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What does NEC4 clause 60.1(10) mean?

It makes it a compensation event when you are told to search for a Defect and none is found, unless your own short notice caused the search.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

The answer

In the NEC4 main contract the Supervisor gives the instruction to search. On an NEC subcontract your main contractor does. The one exception is where the search was needed only because you gave too little notice of work that covered up a required test or inspection. Then you pay for the search, whatever it finds. Put simply, if the suspicion was wrong, the other side pays for testing it. If you covered up work it was entitled to inspect, you pay for uncovering it. To rely on the clause, show the instruction to search, what the search involved, and the recorded outcome showing no Defect. Where a Defect was found in part of the search, only the part where none was found counts. Also show you gave the notice the Scope required before covering the work, because the exception turns on it. The event comes from an instruction, so your main contractor should notify it. But the outcome is not known until the search is finished. So in practice, notify under clause 61.3 as soon as the search closes with nothing found, rather than wait. The change to the Prices, your contract price, is assessed under clause 63.1. It is the effect of the instruction on actual Defined Cost for work done by its date. Add forecast Defined Cost for work still to do, plus the Fee. That covers opening up, testing, making good and standing time. What goes wrong most is that nobody gets the written record of the outcome. An argument then follows about whether something minor found in the search was a Defect. Any delay to the Completion Date is assessed separately under clause 63, and that is a job for your planner.

Example

Illustrative example. The scenario and figures are invented.

The facts

A drylining subcontractor has boarded and skimmed the ceilings on a floor, after giving the notice the Scope requires before closing them. The main contractor suspects missing fire stopping above, and tells the subcontractor to open up 14 locations.

What happens

  1. Each location is cut and inspected with the main contractor present. All are correctly fire stopped, and the main contractor's record says so.
  2. The main contractor notifies the event. If it does not, the subcontractor notifies under clause 61.3 as soon as the last location is closed.
  3. The quotation assesses cutting, inspecting, reboarding, skimming and redecorating the 14 locations at £3,100 of Defined Cost, under clause 63.1. The Fee is added at the Contract Data percentage.

The outcome

Because the subcontractor gave proper notice before covering the work, the exception does not apply, and there is no ground under clause 61.4 to refuse the change.

To have a refused event tested against the clause it falls under and pressed to implementation, see our Compensation Event Claim service.