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NEC ECC: What is the likely effect on tender prices of not having overheads using NEC4?

+1 vote
asked Sep 30, 2017 in NEC3 General by Hayley Morris (160 points)  

2 Answers

+1 vote
Best answer
I assume you mean not having the percentage for Working Area overheads under options C, D and E.

For me, it is more realistic Prices because the risk - which could be both threat and opportunity - associated with  this percentage is removed. That might mean higher Prices or lower Prices but - all other things being equal - will probably mean that real costs are closer to Defined Cost are closer to the Prices. This applies to both forecasts at tender and actuals at out-turn.

Suggest you post this on the BuilltIntelligence LinkedIn NEC forum as it is a good point for discussion.
answered Oct 1, 2017 by Jon Broome (46,270 points)  
selected Mar 1 by Glenn Hide
+1 vote
Probably wont alter tendered total of Prices too much, but will obviously affect the fee percentage as the element for recovery of people/working area overhead will now have to be included within the single fee. Therefore you will see a slight increase in that fee percentage (actually you wont as you wont know what it would have been for any future tender) but overall the attempt would be for a Contractor to get back to the same financial point you were with more than one fee percentage.

This is about redistribution of fee rather than additional/reduction. Will be easier to administer, but more difficult for Contractor to get right in the first place in a competitive tender situation.
answered Oct 2, 2017 by Glenn Hide (60,130 points)