# NEC ECC: Option A correct fee % application

**URL:** <https://reachback.builtintelligence.com/t/nec-ecc-option-a-correct-fee-application/5166>\
**Category:** Contract Data\
**Created:** [11 July 2019 08:06 UTC](https://reachback.builtintelligence.com/t/nec-ecc-option-a-correct-fee-application/5166 "2019-07-11T08:06:42Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![Alfie\_David](https://dub1.discourse-cdn.com/flex013/user_avatar/reachback.builtintelligence.com/alfie_david/32/4_2.png) [@Alfie\_David](https://reachback.builtintelligence.com/u/Alfie_David)\
**Post date:** [11 July 2019 08:06 UTC](https://reachback.builtintelligence.com/t/nec-ecc-option-a-correct-fee-application/5166/1 "2019-07-11T08:06:42Z")

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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?

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**Author:** ![Jon\_Broome](https://dub1.discourse-cdn.com/flex013/user_avatar/reachback.builtintelligence.com/jon_broome/32/192_2.png) [@Jon\_Broome](https://reachback.builtintelligence.com/u/Jon_Broome)\
**Post date:** [11 July 2019 09:31 UTC](https://reachback.builtintelligence.com/t/nec-ecc-option-a-correct-fee-application/5166/2 "2019-07-11T09:31:39Z")

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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.