NEC ECC: Option B - Defined Cost for CE Assessment

I am involved in assessing CE quotations under an ECC Option B contract and the Contractor has submitted “old fashioned” time related prelim charges such as Director, QS, Contracts Manager etc.

I have responded stating that these are not Defined Costs unless the persons “normal place of working is not within the Working Areas but who are working in the Working Areas”, as per bullet point 2 of People 1 of SSOCC. It is therefore for the Contractor to demonstrate that these categories of people satisfy this bullet point.

However, how do I assess the costs for professional staff as the SSoCC included within the tender documents only includes rates for site based management staff, tradesmen and operatives.

I also need to be careful not to assess costs which are overheads and therefore included within the fee.

The cost is assessed using the SSOCC, which, as you rightly say, requires People to be in the Working Areas, whether directly or not directly employed, for their cost to be treated as Defined Cost. ‘Overheads’ are included in the Fee.

The Defined Cost for People who you don’t have a rate for would be determined by the amount paid by the Contractor, so you would likely determine this in conjunction with the finance / accounts department of the Contractor, notwithstanding any confidentiality issues.

There are no ‘hard and fast’ rules as to who should or shouldn’t be included, beyond the above Working Areas requirement, and it would depend upon the scope of the CE and who would likely be required.

Historic involvement on a project would be a good indication of whether certain types of People are needed. This is more relevant to a Lump Sum option (A or B), as you wouldn’t have details of the rates and Prices and what they include for.

The Contractor is also required to submit details of the assessment with a CE quotation, which would hopefully explain the inclusion of any People who are not usually working on the project.