NEC ECS: Supervision for production related cost when no EOT exists

NEC3 and NEC4 Contracts Compensation Events
1

We are a precast concrete Subcontractor under an option A subcontract. When pricing compensation events that have no EOT, the Contractor is happy to pay for the additional factory labour but not the supervisor and the QA manager. His argument is that these costs are prelims and the Subcontractor do not incur any additional cost and that they will only consider a payment if we had to employ additional staff to carry out the works.

However we feel these are production related costs and the dilemma is the labour are not additional cost either as they are permanent company staff too but the additional work through change means that we have to spend more production time with not just labour but also a supervisor and a QA manager. We believe these costs should be paid for by the Contractor but did not succeed in convincing him to pay for these. Are we correct to assume so? If yes what is the contractual approach to adopt?

2

You have to demonstrate that there is a change in Defined Costs (to which you add the Fee). So you have to demonstrate that the supervisor and QA person are directly involved in doing the work i.e. spend more time as a direct result of the compensation event.