NEC4 Payment and Defined Cost Masterclass · Module 1 · Lesson 1 of 4

The money map

8 screensAbout 7 minutes

Why it matters

Dana certifies GBP 646,020 on 1 June 2026, so where does that figure come from?

Dana Whitfield is the Project Manager. Every ECC payment comes from one short chain of figures. Follow it once.

How the amount due climbed, GBP

9 Feb 2026First assessment

GBP 234,000

9 Mar 2026

GBP 660,894

6 Apr 2026

GBP 605,106

4 May 2026

GBP 557,730

1 Jun 2026This lesson

GBP 646,020

01,500,0003,000,000

Amount due at the date beforeThe change, which is the payment

Source: ECC 50.3, 51.1. Aldermere Contract Data.

The rule

Three figures build every payment

Prices are not payments.

PricesA lump sum per activity. Their total is the target.
Option C 11.2(32)
Price for Work Done to DateWhat the Contractor has earned so far.
Option C 11.2(31)
Amount dueThe Price for Work Done to Date, plus and minus other sums.
Clause 50.3

Source: ECC 50.3. ECC Option C 11.2(31), 11.2(32).

The rule

Each payment is the change in a running total

A negative step is paid back.

Amount due at 1 June: GBP 2,703,750

Amount due at 4 May: GBP 2,057,730

Payment: GBP 646,020

“Other payments are the change in the amount due since the previous assessment” (51.1)

The first certificate pays the whole amount due.

Source: ECC 51.1.

See it on the project

Dana counts cost paid by 1 June, plus what she forecasts before 29 June

Watch it build: Defined Cost, the Fee, then retention and last month's amount due come off.

Dana's assessment at 1 June 2026, GBP

Defined Cost paid by 1 June

1,905,000

Forecast to be paid before 29 June

+595,000

Fee at 11%

+275,000

Price for Work Done to Date

2,775,000

Retention: 3% above GBP 400,000

−71,250

Amount due

2,703,750

Less the 4 May amount due

−2,057,730

Payment certified

646,020

The forecast covers the June payroll, Tarnbeck Piling's GBP 112,000 due on 22 June and other invoices.

Source: ECC 11.2(10), 50.3, 51.1, X16.1. ECC Option C 11.2(31). Aldermere Contract Data.

See it on the project

Dana's forecast to 29 June moves the payment by more than itself

Move her forecast and watch the Fee and retention follow it.

Dana's forecast of cost paid before 29 June

…

…the Fee at 11%

…retention held

…the 1 June payment

Her real forecast was GBP 595,000. Try the two ends.

Source: ECC 11.2(10), 51.1, X16.1. ECC Option C 11.2(31). Aldermere Contract Data.

Try it

Sort each change: does it move the 1 June payment, or only the target?

Have a go before you look back. Each answer says why.

Change 1 of 5

…

Source: ECC 50.3, X16.1. ECC Option C 11.2(31), 11.2(32).

Quick check · The money map

Two questions on what you have just covered

Two Aldermere cases.

Quick checkPick an answer to see if you are right and why

1Suppose Dana had forecast GBP 495,000, not GBP 595,000, to be paid before 29 June. What would the 1 June payment have been?

GBP 546,020, exactly GBP 100,000 less

GBP 538,350, with the Fee and retention

GBP 535,020, less GBP 111,000 with the Fee

2At 29 June 2026 the amount due stays at GBP 2,703,750, the same as at 1 June. What does that certificate pay?

GBP 2,703,750, the amount due again

GBP 646,020, the same payment as last time

Nothing, as the amount due has not changed

2 questions to answer

Source: ECC 11.2(10), 51.1, X16.1. ECC Option C 11.2(31).

Recap

Read every certificate as a chain from cost to the payment

Next, how each main Option measures the work.

On Monday at work

Start from the last certificate's amount due, not the application.
Check each payment is the step since the last amount due.
Under Option C, keep the target out of the monthly figures.

In the Toolkit: NEC4 Application for Payment (ECC and ECS, Options A to F) (Excel) Members

Next lesson: Six ways to value work

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Independent course material. It is not published or endorsed by NEC. Clause references are to the NEC4 Engineering and Construction Contract, June 2017 with amendments January 2023. The project and the people are invented. Short quotes from NEC4 (© NEC 2017) and the FIDIC Red Book (© FIDIC 2017) are used for review and comment. Read the full clauses in your own copy of the contract.

Source: ECC 50.3, 51.1. ECC Option C 11.2(31).

Go deeper (optional)

Part of every Option C payment pays for cost not yet paid

Two harder points for later. Skip them if you are short of time.

Is the forecast in an Option C payment an advance?

In effect, yes. On 1 June Dana counted GBP 595,000 that Merrow Vale had not yet paid. The contract does not call it an advance and needs no recovery rule. The 29 June assessment starts again from cost actually paid, so a shortfall makes that payment smaller.

Option C 11.2(31). Clause 51.1

Does an over-forecast carry interest?

Opinion is split. One view treats it as a mistake, corrected with interest under 51.3. The other says an honest forecast on the facts known is no mistake. The contract does not decide it.

Clauses 51.1, 51.3

Source: ECC 51.1, 51.3. ECC Option C 11.2(31).