NEC3 ECC Schedule of Cost Compenents - Charges 4 - Specialist Services 43(h)

What types of costs could be included as ‘Specialist Services’ under Charges (4 - 43(h)) within the Schedule of Cost Components?

This is a difficult category, not least because it comes under Charges and so must relate to a Charge, otherwise it would be an alternative cost component, such as People. or perhaps treated as a Subcontractor. It must also be incurred to Provide the Works, which is the overriding requirement for the inclusion of any cost under the SCC.

What comes to mind is something like specialised weather forecast reports or local tidal information, which you can only obtain by paying for it (not publicly available), especially where works can only be undertaken during specified environmental conditions,

You could also include Met Office reports for weather, to assess whether a compensation event has occurred, as they come under this category of cost and fit with the definition of Provide the Works.

Taking up your statement that Specialist Service Costs “must also be incurred to Provide the Works …” could it be argued that Recruitment Agency Fees are recoverable under Specialist Services as they are incurred in the employment of staff who “Provide the Works”?

The SCC is not 100% clear with the definition of certain costs, which does lead to discussion and debate. The overriding qualification is that ANY cost must be ’ … incurred in order to Provide the Works’ to be treated as Defined Cost.

From the definition of Provide the Works it is clear that the cost must directly relate to undertaking and completing the works and all incidental work, services and actions which the contract requires.

Recruitment agency fees relate to People cost, although it is the People who Provide the Works and not the recruitment agency. I accept that People cost includes other associated costs of employment which do not directly relate to Providing the Works, however, they directly relate to that person as a ‘cost to employ’, so, in a sense, without these costs you wouldn’t have the person. This suggests that a test of ‘remoteness’ should apply, relating to direct or indirect cost, unless the SCC expressly states a category of cost.

There could be a situation where recruitment agency fees ARE actually a Defined Cost, for instance where a particular resource is required as a consequence of a compensation event, which is not currently engaged on the project. If that resource is an employee, however, you may argue that the entire benefit of that person is not specific to the project, but that’s another discussion.