NEC ECC: Design Costs under the schedule of cost components

NEC3 and NEC4 Contracts SOCC SSOCC
1

We are a Joint Venture (Main Contractor and Designer) currently tendering for a Design and build project based on an NEC4 ECC Option C contract.

The potential client believes the cost of the designers staff is recovered under the ‘People’ (1) component in the schedule of cost components.

The designers staff will be working out of their own offices and will not be working within the Working Areas.

It is our understanding that the cost of the designers staff is recovered under the ‘Design’ (7) component in the schedule of cost components utilising rates tendered in the table for the Defined Cost of design outside the Working Areas in contract Data Part 2.

Please can you clarify under which component under the schedule of cost components do you recover costs for designers staff under a Joint Venture working outside the Working Areas.

2

Fist of all let me ask, are you a true JV, in the legal sense, in that the Client will be contracting with both of you directly?

If not, the answer is that designer will be a Subcontractor and paid for in as Defined Cost in in accordance with that contract under heading 4 of the re-jigged (compared with NEC3) Schedule of Cost Components.

If it is a genuine JV and the designers are not working in the Working Areas, then you are right, they would be paid for a Design 7.

Alternatively - and depending upon the circumstances - what I have seen done is a part of the design office is used exclusively on a specific contract. That part - a room say - is specified as part of the Working Areas.