I am on a NEC3 Term Service Contract Option A (Schedule of Rates) and have been building up compensation events using either;
Labour, Plant, Material + direct fee as per SCDP2 (9%)
Subcontractor Quote + subbie fee as per SCDP2 (11%)
However within series 8000 we have a rate for percentage addition to the invoice cost of materials at 15%. My questions are;
- Would I be entitled to the material uplift prior to the direct fee even though its not within P2?
- As its a compensation event, should I be applying overheads to these also?
This is my first post, so apologies if I have been to brief.
Thanks for your help.
Generally, in NEC contracts you calculate the change in Prices due to a compensation event as change in Defined Costs plus Fee.
In the full Engineering & Construction Contracts, you have the option of using (existing) lump sums and rates if the parties agree.
In the Ten Services Contract, the immediate default, under clause 63.1, is to use the “appropriate rates” in the Price List - historically called a Schedule of Rates - but only if quantities only are affected.
So to answer your question, was the percentage uplift for series 8000 in the Price List and only affects quantities ?
If ‘Yes’ use this with no addition of fee percentage.
If ‘No’, build up using Defined Cost + Fee. You would only include overheads if you are actually incurring additional overhead costs as part of the CE>