Under an ECS Option C subcontract, the main contractor applies contra charges to the payment application. A portion of the contra charges relate to de-scoped work and others relate to works instructed by the main contractor to other subcontractors (for which the main contractor has been paid by the Client under a CE).
The main contractor should have issued a PMI to de-scope part of the works that were priced at tender stage but failed to do so and simply deducted contra charges from the subcontractors payment cert. There was no PMI, CEN, Risk Reduction Meeting and the subcontractor was not given the opportunity to mitigate the costs.
Under the ECC contract, the assessment of a CE has to be done based on the forecast defined cost. However, the defined cost is now is substantially higher than the original budget for the descoped works, but the subcontractor was not given the opportunity to complete the work.
The subcontractor has highlighted the contractual problem with the contra charge but the main contractor refuses to release payment and deal with them correctly through the contract.
What recourse has the subcontractor to get fair treatment and ultimately get paid
The main contractor should have issued a PMI to de-scope part of the works that were priced at tender stage but failed to do so and simply deducted contra charges from the subcontractors payment cert. There was no PMI, CEN, Risk Reduction Meeting and the subcontractor was not given the opportunity to mitigate the costs.
Under the ECC contract, the assessment of a CE has to be done based on the forecast defined cost. However, the defined cost is now is substantially higher than the original budget for the descoped works, but the subcontractor was not given the opportunity to complete the work.
The subcontractor has highlighted the contractual problem with the contra charge but the main contractor refuses to release payment and deal with them correctly through the contract.
What recourse has the subcontractor to get fair treatment and ultimately get paid