NEC ECS: Option A Subcontract CE Quotation

NEC3 and NEC4 Contracts Compensation Events
1

We are the Contractor and have a Subcontractor under NEC3 ECC Option A Subcontract. We have delayed access by 3 weeks and the Subcontractor has provided a quotation for 3 weeks delay plus increased programme over winter as we have pushed them into winter working.

Correctly they have applied their people costs and equipment under people / equipment in the SSCC. However they have also added subsubcontractor people costs under people and then also subsubcontractor people / equipment costs in a separate subcontractor section and applied the subcontract fee %.

I’m a little confused as the Subcontractor should price the work as if they hadn’t Subcontracted which would mean everything would be included under the SSCC even Subsubcontracted people / equipment. Or should they put all subsubcontracted costs in the subcontract section and keep it separate from their people / equipment and apply the Subcontract fee?

They have also used BoQ rates for their Subsubcontractor, would you ask them to provide evidence of these rates?

2

The Subcontractor should assess the amount in accordance with the definition of Defined Cost at 11.2 (22) using the SSCC whether work is subsubcontracted or not. The SSCC does not have a ‘subcontractor section’.

After applying the applicable percentages (people overheads, adjustments to Equipment), the appropriate fee percentage is then applied to each component in accordance with the definition under 11.2 (8), that is subsubcontracted fee percentage to subsubcontracted work and the direct fee percentage to other work.

If they have used BoQ rates from their subsubcontractor you would need to be satisfied that they do not include fee otherwise there will be a ‘fee on fee’ assessment. This would give you an opportunity to discuss whether these rates are appropriate to use in an assessment.