Application of Fees for Subcontracted Works

NEC3 and NEC4 Contracts Compensation Events
1

NEC3 Option A

The Contractor has provided a quotation from his sub-contractor for a potential piece of work.

This quotation includes the sub-contractors direct fee percentage.

If it is decided to proceed with these works, it is my understanding that the subsequent quotation for the Compensation Event would exclude the subcontractor’s direct fee percentage and the Contractors subcontractor fee percentage applied in its place thereby avoiding fee on fee.

Is this correct?

2

Yes, your understanding is in line with the definition of Defined Cost under NEC3 ECC form of contract for the assessment of subcontracted costs in the Shorter Schedule of Cost Components.