Hi,
Firstly thank you for all your help, I am learning NEC so please excuse if I ask silly questions!
We have a contractor working under a framework agreement with agreed rates for people etc.
On submission of a CE, the rates p/h are not the same for say for example ‘Construction Manger’.
Under the SSCC, is the contractor able to use whatever rate they want within reason?
We have 2 other contractors who apply the framework rate for people in their CE’s which raises the question whether 1 contractor is over charging, or the 2 other are undercharging?
I know the SSCC does not list rates, merely the components that the contractor can ‘claim’ under a CE.
Thanks
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There is no such thing as silly questions - feel free to ask. The only thing to keep in mind, I would suggest, is to provide as much information and context as practicable - such as whether your contract is NEC3 or NEC4 in this case.
There is a clause in the CE section of your contract (63.13 in NEC3 and 63.16 in NEC4) that provides for the the use of rates by agreement (NEC3) or the People Rates stated in CD Part 2 (NEC4).
Since you have a framework agreement in place, one of its purposes being the consistency of rates, fee percentages etc. for every order/contract, I believe that the Contractor is obliged to stick to those, whether by virtue of the above clause 63.13 (if NEC3) or because they should be also stated in CD Part 2 (if NEC4).
I hope this helps.
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Thanks Peter.
It is NEC3.
So the fact there are agreed ‘framework rates’ sort of overrides the ‘reimburse the contractor his defined cost incurred’ (in line with the components in the SSCC) that I read should be used for putting together a compensation event quotation, i.e. the contractor would submit a CE with people costs at what is normally a higher rate?
The contract was set up by ‘others’ in my group who have since left and when we queried with the contractor as to how/why they are not using the framework rates, the response was along the lines of ’ these rates were previously agreed with A.N.Other’.
It sort of speaks volume that 2 out of 3 contractors are using tbe agreed framework rates on their CE quotations and in all honesty I assumed there were ‘undercharging’ us by using the lower people rates under the framework.
I did also notice that NEC4 clears this up by agreeing exact rates at time of CD2 return.
I will look into this further, thanks
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No worries.
You might want to check the framework contract, the contract in question and any previous communications between PM and Contractor to see what has been agreed.
Good luck!
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