We have employed a Subcontractor under an unamended NEC4 Engineering & Construction Short Subcontract (ECSS) and have a disagreement regarding the calculation of equipment costs for a CE Quotation. In the Subcontractor’s Subcontract Data the published list of Equipment is CECA 2022 with an adjustment of minus 40% to the published list which both parties accept. However, in calculating the total cost impact of the CE quotation, the Subcontractor has applied Fee to the adjusted rate within the published list, i.e. Rate -40% + Fee%. The contention that we have with this is that the published list of equipment states that the rates already make allowance for Head Office charges and profit, which is essentially the same thing as the Fee %, as such, the Fee % should not be applied and the published list should simply be adjusted by the % as stated in Subcontractor’s Subcontract Data which is minus 40%.
My understanding is that the contractor is entitled to defined cost + fee. The DC is determined by the published list (CECA) +/- the percentage adjustment, to which the fee is applied.
I was sure I’d seen a similar post before, here’s the link:
Not what I wanted to hear, but I had a suspicion! Thank you for your response and clearing that up, much appreciated.