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NEC3 ECC: Disallowed costs where we have mitigated further costs that would have been incurred?

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Our client has disallowed the following costs from us: Standing Labour and Plant due to weather cancellations.
They are stating that as our people were not within the working areas then it is not an allowable defined cost. The reasons for the cancellation was to mitigate further costs than if did attend site. However, costs are now being disallowed. Is this correct?
asked Feb 24 in NEC3 General by anonymous  
   

1 Answer

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Let us consider People first :
The opening sentence of 1. People states :
"The following components of the cost of
- people who are directly employed by the Contractor and whose normal place of working is within the Working Areas
- ..."

So if the people's normal place of working is within the Working Areas, then they are an allowable or Defined Cost in the first place and there is no bullet point in the definition of a Disallowed Cost which says they can be disallowed.

You do not give any reasoning for the PM disallowing the cost of Equipment, but the basic logic stays the same.

Consequently, the Project Manager appears to be contractually, as well as morally, wrong to disallow such costs.
answered Feb 25 by Jon Broome (16,120 points)