A very similar question was posted recently which we answered - and (unfortunately) I can only repeat the same answer here to the same question that has been posted a slightly different way. In an un-amended contract you can only disallow a cost for a specific reason within the definition of Disallowed Costs". I can fully understand an Employer saying "why should I pay for correcting a defect when it is their fault" but remember under option C this is a shared risk. You also share the good things - where you benefit from good work and savings that the Contractor made. If the contract intended for all such things to be disallowed then they would have written simply "the cost of correcting defects" and left of the following bit"after Completion".
I understand your frustration, but this is a shared risk contract which includes such items, but equally don't forget under option C the Contractor is losing out on "gain share" or increasing "pain share" so it is NEVER in a Contractors interest to do defects. You (arguably) had a cheaper tender price as well remember as they knew this was a shared risk. You also pay for the Contractor correcting defects under option A - you just don't know it as they will have included an allowance within their fixed price lump sum.
If your Z clauses you believe change these rules then you need to assess and interpret these under their own basis - I cant comment fully without seeing those but from what you describe they MAY change the rules as stated above.
I understand your frustration, but this is a shared risk contract which includes such items, but equally don't forget under option C the Contractor is losing out on "gain share" or increasing "pain share" so it is NEVER in a Contractors interest to do defects. You (arguably) had a cheaper tender price as well remember as they knew this was a shared risk. You also pay for the Contractor correcting defects under option A - you just don't know it as they will have included an allowance within their fixed price lump sum.
If your Z clauses you believe change these rules then you need to assess and interpret these under their own basis - I cant comment fully without seeing those but from what you describe they MAY change the rules as stated above.