NEC3 ECC Option C - WAOH

There are approximately 100 people on site on my current project. 60% of the staff
are employed by the Contractor (either directly or via agency). The remaining 40% are 3rd parties - consultants and the like.

The Contractor is adamant that the cost of any items which would ordinarily fall under WAOH (for which the Contractor is being reimbursed via his fee % - e.g. items related to sanitation, copying etc) which are used by ALL the staff must be split accordingly. In other words, he believes he is entitled to 40% of the communal-use items as a result of them being used by 3rd parties.

Is this correct? How does the NEC deal with such a scenario? Surely the Contractor must have envisaged 3rd parties also being based on site and should therefore have accounted for such an expense in his fee.

I should also add that there is no cost component listed in the SOCC that allows the Contractor to allocate such a cost. The only potential component states “payments for all consumables and equipment provided by the Contractor for the Project Manager’s and Supervisor’s offices.” Even if we were to accept this component, it, strictly speaking, only results in paying for 2 people – the PM and Supervisor.

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I am answering this question on the basis that when you say “the remaining 40% are 3rd parties - consultants and the like,” they are people acting on behalf of the Employer and NOT Subcontractors to the Contractor.

I am also assuming - which might be a big assumption reading between the lines of what you say - that the Works Information has specified that the Contractor is to provide the accommodation for them and therefore the portacabins etc are being paid for as Equipment as per the opening sentence of Equipment 2 in the Schedule of Cost Components and excluded from being included as part of the percentage for Working Area overheads.

The percentage for Working Area overheads covers the equipment (no capital letter so not the Defined term) supplies and services for many things which go inside these portacabins, so regardless of whether the offices are used by the Contractor’s staff or by the Employer’s staff, these costs are covered by the percentage for WA O/H’s.

However, you also state that the SOCC also says “payments for all consumables and equipment provided by the Contractor for the Project Manager’s and Supervisor’s offices.” This is an amendment to the SOCC. A restrictive interpretation would be that it is only for the (singular) Project Manager and the (singular) Supervisor. Just taken on its own, without knowing any other details of what the contract says, this does seem a bit of a biased interpretation !

And if the Works Information says something like “The Contractor is to provide the following accommodation for the PM and Supervisor” and then lists out all the portacabins etc which are to be provided and facilities inside, then I think the Contractor would be quite justified in saying that all the consumables etc are paid at cost.

The caveat to all of this is that I do not know all the details of what the contract says as it has obviously been amended.