Thanks Jon for the full response. One area you touch upon is the provision of cost information at tender. In this case the Contractor requested the completion of a returnable schedule containing rates for various grades of labour. The S/c complied and returned this schedule duly completed for 9 different grades of operative. I can only assume its purpose was to illustrate rates for additional work. The Contractor when drawing up the subcontract chose to embody the Activity Schedule (which was part of the same returnable schedule). I have suggested to the Contractor that the rates in this schedule are implied as the SSOCC was deleted from the form of agreement. As noted in an earlier question the Contractor has a head agreement under Option C and is claiming he has to justify to his Client what he pays to the Subcontractor, as indeed he does. To what extent can this schedule be relied upon?
Some clarifications please :
- In the original question, you did not say it was a Term Service Contract (TSC). The TSC does not have a Schedule of Cost Components (SOCC) or a Shorter SOCC (SSOCC). Can you confirm whether it is TSC or and Engineering & Construction Contract (ECC).
- I do not understand what is meant by “The Contractor chose to … … embody the Activity Schedule”. Please clarify.
Despite these clarifications, from what I can gather it seems that the Subcontractor submitted their rates for operatives as part of their tender and were therefore PROBABLY part of their offer, which the Contractor accepted. This would apply regardless of whether the SSOCC was deleted or not - see clause 52.1 of either the TSC or ECC. So from what I can gather, the rates are not “implied” - they form part of the Contractor’s Defined Cost which they are to pay the Subcontractor in accordance with the subcontract.
Note my caveats though : “from what I can gather” etc !