NEC 3 SoCC - Bonus & Incentive Payments or Disallowed Cost?


The subcontractor is using agency operatives to carry out their works, however the agencies have said that the operatives will not be willing to work on the project unless they are paid a 10hr day shift and would need a bonus. The shift on site is only 7.5hrs (due to permit reasons), therefore I wanted to understand that if the subcontractor brought the operatives to site, paid them based on a 10hr/day rate (albeit they only worked 7.5hrs) could the additional hours pay be deemed as an incentive payment and the following statement, ‘Any project specific bonuses and incentives will only become payable if they are for performance criteria in relation to this contract only.’ within the SoCC be used? Or would the 2.5hrs (and even the bonus) become a disallowed cost?

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I do not recognise the statement you have quoted from the SoCC which makes me think that your contract has been amended with Z clauses in which case it is difficult to answer your question without full sight of the amended contract.

Ordinarily the agency operatives would fall under item 14 in the SoCC “people not directly employed … but paid for … according to time worked … in Working Areas”. What can be recovered is “amounts paid” therefore if they can demonstrate that they have paid the operatives for 10 hours, this can be included in Defined Cost.

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That’s great, thank you for your response.