NEC ECC: Own Equipment

NEC3 and NEC4 Contracts Compensation Events
1

If the CE requires the provision of equipment that meets the criteria of item 27, but it is owned by the Contractor; is the correct course of action to establish a market rate for the equipment by evidencing alternative supplier quotes/ historical ‘re-hire’ invoices then applying the fee to that?

Or, given its your own plant and thereby deemed to included an element of overhead & profit - should fee then not be applied? My opinion is do what the contract says - establish a market rate and add fee, however if you own the plant isn’t this fee on fee?

2

If the item of Equipment is neither in the published list nor listed in Contract Data then your proposal sounds entirely reasonable and yes whatever market rate you establish you apply the direct fee percentage to it just like if you’d hired it in. Equipment is a component of Defined Cost and clause 63.1 states you can recover the Defined Cost plus Fee.

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