Can the people cost required for managing subcontractors (works visits) providing the WI become disallowable if the working area in the head contract is not extended to include the subcontractors premises

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The answer to whether the cost is part of the Defined Cost lies in where the normal place of work for the person carrying out the supervisory visit is (see Part 1 to People Costs in the Schedule of Cost Components and a very similar entry in the Shorter Schedule). If the normal place of working is within the Working Area then the cost will be part of the Defined Cost.

There is no heading of disallowance which would then apply. Disallowance is not in fact properly applicable.

Agree with Rob’s comments but I would like to pick on the use of the word Disallowable Cost. Disallowed Cost is defined in clause 11.2(25) of main Options C, D, E and 11.2(26) of main option F and has a very precise meaning.

To me we are talking about costs which are either admissible or not admissible as part of Defined Cost and the Schedule of Cost Components or deemed to be part of the Fee.

Just because a cost is not paid to a Contractor does not mean we should call it a Disallowable Cost. This is important as the use the word Disallowable Cost is very emotive.


Absolutely right and a point I was trying to make.