Option B (NEC3) Fee percentage

Under an NEC3 Option B contract: For pricing a Compensation Event, the “Subcontract Fee Percentage” should be applied to the Defined Cost of the subcontracted work. Is the “Direct Fee Percentage” only applied to the non-subcontracted Defined Cost, of the the whole value of the quotation ?

Cl.11.2(8): Suggests the Direct Fee only applies to the “non-subcontracted” section of the quotation, is this correct ?

Your quotation will apply the Direct Fee to all costs except Subcontractor costs. You’ll only apply the Subcontract Fee to those costs. So basically, it’s not fee on fee.

You’ll then need to consider your People / Design Overhead % which will attract Direct Fee .