NEC ECC: Contract Part 2 layman's terms

NEC3 and NEC4 Contracts General
1

Can anyone provide a bit of a glossary to the following terms in NEC3 Contract Part2 please?

Trying to complete a tender and this is the first time we have ever encountered NEC3 and struggling to get my head around it!

Direct fee percentage?

Subcontracted fee percentage?

Percentage of people overheads? Is this calculated based on the Tendered Total Price or is it over a standard financial year? Is it just the key people listed or all working on the project? What would be normal on a sub £1m project?

Published list of equipment?

Percentage adjustment for equipment?

Rates for other equipment?

Percentage for deign overheads?

I have been trawling the internet and there seems to be nothing even from NEC in terms of guidance glossary for the layman

1 Like
2

Have a look either at :

  • the Guidance Notes published with the contract;
  • Mitchell & Trebes “NEC Managing Reality” Book2; or
  • my “NEC3 ; A User’s Guide”
3

Thanks Jon,

I have now purchased and read your book and also got hold of a copy of the guidance notes which have both made things a lot clearer. What I still don’t understand/can’t find information on is how I would actually go about working out what our “Fee Percentage” is or “Percentage People Overheads”

4

I know its somewhere in there, but fee percentage is effectively head office overhead including profit. Note though that on small sites where much of the professionals time might be spent at head office, as opposed to within the Working Areas, that is needs to be counted as head office time overheads.

For people overheads, see Charges 41 of the Shorter SCC for what it has to cover. In simple terms, for the ‘average’ / ‘typical’ compensation event, calculate these costs and put them over the ‘average’ / ‘typical’ People costs for such a CE and you get the percentage.

What the hell the ‘average’ / ‘typical’ CE is, though, is up for debate !