NEC3 Option A Subcontract - Defined Costs: What should be included in the agreed hourly rate for a CE?

Hello and thank you in advance for reading,

In a NEC3 Option A subcontract, the subcontractor has applied for a CE and used the agreed hourly rates defined in our subcontract as part of data part 2.
These are rates for a site operative to do additional works within the site.

The subcontractor has then added fees including Hotels and Sustenance on top of these hourly rates used, and has added the direct fee on top of the total of all.

I have looked at the Short Schedule of Cost Components in the Subcontract Option A, which seems to infer that everything should be included within the rates agreed as defined costs, in part due to its vagueness on what is/isn’t included.
For option C contracts there is a more detailed list of cost components that explicitly states travel and lodging etc should be included in the rate as a defined cost.

Is the subcontractor wrong to add hotel and sustenance on top of the hourly rate for the works?
Is the the subcontractor wrong to charge the direct fee on top of the total of everything?


Welcome to the community!

If I’m not mistaken, the standard form of SCD Part 2 in the NEC3 ECS does not provide for people rates in Option A (except for Design Cost related employees) and no relevant reference in the SSCC. I therefore assume they have both (SCD Part 2 & SSCC) been amended. From experience, clients make the mistake of amending the first without the second, hence your query.

Regarding the subsistence etc. you would need to check the wording of the above carefully (as amended) - as for the subcontracted fee percentage, this applies to the Defined Cost (as per SSCC); again check the added wording in SCD Part 2 and any other amendments.

Your contract amendments are key in something like this.
However, if the SSCC is in the contract, then they should be all in rates (every cost associated with people, except site vehicles and power tools).
If their is not schedule, the subcontractor will have to demonstrate the entire defined cost for the people (rate of pay, training cost, accommodation, travel etc).