When is a subcontractor a Subcontractor?

NEC3 and NEC4 Contracts General
1

In the NEC3 EC Contract, Clause 11.2(17) defines a subcontractor as ‘a person or organisation who has a contract with the Contractor to; construct or install part of the works; provide a service necessary to Provide the Works or; supply Plant and Materials which the person or organisation has wholly or partly designed specifically for the works.’

We (the Contractor) are looking to place an ECS Option A contract for the manufacture of a Plant item. The Plant item has been designed by us (the Contractor) and has a value of circa £50k. The subcontract works do not require any further design input from the subcontractor, it is purely ‘build to print’.

Based on Clause 11.2 (17), are we correct to classify the associated costs as Plant and Materials and therefore apply Direct Fee instead of Subcontract Fee?

In which case, the subcontractor is not a Subcontractor according to the definition in the Main Contract, despite the fact the subcontractor is referred to as the Subcontractor (identified term, not defined term) within the subcontract.

Also, is there any advantage in this scenario of using the Supply Contract instead of the ECS Option A? This may help avoid the confusion of a Subcontractor in the subcontract not being a Subcontractor in the main contract. They would of course be referred to as the Supplier.

Would really appreciate a response to this one as 2 of my last 3 posts have not been responded to.

2

@Jon_Graham you are correct in your interpretation, under the ECC they would not be classed as a Subcontractor however “for the avoidance of doubt” it would be better to procure them as a Supplier under the SC. I can imagine you facing some push back from the PM even though, as I say, your interpretation is correct, using the SC would help to avoid this. I presume the main Option is C, D or E as if it was Option A or B it wouldn’t really matter as much.

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