A Contractor, working under NEC 3 Option A, has issued quotations that include sub-contractor costs to which he has applied his people overhead fee and then direct fee.
Is people overhead fee applicable to sub-contractor costs when the costs are time related based. i.e. cost per hour?
Some sub-contractors are labour only with an agreed rate per hour and others are working under Option A or B.
I am aware “fee one fee” is not allowed however this is not currently being claimed.
For NEC3 Option A the default assessment of compensation events is Defined Cost + Fee. Clause 11.2(22) defines Defined Cost is based on the Shorter Schedule of Cost Components (whether work is subcontracted or not). The Contractor should therefore be basing its assessment on the components in the Schedule and not just subcontractor cost eg People as item 11.
The assessment should include the People overhead % applied to People and since the work is subcontracted the Subcontract Fee % should be used.