Client disallowing costs based on; ‘resources not used to Provide the Works (after allowing for reasonable availability and utilisation) …’ the story is on site subbie labour being watched and reported on by clients on site. Said labour sitting in vans when unsupervised as supervision staff having to cover too many areas to cover (when the cats away). Client disallowing for resources not used to provide the works… I would think if the client wasn’t happy he could have instructed the removal off site or had risk reduction meetings and EW’s none of which happened.
Is inefficiency/non-productivity a valid disallowable under option E?
When would ‘resources not used to Provide the Works (after allowing for reasonable availability and utilisation) …’ be used?
The Disallowed Cost clause is one of the mechanisms to determine what is Defined Cost and what isn’t. This includes the 7th bullet point relating to resources not used to Provide the Works. Note that this is not a measure of how efficient resources are being used but rather whether they are actually being used. Over a project’s lifetime it is natural for resource usage to fluctuate, for various reasons, although I am unable to comment in your situation.
Note that the Client has no authority to apply the Disallowed Cost clause as it is the Project Manager who administers the payment procedure under core clause 5, unless the Client is advising the Project Manager to treat such costs as Disallowed Costs. Under NEC3 the right to instruct removal relates to an employee but NEC4 has changed this to person, which could mean a subcontracted resource. Again this is a Project Manager instruction not a Client one.
I would suggest giving an early warning and discussing the matter. If any such costs have been disallowed incorrectly then you would be entitled to payment of interest on the ‘corrected amount’.
I would suggest that an application of this bullet point is where resources are using the Site facilities as a convenient place to work but who are not actually working on the project, or where particular activities have been completed but the associated resources are still on Site, although they are no longer required.
In my experience with Option E, the not used to provide the works information has been used to deter contractors from using a site as a car park for people and plant that are usually sat in their yard not being charged out, they will move it to a site to charge for it and it not be needed. One thing to ensure is that the people who are sat in vans may not be physically able to do any work due to an issue on site but they must be within the working area or there is an awkward conversation to be had with the Employer. Always useful if you can link the standing time to a CE that stops you completing the works.