Under an NEC4 Option A, the Subcontractor was due to provide all fuel for undertaking the works. Instead, the Contractor has provided all of the fuel, following agreement between both parties post Subcontract award. An instruction was issued to the Subcontractor detailing that the Contractor will be providing all fuel to the Subcontractor, and recovering the cost.
The Subcontractor has now applied for a negative Compensation Event to their forecast of fuel costs for the works. Is this the correct methodology, or should the Contractor be contra-charging their incurred fuel costs under Clause 25.2? If the latter, which fee percentage is applied to the contra-charge - the Subcontract fee %, or the Contractor’s fee % with the client?