salaries and amounts paid by the Subcontractor for people paid according to the

12
time worked on the subcontract.

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Payments related to work on the subcontract and made to people for

(a) bonuses and incentives

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(b) overtime
SECONDARY OPTION CLAUSES

(c) working in special circumstances

(d) special allowances

C

(e) absence due to sickness and holidays

AE

(f) severance.
13 Payments made in relation to people in accordance their employment contract for

(a) travel

(b) subsistence and lodging

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(c) relocation
COST COMPONENTS

(d) medical examinations

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(e) passports and visas

(f) travel insurance

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(g) items (a) to (f) for dependants

(h) protective clothing

(i) contributions, levies or taxes imposed by law

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(j) pensions and life assurance

SUBCONTRACT DATA

(k) death benefit

(l) occupational accident benefits

(m) medical aid and health insurance

(n) a vehicle

(o) safety training.

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 Schedule of Cost Components

14 The following components of the cost of people who are not directly employed by the
Subcontractor but are paid for by the Subcontractor according to the time worked while they
are within the Working Areas.

CORE CLAUSES
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Amounts paid by the Subcontractor.

Equipment 2 The following components of the cost of Equipment which is used within the Working Areas.

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21 Payments for the hire or rent of Equipment not owned by

• the Subcontractor,

• the Subcontractor’s ultimate holding company or

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• by a company with the same ultimate holding company

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at the hire or rental rate multiplied by the time for which the Equipment is required.

MAIN OPTION CLAUSES

22 Payments for Equipment which is not listed in the Subcontract Data but is

• owned by the Subcontractor,

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• purchased by the Subcontractor under a hire purchase or lease agreement or

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hired by the Subcontractor from the Subcontractor’s ultimate holding company or from
a company with the same ultimate holding company

at open market rates multiplied by the time for which the Equipment is required.
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23 Payments for Equipment purchased for work included in the subcontract listed with a time-
related on cost charge, in the Subcontract Data, of

SECONDARY OPTION CLAUSES

O

• the change in value over the period for which the Equipment is required and

• the time-related on cost charge stated in the Subcontract Data for the period for which
C

the Equipment is required.

AE

The change in value is the difference between the purchase price and either the sale price
or the open market sale price at the end of the period for which the Equipment is required.
Interim payments of the change in value are made at each assessment date. A final payment
is made in the next assessment after the change in value has been determined.

If the Contractor agrees, an additional item of Equipment may be assessed as if it had been
on

listed in the Subcontract Data.

24 Payments for special Equipment listed in the Subcontract Data. These amounts are the rates

COST COMPONENTS
stated in the Subcontract Data multiplied by the time for which the Equipment is required.

If the Contractor agrees, an additional item of special Equipment may be assessed as if it had
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been listed in the Subcontract Data.

25 Payments for the purchase price of Equipment which is consumed.
26 Unless included in the hire or rental rates, payments for
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• transporting Equipment to and from the Working Areas other than for repair and
maintenance
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• erecting and dismantling Equipment and

SUBCONTRACT DATA

• constructing, fabricating or modifying Equipment as a result of a compensation event.

27 Payments for purchase of materials used to construct or fabricate Equipment.
28 Unless included in the hire rates, the cost of operatives is included in the cost of people.

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 Schedule of Cost Components

Plant and Materials 3 The following components of the cost of Plant and Materials.
31 Payments for

• purchasing Plant and Materials,

CORE CLAUSES

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• delivery to and removal from the Working Areas,

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• providing and removing packaging and

• samples and tests.

32 Cost is credited with payments received for disposal of Plant and Materials unless the cost is
disallowed.

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Subsubcontractors 4 The following components of the cost of Subsubcontractors.

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41 Payments to Subsubcontractors for work which is subsubcontracted without taking into
MAIN OPTION CLAUSES

account any amounts paid to or retained from the Subsubcontractor by the Subcontractor,
which would result in the Contractor paying or retaining the amount twice.

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Charges 5 The following components of the cost of charges paid or received by the Subcontractor.
51 Payments for the provision and use in the Working Areas of

•
water,

gas, pr
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• electricity,
SECONDARY OPTION CLAUSES

• telephone and
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• internet.
52 Payments to public authorities and other properly constituted authorities of charges which
C

they are authorised to make in respect of the subcontract works.

53 Payments for
AE

(a) cancellation charges arising from a compensation event

(b) buying or leasing land or buildings within the Working Areas

(c) compensation for loss of crops or buildings

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(d) royalties
COST COMPONENTS

(e) inspection certificates

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(f) charges for access to the Working Areas

(g) facilities for visits to the Working Areas by Others

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(h) consumables and equipment provided by the Subcontractor for the Contractor’s offices.
54 Payments made and received by the Subcontractor for the removal from Site and disposal or
sale of materials from excavation and demolition.
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Manufacture and 6 The following components of the cost of manufacture and fabrication of Plant and Materials
fabrication by the Subcontractor which are
SUBCONTRACT DATA

• wholly or partly designed specifically for the subcontract works and

• manufactured or fabricated outside the Working Areas.

61 Amounts calculated by multiplying each of the rates for people in the Subcontract Data by
the total time appropriate to that rate spent on manufacture and fabrication of Plant and
Materials outside the Working Areas.

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 Schedule of Cost Components

Design 7 The following components of the cost of design of the subcontract works and Equipment
done outside the Working Areas.
71 Amounts calculated by multiplying each of the rates for people in the Subcontract Data
by the total time appropriate to that rate spent on design of the subcontract works and

CORE CLAUSES
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Equipment outside the Working Areas.
72 The cost of travel to and from the Working Areas for the categories of design people listed in

on
the Subcontract Data.

Insurance 8 The following are deducted from cost

• the cost of events for which the subcontract requires the Subcontractor to insure and

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• other costs paid to the Subcontractor by insurers.

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MAIN OPTION CLAUSES

oj
pr
M

SECONDARY OPTION CLAUSES

O
C
AE
on

COST COMPONENTS
se
ru
Fo

SUBCONTRACT DATA

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 Short Schedule of Cost Components

Short Schedule of Cost Components

CORE CLAUSES

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This schedule is part of these conditions of subcontract only when Option A or B is used. An

on
amount is included

• only in one cost component and

• only if it is incurred in order to Provide the Subcontract Works.

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People 1 The following components of the cost of

• people who are directly employed by the Subcontractor and whose normal place of

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working is within the Working Areas,
MAIN OPTION CLAUSES

• people who are directly employed by the Subcontractor and whose normal place of
working is not within the Working Areas but who are working in the Working Areas,

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proportionate to the time they spend working in the Working Areas and

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• people who are not directly employed by the Subcontractor but are paid for by it
according to the time worked while they are within the Working Areas.
11 Amounts calculated by multiplying each of the People Rates by the total time appropriate to
that rate spent within the Working Areas.
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Equipment 2 The following components of the cost of Equipment which is used within the Working Areas.
SECONDARY OPTION CLAUSES

21 Amounts for Equipment which is in the published list stated in the Subcontract Data. These
O

amounts are calculated by applying the percentage adjustment for listed Equipment stated in
the Subcontract Data to the rates in the published list and by multiplying the resulting rate by
C

the time for which the Equipment is required.

22 Amounts for Equipment listed in the Subcontract Data which is not in the published list
stated in the Subcontract Data. These amounts are the rates stated in the Subcontract Data
AE

multiplied by the time for which the Equipment is required.

23 The time required is expressed in hours, days, weeks or months consistent with the list
of items of Equipment in the Subcontract Data or with the published list stated in the
Subcontract Data.
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24 Unless the item is in the published list and the rate includes the cost component, payments
for
COST COMPONENTS

• transporting Equipment to and from the Working Areas other than for repair and
maintenance,
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• erecting and dismantling Equipment and

• constructing, fabricating or modifying Equipment as a result of a compensation event.

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25 Unless the item is in the published list and the rate includes the cost component, the
purchase price of Equipment which is consumed.
26 Unless included in the rate in the published list, the cost of operatives is included in the cost
of people.
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27 Amounts for Equipment which is neither in the published list, stated in the Subcontract Data
SUBCONTRACT DATA

nor listed in the Subcontract Data, at competitively tendered or open market rates, multiplied
by the time for which the Equipment is required.

Plant and Materials 3 The following components of the cost of Plant and Materials.

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 Short Schedule of Cost Components

31 Payments for

• purchasing Plant and Materials,

CORE CLAUSES
• delivery to and removal from the Working Areas,

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• providing and removing packaging and

on
• samples and tests.
32 Cost is credited with payments received for disposal of Plant and Materials unless the cost is
disallowed.

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Subsubcontractors 4 The following components of the cost of Subsubcontractors.
41 Payments to Subsubcontractors for work which is subsubcontracted.

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Charges 5 The following components of the cost of charges paid or received by the Subcontractor.

MAIN OPTION CLAUSES

51 Payments for the provision and use in the Working Areas of

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• water,

•
gas,

electricity,

telephone and
pr
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• internet.

SECONDARY OPTION CLAUSES

O

52 Payments to public authorities and other properly constituted authorities of charges which
they are authorised to make in respect of the subcontract works.
53 Payments for
C

(a) cancellation charges arising from a compensation event

AE

(b) buying or leasing land or buildings within the Working Areas

(c) compensation for loss of crops or buildings

(d) royalties
on

(e) inspection certificates

COST COMPONENTS
(f) charges for access to the Working Areas

(g) facilities for visits to the Working Areas by Others

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(h) consumables and equipment provided by the Subcontractor for the Contractor’s offices.
54 Payments made and received by the Subcontractor for the removal from Site and disposal or
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sale of materials from excavation and demolition.

Manufacture and 6 The following components of the cost of manufacture and fabrication of Plant and Materials
fabrication by the Subcontractor which are
Fo

• wholly or partly designed specifically for the subcontract works and

SUBCONTRACT DATA

• manufactured or fabricated outside the Working Areas.

61 Amounts calculated by multiplying each of the rates for people in the Subcontract Data by
the total time appropriate to that rate spent on manufacture and fabrication of Plant and
Materials outside the Working Areas.

Design 7 The following components of the cost of design of the subcontract works and Equipment
done outside the Working Areas.

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 Short Schedule of Cost Components

71 Amounts calculated by multiplying each of the rates for people in the Subcontract Data
by the total time appropriate to that rate spent on design of the subcontract works and
Equipment outside the Working Areas.
72 The cost of travel to and from the Working Areas for the categories of design people listed in
CORE CLAUSES

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the Subcontract Data.

Insurance 8 The following are deducted from cost:

on
• the cost of events for which the subcontract requires the Subcontractor to insure and

• other costs paid to the Subcontractor by insurers.

ts
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MAIN OPTION CLAUSES

oj
pr
M
SECONDARY OPTION CLAUSES

O
C
AE
on
COST COMPONENTS

se
ru
Fo
SUBCONTRACT DATA

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 Subcontract Data

Subcontract Data

CORE CLAUSES
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PART ONE – DATA PROVIDED BY THE CONTRACTOR

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Completion of the data in full, according to the Options chosen, is essential to create a
complete contract.

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1 General
The conditions of subcontract are the core clauses and the clauses for the following main

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Option, the Option for resolving and avoiding disputes and secondary Options of the NEC4

MAIN OPTION CLAUSES

Engineering and Construction Subcontract June 2017 (with amendments January 2019)

Main Option      Option for resolving and avoiding disputes

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Secondary Options

pr
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The works in the
main contract are

SECONDARY OPTION CLAUSES

O

The subcontract
C

works are
AE

The Contractor is

  Name

   Address for communications

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   Address for electronic communications COST COMPONENTS

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The Client in the main contract is

  Name
ru

   Address for communications

Fo

SUBCONTRACT DATA

   Address for electronic communications

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 Subcontract Data

The Project Manager in the main contract is

  Name

   Address for communications

CORE CLAUSES

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   Address for electronic communications

The Supervisor in the main contract is

ts
  Name

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   Address for communications
MAIN OPTION CLAUSES

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   Address for electronic communications

The Subcontract Scope is in pr

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SECONDARY OPTION CLAUSES

O
C

The Site Information is in

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The boundaries of the site are

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COST COMPONENTS

The language of the subcontract is

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The law of the subcontract is the law of

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The period for reply by the Contractor is   except that

• The period for reply for        is

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• The period for reply for        is

SUBCONTRACT DATA

The period for reply by the Subcontractor is except that

• The period for reply for        is

• The period for reply for        is

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The following matters will be included in the Early Warning Register

CORE CLAUSES
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on
Early warning meetings are to be held at intervals no longer than

ts
ec
2 The Subcontractor’s main responsibilities

MAIN OPTION CLAUSES

If the Contractor has The key dates and conditions to be met are
identified work which is set

oj
to meet a stated condition condition to be met key date
by a key date
(1)

(2)

(3) pr
M

SECONDARY OPTION CLAUSES

If Option C, D or E is used The Subcontractor prepares forecasts of the total Defined
O

Cost for the subcontract works at intervals no longer than

C

3 Time
AE

The subcontract starting date is

The subcontract access dates are

part of the Site date

on

(1)

COST COMPONENTS
(2)

(3)
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The Subcontractor submits revised programmes at intervals

ru

no longer than
Fo

If the Contractor has decided The subcontract completion date for the whole of the
the subcontract completion subcontract works is
SUBCONTRACT DATA

date for the whole of the

subcontract works

Taking over the subcontract The Contractor is / is not willing to take over the subcontract
works before the Subcontract works before the Subcontract Completion Date.
Completion Date (Delete as applicable)

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 Subcontract Data

If no programme is identified The period after the Subcontract Date within which the
in part two of the subcontractor is to submit a first programme for
Subcontract Data acceptance is
CORE CLAUSES

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4 Quality management

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The period after the Subcontract Date within which the
Subcontractor is to submit a quality policy statement and
quality plan is

The period between Completion of the whole of the

ts
subcontract works and the defects date is

The defect correction period is    except that

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MAIN OPTION CLAUSES

• The defect correction period for is

• The defect correction period for is

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5 Payment

The currency of the subcontract is the pr

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The assessment interval is
SECONDARY OPTION CLAUSES

The interest rate is % per annum (not less than 2) above the
O

rate of the bank

C

If the period in which The period within which payments are made is
AE

payments are made is not

four weeks and Y(UK)2 is
not used
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If Option C or D is used The Subcontractor’s share percentages and the share ranges are
COST COMPONENTS

share range Subcontractor’s share

percentage
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less than % %

from % to % %
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from % to % %

greater than % %
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If Option C, D or E is used The exchange rates are those published in  

SUBCONTRACT DATA

on (date)

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 Subcontract Data

6 Compensation events

The place where weather is to be recorded is

CORE CLAUSES
The weather measurements to be recorded for each calendar month are

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• the cumulative rainfall (mm)

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• the number of days with rainfall more than 5 mm

• the number of days with minimum air temperature less than 0 degrees Celsius

• the number of days with snow lying at hours GMT

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and these measurements:

ec

MAIN OPTION CLAUSES

oj
pr
The weather measurements are supplied by
M
The weather data are the records of past weather measurements for each calendar month

SECONDARY OPTION CLAUSES

which were recorded at
O

and which are available from

C

Where no recorded data are Assumed values for the ten year weather return weather data for each weather
AE

available measurement for each calendar month are

on

COST COMPONENTS
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If Option A or B is used The value engineering percentage is 50%, unless another percentage     %
is stated here, in which case it is
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If Option B or D is used The method of measurement is

Fo

If there are additional These are additional compensation events

compensation events
SUBCONTRACT DATA

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 Subcontract Data

8 Liabilities and insurance

If there are additional These are additional Client’s liabilities
Client’s liabilities
(1)
CORE CLAUSES

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(2)

on
(3)

If there are additional These are additional Contractor’s liabilities

ts
Contractor’s liabilities
(1)

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(2)
MAIN OPTION CLAUSES

(3)

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The minimum amount of cover for insurance against loss of or damage to property (except
the subcontract works, Plant and Materials and Equipment) and liability for bodily injury to or
death of a person (not an employee of the Subcontractor) arising from or in connection with

event is
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the Subcontractor Providing the Subcontract Works for any one

The minimum amount of cover for insurance against death of or bodily injury to employees
M
of the Subcontractor arising out of and in the course of their employment in connection with
the subcontract for any one event is
SECONDARY OPTION CLAUSES

If the Client or Contractor is The insurance against loss of or damage to the subcontract works, Plant and Materials is to
C

to provide Plant and Materials include cover for Plant and Materials provided by the Client or Contractor for an amount of
AE

If the Client or Contractor The Client or Contractor provides these insurances from the Insurance Table
is to provide any of the
insurances stated in the (1) Insurance against
Insurance Table
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Minimum amount of cover is

The deductibles are

COST COMPONENTS

(2) Insurance against

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Minimum amount of cover is

The deductibles are

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(3) Insurance against

Minimum amount of cover is

Fo

The deductibles are

SUBCONTRACT DATA

If additional insurances are The Client or Contractor provides these additional insurances
to be provided
(1) Insurance against

Minimum amount of cover is

The deductibles are

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 Subcontract Data

(2) Insurance against

Minimum amount of cover is

CORE CLAUSES
The deductibles are

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(3) Insurance against

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Minimum amount of cover is

The deductibles are

The Subcontractor provides these additional insurances

ts
(1) Insurance against

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Minimum amount of cover is

MAIN OPTION CLAUSES

The deductibles are

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(2) Insurance against

Minimum amount of cover is

The deductibles are

(3) Insurance against pr

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Minimum amount of cover is

SECONDARY OPTION CLAUSES

The deductibles are
O
C

Resolving and avoiding disputes

AE

The tribunal is

If the tribunal is arbitration The arbitration procedure is

The place where arbitration is

on

to be held is

COST COMPONENTS
The person or organisation who will choose an arbitrator if the Parties cannot agree a choice
or if the arbitration procedure does not state who selects an arbitrator is
se
ru

The Senior Representatives of the Contractor are

  Name (1)
Fo

   Address for communications

SUBCONTRACT DATA

   Address for electronic communications

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 Subcontract Data

  Name (2)

   Address for communications

CORE CLAUSES

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on
   Address for electronic communications

The Adjudicator in the subcontract is

  Name

ts
   Address for communications

ec
MAIN OPTION CLAUSES

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   Address for electronic communications

The main contract Adjudicator is

  Name

   Address for communications pr

M
SECONDARY OPTION CLAUSES

   Address for electronic communications

C

The Adjudicator nominating body is

AE

X1: Price adjustment for inflation (used only with Options A, B, C and D)
If Option X1 is used The proportions used to calculate the Price Adjustment Factor are

0.    linked to the index for  

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0.
COST COMPONENTS

0.
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0.

0.
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0.

0.    non-adjustable    

1.00
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The base date for indices is

SUBCONTRACT DATA

These indices are

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X3: Multiple currencies (used only with Options A and B)

If Option X3 is used The Contractor will pay for the items or activities listed below in the currencies stated

items and activities other currency total maximum

CORE CLAUSES
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payment in the currency

on
ts
The exchange rates are those published in

on (date)

ec

MAIN OPTION CLAUSES

X5: Sectional Completion

oj
If Option X5 is used The subcontract completion date for each section of the subcontract works is

pr
section description subcontract completion date

(1)

(2)
M
(3)

SECONDARY OPTION CLAUSES

O

(4)
C

X6: Bonus for early Completion

AE

If Option X6 is used without The bonus for the whole of the subcontract works is per day
Option X5

If Option X6 is used with The bonus for each section of the subcontract works is
on

Option X5
section description amount per day

COST COMPONENTS
(1)
se

(2)

(3)
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(4)

The bonus for the remainder of the subontract works is

Fo

X7: Delay damages

SUBCONTRACT DATA

If Option X7 is used without Delay damages for Completion of the whole of the subcontract works are per day
Option X5

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 Subcontract Data

If Option X7 is used with Delay damages for each section of the subcontract works are
Option X5

section description amount per day

CORE CLAUSES

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(1)

(2)

on
(3)

(4)

ts
The delay damages for the remainder of the subcontract works are

ec
MAIN OPTION CLAUSES

X8: Undertakings to the Client or Others

If Option X8 is used The undertakings to Others are

oj
provided to

The undertaking to the Client are

pr
M
subcontract works
SECONDARY OPTION CLAUSES

O
C
AE

X10: Information modelling

If Option X10 is used
on

If no information execution The period after the Subcontract Date within which the Subcontractor is to submit a first
plan is identified in part two Information Execution Plan for acceptance is
COST COMPONENTS

of the Subcontract Data

The minimum amount of insurance cover for claims made against the Subcontractor arising
out of its failure to use the skill and care normally used by professionals providing information
se

similar to the Project Information is, in respect of each claim

The period following Completion of the whole of the subcontract works or earlier
termination for which the Subcontractor maintains insurance for claims made against it
ru

arising out of its failure to use the skill and care is

X12: Multiparty collaboration (not used with Option X20)

Fo

If Option X12 is used The Promoter is

SUBCONTRACT DATA

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The Schedule of Partners is in

CORE CLAUSES
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The Promoter’s objective is

ts
ec

MAIN OPTION CLAUSES

oj
The Partnering Information is in

pr
M

SECONDARY OPTION CLAUSES

O
C
AE

X13: Performance bond

If Option X13 is used The amount of the performance bond is

on

X14: Advanced payment to the Subcontractor

COST COMPONENTS
If Option X14 is used The amount of the advanced payment is
se

The period after the Subcontract Date from which the

Subcontractor repays the instalments in assessments is

The instalments are

ru

(either an amount or a percentage of the payment otherwise due)

Fo

Advanced payment bond An advanced payment bond is / is not reqired. (Delete as applicable)
SUBCONTRACT DATA

X15: The Subcontractor’s design

If Option X15 is used The period for retention following Completion of the whole of the subcontract works or
earlier termination is

The minimum amount of insurance cover for claims made against the Subcontractor arising
out of its failure to use the skill and care normally used by professionals designing works
similar to the subcontract works is, in respect of each claim

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 Subcontract Data

The period following Completion of the whole of the subcontract works or earlier
termination for which the Subcontractor maintains insurance for claims made against it
arising out of its failure to use the skill and care is
CORE CLAUSES

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X16: Retention

on
If Option X16 is used The retention free amount is

The retention percentage is %

ts
Retention bond The Subcontractor may / may not give the Contractor a retention bond. (Delete as

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applicable)
MAIN OPTION CLAUSES

X17: Low performance damages

oj
If Option X17 is used The amounts for low performance damages are

amount

for pr performance level

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for
SECONDARY OPTION CLAUSES

for
O

for
C

X18: Limitation of liability

AE

If Option X18 is used The Subcontractor’s liability to the Contractor for indirect or
consequential loss is limited to

For any one event, the Subcontractor’s liability to the

Contractor for loss of or damage to the Client’s or
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Contractor’s property is limited to

The Subcontractor’s liability for Defects due to its design

COST COMPONENTS

which are not listed on the Defects Certificate is limited to

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The Subcontractor’s total liability to the Contractor for all

matters arising under or in connection with the subcontract,
other than excluded matters, is limited to
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The end of liability date is years after the Completion of the whole of the
subcontract works
Fo

X20: Key Performance Indicators (not used with Option X12)

SUBCONTRACT DATA

If Option X20 is used The incentive schedule for Key Performance Indicators is in

A report of performance against each Key Performance

Indicator is provided at intervals of months

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 Subcontract Data

Y(UK)1: Project Bank Account

If Option Y(UK)1 is used The Trust Deed is in

CORE CLAUSES
The Joining Deed is in

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on
Y(UK)2: The Housing Grants, Construction and Regeneration Act 1996
If Option Y(UK)2 is used and The period for payment is days after the date on which payment becomes due
the final date for payment

ts
is not fourteen days after
the date on which payment
becomes due

ec

MAIN OPTION CLAUSES

Y(UK)3: The Contracts (Rights of Third Parties) Act 1999

oj
If Option Y(UK)3 is used term beneficiary

pr
M

SECONDARY OPTION CLAUSES

O

If Y(UK)3 is used with term beneficiary

C

Y(UK)1 the following entry The provisions of Options Named Suppliers

is added to the table for Y(UK)1
AE

Y(UK)3

Z: Additional conditions of subcontract

If Option Z is used The additional conditions of subcontract are
on

COST COMPONENTS
se
ru
Fo

SUBCONTRACT DATA

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 Subcontract Data

PART TWO – DATA PROVIDED BY THE SUBCONTRACTOR

Completion of the data in full, according to the Options chosen, is essential to create a
complete subcontract.
CORE CLAUSES

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1 General

on
The Subcontractor is

  Name

ts
   Address for communications

ec
MAIN OPTION CLAUSES

   Address for electronic communications

oj
pr
The fee percentage is            %

The subcontract working areas are

M
SECONDARY OPTION CLAUSES

The key persons are

Name (1)
C

Job
AE

Responsibilities

Qualifications

Experience
on

Name (2)
COST COMPONENTS

Job

Responsibilities
se

Qualifications

Experience
ru

The following matters will be included in the Early Warning Register

Fo
SUBCONTRACT DATA

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2 The Subcontractor’s main responsibilities

If the Subcontractor is to The Subcontract Scope provided by the Subcontractor for its
provide Subcontract Scope design is in

CORE CLAUSES
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for its design

on
3 Time
If a programme is to be The programme identified in the Subcontract Data is
identified in the Subcontract

ts
Data

ec

MAIN OPTION CLAUSES

If the Subcontractor is to The subcontract completion date for the whole of the
decide the subcontract subcontract works is
completion date for the

oj
whole of the subcontract
works

5 Payment pr
M
If Option A or C is used The activity schedule is

SECONDARY OPTION CLAUSES

O

If Option B or D is used The bill of quantities is

C

If Option A, B, C or D is used The tendered total of the Prices is

AE

Resolving and avoiding disputes

The Senior Representatives of the Subcontractor are
on

  Name (1)

COST COMPONENTS
   Address for communications
se

   Address for electronic communications

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  Name (2)

   Address for communications

Fo

SUBCONTRACT DATA

   Address for electronic communications

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 Subcontract Data

X10: Information modelling

If Option X10 is used
CORE CLAUSES

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If an information execution The information execution plan identified in the Subcontract
plan is to be identified in the Data is

on
Subcontract Data

Y(UK)1: Project Bank Account

ts
If Option Y(UK)1 is used named suppliers are

ec
MAIN OPTION CLAUSES

oj
Data for the Schedule of Cost Components (used only with Options C, D or E)
The listed items of Equipment purchased for work on the contract, with an on cost charge,
are

Equipment pr
time-related on cost charge per time period
M
SECONDARY OPTION CLAUSES

O
C

The rates for special Equipment are

AE

Equipment rate
on
COST COMPONENTS

The rates for Defined Cost of manufacture and fabrication outside the Working Areas by the
se

Subcontractor are

category of person rate

ru
Fo
SUBCONTRACT DATA

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 Subcontract Data

The rates for Defined Cost of design outside the Working Areas are

category of person rate

CORE CLAUSES
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The categories of design people whose travelling expenses to and from the Working Areas

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are included as a cost of design of the subcontract works and Equipment done outside the
Working Areas are

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MAIN OPTION CLAUSES

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Data for the Short Schedule of Cost Components (used only with Options A or B)

SECONDARY OPTION CLAUSES

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The people rates are

category of person unit rate

C
AE

The published list of Equipment is the edition current at the

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Subcontract Date of the list published by

COST COMPONENTS
The percentage for adjustment for Equipment in the published
list is % (state plus or minus)
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The rates for other Equipment are

Equipment rate
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SUBCONTRACT DATA

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The rates for Defined Cost of manufacture and fabrication outside the Working Areas by the
Subcontractor are

category of person rate

CORE CLAUSES

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on
ts
The rates for Defined Cost of design outside the Working Areas are

category of person rate

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MAIN OPTION CLAUSES

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The categories of design people whose travelling expenses to and from the Working Areas
are included in Defined Cost are
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SECONDARY OPTION CLAUSES

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C
AE
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COST COMPONENTS

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ru
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SUBCONTRACT DATA

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Index

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Index by clause numbers (Option clauses indicated by their letters, main clause heads by bold numbers).

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Terms in italics are identified in Subcontract Data, and defined terms have capital initial letters.

acceleration 36 bankruptcy 91.1

Accepted programme base date X1.1(a), X1.5
access to Site 33.1 Base Date Index (B)

ts
Activity Schedule 55.1, 55.3–4 definition X1.1(a)
assessing compensation events 63.5 Price Adjustment Factor (PAF) X1.1(c)
compensation events 60.1(2–5), 60.1(19)
Bill of Quantities 56

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definition 11.2(1)
Prevention 19.1 assessing compensation events 63.15
quotations for compensation events 62.2 compensation events 60.4, 60.6–7
reasons for termination 91.7 definition 11.2(22)
revising the programme 32.1 Price for Work Done to Date 11.2(28)

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see also programme Prices 11.2(31)
Total of the Prices 11.2(32)
accepting Defects 45
bill of quantities 11.2(22)

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access
Site 33 bodily harm 81.1
to work being done 27.2 bonus for early Completion X6
actions 10, X12.2 boundaries of the site 11.2(14)
Activity Schedule 55
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assessing compensation events 63.14 changes in the law X2
definition 11.2(21)
Prices 11.2(30) Client
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programme 31.4 additional costs 25.3

compensation events 60.1(5), 60.1(14)
activity schedule 11.2(21) Completion 11.2(2)
additional conditions of subcontract 26.2 correcting Defects 44.3–4
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additional costs 25.3, 93.2, W1.3(8), W2.3(7) Information Model X10.1(3), X10.6
insurance by Client or Contractor 86
adjudication W1.3, W2.3 insurance cover 83.1–2
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Adjudicator W1.2, W2.2 Joining Deed Y1.10

adjudication W1.3(1–12), W2.3(1–12) limitations of liability X18.3, X18.5
final assessment 53.2–3 Others 11.2(10)
Others 11.2(10) payment(s) Y1.6
payment(s) 51.3 programme 31.2
resolving disputes W1(1), W1(4), W2.1(1), W2.1(4) reasons for termination 91.3
tribunal W1.4(1–4), W1.4(6), W2.4(1–3), W2.4(5) recovery of costs 82.2
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Adjudicator nominating body W1.2(3), W2.2(5) Subcontract Named Suppliers Y1.3

Subcontractor’s design 22.1
advanced payment X14 Subcontractor’s liabilities 81.1
ambiguity Subcontractor’s proposal 16.1–2
assessing compensation events 63.10 take over 35.2
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Bill of Quantities 60.6–7 transfer of rights X9.1

compensation events 60.6 Trust Deed Y1.10
requirements for instructions 17.1 undertakings to the Client X8
Site Information 60.3 whole life costs X21.2–3
amount due see also Client’s liabilities
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assessing 50 Client’s liabilities 80, X10.7

final assessment 53 insurance by Client or Contractor 86.3
payment on termination 93.1–2 collaboration X10.2
reasons for termination 91.4 see also multiparty collaboration; working together
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assessing compensation events 63 communications 13

assessing the amount due 50 Defined Cost 52.2
assessment date compensation events 60, X1.5, X10.5
assessing the amount due 50.1–4 assessing compensation events 63
payment(s) 51.1–2 Contractor’s assessment 64
assessment interval 50.1 implementing compensation events 66
notifying compensation events 61
Assignment 28 quotations for compensation events 62
Authorisation see also proposed instructions
definition Y1.1(1) completed activity/work, definition 11.2(27), 11.2(28), 11.2(32)
payment(s) Y1.5–7

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Completion instructions 27.3

acceleration 36.1 instructions to restart/start work 34.1
assessing compensation events 63.5 instructions to stop or not to start work 34.1
bonus for early Completion X6.1 insurance by Client or Contractor 86
compensation events 60.1(15), 60.1(19), 60.5 insurance cover 83.1–2
date of 30.2 insurance policies 84.1

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definition 11.2(2) Joining Deed Y1.10
delay damages X7.1, X7.3 Key Date(s) 14.4
notifying compensation events 61.2, 61.4 key person 24.1–2

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Prevention 19.1 limitations of liability X18.2–6
programme 31.2 marking Equipment, Plant and Materials outside Working
Provide the Subcontract Works 20.3 Areas 71.1
reasons for termination 91.7 notifying compensation events 61.1–7
retention X16.1–2 objects and materials within the Site 73.1

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revising the programme 32.2 other responsibilities 27.2, 27.2–3
sectional completion X5.1 Parties 11.2(11)
starting work 30.1 payment on termination 93.1–2, 93.4, 93.5–6, 93.6
Subcontractor’s share 54.3, 54.7 payment(s) 51.1–3, Y1.5–6, Y1.8

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take over 35.1–2 performance bond X13.1
Condition Prevention 19.1
programme 31.2 Price for Work Done to Date 11.2(29)
Subcontract Data 11.2(9) procedures on termination 92.1–2

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programme 31.1, 31.2–3
condition(s), definition 11.2(9) Project Bank Account Y1.1(1), Y1.1(3)
conditions of subcontract proposed instructions 65.1–3

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activity schedule 11.2(21) Provide the Subcontract Works 20.2–3
assessing compensation events 63.3 quality management system 40.2–3
bill of quantities 11.2(22) quotations for compensation events 62.1, 62.3–6
communications 13.3, 13.8 reasons for termination 91.2–4, 91.6–9
compensation events 60.1(14) recovery of costs 82.1–2
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implementing compensation events 66.2 removing Equipment 72.1
interpretation 12.3 requirements for instructions 17.1–2
notifying compensation events 61.4 resolving disputes W1(3), W2.1(3)
sectional completion X5.1 retention X16.1–3
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subsubcontracting 26.2 revising the programme 32.2

termination 90.3 searching for and notifying Defects 43.1–2
Contractor 14 Subcontract Named Suppliers Y1.3
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acceleration 36.1, 36.3 Subcontract Scope 14.4

Accepted programme 11.2(1) Subcontractor 14.1–4
accepting Defects 45.1–2 if Subcontractor does not insure 85.1
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access to Site 33.1 Subcontractor’s design 21.2, 22.1, X15.3

access to work being done 27.2 Subcontractor’s liabilities 81.1
Activity Schedule 55.3 Subcontractor’s proposal 16.1–3
additional costs 25.3 Subcontractor’s share 54.1, 54.3–4, 54.5, 54.7–8
adjudication W1.3(1–2), W1.3(5–6), W2.3(3b–4) subsubcontracting 26.2–3, 26.4
advanced payment X14.1–3 take over 35.1–3
assessing compensation events 63.2–4, 63.6–7, 63.11, 63.12, termination 90.1, 90.3, Y1.11
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63.13, 63.15–16, 64.1–4 termination by Contractor X11

assessing the amount due 50.1–2, 50.4–6, 50.9 tests and inspections 40.2–3, 40.5–6, 41.7, 42.1
assessment 64 title to Plant and Materials 70
Assignment 28.1 transfer of rights X9.1
bonus for early Completion X6.1 tribunal W1.4(4), W2.4(3)
Trust Deed Y1.10
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breach of contract 60.1(18)

communications 13.3–6, 13.8 ultimate holding company guarantee X4.1–2
compensation events 60.1(1–11), 60.1(14–18), 60.1(20), 60.6 uncorrected Defects 46.1–2
Completion 11.2(2) undertakings to the Client or Others X8.3
completion date 30.2 whole life costs X21.1–5
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correcting Defects 44.1, 44.3–4 see also Contractor’s liabilities

Corrupt Act 11.2(3) Contractor’s assessment 64
Defect(s) 11.2(4) Contractor’s certificate 51.1
Defects Certificate 11.2(5)
Defined Cost 52.3 Contractor’s liabilities 80, X10.7
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delay damages X7.1–3 insurance by Client or Contractor 86.3

Disallowed Cost 11.2(25) Contractor’s title to Plant and Materials 70
disclosure 29.1–2 Core Group
early warning X10.3 actions X12.2(3–5)
early warning meeting 15.2 definition X12.1(4)
Early Warning Register 11.2(6), 15.1–2, 15.4 Schedule of Core Group Members X12.1(5)
effect of payment Y1.9 working together X12.3(5–9)
Equipment 23.1
final assessment 53.1–2 correcting Defects 44
implementing compensation events 66.1 compensation events 60.1(9)
incentives X20.2–3, X20.5 Disallowed Cost 11.2(25)
Information Execution Plan X10.1, X10.4(1–3) Corrupt Act(s) 18
Information Model X10.1(3), X10.6 definition 11.2(3)

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reasons for termination 91.8 delivery, tests and inspections before 42

costs design
additional costs 25.3 Equipment 23
Disallowed Cost 11.2(25) see also Subcontractor’s design
recovery of costs 82 Disallowed Cost, definition 11.2(25)

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whole life costs X21
see also Defined Cost disclosure 29
currency of the subcontract 50.7, 50.8, 51.1, X3.1–2 Dispute Reference Table W1(1), W1(4)

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Dispute Resolution Service Contract W1.2(1), W2.2(3)
damages disputes, resolving disputes W1, W2
delay damages X7, X18.5
low performance damages X17, X18.5 early warning
defect correction period assessing compensation events 63.7

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correcting Defects 44.2–4 Disallowed Cost 11.2(25)
uncorrected Defects 46.1 information modelling X10.3
Defect(s) early warning meeting 15.2–3

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accepting Defects 45 Early Warning Register 15
Client’s and Contractor’s liabilities 80.1 definition of 11.2(6)
compensation events 60.1(1), 60.1(9–10) early warning meeting 15.2–3
Completion 11.2(2)
effect of payment Y1.9

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Defects Certificate 11.2(5)
definition 11.2(4) end of liability date X18.6
Disallowed Cost 11.2(25) Equipment

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limitations of liability X18.4 Client’s and Contractor’s liabilities 80.1
low performance damages X17.1 compensation events X1.5
notifying Defects 32.1 Corrupt Act(s) 18.2
searching for and notifying 43 definition 11.2(7)
Subcontractor’s design X15.1–2 design 23
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tests and inspections 40.3–5, 41.7 marking Equipment outside Working Areas 71.1
uncorrected Defects 46 payment on termination 93.2
see also correcting Defects procedures on termination 92.2
Defects Certificate 44.3 programme 31.2
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assessing the amount due 50.1 removing Equipment 72

definition 11.2(5) Subcontractor’s liabilities 81.1
final assessment 53.1 Subsubcontractor 11.2(19)
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incentives X20.2 exchange rates 50.7, 50.8, X3.1

insurance cover 83.3
limitations of liability X18.4
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low performance damages X17.1 Fee

notifying compensation events 61.7 assessing compensation events 63.1
retention X16.2 assessing the amount due 50.7, 50.8
Defined Cost 52.1
defects date
definition 11.2(8)
correcting Defects 44.3
payment on termination 93.2
Defects Certificate 11.2(5)
Price for Work Done to Date 11.2(29)
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insurance policies 84.1

searching for and notifying Defects 43.1–2 fee percentage
uncorrected Defects 46.2 definition 11.2(8)
payment on termination 93.2
Defined Cost 52
assessing compensation events 63.1, 63.3–4, 63.9, 63.12, final assessment 53
63.13 forecasts
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assessing the amount due 50.7, 50.8, 50.9 additional costs 93.2
changes in the law X2.1 compensation events 61.6
compensation events 60.4, X1.5 cost reduction X21.2
definition 11.2(23), 11.2(24) Defined Cost 11.2(29), 11.2(32), 20.3, 63.1, 93.2
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Fee 11.2(8) delay Completion 91.7

notifying compensation events 61.2, 61.4 final measurement X20.2–3
payment on termination 93.1–2, 93.4, 93.5 Price for Work Done to Date 54.3, 54.7
Price for Work Done to Date 11.2(29) Provide the Subcontract Works 20.3
Provide the Subcontract Works 20.2
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defined terms 11, X10.1(1), X12.1, Y1.1

guarantee, ultimate holding company guarantee X4
delay damages X7, X18.5
delay(s)
health and safety requirements
in advanced payment X14.2
programme 31.2
assessing compensation events 63.5
reasons for termination 91.3
compensation events 60.1(11), 60.5
Subcontractor 27.4
damages X7, X18.5
early warning 15.1 holding company guarantee X4
payment(s) 51.3, Y1.9
quotations for compensation events 62.2 implementing compensation events 66
reasons for termination 91.7
revising the programme 32.1 Incentive Schedule
tests and inspections 41.5, 60.1(11) definition X20.1

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incentives X20.3–5 Key Performance Indicator

incentive schedule X20.1 definition X12.1(5), X20.1
incentives X12.4(1–2), X20.2–5
incentives X12.4, X20
key person 24.1–2
inconsistency
assessing compensation events 63.10

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Bill of Quantities 60.6–7 language of the subcontract 13.1
compensation events 60.6 Latest Index (L)
requirements for instructions 17.1

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definition X1.1(b)
Site Information 60.3 Price Adjustment Factor (PAF) X1.1(c)
Information Execution Plan X10.4 law of the subcontract 12.2, X18.5
compensation events X10.5
definition X10.1(1) liabilities see Client’s liabilities; Contractor’s liabilities; limitations of
liability; Subcontractor’s liabilities
information execution plan X10.1

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limitations of liability X18
Information Model
definition X10.1(3) low performance damages X17, X18.5
early warning X10.3

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Information Model Requirements X10.1(4) marking Equipment, Plant and Materials outside Working Areas 71
Information Providers X10.1(5)
Project Information X10.1(2), X10.7(1) materials see Plant and Materials
use of X10.6 method of measurement 60.6

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Information Model Requirements assessing compensation events 63.15
collaboration X10.2 multiparty collaboration X12
definition X10.1(4) multiple currencies X3

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Information Execution Plan X10.4(2), X10.4(4)
Information Model X10.1(3)
Information Providers X10.1(5) named suppliers Y1.1(2), Y1.10
Information Providers notifying
collaboration X10.2 acceleration 36.1
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definition X10.1(5) Defect(s) 32.1
Information Model X10.1(3) notifying compensation events 61
liabilities X10.7(1)
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inspections see tests and inspections

object of (historical) value
instructions to restart/start work 34.1 compensation events 60.1(6)
instructions to stop/not to start work 34 objects and materials within the Site 73.1
C

compensation events 60.1(4) objects and materials within the Site 73

insurance option W1 53.2
AE

by Client or Contractor 86
option W2 53.2
insurance cover 83
insurance policies 84 other responsibilities 27
Project Information X10.7(3) Others
if Subcontractor does not insure 85 access to work being done 27.2
Subcontractor’s design X15.5 Client’s and Contractor’s liabilities 80.1
Insurance Table 83.2–3 compensation events 60.1(5)
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Completion 11.2(2)
interest, payment(s) 51.3–4
definition 11.2(10)
interest rate, payment(s) 51.4 other responsibilities 27.1
interpretation, legal 12 programme 31.2
reasons for termination 91.3
recovery of costs 82.2
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Joining Deed Y1.10, p.59 Subcontractor 27.1

definition Y1.1(6) Subcontractor’s liabilities 81.1
named suppliers Y1.1(2) undertakings to Others X8
Subcontract Named Suppliers Y1.3 working with 25.1, 25.3
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Own Contract
key date 11.2(9) definition X12.1(2)
Key Date(s) working together X12.3(2), X12.3(5), X12.3(8)
acceleration 36.1–3
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accepting Defects 45.2 Parties W1.2(4)

additional costs 25.3 actions 10.1–2
assessing compensation events 63.5–6, 63.10–11 adjudication W1.3(1–4), W1.3(6–7), W2.3(1–3), W2.3(4–6),
compensation events 60.1(4), 60.5 W2.3(8–12)
completing work 30.2 Adjudicator W1.2(1), W1.2(3), W2.2(1), W2.2(3), W2.2(5),
Contractor 14.4 W2.2(7–8)
definition 11.2(9) assessing the amount due 50.1
Early Warning Register 15.1 Assignment 28.1
implementing compensation events 66.2 compensation events 60.1(19)
notifying compensation events 61.2–3, 61.4 to contract 12.3–4
programme 31.2 definition 11.2(11)
quotations for compensation events 62.2 Disallowed Cost 11.2(25)
whole life costs X21.5 disclosure 29.1–2

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final assessment 53.2–3 Subcontractor’s share 54.1–4, 54.5–8

insurance cover 83.3 Prices
insurance policies 84.3 acceleration 36.2–3
Prevention 19.1 accepting Defects 45.2
reasons for termination 91.1, 91.5 Activity Schedule 55.4
recovery of costs 82.3

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assessing compensation events 63.1–4, 63.10, 63.12, 63.13–14,
resolving disputes W1(2), W2.1(1–2) 63.14, 63.15
tax 51.5 changes in the law X2.1
termination 90.1–2

on
compensation events 60.4
tribunal W1.4(1–4), W1.4(6), W2.4(1–3), W2.4(5) definition 11.2(30), 11.2(31)
Partnering Information implementing compensation events 66.2
actions X12.2(3–4) notifying compensation events 61.3–4
definition X12.1(4) payment on termination 93.2, 93.4
working together X12.3(1), X12.3(4), X12.3(6) price adjustment X1.4

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Partners quotations for compensation events 62.2
actions X12.2(1–4), X12.2(6) Subcontractor’s share 54.1–4
Core Group X12.1(4) whole life costs X21.2, X21.5

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definition X12.1(1) working together X12.3(6–7)
incentives X12.4(1) see also Price for Work Done to Date
Own Contract X12.1(2) procedures on termination 92
Partnering Information X12.1(4) programme

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Schedule of Core Group Members X12.1(5) accepting 31
Schedule of Partners X12.1(2) revising the programme 32
working together X12.3(1–9) see also Accepted programme

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payment(s) 51, Y1.4–8 project bank
advanced payment X14 Authorisation Y1.1(1)
effect of payment Y1.9 payment(s) Y1.6
incentives X12.4(1–2)
on termination 93 Project Bank Account Y(UK)1
definition Y1.1(3)
M
people 24 effect of payment Y1.9
People Rates payment(s) Y1.7–8
assessing compensation events 63.16 Subcontract Named Suppliers Y1.2
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definition 11.2(26) termination Y1.11

people rates 11.2(26) Trust Deed Y1.1(5)
performance bond X13 Project Information
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definition X10.1(2)
period for reply Information Model X10.7(1)
communications 13.3–5 liabilities X10.7(2–3)
Information Execution Plan X10.4(3)
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revising the programme 32.2 Project Manager

whole life costs X21.3 access to work being done 27.2
Defined Cost 52.3
period of retention X15.4 early warning meeting 15.2
Plant and Materials other responsibilities 27.2
access to work being done 27.2 Others 11.2(10)
Client’s and Contractor’s liabilities 80.1 Subcontractor’s proposal 16.1
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Contractor’s title to Plant and Materials 70 Promotor

Corrupt Act(s) 18.2 actions X12.2(1)
definition 11.2(12) definition X12.1(1)
Disallowed Cost 11.2(25) incentives X12.4(2)
marking Plant and Materials outside Working Areas 71.1
other responsibilities 27.2 proposed instructions 65
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payment on termination 93.1 see also compensation events

procedures on termination 92.1–2 Provide the Subcontract Works 20
programme 31.2 Client’s and Contractor’s liabilities 80.1
Subcontractor’s liabilities 81.1 definition 11.2(13)
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Subsubcontractor 11.2(19) Disallowed Cost 11.2(25)

Supplier Y1.1(4) Equipment 11.2(7), 23.1
tests and inspections 42.1 Information Execution Plan X10.4(2)
Prevention 19 programme 31.2
quality management system 40.2
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price adjustment Subcontract Scope 11.2(15)

options A and B X1.3 Subcontractor’s liabilities 81.1
options C and D X1.4 Subcontractor’s proposal 16.1, 16.3
Price Adjustment Factor (PAF) X1.2 subsubcontracting 26.1–3
compensation events X1.5 Subsubcontractor 11.2(19)
definition X1.1(c) Supplier Y1.1(4)
price adjustment X1.4 termination 90.1, 90.4
Price for Work Done to Date termination by Contractor X11.1
assessing the amount due 50.3, 50.5 Working Areas 11.2(20)
definition 11.2(27), 11.2(28), 11.2(29)
payment on termination 93.2, 93.4, 93.5 quality management system 40
price adjustment X1.3, X1.4
retention X16.1 quotations for compensation events 62

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reasons for termination 91 Completion 11.2(2)

recovery of costs 82 definition 11.2(15)
delay damages X7.1–2
removing Equipment 72 implementing compensation events 66.2
requirements for instructions 17 notifying compensation events 61.3
Price Adjustment Factor (PAF) X1.2

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resolving disputes W1, W2
programme 31.2
retention X16 quotations for compensation events 62.2
retention free amount X16.1 sectional completion X5.1

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retention percentage X16.1 starting work 30.1
take over 35.1
review by tribunal W2.4
whole life costs X21.5
revising the programme 32
subcontract completion date, definition 11.2(15)
rights, transfer of rights X9
Subcontract Data

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risk allowances 31.2, 63.8, X12.3(8) Accepted programme 11.2(1)
actions X12.2(1)
adjudication W2.3(1)
Schedule of Core Group Members

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Adjudicator W1.2(3), W2.2(5)
actions X12.2(5)
advanced payment X14.1, X14.3
definition X12.1(5)
assessing the amount due 50.5
Schedule of Partners bonus for early Completion X6.1
actions X12.2(1), X12.2(5)

oj
changes in the law X2.1
definition X12.1(2) Client’s and Contractor’s liabilities 80.1
incentives X12.4(1–2) communications 13.2
Key Performance Indicator X12.1(5) compensation events 60.1(13), 60.1(21), 60.4, X1.5
working together X12.3(3)
searching for and notifying Defects 43
sectional completion X5
Senior Representative
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Defined Cost 52.1
delay damages X7.1
early warning meeting 15.2
Early Warning Register 11.2(6)
final assessment 53.1–2
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adjudication W1.3(1) incentives X20.2
final assessment 53.2 Information Execution Plan X10.4
resolving disputes W1(1–3), W2.1(1–3) insurance by Client or Contractor 86.2
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share ranges, Subcontractor’s share 54.1, 54.5 insurance cover 83.1–2, X10.7(3)
Site Key Date 11.2(9)
access 33 key person 24.1
C

changes in the law X2.1 limitations of liability X18.1–5

Client’s and Contractor’s liabilities 80.1 low performance damages X17.1
compensation events 60.1(2), 60.1(5–6), 60.1(12), 60.2 multiple currencies X3.1–2
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definition 11.2(14) Partnering Information X12.1(4)

objects and materials within the Site 73 payment(s) 51.2
procedures on termination 92.2 performance bond X13.1
programme 31.2 Price Adjustment Factor (PAF) X1.1(c)
removing Equipment 72.1 programme 31.1
Site Information 11.2(15) Provide the Subcontract Works 20.3
starting work 30.1 quality management system 40.2
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Working Areas 11.2(20) retention X16.3

revising the programme 32.2
Site Information Schedule of Partners X12.1(2)
Activity Schedule 55.1, 55.2 Site Information 11.2(15)
ambiguity and inconsistency 60.3 Subcontractor’s design X15.5
Bill of Quantities 56.1 take over 35.1
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compensation events 60.2 undertakings to the Client or Others X8.1

definition 11.2(15)
Subcontract Date
starting 30.1 bonus for early Completion X6.1
subcontract compensation events 60.1(12), 60.1(19)
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additional conditions 26.2 Corrupt Act 11.2(3)

currency of 50.7, 50.8, 51.1, X3.1–2 definition 11.2(14)
language 13.1 performance bond X13.1
law 12.2, X18.5 Prevention 19.1
option W1 53.2 reasons for termination 91.7
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option W2 53.2 ultimate holding company guarantee X4.1

see also conditions of subcontract Subcontract Named Suppliers Y1.2–3
subcontract access date definition Y1.1(2)
access to Site 33.1 effect of payment Y1.9
compensation events 60.1(2) Joining Deed Y1.10
programme 31.2 payment(s) Y1.4–5, Y1.7
starting work 30.1 Project Bank Account Y1.1(1), Y1.1(3)
Subcontract Completion Date Subcontract Scope
acceleration 36.1–2 accepting Defects 45.1–2
accepting Defects 45.2 Activity Schedule 55.1, 55.2, 55.3
assessing compensation events 63.5–6, 63.10 advanced payment X14.2
compensation events 60.1(13), 60.1(15) assessing compensation events 63.4, 63.10–11, 63.12, 63.13

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assessing the amount due 50.2 Subcontractor’s share 54.3, 54.7

Bill of Quantities 56.1 Subsubcontractor 11.2(19)
Client’s and Contractor’s liabilities 80.1 Supplier Y1.1(4)
communications 13.2 take over 35.1–3
compensation events 60.1(1), 60.1(5), 60.1(16), 60.4 transfer of rights X9.1
Completion 11.2(2)

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Subcontractor
Contractor 14.4 acceleration 36.1–2
Defect(s) 11.2(4) accepting Defects 45.1–2
Defined Cost 52.2

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access to Site 33.1
definition 11.2(15) Activity Schedule 55.1, 55.3
Disallowed Cost 11.2(25) additional costs 25.3
Equipment 11.2(7), 23.1 adjudication W1.3(2), W1.3(4–5), W1.3(8), W2.3(3b), W2.3(7)
health and safety requirements 27.4 advanced payment X14.1–3
Information Model Requirements X10.1(4) assessing compensation events 63.2, 63.4–7, 63.9, 63.12,

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instructions to stop or not to start work 34.1 63.13, 63.15–16, 63.16, 64.1–4
objects and materials within the Site 73.1 assessing the amount due 50.2–5, 50.7, 50.8, 50.9
other responsibilities 27.4 Assignment 28.1
Others 25.1

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bonus for early Completion X6.1
performance bond X13.1 Client’s and Contractor’s liabilities 80.1
programme 31.1–3 collaboration X10.2
Provide the Subcontract Works 20.1 communications 13.3–6, 13.8
quality management system 40.1 compensation events 60.1(1), 60.1(6), 60.1(8), 60.1(9–10),

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reasons for termination 91.6 60.1(17–18), 60.1(20), 60.2–3, 60.7, X10.5
requirements for instructions 17.2 Completion 11.2(2)
Subcontract Data 11.2(15) Contractor 14.1–4

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Subcontract Named Suppliers Y1.3 Contractor’s title to Plant and Materials 70.1–2
Subcontractor’s design 21.1–2, 22.1, X15.3–4 correcting Defects 44.1–2, 44.4
Subcontractor’s proposal 16.1–2 Corrupt Act(s) 18.1–3
take over 35.2 Defect(s) 11.2(4)
tests and inspections 40.1–2, 42.1 Defects Certificate 11.2(5)
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transfer of rights X9.1 Defined Cost 52.1, 52.2–3
ultimate holding company guarantee X4.1 delay damages X7.1
uncorrected Defects 46.1–2 Disallowed Cost 11.2(25)
undertakings to the Client or Others X8.2
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disclosure 29.1–2
whole life costs X21.1, X21.4–5 does not insure 85
subcontract starting date early warning X10.3
Adjudicator W1.2(1), W2.2(3) early warning meeting 15.2
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assessing the amount due 50.1 Early Warning Register 11.2(6), 15.1–2, 15.4
early warning meeting 15.2 effect of payment Y1.9
incentives X20.2 Equipment 11.2(7), 23.1
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insurance by Client or Contractor 86.1 final assessment 53.1–2

insurance cover 83.3 health and safety requirements 27.4
insurance policies 84.1 implementing compensation events 66.1
programme 31.2 incentives X20.1, X20.1–4
Provide the Subcontract Works 20.3 Information Execution Plan X10.4(1–4)
revising the programme 32.2 Information Model X10.6
Subcontractor’s design X15.5 instructions 27.3
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subcontract working areas 11.2(20) instructions to restart/start work 34.1

instructions to stop or not to start work 34.1
subcontract works insurance 85.1
bonus for early Completion X6.1 insurance by Client or Contractor 86.1–3
Client’s and Contractor’s liabilities 80.1 insurance cover 83.2–3
compensation events 60.1(13), 60.1(15), 60.1(19)
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insurance policies 84.1

Completion 11.2(2) Joining Deed Y1.10
Defect(s) 11.2(4) Key Date(s) 30.2
delay damages X7.1, X7.3 key person 24.1–2
disclosure 29.1–2 limitations of liability X18.1–6
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early warning meeting 15.2 low performance damages X17.1

Early Warning Register 15.1 marking Equipment, Plant and Materials outside Working
Equipment 11.2(7) Areas 71.1
Others 25.1 multiple currencies X3.1–2
payment on termination 93.1–2 notifying compensation events 61.1–7
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Plant and Materials 11.2(12) objects and materials within the Site 73.1
Prevention 19.1 other responsibilities 27
Price Adjustment Factor (PAF) X1.2 Others 11.2(10), 25.1
procedures on termination 92.1–2 Parties 11.2(11)
Provide the Subcontract Works 11.2(13), 20.2–3 payment on termination 93.1, 93.4, 93.5–6
reasons for termination 91.7 payment(s) 51.1, Y1.4–5, Y1.7–8
removing Equipment 72.1 performance bond X13.1
retention X16.1–2 Prevention 19.1
revising the programme 32.2 Price for Work Done to Date 11.2(28), 11.2(29)
sectional completion X5.1 procedures on termination 92.2
Subcontract Scope 11.2(15) programme 31.1–3
Subcontractor’s design 21.1, 22.1, X15.1 Project Bank Account Y1.1(1), Y1.1(3)
Subcontractor’s liabilities 81.1 Project Information X10.1(2), X10.6

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proposal 16 Subcontract Named Suppliers Y1.3

proposed instructions 65.1–3 see also Subcontract Named Suppliers
Provide the Subcontract Works 20.1, 20.2–3
quality management system 40.1–3
quotations for compensation events 62.1–6 take over 35
reasons for termination 91.2–4, 91.6–8 tax, payment(s) 51.5

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recovery of costs 82.1–2 termination 90, Y1.11
removing Equipment 72.1 by Contractor X11
requirements for instructions 17.1–2

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procedures on termination 92
resolving disputes W1(3), W2.1(3) reasons for 91
responsibilities 20–36
revising the programme 32.1–2 termination certificate
searching for and notifying Defects 43.1–2 assessing the amount due 50.1
starting/completing work 30.1, 30.3 final assessment 53.1
insurance cover 83.3

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Subcontract Named Suppliers Y1.2–3
Subcontract Scope 11.2(15) termination 90.1, Y1.11
subsubcontracting 26.1–3, 26.4 Termination Table 90.2, 92.2
Subsubcontractor 11.2(19) payment on termination 93.2

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termination 90.1, 90.4 termination by Contractor X11.1–2
termination by Contractor X11.1 tests and inspections 41
tests and inspections 40.2–6, 41.7, 42.1 compensation events 60.1(11)
Total of the Prices 11.2(32) before delivery 42

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transfer of rights X9.1
time risk allowances, programme 31.2
tribunal W1.4(5)
Trust Deed Y1.10 Total of the Prices
definition 11.2(32)

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ultimate holding company guarantee X4.1–2
uncorrected Defects 46.1–2 Subcontractor’s share 54.5–8
undertakings to the Client or Others X8.1, X8.3 transfer of rights X9
use of material 74
tribunal W1.4, W2.4
whole life costs X21.1–4
adjudication W1.3(2), W1.3(11), W2.3(11)
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working together X12.3(7)
Disallowed Cost 11.2(25)
see also Subcontractor’s design; Subcontractor’s liabilities
final assessment 53.2–3
Subcontractor’s design 21, 22, X15 payment(s) 51.3
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Defect(s) 11.2(4) resolving disputes W1(4)

Subcontractor’s liabilities 81, X18 Trust Deed Y1.10, p.58
insurance cover 83.3 definition Y1.1(5)
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Project Information X10.7(2) Subcontract Named Suppliers Y1.2

Subcontractor’s proposal 16
Subcontractor’s share 54 ultimate holding company guarantee X4
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payment on termination 93.4, 93.5–6

uncorrected Defects 46
Subcontractor’s share percentage 54.1, 54.5
undertakings to the Client or Others X8
subsubcontracting 26
working together X12.3(9)
value engineering percentage 63.12
Subsubcontractor
adjudication W1.3(4), W2.3(3)
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Corrupt Act(s) 18.2 weather data 60.1(13)

Defined Cost 52.2 weather measurement 60.1(13)
definition 11.2(19)
Disallowed Cost 11.2(25) whole life costs X21
Information Model X10.6 winding-up 91.1
Others 11.2(10)
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Working Areas
reasons for termination 91.8 Contractor’s title to Plant and Materials 70.1–2
Subcontractor’s design 22.1 definition 11.2(20)
subsubcontracting 26.2 Disallowed Cost 11.2(25)
Supervisor Others 25.1
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access to work being done 27.2 payment on termination 93.1

other responsibilities 27.2 procedures on termination 92.2
Others 11.2(10) Subcontractor’s proposal 16.1–2
searching for and notifying Defects 43.1 Subsubcontractor 11.2(19)
tests and inspections 40.5 tests and inspections 42.1
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Supplier(s) working together X12.3

definition Y1.1(4) see also collaboration; multiparty collaboration
Joining Deed Y1.1(6)

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