NEC ECC: Payment for Deposit Charges

In the option D contract, can the payment be made for the deposit charge of some utility company, e.g. electric or hydro? If it can, under which SCC should the payment be made?

The answer would depend on whether you were using NEC3 or NEC4 although the principle would stay the same.

Under NEC3, Subcontractors are not a listed cost in the Schedule of Cost Components, but the Contractor is paid, as a Defined Cost, what he incurs in accordance with the subcontract + subcontract fee percentage.

Under NEC4, Subcontractor costs have been moved into the Schedule of Cost Components so, again, the Contractor is paid, as a Defined Cost, what he incurs in accordance with the subcontract + fee percentage*

  • In NEC4, there is only one fee percentage which applies to both direct and indirect costs…

Is the ‘deposit charge’ for provision of a utility service or for the diversion of the utility company’s equipment?

I apologise for having asked a very misleading question! Let me pose an example. Suppose the contractor needs to rent a storage compound and he needs to place a deposit to the landlord which will be released after the works are completed. In the interim payment, should the PM provide the deposit amount to the contractor?

This could be classed as either Equipment or the provider could be a Subcontractor. Note that if treated as Equipment then the storage compound would need to be in the Working Areas to be a genuine Defined Cost so you would need to include this. If a Subcontractor then the overall cost would be paid, including any deposit as it is a cost incurred in order to Provide the Works. The return of the deposit would be a negative interim adjustment to the account.