Where an ECC target price contract with activity schedule (option C) is for design work only, entailing minimal attendance onsite (preliminary surveys, data gathering etc). Is there a benefit to the Employer from either option?
Should a design house be declared as inside or outside the working area
My first question is “if it is for design only, why are you using the ECC when you could / should be using either of the Professional Services contracts ?”
However, if you are to use the ECC :
- if they are within the Working Areas, then the costs of People should be built up in accordance with People 1 of the Schedule of Cost Components, multiplied by the time used and to which the percentage for Working Area overheads is applied and then the relevant Fee. Building up the base costs of people could be burdensome on both parties depending on the consultant / Contractor’s ability (and willingness) to reveal these costs.
- if they are outside the Working Areas, then the consultant / Contractor should tender hourly rates which are then multiplied by hours worked and to which, in accordance with Design 6, the tendered percentage for design overheads is applied, then the relevant Fee. The advantage of this is the rates are a given, but (as with the other percentages) it does assume that there is some sort of competitive tension at tender to have reasonable rates.
All this assumes the design is not being Subcontracted by the Contractor in which case, you need to ask me another question on that !