On a project, if the Contractor’s staff are required to fly in, hire cars for transport from the airport to the working area, and stay overnight in local hotels, are these costs recoverable under ‘people’ costs in the SSoCC?
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First of all, as it is an option B contract, before we dive into the detail, they would possibly only be recoverable if it was a compensation event.
Secondly, under clause 63.1, it is the change in Defined Costs that are assessed, so if the people are just working two hours extra a day and being paid over-time, then you are entitled to have this overtime reimbursed, but not factor in the flying in, hire cars etc. as there is no extra cost. On the other hand, if the duration of the contract is being extended so they have to to fly-in etc for additional week, then that is a change in Defined Costs.
The SSoCC became extremely vague in the 3rd edition about how People costs are assessed, stating “amounts paid by the Contractor including those for meeting the requirements of the law and pension provision”. So reading the contract strictly, you are entitled to the additional “amounts paid” to or with respect to People for the compensation event. I think “amounts paid” covers your items listed.
A persuasive argument if it got to court would be to ask what was the intention of the authors of the third edition and if you look in the GNs on p61, it says “The intention is that amounts paid in the Shorter SCC would cover all the specific items listed in the full SCC.” In the full SCC, it lists “13 (a) travel” and"(b) subsistence and lodging" so that would reinforce the common sense interpretation of the clause.