Parties moving between JCT and NEC projects tend to carry their habits with them, and payment is where that goes wrong fastest. The sequence is comparable in shape and different in almost every detail, including who assesses, what the documents are called and when they are due. Establishing the actual sequence for your contract is where a payment and pay less notice review starts.
What follows describes the general shape rather than a particular option or edition. NEC contracts are assembled from options and amended like any other, so the contract data remains the only reliable source for your dates and roles.
Assessment dates drive everything
NEC works to assessment dates set from a starting date in the contract data and repeating at intervals. The first one is fixed and the rest follow it, which makes the whole timetable derivable at the outset.
That is a genuine advantage over arrangements that depend on when somebody submits something. The dates exist whether or not an application has been made, which removes one common category of argument.
It also means the dates can be calendared for the whole project on day one. Projects that do this have markedly fewer payment disputes than projects that work it out monthly.
Where the contract data has been completed carelessly, or left incomplete, the sequence becomes uncertain in exactly the way the form was designed to prevent.
Who assesses, and what that means
The project manager assesses the amount due at each assessment date. The contractor normally submits an application, and the assessment takes it into account, but the assessment is the project manager’s act rather than a response to the application.
That distinction matters when nothing is submitted. Under NEC the obligation to assess does not disappear because the contractor was late or silent, which is a different position from mechanisms that start with an application.
It also places a positive duty on the project manager. An assessment that simply repeats the previous one, or that is not made at all, is a failure to perform a contractual function rather than a negotiating position.
Where the project manager is employed by the client, that duty is sometimes uncomfortable. It is nonetheless what the role requires, and assessments shaped by what the client would prefer to pay create problems for the client in the end.
The payment certificate and the dates after it
A certificate follows the assessment within a period set by the contract, and payment follows the certificate within a further period. Both periods are in the contract data and both are frequently amended.
The amounts certified are cumulative, as elsewhere, so each certificate carries the whole picture rather than the month in isolation. Errors therefore propagate until somebody corrects them.
Interest on late payment is addressed by the contract, which is a difference worth knowing about. What it provides for your project depends on the option and the data rather than on the general position.
Compensation events sit alongside, not inside
Change under NEC runs through the compensation event procedure, with its own notification periods, quotations and assessment. It feeds the amount due but it is a separate mechanism with separate deadlines.
Treating a compensation event as though it were a variation to be valued later misses the point of the procedure, which is to price and agree change close to the time it arises.
Where compensation events have been allowed to accumulate unassessed, the payment position and the change position become entangled, and untangling them is variations and entitlement work rather than a payment question.
Where habits from other forms cause trouble
Waiting for an application before assessing. Assuming the application sets the figure. Treating notification periods as targets. Using JCT language in correspondence, which creates confusion about what is being invoked.
The vocabulary problem is more than cosmetic. A letter referring to a variation and a pay less notice on an NEC project leaves genuine doubt about which contractual step is being taken, and that doubt is resolved later by somebody else.
The cure is to use the contract’s own terms, even where they feel unfamiliar. Precision in naming the step is free and it removes an entire class of argument.
What to establish at the start
The assessment dates for the whole project. The periods to certificate and to payment. Who holds the project manager role and whether that has been delegated. And which options apply, since they change the mechanism.
Half an hour with the contract data produces all of it, and it does not need repeating unless the contract is amended.
Where it is not done, the project runs on assumptions drawn from whatever form the people involved used last, which is the origin of most of these disputes.
It is worth writing the answers down and circulating them, rather than leaving them with whoever did the reading. People move between projects and the knowledge moves with them unless it is recorded.
Running the cycle properly
The underlying work is the same whatever the form: measure what is in place, assess change as it arises, and record both in a way somebody else can follow. The form determines the labels and the dates, not the substance.
That substance is cost control and variations work, and it is what makes an assessment defensible whichever side of it you are on.
Where a cycle has already been contested, establishing what the contract required and what actually happened is a defined piece of work rather than an exchange of letters.
On NEC that examination usually also touches the compensation events, because the two mechanisms feed each other and a payment dispute on this form is rarely only about payment.
Money held back on a payment cycle?
A payment and pay less notice review examines one cycle end to end: the application, the notices, the dates and what the contract actually required of each party.