X5: Sectional Completion

NEC X5 lets parts of the works have their own completion dates. Each section can be completed, certified and taken over separately, and can carry its own delay damages or bonus if Options X6 or X7 apply. Use it when the Client needs phased handover written into the contract rather than hoped for on the programme.

The Option has one short clause, X5.1, in NEC3. The NEC4 subcontract text has the same clause and number, and the approach carries through to NEC4 ECC. It extends the normal references to the works, Completion and the Completion Date, so that each can mean a section as well as the whole. For the wider picture see the secondary Options overview.

Sections or Key Dates?

People often confuse these. Both are earlier milestones, but they do different jobs.

	Section (Option X5)	Key Date (core clauses)
Purpose	A usable part of the works handed over	A condition met so that others can proceed
Available	Only with X5	In any ECC, if the Contract Data gives one
Late consequence	Delay damages for the section, if X7 applies	The cost the Client incurs, as assessed by the Project Manager
Certified Completion	Yes	No
Take over	Yes, the section is taken over	No

If the Client wants a building's first floor to be ready for fit-out by others while the Contractor keeps the Site, a Key Date is probably right. If it wants to occupy the first floor while work carries on elsewhere, a section is the better tool. See Key Dates and sectional completion in the programme for how each shows on the Accepted Programme.

What goes in the Contract Data

• A description of each section. Say what's in and out by reference to drawings or areas. Vague boundaries cause arguments at the moment you're trying to certify.
• A Completion Date for each section, given by the Client or, in some procurements, by the Contractor in part two of the Contract Data.
• Delay damages per section if X7 is used, and a bonus per section if X6 is used.
• What the Scope requires for Completion of that section, such as tests, records and any access it depends on.

Sections don't have to cover the whole of the works. Whatever isn't in a section falls under the Completion Date for the whole.

A worked example

A fictional school extension with illustrative figures.

Part	Completion Date	Delay damages per day
Section 1: car park and drop-off	1 August	£500
Section 2: teaching block	25 August	£3,000
Whole of the works	30 September	£1,000

Section 2 reaches Completion on 4 September, ten days late, so the Contractor owes £30,000 under X7. A compensation event on the teaching block might move the Section 2 date. Under NEC's approach, the assessment looks at the effect on each date separately, so it's possible for the same event to move one Completion Date and leave another alone.

What to watch

• Quotations should deal with each date. A compensation event delay needs assessing against each affected section's planned Completion, not just the last.
• Retention. Under Option X16, the halving refers to the whole of the works, so finishing one section doesn't release anything unless a Z clause says so.
• Risk and insurance. Take over moves risk to the Client for that section, so its insurers will want notice.
• Defects dates. Read how your contract's defects date and defect correction periods relate to Completion of the whole, as they may not run separately by section.
• Too many sections. Each adds an extra date to manage and more combinations of event and delay. Use them only where the Client truly needs a handover.

Related guides

• NEC Secondary Options: X, Y, W and Z Clauses Explained
• X6: Bonus for Early Completion
• X7: Delay Damages
• X8: Undertakings to the Client or Others
• X3: Multiple Currencies
• X4: Ultimate Holding Company Guarantee

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.