NEC ECC: Direct fee and subcontract fee on NEC3 ECC option E contract

If the direct fee and subcontract fee are applicable on the defined cost. What is the equipment over head, design overhead and people overhead used for - would this not fall part of the direct fee?

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No, these three make up Defined Cost and are intended to avoid the need for the calculation of minutae when compensation events occur, so

  • the percentage adjustment for listed Equipment is normally a negative percentage adjustment from a standard list, thus avoiding the need to justify (argue over) the costs of Contractor owned Equipment as well as produce an invoice for hired in Equipment;

  • the percentage for People overheads is to avoid the need for calculating the on-Site minutae of the costs listed in People 41 of the Shorter Schedule of Cost Components;

  • the percentages for design overheads is to avoid the hassle / complexity of calculating design office overheads on top of what is paid for an individual designer working outside the Working Areas.