NEC ECS: Supplier design fee - is this recoverable as part of a compensation event?

In NEC3 ECS option A, a variation is issued to a Subcontractor. The Subcontractor then passes the design and manufacture of the variation to their Supplier who is under a supply agreement.

Does the design carried out by the Supplier attract the design fee in the Data Part 2?

And as the Supplier is not classed as a Subcontractor this variation does not attract the Subcontract fee in the DP2, but does however attract direct fee as it is a supply agreement.

To note, the Subcontractor only carried out the installation of the variation.

Your supplier is classed as a Subsubcontractor in NEC3 ECS as they “supply Plant and Materials … wholly or partly designed specifically for the subcontract works”, see clause 11.2(17).

However the definition of Defined Cost in Option A states that you use the Shorter Schedule of Cost Components (SSoCC) whether the work is subsubcontracted or not. Therefore the quotation you submit for the CE will be based on the SSoCC i.e. people, Equipment, Plant and Materials, charges, manufacture and fabrication and design, i.e. you don’t just pass on the Subsubcontractor’s lump sum and apply your fee percentage.

So yes the Subcontractor is correct in being entitled to recover the cost of the design using rates in CD2 for design outside Working Areas and the rest of the quotation in accordance with the SSoCC too.