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NEC TSC: View on whether direct fee is applicable to payment

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NEC3 TSC option A.

I have a situation where monthly assessments submitted by Contractor apply direct, indirect and management fees to the cumulative total of all works carried out and prelims.  There is no compensation events within this total and all work carried out are costed as per the price schedule provided before contract was formalised.

My understanding is that fees are not additional to price list clause 11.2(17) and (19) and should only be used in compensation events clause 63,1 and 63.2.

I do not believe the Contractor should be adding the fees to both the works and prelims however, the price list provided before contract formation gave this example.

My question therefore is as following - does the fees form part of the price list given that the example given at tender stage demonstrated that fees would be applied to all items on the price list?

Interested to hear your thoughts.

Regards

Robert
asked Nov 24, 2018 in Payment by robert81 (240 points)  

1 Answer

+1 vote
Very simple this one and yes you are correct. I would always recommend a Contractor actually READS their contract to understand what the rules are and how they should price it in the first place.

In any of the NEC option A contracts (TSC, ECC, PSC, ECS) the fee percentage only comes into play for assessing compensation events where they are being assessed using defined costs. Fee is deemed to be included within elements on the Price List (TSC) and activity schedule (ECC).
answered Nov 24, 2018 by Glenn Hide (71,250 points)  
Thanks Glen, my thoughts exactly however I was concerned that it could be deemed applicable as employer didn't challenge the price list pre-contract which had shown the contractor wrongly applying the clauses of the contract.  

Would I be correct in assuming that I could issue a pay less notice at next assesment, applying the interest rate to the overpaid money? This has been going on for 2 1/2 years on a fm contract that I have just became part of