NEC ECS: Contractor does not consider Subsubcontractor to be Defined Cost

NEC3 and NEC4 Contracts
1

We are a subcontractor who could not start work due to the Contractor’s delays. As we are a production factory and our subcontract is a supply and install under ECC option A, we have engaged a subsubcontractor for the installation works which had to be available from the start of the job.

When claiming for the subsub’s project manager time during the delay period, the Contractor refused to agree this cost even though we have submitted their time sheets showing time allocated to this job. Furthermore, we have mitigated their involvement, through requesting the subsubcontractor to only allocate half a day per week during this period and the reason being is that we did not want the subsub to allocate his PM elsewhere; as they were required to review and produce a number of documents during this period in addition to the multitude of revisions that were required.

The Contractor feels that this is not a Defined Cost as per the shorter schedule and fears that this cost will be disallowed by their client. How can we demonstrate our entitlement in line with our subcontract?

2

Assuming this is NEC3, then, in accordance with the definition of Defined Cost at 11.2 (22), the cost components of a subsubcontractor would be included in the quotation without differentiating between who the resources are ‘employed’ by.

I’m not sure if this is the reason why the Contractor is raising an objection, as the subsubcontractor’s Project Manager should be included in People under section 1.

NEC4 is different, however, with the Short Schedule of Cost Components, which allows for the inclusion of Subsubcontractors cost as a discrete cost component.

I think it is always important to include at least a brief commentary with a submitted quotation, to explain how the quotation has been priced and why costs have been included. This then at least allows some understanding when making an assessment without having to ‘second guess’.