We have submitted an application for payment to the Client which includes cost for staff for the time spent to prepare the task quotations (QS, Com. manager, planner etc). This cost was incurred before the actual start of the works onsite (which is the date stated in the task order). The Client has disallowed this cost stating that this cost is part of the fee. We believe that this cost is part of our defined cost as this time was spent to provide the services. Any thoughts?.
If I was you I would ask them for what reason under the disallowed cost definition they are disallowing that cost. If it does not fit a specific reason then it should not be disallowed. Assuming that the costs were associated with providing the Service then they should be paid, and then you see where all the costs compare to the target at the end.
The whole nature of option C is that you are encouraged to work as efficiently as possible to reduce the costs to get them below the target and share the gain with the Client.
Thank you for taking the time to reply. We have challenged the client’s decision and waiting for their justification. I will comment right after