Final Assessment of the Amount Due in NEC4

The NEC4 final assessment is a new step, at clause 53, that fixes the final amount due after the Defects Certificate or a termination certificate. The Project Manager makes the assessment, and it becomes conclusive unless a Party takes the dispute route in time. NEC3 has no equivalent procedure, so this is one of the bigger changes in the edition.

This page covers the NEC4 ECC, with periods from the NEC4 ECS text where we say so. Check your own contract, as these periods differ between forms. For the wider payment process, see NEC payment and Defined Cost, and for other edition changes, the NEC4 contracts guide.

Clause 53 step by step

Clause	What happens	Period
53.1	The Project Manager assesses the final amount due, gives details, and certifies any final payment	ECC: within 4 weeks of the Defects Certificate. There is a longer period after a termination certificate: the ECS gives 14 weeks, so check your form
53.1	The final payment is made	ECS: 3 weeks from the assessment, unless the data states another period
53.2	If the Project Manager misses the deadline, the Contractor may issue its own assessment, with details	Once the time has passed
53.3	An assessment issued in time settles the final amount due, as conclusive evidence, unless the dispute steps are taken	ECS: refer within 4 weeks of the assessment being issued, then follow the dispute Option's further limits
53.4 (ECS)	The assessment changes to reflect any agreement or an Adjudicator's decision that isn't taken further, and that changed figure then becomes conclusive	See your contract

What "conclusive" means for you

After the Defects Certificate, the amount due can stop being open to argument after only a few weeks. This changes how a commercial team should behave at the end of a job. In the past, a disagreement could sit in a "final account" pile for a long time. Under clause 53, the clock starts when the assessment is issued, and it does not wait for anyone to get round to reading it.

Published commentary from NEC makes the point that this isn't a traditional final account, but a way of making sure the final amount is calculated properly in light of what has already been assessed. If compensation events and cost have been dealt with along the way, it should be a short exercise. If they haven't, it brings everything to a head.

A worked example

A fictional Option C contract, with illustrative figures and dates.

1. The Supervisor issues the Defects Certificate on 1 September.
2. By 29 September, the Project Manager issues a final assessment of £8,420,000, with details.
3. The Contractor's own figure is £8,510,000. The £90,000 gap relates to a disputed subcontract cost that was treated as Disallowed Cost.
4. The Contractor diarises the 4-week limit to refer the dispute, runs it under Option W2, and keeps to the later limits for adjudication.
5. The Adjudicator awards £50,000. Neither Party goes further, and the assessment changes to £8,470,000, which becomes conclusive.

Had the Contractor done nothing by the limit, £8,420,000 would have been conclusive, whatever the merits of the argument.

Finalising cost earlier: clause 50.9

Under Options C, D and E, the Contractor can tell the Project Manager once part of the works has its Defined Cost finalised, and make the records available. The Project Manager reviews them and then accepts that part as correct, asks for further records, or notifies errors. If no decision arrives in the time allowed, the Contractor's assessment is treated as correct.

The periods have been a moving target. Published reviews of the original ECC gave 13 weeks for the first review, while the ECS as amended in January 2019 gives 14 weeks, and clause 50.9 was among those amended that month. So read the period in your own copy. The practical point stays the same either way: agree a plan for parcels of cost early, so nobody receives years of records in one go.

Clause 50.9 suits cost-based jobs that run for years, because it can remove audit risk in stages. See open book under NEC and audit under NEC.

Checklist

Contractors

• Diarise the Defects Certificate date, the assessment deadline and the limit for referring a dispute.
• Prepare your own figure before the Defects Certificate, ready for 53.2 if needed.
• Read each assessment the day it arrives, and compare it line by line.
• Clear unimplemented compensation events well before the end.

Project Managers

• Start drafting at Completion rather than at the Defects Certificate. Four weeks isn't long.
• Give details of how the figure has been reached, as the clause asks.
• If you miss the deadline, expect the Contractor's figure to arrive.

What people get wrong

• Thinking the Defects Certificate ends the commercial work. It starts the last and shortest stage.
• Assuming the time is the same in every form. The PSSC, for example, has no clause 53 process of this kind.
• Confusing it with the share. The Contractor's share of the target saving or overrun moved to clause 54. Clause 53 in NEC3 is the share, so an old template citing 53 means something quite different.
• Calling the process a final account. That language is familiar, but it can mislead a team into thinking there's plenty of time. See the final assessment guide and final accounts under NEC.

Related guides

• NEC4 Contracts: A Complete Guide
• Dispute Resolution Changes in NEC4
• Proposed Instructions and Quotations in NEC4
• NEC4 Terminology Changes
• Programme Changes in NEC4
• Cost and Fee Changes in NEC4

This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.