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NEC ECC: Option A correct fee % application

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ECC Option A, I need to assess the Contractor's Compensation Event and ensure that the correct fee % is applied.

I have a situation whereas a Contractor is applying direct fee on a required third tier company to provide a specalist survey.

I am aware that the Contractor doesn't have a subcontract with the company 11.2(17), just a purchase order. The Contractor has provided purchase order and invoice to demonstrate the actual cost paid, but has applied the direct fee %.

Is the contractor correct with regards to the direct fee % or should this be the subcontract fee % - or am I missing this within the Shorter SSCC?
asked Jul 11, 2019 in Contract Data by Alfie David (260 points)  

1 Answer

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Firstly, I am a little confused when you say "a required 3rd tier company" which implies they are a Subsubcontractor. However, I will proceed as if they are a Subcontractor - correct me if wrong.

Go back to the definition of a Subcontractor in 11.2 (17) of NEC3 ECC, which I presume it is as NEC4 has only one fee percentage.

It has the words "A Subcontractor is a person or organisation who has a contract with the Contractor to - provide a service necessary to Provide the Works ...".

I sounds as if the 'supplier' is doing this, so by the definition of the contract - without being certain of all the details - I think you are right to query the application of the direct fee percentage.
answered Jul 11, 2019 by Jon Broome Panel Member (64,190 points)