NEC ECC: WAO on Cost of People within a Subcontract

We have completed a project under an ECC Main Option C, during which we engaged a Traffic Management subcontractor on an ECSS. Within the price list in the ECSS, the Subcontract allowed for his operatives separately to his equipment. Can we as the main contractor claim WAO on the people element of the subcontractors cost as they are priced separately to the equipment and therefore become a people cost?

No. Under an option C, D, E or F contract, a Defined Cost is what you pay Subcontractors in accordance with the subcontract.

To apply the percentage for WAO’s, the people would either have to be directly employed by you or agency people under your direction in accordance with People 14.

Jon,

Would your answer be the same if you knew that the Subcontractor did not set their own programme, the subcontract was merely the payment vehicle that was most appropriate but in truth it was an arrangement more similar to a labour supply arrangement.

The TM provider was not responsible for determining how many operatives or when the operatives would be on site, he was given instruction as to how many people to provide and for how long. Their working hours were set by the Contractor’s management team and if they worked less hours the subcontractor was paid less.

Therefore do they not fall under the definition of para 14 of the SCC as being “paid for by him according to the time worked while they are within the Working Areas.” ?

Thanks

Phil

By a strict interpretation of the contract, under NEC3, the answer would be the same. That would go against what is intended and in the Guidance Notes.

They have cleared up this anomaly under NEC4, because of the changes made in the definition of a Subcontractor.