NEC ECC: What items should be included / allowed for when calculating percentage for peoples overheads?

I would like to clarify what items are included / allowed for when calculating the percentage for peoples overheads within the Shorter Schedule of Cost Components (SSCC).

Our Contract is Option A and under the SSCC has a people overhead fee percentage of 15%. I am trying to find what is included for or allowed within “people overhead fee” and do a sense check. I would also like to know what is included so that i can assess our own proposed people overhead fee in the future


Strictly speaking by the contract, it is what is listed in Charges 41.

The issues come when interpreting that. As a real life example - and there are others - when it says in the 3rd bullet “payments for … services for … security” does this mean for the hire costs of security infrastructure e.g. movement detectors, security lights etc or does it also include the cost of security person (or are they paid for directly as a Subcontractor or under People).

Even if you arrive at a definitive view on this, there is then the question of where you pitch it. At one extreme, do you assume all compensation events have a time-related aspect and therefore the people percentage needs to take account of this (but that might make you un-competitive at tender) or, at the other extreme, no time-related effects, which means you might well lose money on compensation events which have an affect.

Although not the official reason given, this is probably the main driver for removing it from the fourth edition with things just being paid for at cost.