NEC 3 - Option A (ECC)
We have a contract that included a Contractors schedule of rates listed in Contract Date Part 2 (as requested by the Employer). The rates are for general site operatives i.e. Steel fixer = £300/day, Carpenter = £280/day etc. Using Cl.63.14 both parties may agree to use these rates for pricing Compensation Events for additional works. The Contractor has submitted a CE quotation with the rates plus the direct fee percentage applied. We believe the rates are all inclusive and not a Defined Cost, and therefore should not attract the fee percentage. Contract Data Part 2 rates are only referencing data for the Short Schedule of Cost Components for “Equipment” and “Design”, of which neither of the operative rates fall under. Should all listed staff rates in a schedule of rates under NEC3 be able to attract the fee percentage on top? (I believe this was changed in NEC 4)
Would welcome views on this ? (I appreciate the starting position should have been a forecast of defined cost + fee)
1 Like
Clause 52.1 is your starting point here. It says (in short) that Defined Cost is calculated using rates and percentages stated in the Contract Data and other amounts (where there are no rates) using open market or competitively tendered prices.
So by the sounds of things, you have rates for certain categories of people within your CDp2. As such, these rates should be used to work out the Defined Cost of these people. The final step, is to apply the direct fee percentage to these people.
Unless your schedule of rates clearly says that the rates were to be inclusive of the fee, I do not see any reason why the rates would be deemed to be all inclusive.
Hello William - Thanks for responding. This is relating to an NEC3 contract. In Contract Data Part 2 it lists the following “The hourly rates for Defined Cost of design outside the Working Areas are:” This reads that the Data for the Short Schedule of Cost Components to be used in CD2 is only for design staff costs. I still view other staff costs listed in the schedule as not a Defined Cost (if they are not design related).
Should the contract be clearer here? My interpretation is based on how it’s written i.e. It does not reference all staff, it is very specific the wording and is only referencing “design”
1 Like
Anyone else able to offer a view on this?