when pricing a project with the contract conditions being NEC4 “Term Service Short Contract” how should the percentage fee work?
The pricing schedule is rate only items for plant and labour, should these items be classed and priced as defined cost with a percentage fee then applied for on application for payment? Or should the rates allow O&P and the fee is only for CE?
Thanks
Bryan, you should ask the Client through a tender clarification. The Contract Data should tell you what method and rules have been used to compile the Price List, the Client carries the risk of mistakes and errors in the Price List - see CE 60.1(9).
In normal circumstances, the NEC4 TSSC identifies the work in the Price List as either lump sums or measured rates, see cl11.2(9), these would normally include overheads and profit.
The only time the fee percentage is used is to add it to the Defined Cost in an assessment of a CE, see clauses 11.2(3), 11.2(5), 11.2(7), & 63.2. Defined Cost includes the People Rates, cost of Plant and Materials, subcontract payments and Equipment, so your fee percentage has to be sufficient to cover all other costs such as head office overheads and profit, etc.
It sounds as if the contract you are pricing is doing something different, so if it is not clear on this point you should ask for a tender clarification, do not assume or interpret.
Happy to discuss further if you want to share more information.
Thanks Steve, i was going to ask via a tender clarification however i wanted to do some research first.
thanks for the response its greatly appreciated