NEC4 Term Service Subcontract Option C

Hi,
I’m operating under an NEC4 Term Service Subcontract Option C.

Payment is operated under clause 50.3 and assessed as the Price for Service Provided to Date.
Which in turn is defined at 11.2(27) as the total Defined Cost plus Fee,
which takes us to 11.2(23) as the definition of Defined Cost as the cost of the components in the Schedule of Cost Components.
The Schedule of Cost Components then sets out People, Equipment, Plant and Materials etc. all using the phrase ‘the cost of’.
Is this ‘cost of’ then the actual cost? In the case of People, the actual wage, plus the variously allowed additional items in section 12 and 13 of the SoCC (plus fee)?
Importantly, there appears to be no obvious option to use agreed rates as you would expect on other Option C contracts for people as the SoCC is particularly prescriptive in this case?
Many thanks for your thoughts!
Simon

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The simple answer is yes, cost means what it’s actually cost. See also references in most of the components to the word “payments” as in what you’ve paid for something.

All of the cost reimbursable NEC contracts take the same approach, none of them provide for the use of agreed rates for payment of Defined Cost. Rates can only be used by agreement and only to assess the change to the Prices for a compensation event (clause 63.3).

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