I am currently working on an 8 year single party NEC framework.
There are 8 individual NEC contracts spread out over the duration of the contract. I am in the negotiation stage of signing up to contract no.3. However there is some difference between myself and the client on how to calculate the annual inflation uplift.
When calculating the inflation uplift for year 3, I have used the rates from contract 2 and applied the % difference from last years index to this year which is 3 %.
The client has gone back to the rates in contract 1 which were agreed 3 years ago and applied the difference between the index on that date to this years index. Which only gives an increase of 2.3% on my rates from contract 2.
What would be the correct way to calculate this? There is no X1 clause in the contract data for each of the individual contracts. The client position is the rates in contract no.1 are the framework rates and we must use them for calculating the uplift.