NEC3 ECC - application of exchange rates

Clause 50.7 states - Payments of Defined Cost made by the Contractor in a currency other than the currency of this contract are included in the amount due as payments to be made to him in the same currency. Such payments are converted to the currency of this contract in order to calculate the Fee using the exchange rates.

Do the exchange rate apply to rates provide in the contract data for equipment i.e. equipment rates stated in contract data is adjusted for exchange rates, because the supplier of equipment is foreign ? This would appear to undermine the cost certainty (the purpose) of having these rates.

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Firstly, for any body reading this and saying “there is no clause 50.7”, it is in main payment options E & F. There is also no identical wording in options C & D in clause 50.6, but which also covers the calculation of the Contractor’s share.

So in answer to your question, I would say that if the Contractor has provided a rate in the Contract Data, that is the rate that applies. This is because clause 52.1, second sentence says “Defined Cost includes only amounts calculated using rates and percentages stated in the Contract Data and OTHER” (my capitalisation) “amounts at open market or competitively tendered prices with deductions for all discounts, rebates and taxes which can be recovered.”

In other words, if there is a rate stated in the Contract Data, that has precedence over the open market rate, regardless of whether it is paid in a foriegn currency or not.