We are engaged under an ECC3 Option A contract. An additional Employer’s risk was introduced to revalidate escalation of the Subcontractor’s material prices in advance of placement of the Subcontracts, mainly due to reluctance in the supply chain to hold material prices due to volatility at the point when the Head Contract was executed. The tendered total prices is fixed, other than for material price escalation which will be adjusted as a compensation event.
We have revalidated the material prices and provided the underpinning as required from the supply chain to demonstrate the material increases. When we submitted the quotations for the CE against the Employer’s Risk, the Subcontracted Fee Percentage was applied to the SC material price only. Is this the correct application of the contract?
Note: The wording in the Employer’s Risk revalidation clause neither includes nor excludes the words Direct or Subcontract Fee percentage.
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@Barry_Trebes any thoughts on the above?
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