I am working for a Contractor who has subcontracted the preparation of quotations to a firm of Quantity Surveyors.
The main contract between the Employer and Contractor is an NEC3 ECC Option C, the contract between the Contractor and the Quantity Surveyors is a NEC3 PSC Option E.
The quotes are prepared at the offices of the QS practice which is not part of the Working Area. My question is in 2 parts:-
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Should the Project Manager include the cost associated with preparing these quotations when assessing the amount due?
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Can the Contractor include the costs of preparing the quotations within the quotation itself as a proposed change to the Prices?
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The QS time, if carried out under a subcontract, is part of the PWDD being Defined Cost (the QS firm can be a subcontractor under the second bullet of Clause 11(7) as they are providing a service necessary to Provide the Works). On that basis, yes it should be assessed by the PM. There may be a discussion on whether they are a subcontractor or a labour only type subcontractor and therefore properly recoverable as People Costs under the SCC. Assuming they are approved as a subcontractor under Clause 26.2 I suggest they should be treated as a subcontractor providing a service and not a people cost.
In terms of including the costs of preparing quotations in the quotations yes that is allowable under Option C (it is specifically excluded for Options A and B). Cluase 63 setting out the basis for assessment uses Defined Cost (incurred or to be incurred) and as noted above the preperation costs are part of the Defined Cost.
The Guidance Notes confirm these points.
The guidance notes also state that with regard to Options C, D, E and F, the Contractors cost of preparing compensation events will usually be included in Defined Cost (assuming that quotations are prepared by using people working in the Working Areas), this would suggest that if the quotes are prepared at the offices of the QS practice which is not defined as part of the Working Area then those costs would not be allowable within the quotation itself under Option C (page 75 of Guidance Notes)
Mark
The Guidance Notes are helpful as a starting point but they are NOT part of the contract so you need to take the issue back to the Contract.
The point in the Guidance Notes and your point above are correct if the QS is a People Cost. My origianl answer was assuming the QS was in fact a subcontractor.
As Rob states it all depends on whether the QS is providing a Professional Service as a Subcontractor or is the QS firm just providing a resource (labour only) in which case the resource woould need to be working in the Working Areas.