Our subcontractor believes they are entitled to price the cost of a delay differently to any of their other compensation events i.e instead of applying their usual uplift percentages they are including actual rates for accomodation etc. which is more expensive than their percentages. This is a lump sum contract.
They are largely right.
See the detail of the SSCC : i.e. site management people who on site longer are paid at cost with uplift (percentage for WA overheads). Accommodation is within Equipment. General construction plant, which will be on-site longer as a result of prolongation is within Equipment etc.
Some costs though will be within the percentage for WA overheads so you need to look at what is within that percentage to avoid double payments.
I was confused by the statement “This is a lump sum contract”.
Sorry, I didn’t pick up on the observation by Dave Bates, although I am not sure it his relevant. Under an NEC3 ECS option A/B , Defined Cost is cost incurred in accordance with the Shorter SCC (SSCC). Under options C to E, it is in accordance with he full SCC if incurred by the Subcontractor directly and in accordance with the sub subcontract if sub subcontracted. So if the Subcontractor is having to keep extra management people on for a period of time because of a compensation event, that is a people costs as per 1. People of either SCC. Ditto for accommodation and construction plant under 2. Equipment etc.