NEC4 ECC B: Are travel to site costs Defined Cost?

Two questions, just to get some alternative opinions.

An instruction to change the Scope adds work to a more remote part of the Site which requires the operatives to travel there in a van. The van is not utilised for the rest of the day but stays at the remote part of the Site so that the operatives can use it to travel back at the end of the day. According to the SSCC, a cost for a piece of Equipment is Defined Cost for the time it is ‘required’. Is the van ‘required’ for the full day or only for the time travelling from one part of the Site to the remote part? Irrespective of that, is the van being used to ‘Provide the Works’ when all it is doing is ferrying the operatives to the part of the Site in order for them to Provide the Works?

An event occurs which is a compensation event (take that as read) which significantly increases the operatives’ travel cost from home to the Working Area. If the full SCC applied, the extra cost would likely be Defined Cost under 13(a). However, the SSCC provides for recovery of People costs based on the People Rates rather than individual categories of cost. Those People Rates should include all the things that are listed in the full SCC wrapped up in one, pre-agreed, rate, including the cost of travel. There is no method to change the People Rates, but a new rate can be added under 63.16 for a category of person not included in the existing People Rates. As the extra travel cost does not require a new category of person, how can the Contractor recover the additional cost?


In the first question there are a number of issues to be raised:
I think that the question needs to be asked as to whether this is an additional van (piece of Equipment) that is brought to site or an existing piece of Equipment that has been parked up previously and now has an additional purpose.
We need to be mindful that the assessment of a CE is to assess the change in prices.
In the case that it is an existing van then the cost for the hire is already included in the rates in the BoQ. The change to the prices would effectively only the fuel cost for the extra distance which would I would expect be minimal.
If it is an additional piece of equipment then there is an argument that this is recoverable and you would look at the Quoted Schedule of Rates in C Data part 2 for guidance. In the example of CECA you would look at Note 3.Supplementary Charges which states “transport provided by contractors for operatives to, from, in and around the site to be charged at the appropriate Schedule Rates”. It is clear then that this additional van would be chargeable. According to CECA in the case of Plant brought in specifically for an element of works (transferring people around site) then it is valued at invoice cost plus 12.5% and not the rates quoted in the schedule - so the argument as to usage versus standing time falls away. Finally on this first question the test would be can the works be done without the Van. In this instance the operatives need the van to Provide the Works - therefore the van is being used to provide the works, in a similar fashion to say a standing piece of Equipment that is not used all the time but used part of the day. The cost per day is still factored into the rate - therefore the cost of the van for all of the day should be included in the rate.

For the second question you would need to review the instance which is causing the additional cost. Is this just the cost to the operatives e.g. his bus fare has increased, or it takes him longer to get to site. I would suggest that this is down to the risk of the operative.
A more likely scenario would be that the cost is the same to the operative but there is an increase in transport costs (limitations on shared vans / buses) or additional travel time is required as a consequence of travel restrictions which the employees have an entitlement to and the Contractor needs to pay.
It seems that there is an agreement that the event is a CE and therefore the Client and Project Manager accepts that there is a time and/or cost impact. Under the current drafting there appears to be no mechanism. Acting reasonably the Contractor can evidence the increase in cost (via EWN if necessary) and in such special circumstances request a Deed of Amendment / Variation to the contract to facilitate the amendment of the People Rate in Contract Data Part 2, or a subcategory for that type of person that is affected by the CE. This could then be applied to the CE and incorporated in the rates and prices.
An alternative to this solution would be to use Clause 63.2 and apply a Lump Sum which would have no bearing on the method of calculation and may be a lot simpler than drafting a DoA.

Good answer by Steve above (which has listed as another question)