NEC ECC: When is the Contractor entitled to a direct fee and when is a subcontractor entitled to a Subcontractor's fee?

What is the difference between P&G’s, and direct fee?

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The Contractor is entitled apply the Direct Fee on top of the Defined Cost. This could be on all costs demonstrated under a ‘cost reimbursable’ options such as an Option C (Target Cost) or Option E (Cost Plus). This Direct Fee and Subsubcontract Fee is also applied on Compensation Event Quotations.

The Subsubcontract fee is only applied to Subcontractors. A Subcontractor is a person or organisation who has a contract with the Employer. The full definition is under CL 11.2 (17) (Option A)

The Direct Fee is applied on all others works, this is described under 11.2 (8) (Option A)

So in summary, Subcontract Fee on Joe Blogs Construction Ltd. Direct Fee on your Schedule of Cost Components.

Just to add to QS007’s comment above, As well as including for P&G type costs, the direct fee also includes head office overheads and any other cost not included in the Schedules of Cost Components.