NEC4 Option C - Income Protection

NEC3 and NEC4 Contracts Payment
1

We have been working collaboratively with the Contractor on our project, working through the details of their People costs and what we agree is a defined cost, and what is disallowable.

The last People cost item we are having backwards and forwards discussions over is “Income Protection”. The Contractor believes that this falls under 1.13(j) - pensions and life assurance of the Schedule of Cost Components, but we don’t think it falls under this category. We understand the Contractor’s reasoning for claiming this cost, but we don’t think it’s clear that it falls under any of the other headings.

Therefore, is this a defined cost, and if so, where does the cost fall?

2

I suppose the question has to be what exactly this covers. On the face of it, that’s a cost for an insurance (as opposed life assurance, which isn’t quite the same thing) and therefore would not be recoverable, and therefore covered by the fee.

I’d also question whether it is incurred to provide the works (take a look at the descriptions at the very top of SoCC).