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NEC ECC: Option A - Design in Compensation Events

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When assessing a compensation event under the NEC3 Option A Contract how do you correctly apply the relevant fees to design costs?

The contractor directly employs a designer (off-site) and has reasonably forecast defined cost for design within their CE quotation.

Within the Contract Data Part 2 there is a prescribed design overhead percentage.

In assessing the design costs in this instance do you:

1. Apply only the design overhead percentage.
2. The design overhead percentage then the direct fee percentage.
3. The design overhead percentage then the subcontract fee percentage.

In the instance of 2 and 3 is the direct/sc percentage applied to the defined cost element only to avoid fee-on-fee?
asked Feb 7, 2019 in Compensation Events by kje537 (120 points)  

1 Answer

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The answer would depend on whether the designer is a Subcontractor or not.

If 'No', then 2. above applies.

If 'Yes', then 3. above applies.
answered Feb 7, 2019 by Jon Broome Panel Member (64,230 points)