Expert advice in minutes not days. Register it's free and ask your first question now.
ReachBack is a free community help desk for construction professionals run by Built Intelligence. A library of high-quality questions from real users with answers delivered and curated by industry experts.

5,617 questions

6,029 answers

1,389 comments

Register its Free

Download here

NEC ECC: Reduction of Prelims under Option C?

0 votes
154 views
Does the Client have the right to request the contractor reduces prelims (white collar staff) under the contract?

The Prices (Target) was never broken down to great detail so there was no indication of how many white collar staff were required to deliver the works.

The Contractor is now requesting we remove staff indicating that they are not required to deliver the works, however we believe they are.

Our argument is that there is a target in place due to being an Option C (understand this would be different under Option E), therefore if we spend more on white collar cost then we are in theory penalised by the pain/gain split therefore the Client should not dictate who we have delivering the works.
asked Nov 20, 2019 in General by Hrunner (370 points)  

2 Answers

0 votes
The Client doesn't have the right, although the Project Manager has certain rights with regard to People.

Procedures may be incorporated to allow reasonable control of People and their time, such as use of 'key persons' and by including particular constraints in the Works Information / Scope in relation to working hours and a process in relation to 'overtime' working.

The Project Manager could instruct the removal of an 'employee' ('person' under NEC4), although the PM would need to state the reasons for the instruction beforehand.

This matter could also be treated as Disallowed Cost where resources are not considered to be used to Provide the Works.

Outside of the contractual actions, it is probably a good idea to discuss staffing levels with the Project Manager and Client, not least for them to understand what level of resources is required to administer the contractual processes and procedures.

If you produce an organisation chart with brief summary of the role for each of the key people then that may assist with your discussions, along with explaining your point that the share calculation is intended to encourage efficiency.
answered Nov 21, 2019 by Andrew W-I Panel Member (26,920 points)  
0 votes
It should be in your interest to run the project as efficiently as possible to meet the quality but also provide the most optimum cost possible which will then increase your gainshare (and theirs). Very difficult for them to "instruct" your resource level if you think you need the level you have. To reduce the resources you may think means you might not meet the programme.

They should know it is in your interest to provide the optimum number of people as any cost saving they can make they will get a share of. If I was the PM I might be tempted to notify an early warning that they are concerned that the resource levels are excessive and have a discussion and mutually agree what ever action plan the Parties deem necessary/suitable. Talk to each other!
answered Nov 21, 2019 by Glenn Hide Panel Member (82,630 points)