Under an ECC3 option C target contract, do you consider the time preparing quotations over and above that chargeable as actual cost (ie undertaken by the contractor in good faith in order to meet the submission timescales) merits an increase to the Target

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In the circumstances you describe I don’t think there is time not recoverable as Defined Cost. You obviously need to comply with 63.7 and ensure costs are reasonably incurred and that the contractor is reacting competently and promptly (which may have a small question mark if you expended significantly more cost to achieve the timescale rather than discussing the need for extra time with the PM)

I have experienced this situation where the PM has reluctance to increase the TP yet is happy for the Contractor to work non-recoverable additional hours (definition of defined cost) on top of the budgeted day job hours. The only way the Contractor can benefit from this scenario is by gain share.

In so far as the Contractor can demonstrate that he has incurred additional Defined Cost then the costs incurred should be recoverable. If the Contractor’s team are just working additional hours for no additional payment then there is no effect upon Defined Cost as required by clause 61.4. The key is to keep the actual Defined Cost for the PWDD and the total of the Prices (target) in balance.

It is recognised that only the actual cost of preparing quotations is reimbursed. However, if there is an embargo on overtime payments (for example) it is common that the Contractors team will work the additional hours to comply with the quotation obligations (as it would be impracticable and uneconomic to bring in a third party reimbursed as actual Cost). As the quotation has been undertaken in good faith and in accordance with clause 10, why would the PM not reciprocate this by increasing the TP to at least recover part of the additional effort expended in the TP gain mechanism ?