NEC4 Option 4 - Missing Fee Percentage in Contract Data part two

In Contract Data part two, the Contractor has left the fee percentage entry blank. You speak to the Contractor about this and you are told that, it thought Contract Data part two had been completed properly, but nevertheless it should be 11% and the Contractor now wants to include this in Contract Data part two. You are told, verbally, that ‘in a spirit of mutual trust and co-operation’ you should agree.

Is the Project Manager able to change Contract Data?

How many times have we seen this crucial entries like this left blank which just opens the door for an argument.

Neither the Project Manager or the Contractor are allowed to just add-in whatever fee percentage they like. Instead, with opposing commercial aims, the law would take the view that it would be something like a ‘fair and reasonable’ amount which is somewhat subjective and will vary between sectors.

For a typical main Contractor in building or civil engineering, it is typically going to be somewhere between 5.5 and 10%. However, in the process sector, main contractors tend to have higher head office overheads and profits as do some smaller specialists particularly if they are niche … so go figure or just agree beforehand !!!

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To add to Jon’s answer, the Project Manager cannot change the Contract Data - Clause 14.3 enables the PM to give an instruction changing the Scope or a Key Date, which then (usually) becomes a CE under 60.1(1), but a change to the Contract Data can only be made by agreement under Clause 12.3 between the Parties, which are the Client and the Contractor. The PM can play no part in this.

The two questions that arise are:

  1. Why didn’t the Contractor complete the Contract Data at time of tender?
  2. Why didn’t the Client check the submitted tender before awarding the contract?

Very helpful.

Thank you gentlemen.