The Contractor included subcontractor's claim in their Quotation for a CE

NEC3 and NEC4 Contracts Compensation Events
1

I am a PM, some events happened and they are CEs. When the Contractor submit their quotations, the Contractor included their subcontractor’s claim affected by the events. In NEC a contract is made between the employer and the contractor, and if the Contractor sublet the works then contracts between Contractor and Subcontractor. What the subcontractor is trying to claim the main contractor, even under the same event classified as CE, has nothing to do with the employer. Is my understanding correct? Thank you.

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Any help would be much appreciated. Thank you.

3

Compensation Events are priced using the Schedule of Cost Components (or the Shorter version, depending on your Main Option). One of the headings in there is ‘Subcontractors’, so its not surprising to see a subcontractor quote as part of the backup for the main contract quotation.
What you do need to be careful of is whether the prices in there are compliant with the Contract Data pt 2; but the Schedule of Cost Components will flag those areas to you.

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4

Benny, you do not say whether it is NEC4 or 3, if you give some more detail in your question the answer can be more targeted. As an NEC PM you’ll be aware of clause 26.1 so the Contractor is allowed to subcontract but must Provide the Works as if they had not subcontracted however, with regards to the recovery of subcontract costs NEC4 allows them to be recovered under all main Options through component 41 of the Schedules of Cost Components. Clauses 52.2, 52.3 & 52.4 allow the PM to inspect the records which he Contractor is required to keep and these include; ‘accounts of payments made to Subcontractors’, ‘proof that payments have been made’, ‘communications about and assessments of CEs for Subcontractors’.
If it is an NEC3 contract refer to the main Option clauses and Schedules of Cost Components, Opt A & B are very different under NEC3, you need to refer to the Shorter Schedule of cost Components and understand the process of costing work done by Subcontractors and the application of the subcontract fee percentage.
As always, the answer is actually in the contract, you just need to know where to find it.
Hope that helps, happy to discuss.

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Thank you all for your responses.

The contract I am referring to is NEC 3 Option C.

The main contractor iterally just “forward” their subcontractor’s claims to the PM.