ECC Option A, I need to assess the Contractor’s Compensation Event and ensure that the correct fee % is applied.
I have a situation whereas a Contractor is applying direct fee on a required third tier company to provide a specalist survey.
I am aware that the Contractor doesn’t have a subcontract with the company 11.2(17), just a purchase order. The Contractor has provided purchase order and invoice to demonstrate the actual cost paid, but has applied the direct fee %.
Is the contractor correct with regards to the direct fee % or should this be the subcontract fee % - or am I missing this within the Shorter SSCC?
Firstly, I am a little confused when you say “a required 3rd tier company” which implies they are a Subsubcontractor. However, I will proceed as if they are a Subcontractor - correct me if wrong.
Go back to the definition of a Subcontractor in 11.2 (17) of NEC3 ECC, which I presume it is as NEC4 has only one fee percentage.
It has the words “A Subcontractor is a person or organisation who has a contract with the Contractor to - provide a service necessary to Provide the Works …”.
I sounds as if the ‘supplier’ is doing this, so by the definition of the contract - without being certain of all the details - I think you are right to query the application of the direct fee percentage.