Under option B, Contractor had confirmed that their direct field labour is an all inclusive rates during tender phase. Contract was awarded and now Contractor wants to add direct fee % to their labour rates. In this instance there’s is only DFL involved. In my mind an all inclusive rate includes overheads, statutory obligations by law and profit as well as small tools and consumables. This work is done well within the contract duration and is within the working areas. So in essence I want to know if they said their defined costs is all inclusive do I still add the direct fee? I am also not convinced that they used the sscc to build up their rates. There is no breakdown of rates, only normal time, overtime etc.
Secondly what is my recourse if we can’t come to an understanding.
If we assume an un-amended NEC3 ECC main option B contract.
The definition of the Price for Work Done to Date 11.2(28) is the total of the quantity of work which the Subcontractor has completed for each item in the Bill of Quantities multiplied by the rate and a proportion of each lump sum.
If you have a compensation event the change to the Prices 63.1 it is assessed using the SSCC 11.2.22. and the final bullet of 63.1 identifies that the resulting Fee 11.2 (8) comprising of the direct and subcontract fee percentage are applied.
In the SSCC cost component 1 people item 11 is payment made in relation to people. There is no requirement to show the build up just the amounts paid to the person. You would expect the components of 11 in the SSCC to be the same as in the SCC.
You can only operate the contract you have been given. The PWDD is the quantities times the rate - no direct fee. If the Contractor disagrees then his recourse in the first instance would be adjudication.