Does the subcontractor have to provide a break down of labour , plant & materials on their priced activity schedule ? Also will their cost be subject to assessment of their actual daily out put verses their original cost?
A breakdown of rates is often requested by both Clients and Contractors, although in practice there are various states of compliance with this request. This information is often used for bench marking and data analysis, although without meaningful information there may be limited value. A Contractor often requests this information simply because of a requirement (perceived or real) under the terms of the main contract. At tender stage you are not ‘in contract’ so both parties may request whatever they wish, notwithstanding Public Procurement requirements.
Under main option C, the activity schedule is initially used to calculate the ‘target’ (total of the Prices) and is not used for payment assessments which are based upon Defined Cost. Any ‘outputs’ shown on the activity schedule are not subject to re-measure, although a share calculation made at completion effectively makes a re-assessment, but on a ‘global’ basis and in financial terms only.
We have had a Tender amendment which has removed the schedule of rate for people and equipment from the contract data. We have been informed they will have an independent assessment of our define costs as the works progress. Should we not be agreeing define costs for plant & labour prior to signing into the contract?
Under main options A and B the Short Schedule of Cost Components (SSCC) uses ‘people rates’ for specified categories, stated in Subcontract Data Part 2, although this does not apply under main option C, which uses the Schedule of Cost Components (SCC). People rates would, therefore, need to be built up in accordance with the cost categories in s1 of the SCC and are not ‘pre-agreed’.
For Equipment (‘plant’) there should be tendered percentages in Subcontract Data Part 2, regardless of whether you use the SCC or SSCC. If this is not the case then these would likely be assessed using the cost sub-categories 21 and 22 in the SCC, although you may agree to use rates which can be treated as though they were included in the Subcontract Data (see sub-category 23).