NEC ECC: Can Percentage Fee Uplifts be applied to Lump Sums under NEC3 PSC Clause X1

NEC3 and NEC4 Contracts Secondary X, W and Y options
1

A number of years back we were successful in a Primary Competition to get a place on a Government Framework and following the award of a Secondary Competition in 2013 were are providing the service defined in the Scope. Both the primary and secondary contracts are NEC PSC with Clause X1 included and the Price Adjustment Factor is calculated using the RPI. The Contract Data of the Secondary Competition notes that “The index for adjustment of hourly rates on the 2nd and subsequent anniversaries of the date of award of the Framework Agreement is the Retail Price index”.

We have been successful in agreeing the percentage uplift or Staff Rates for CEs however, given that lump sum activities (ie RIBA Stage 3) priced in the tender for the secondary competition are , and will be, undertaken several years from the award of the framework can you advise if we would be entitled to a percentage fee increase on the lump sum values used the the tender for the secondary competition in a similar fashion to the Staff Rates?

1 Like
2

You don’t say which Main Option you are using, which would change the definition of certain defined terms and also the application of an X1 calculation.

3

Apologies. Option A

4

The simple answer is ‘yes’.

The adjustment under Option X1 for Main Option A would be applied to the difference between the charge for Price for Services Provided to Date from year to year, taking the anniversary of the Contract Date as the assessment point.

The percentage uplift agreement in relation to staff rates in Contract Data Part 2 would apply to compensation events only, which these rates would be used for, and ‘backdated’ under Option X1 to the applicable base date. This implemented CE is added to the Prices and would be included in the X1 adjustment above,

The ‘lump sum values’ or activity values form part of the Price for Services Provided to Date so would be subject to an Option X1 adjustment at each anniversary of the Contract Date using the stated indices, which in your case would be RPI.

5

Thanks Andrew!