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NEC ECC: Option C - Disallowed Costs

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NEC ECC Option C: Specialist Site 3D Surveying – Cost disallowed by the Client

We have employed a specialist surveying subcontractor to carry out a Ground Penetration Radar survey to locate services, and also to produce the data required for us as the contractor to produce 2D & 3D models to aid in the construction.

To date, the PM has disallowed the cost, as he believes it falls within section 44 of the schedule of cost components, specifically item h, surveying setting out.

The counter argument from ourselves as the Contractor is that the subcontractor is not to be classed as a people cost, but falls under the Schedule of Cost Components, 43 (h) ‘specialist services’.

Please advise?
asked Jan 15 in SOCC SSOCC by neil_mccoll (140 points)  

1 Answer

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The Schedule of Cost Components does not apply because, as you say, the surveyor is a Subcontractor and therefore you are reimbursed in accordance with that subcontract - see option C clauses 11.2 (23) for the definition of Defined Cost and its first main bullet.

The PM would need to find a reason to disallow it under clause 11.2 (25) for Disallowed Cost. However, before your Project Manager does that, it is perhaps worthwhile reminding him or her that as the judge said in the first bit of case law on NEC (Costain v Bechtel) :
"I am unable to find anything which militates against the existence of a duty upon the project manager to act impartially in matters of assessment and certification [and more generally] when the project manager comes to exercise his discretion in those residual areas [of subjectivity in the NEC] . . . it would be a most unusual basis for any building contract to postulate that every doubt shall be resolved in favour of the employer and every discretion shall be exercised against the contractor."
answered Jan 16 by Jon Broome Panel Members (56,140 points)