Hi my end client has challenged unskilled labour rate being applied to our direct labour who are travelling and subsiding for the project. There is no agreed rates for unskilled labour in the contact or rates. The client has paid these rates previously however is making its own assessment of the rate that should be applied. What rights do I have to challenge the (contractor) rate applied and the (client) rate been proposed for the labour?
I would turn this question around : what right do they have to challenge the rates you have put forward for direct labour ?
If you have built up the rates in accordance with the Shorter Schedule of Cost Components and have presented that honestly, then their right is to seek justification e.g. “how did you arrive at that figure”. My view is that NEC3 Shorter Schedule is a bit too brief when it comes to this and the Panel (as was) seem to agree as the Guidance Notes almost say “see the full schedule if this brief”. (Don’t get me started on the 4th edition Short Schedule for People which is even briefer !!!)
Nevertheless, if you have given an honest breakdown with sufficient justification, then they would not have the right to make their own assessment.