NEC3 ECC: Can Contractor's head office be included within the Working Area?

Can Contractors define the Working Area to take into account their head office so as to allow for payments of Project Managers, Quantity Surveyors etc within Compensation Events? Contract Conditions are NEC3 Option B. There is no design services from the contractor.


The guidance notes advise that the Contractor’s head office should not be considered as a Working Area. In relation to quotations for compensation event using the Shorter Schedule of Cost Components only the Contractors staff (PM/QS, etc) whose normal place of work is within the Working Areas.

Can you confirm which page/ section it notes about working area not being considered a working area?

The guidance notes at the end of the section on schedule of cost components give clear notes on anything not included within the schedule of cost components should be included within the Contractor’s fee. It lists examples of what the fee should include, and the very first line is head office charges and overhead.

It is rather a case of not “where does it say Head Office is not part of the working area” but the fact that it doesn’t say that it is. I know guidance is not part of the contract – but it is the clearest words we have as to interpretation and intent.

Also look at definition of working area – which is “those parts of the working areas which are necessary for Providing the Works and used only for work in this contract”. Head office would not fit this description.