The People Overhead is used in conjunction with the Shorter Schedule of Cost Components to calculate a charge/allowance to cover the cost of the items listed in paragraph 44 (which may be amended by Z clauses).
The charge is used under Options A & B (and can be used under Options C & D) for the assessment of compensation events. It is calculated by applying the percentage for people overheads stated in Contract Data 2 to the People Defined Cost.
The Direct Fee and Subcontracted Fee %s are used on Options A, B, C & D to assess compensation events and are also used under Options C & D to assess the PWDD.
Both %s are to provide for anything that the Contractor requires to recover that is not covered by the Schedule of Cost Components or the Shorter Schedule of Cost Components (ie it is not included in Defined Cost or will be disallowed cost).
Hope the above clarifies,