NEC3 PSC: Applying Indexation

Under our NEC3 PSC contract, for the life of the project, the staff rates used to determine the value of the prices / budgets should remain the same as those included in the head contract. Our contract includes an Indexation clause that is linked to the ONS index as a mechanism to adjust the rates.

My question is, should the annual indexation adjustment be applied cumulatively year on year or should we only apply the percentage movement from the previous year?

Hi Filipa There quite a good worked example of this in the guidance notes on page 14. My understanding is it’s the difference in each year rather than cumulative, but there are quite a few variables to consider