NEC ECC: Subsubcontractor Fee Percentage on Contractor quotation

NEC3 and NEC4 Contracts Compensation Events
1

I am currently managing an NEC3 ECC Option B contract and have been presented with a quotation for CE as follows:

The Contractor has submitted a quotation which includes their Subcontractor costs, hence subject to the Subcontractor fee percentage of 10%, as per CDP1.

However, reviewing the Subcontractor costs included within the quotation submission , they have in turn subcontracted a particular element to another subcontractor, and have applied there own mark up on those costs at 15%.

Therefore, there is now a fee on fee situation, I.e. subcontractor on his subcontractor, and Contractor on his subcontractor.

Where do I stand on this?

2

Apologies for the delay in getting back on this.

Strictly speaking by the contract, under NEC3 options A & B, it does not matter what Subcontractors and sub-subcontractors quote wrt works under a compensation event: the event is assessed using the Shorter Schedule of Cost Components unless the PM and Contractor agree otherwise to use lump sums and rates.