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NEC ECC: Under Option C are agency staff considered as Subcontractor or People Cost, when considering the application of the working area overhead?

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NEC3 ECC - option C - payment application

We have been informed by the Client that Agency Staff  fall under the definition of Subcontractor  and not People Cost -therefore  accordingly the working area overhead cannot be applied .

Client Justification:

1) Agency staff fall under the definition of Subcontractor , specifically  2nd  bullet point of 11.2(17)  "Provide a service necessary to Provide the Works "
2) The Contractor cannot seek payment under item14 of the SCC and in accordance with item 44 of the SCC  because in accordance with item 14 , Agency Staff are not people paid by the Contractor , they are  paid for by the Agency as a Subcontractor to the Contractor.

We believe this is incorrect ?
asked Jan 12 in Payment by jlangla (120 points)  

1 Answer

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This question has been discussed previously, see the following link;

https://reachback.builtintelligence.com/18266/freelance-project-manager-subcontract-direct-percentage?show=18268#a18268

This is an issue which is often debated on NEC ECC projects but if you apply objective tests to the status, then this could assist in determining how the cost should be treated.  

This 'evidential' approach should help in discussions to determine and agree the status with the Project Manager / Client.
answered Jan 13 by Andrew W-I Panel Member (25,540 points)