I am currently managing an Option E Main Contract which has a 15% Subcontract fee percentage in. We have Subcontracted a company to provide labour costs. Their direct fee percentage is 15%. They apply for their costs each month. Defined Costs + 15% Direct fee percentage. Do we then apply our 15% on top as I have always thought option E allows fee on fee as the first 15% is included within the amount owed to a Subcontractor. Is this correct?
Yes you are indeed correct, the subcontractor’s direct fee % covers their corporate overheads and profit, your 15% subcontract fee % covers your corporate overheads and profit.