NEC Option C with no SCC

NEC3 and NEC4 Contracts Payment
1

I am PQS on an NEC3 Option C Contract which the Client put together prior to our engagement on the project.

The SCC is blank in the Contract.

I have argued that the Defined Cost for staff should only include those roles who were itemised within their Target Cost forecast included in Part 2 of the Contract, which covers about 95% of what they have claimed for.

There are staff roles who were never listed in their Part 2, such as Admin assistants, marketing managers etc, who I am arguing are not defined cost on the basis that;

  1. The lack of a SCC means we have to use something to define what can be claimed as Defined Cost for direct staff costs, therefore I am using the forecast within the Part 2, and;
  2. The disputed people are head office functions who cannot be included in defined cost.

Their position is that the lack of SCC means they can claim anyone involved in the scheme and that as the Working Area is extremely vague as it allows for ‘‘anywhere any direct member of staff may choose to work’’ they can claim for head office staff.

Is my position logical?

2

Hi Keiran Can you clarify what you mean by the SCC is blank? Do you mean the entries in the contract data for SCC are blank? Are all the NEC terms bound into the signed agreement? This is not normally the case. Typical the terms are included “by reference” to them with a statement at the start of the contract data that states the “conditions of contract are the core clauses, main option C, secondary options X1, etc of the NEC4 Engineering and Construction Contract.” So the SCC is typically included by reference. Most of the entries in the contract data for SCC are optional.

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3

Hi Chris,

We have a Memorandum of Agreement which references the contract and it’s core clauses and options.

The Contractor’s Part 2 tender return is included, however the section for them to include staff, plant for use under the SCC was not completed.

The Contractor’s position is that all staff billed to the project are defined cost, irrespective of the fact that they were never included within the original forecast target cost.

Thanks,

Keiran