Using an NEC3 Option B: When creating a quotation for a Compensation Event, we are applying the “People Percentage Overhead” (5%) to the People Costs, then applying the Direct Fee percentage (10%) to the sum of all the costs in the Short Schedule of Cost Components (Note: No work is Subcontracted).
Example: People Cost = £1000, times by 5% (£1055), times (£1055) by 10% = £1,155. Is this correct ? CL.11.2.(8) suggests the Direct Fee percentage is applied to all costs incurred under the SSCC (People, Equipment, Plant, Charges, Manufacture, Design & Insurances).
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Yes, it sounds correct. The fee percentage is applied to the Defined Cost, which for Option B is the cost of components in the SSCC, as you said.
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