NEC3 ECC: Contractors claiming direct and people overheads fee

Option B - Contractor is claiming both fees. He has been given additional works, all carried out within the working areas. He is claiming both fees for his labour. We have rates in the contract - which I believe is a Defined costs. ( 11.2(22) ) as per above, which incl. his overheads (in my opinion). so my questions is as below:

  1. Where can I find this clause 11.2 (22), in which book?
  2. Is my recourse to ask for actual costs (payroll) if we do not come to an agreement, and then pay them both fees?
  3. When do we pay people overheads? when its outside the working areas? If the overheads is already built up in the rates why do we add it in the contract data part 2 as well?


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With option B the fee percentage(s) only come into play with compensation events. For the original contract work you are right, that any fee percentage should be included within their original rates. For additional works or significant changes in quantity (see 60.4 for this threshold) these are assessed as compensation events. By agreement (both Parties agreeing) you can agree to use existing rates, but otherwise it is assessed as defined cost using the shorter schedule of cost components. Once you have built up the quote using the SSCC, you can apply the subcontract fee percentage to the elements that are subcontracted, and the direct fee percentage to everything else. You do not apply both to everything.

You will find clause 11.2(22) in the ECC contract. If you have the black book, clause 11.2(22) is in the option B specific clauses from page 29. If you happen to have the option B specific book then you will find it within clause 11 on page 4.