ABSTRACT
In 2008, the Office of Government Commerce (OGC) published a guide to fair payment practices, following which the NEC Panel prepared a document in June 2008 to allow users to implement these fair payment practices in NEC contracts. This document originally entitled 'Z3: Project Bank Account', now Option Y(UK)1, authorises a Project Bank Account which, if one use the Engineering and Construction Contract as an example, receives payments from the Employer which is in turn used to make payments to the Contractor and to Named Suppliers. The Contractor and Named Suppliers then receive payment from the Project Bank Account of the sums set out in the Authorisation after the Project Bank Account receives payment. In the event of termination, no further payments are made into the Project Bank Account. Mobilisation payments are appropriate when the Contractor will incur significant 'up front' costs before he starts receiving payments.
