In episode 124 of The Subcontractors Blueprint podcast, host Jacob Austin continues his NEC4 mini-series, focusing on clauses 70, 80, and 90. He provides clear, practical guidance on material ownership, insurance obligations, and, most critically, termination procedures. Jacob explains how to protect your business by understanding payment entitlements, risk allocation, and the importance of following contract procedures. He highlights common pitfalls, offers actionable tips, and stresses the need for documentation and legal advice. This episode and mini-series equips construction business owners with essential knowledge to manage NEC4 contracts confidently and safeguard profitability.

KEY TAKEAWAYS:

• Once materials are delivered to site, legal ownership passes to the contractor or client, affecting both risk and payment security.
• Subcontractors are responsible for a range of insurances and liabilities, with the contract specifying who must cover which risks.
• Termination under NEC4 is highly structured, with clear reasons, procedures, and payment calculations depending on who is at fault.
• Wrongful or improperly handled termination can have serious financial and legal consequences, so understanding and following the contract is critical.
• Subcontractors should document everything, know their rights, and approach termination as a last resort, aiming to protect both reputation and financial interests.
• Proactively communicating and keeping thorough records can help subcontractors avoid disputes and ensure they recover all monies owed if termination does occur.

BEST MOMENTS:

"As soon as your materials are on site, they belong to the project, so you can't just drive off with them if things go awry."

"Termination means ending the subcontract before all work is completed, which means both parties are freed from any further obligations to complete the construction of the work."

"If the process isn’t followed properly, then this is effectively a breach. The consequence of that breach is that the calculation is different—you will get full compensation without a deduction."

"Termination is a situation where nobody truly wins. It’s a salvage operation as a subcontractor, and your goal is likely to get out of there without a huge loss and without burning bridges."

"Many subcontractors have been strong-armed into accepting zero compensation after rough termination, simply because they don’t know what they’re entitled to—don’t let that be you."

"Demonstrating you know your stuff can change the conversation—it changes you from being a victim in the process to an informed participant."

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to over £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/

Instagram - www.instagram.com/qs.zone/

www.qs.zone/all-links

In episode 123 of The Subcontractors Blueprint podcast, host Jacob Austin provides construction business owners with practical guidance on managing compensation event clauses under NEC contracts. He explains the crucial differences between early warnings and compensation events, outlines notification and quotation procedures, and emphasises the importance of timely communication, thorough record-keeping, and contract compliance. Using real-world examples, Jacob demonstrates how proactive management of these clauses can protect subcontractors’ interests, improve cash flow, and foster collaborative relationships with contractors—ultimately supporting business growth and successful project delivery.

KEY TAKEAWAYS:

• The episode explains the difference between early warnings and compensation events in NEC contracts, emphasising their roles in proactive risk management.
• Early warnings are about flagging potential risks before they happen, while compensation events address actual changes that impact time or cost.
• Failing to issue early warnings can result in reduced compensation, as contractors may assess claims as if warnings had been given.
• Strict notification and time bar requirements mean subcontractors must act quickly and provide clear evidence to protect their entitlements.
• Compensation events are assessed based on defined costs, and well-prepared, transparent quotations are essential for successful claims.
• Collaboration, clear communication, and following contract processes are key to avoiding disputes and ensuring fair outcomes on NEC projects.

BEST MOMENTS:

"The principle behind [Early Warnings] is that it's a proactive risk management tool to flag up issues that could impact time, cost and quality."

"Early warnings are future events—they may happen or they might not. Compensation events are guaranteed to happen."

"Compensation events are assessed on the basis of defined cost, which is essentially the reasonable cost that you incur yourself, plus an applicable fee."

"A well-prepared quote is critical. It needs to be clear with breakdowns of your labor, plant, materials, and descriptions of how it's been calculated."

"The point is to create early and binding agreements as you go throughout the contract, to avoid the need for lengthy disputes and final account meetings."

"The straight talking truth is that compensation events can become contentious if people can't get around the table and talk sense and come to sensible agreements."

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to over £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/

Instagram - www.instagram.com/qs.zone/

www.qs.zone/all-links

In episode 122 of The Subcontractors Blueprint podcast, host Jacob Austin guides construction business owners through the payment mechanisms of NEC subcontract agreements, focusing on the 50 series clauses. He explains the importance of assessment dates, compliant payment applications, and the impact of main option clauses (A–E) on cash flow. Jacob highlights that contract amendments that can complicate payments and shares a practical checklist for managing the payment process. The episode offers actionable advice to help subcontractors protect their cash flow, avoid payment disputes, and ensure profitability under NEC contracts.

KEY TAKEAWAYS:

• The NEC subcontract’s payment process is strictly tied to assessment dates, requiring timely and compliant applications for payment.
• Missing an application deadline or submitting a non-compliant claim can result in receiving no payment or even owing money due to contract clauses like 50.4.
• Different NEC main options (A–E) significantly affect how payments are calculated, from activity schedules to bills of quantities and cost-reimbursable models.
• Maintaining clear records and collaborating with the main contractor is crucial, especially for measurement and cost-based payment options.
• The UK Construction Act (via clause Y(UK)2) mandates fixed payment timelines and defines payment notice requirements, overriding variable invoice-based systems.
• Careful contract administration, matching application formats, and assertively managing payment schedules are essential to protect subcontractor cash flow.

BEST MOMENTS:

"The NEC payment process is only fair if you run it properly and it can punish you with cash flow problems if you don't."

"If your application is non-compliant, you're basically volunteering not to be paid."

"Clause 50.4, The Quiet Assassin...if you miss your application date, you don't just get paid slightly late because you applied late. The contract says that you get nothing."

"Defined cost can be weaponised via audits if you don't have good records of what people were doing and when they were doing it."

"A defective notice could mean that you're entitled to full payment of your application without any deduction."

Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.

HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to over £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.

LinkedIn - www.linkedin.com/in/jacob-austin/

Instagram - www.instagram.com/qs.zone/

www.qs.zone/all-links