What is being asked or can someone give me a worked example please - 1.The percentage for overheads and profit added to the Defined Cost for people is 2. The percentage for overheads and profit added to other Defined Cost.
What are they looking for here?
I assume you are talking NEC3 here, as it is a different answer for NEC4.
Under NEC3 there are different percentage elements applied to different parts of the schedule of cost components.
For the amount applicable to people, you first apply the people overhead (for options A/B) or working area overhead (for other options). So if it was £10k of people cost and your people/working area overhead is 10% this would make the people element £11k. You then add up all the other amounts within the other schedule of cost components, and if the £11k added to the other elements is £30k, over and above that you then get to apply the direct fee percentage which if also was 10% would make the whole lot now £33k.
Just to confuse thing slightly more, under NEC3 there is a subcontract fee and a direct fee, and you apply the subcontract fee to the element that was subcontracted, and the direct fee to everything else. If in the example above the £30k was made up of half subcontracted work, and the subcontract fee was 15%, you would apply 15% to £15k and the 10% direct fee percentage to the half not subcontracted making the total £34.5k.
NEC4 does away with the subcontract fee, people and working area percentages and just applies a single fixed fee percentage. Much easier to administer, but harder for the Contractor in a competitive tender situation to come up with one number that covers everything.