Should a self employed or agency QS or other professional working within the working area be considered to be a subcontractor or a people cost on and NEC3 ECC option c contract under the full schedule of cost components? Both for CE’s and applications this can make a big difference. Similarly how should a labour only subcontractor, paid per operative, per day or hour be considered? One reading of the schedule suggests that only people employed directly are a people cost and the self employed QS is an employee of their own company not the contractor. As is the operative employed through a labour only subcontractor, from a legal point of view they remain an employee of the subcontractor who will pay sick pay or holiday pay etc.
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I always take the view that a self employed or agency QS is a People cost and recoverable under item 14 of the Schedule of Cost Components. SImilarly, labour only operatives are considered under this element too.
The reasoning for this is that whilst thery are in the Working Areas, they are generally treated (for the purpose of site activities) as employees. I.e. the Contractor provides all their welfare, acommodation, sundries etc. Therefore it is more applicable that the Working Area Overhead percentage applies.
Subcontractor’s that are contracted to carry out a specific piece of work, i.e. roofing / piliing etc. and provide their own support to their workforce are classed as ‘subcontractors’ for the purposes of evaluating the contract.
Do not confuse the legal status of individuals with the cost recovery mechanism of the contract. It is not relevant in this respect.