Most Contractors will cap the amount of deductions that can be made from the Unitary Charge. The precise wording and the impact of the cap can vary a lot from Contract to Contract.
The Contract Management Manual should state the contractual cap on deductions under the Payment Mechanism and make it clear which deductions are subject to the cap, as it may not apply to all adjustments in the Payment Mechanism even if the parties are accustomed to referring to them as deductions. The cap should ideally be clearly visible as an input into the payment spreadsheet and used in the logic of that spreadsheet in a way that matches the contractual provisions.