I am working for a groundworks sub-contractor we are working for a main contractor under NEC option B.
We have encountered several delays and the main contractor has requested that our works are carried out on a cost + fee basis.
I have put forward cost + 15%.
However he has stated that in sub-contract data part 2 the sub-contract fee is 0%
So therefore we should be happy with 7.5%
Is this correct could he actually enforce cost + zero fee?
What matters is your ‘direct fee percentage’ as entered in your contract’s Contract Data. That is the deal which is struck under NEC option B and you have signed up for it at 0%. Consequently, for the additional work, you will receive 0% margin.
They are asking you to convert the whole of your works to an an option E contract which is a fundamentally different contract strategy. It effectively means an agreement to terminate the old contract and replace it with a new contract. That is subject to commercial negotiation.
So you have to make a commercial decision wrt your total recovery under option B - i.e. original work Works Information @ whatever margin you had priced + changed WI @ 0% margin versus all remaining work @ 7.5% margin.