We are the Contractor on an NEC4 Option C Contract. Our Defined Cost for People has been calculated as we believe is a standard way of doing this with a build-up of total cost of employment using the categories in the SOCC divided by the available working hours (total hours deducting holidays, bank holidays, an allowance for sick days etc…) to give a hourly cost for each person.
We have been audited and cannot agree on several issues. We have been told that sick days cannot be included and should only be included when sick days actually happen. I can see why they have taken this stance but with over 60 people on site, we are trying to avoid recalculating hourly costs for everyone when they have a sick day as not everyone is working full time on the Contract.
We have also been told to remove severance pay as we can only charge this if someone is actually made redundant, we disagree and total the allowable weeks incurred during the Contract that would be paid if that person was made redundant.
Things such as employee incentive schemes have also been removed as they state that this isn’t specific to the work in question but it is a employers cost so we believe should be included as an incentive.
Does anyone have any thoughts / past experiences of similar issues? Usually we would discuss with the PM but this is so far not an option as they are refusing to listen to our point of view.
Thanks