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Your search has returned 49 FAQs

Can I recover the cost of insurance premiums?
We are using NEC3 ECC option E (cost-reimbursable contract). My query relates to the payment of insurance premiums in accordance with the rules in the schedule of cost components as part of the price for work done to date.
 Item 7 of the schedule deals with omitting certain items from cost. It does not, however, state that the cost of taking out insurance is to be included under that cost component. Does this mean therefore that the cost of taking out insurances should be part of the fee? The schedule does not appear to deal with this aspect as a cost anywhere else.
Are the costs of accruals recoverable?
We have recently embarked upon a new contract for a local authority, using NEC3 ECC option C (target contract with activity schedule).
 Can you please provide some guidance on clause 11.2(29) where the price of work to date is the total defined cost which the project manager forecasts will have been paid by the contractor before the next assessment date, plus the fee?
 Our experience has been that on each monthly application, the price for work done to date comprises our real actual costs incurred (substantiated by our internal costing system) plus an allowance for any costs we feel we will have to pay out prior to our next assessment. Items that fall into this category are weekly direct labour costs and materials on payment terms of less than one month. Can you confirm this is correct?
 Also, we assume the same applies to subcontracted specialists that have been let on the NEC3 Engineering and Construction Subcontract (ECS), as long as they can provide the necessary substantiation. Again, can you confirm this is correct?
Option C or option D?
Is there a definitive paper on when to use NEC3 ECC option C (target contract with activity schedule) over option D (target contract with bill of quantities) with associated advantages or disadvantages?
Where do I put preliminaries?
I am preparing tender documents for an NEC3 ECC option B contract (priced contract with bill of quantities) for a project in South Africa. In terms of preliminaries, what does this look like and where must this be priced?
Can I recover the cost of insurance premiums?
We are using NEC3 ECC option E (cost-reimbursable contract). My query relates to the payment of insurance premiums in accordance with the rules in the schedule of cost components as part of the price for work done to date.
 Item 7 of the schedule deals with omitting certain items from cost. It does not, however, state that the cost of taking out insurance is to be included under that cost component. Does this mean therefore that the cost of taking out insurances should be part of the fee? The schedule does not appear to deal with this aspect as a cost anywhere else.
Lump sum and rates for compensation events
I would appreciate your advice on the following:

regarding the use of lump sums and rates for assessing compensation events. We are using NEC3 ECC.
In NEC2 ECC the method was only available in options B and D and the clause referred to lump sums and rates in the bills of quantities. This was clearly a reference to the approach taken in 'traditional' forms of contracts, where use of rates in the bill is the default method of valuing variations.

In NEC3 ECC the method is now also available to option A, where there is obviously no bill of quantities. The guidance notes state this is to help overcome the difficulty where the work has been subcontracted and the contractor, in the absence of a quotation from the subcontractor, may be unable to make an assessment using the shorter schedule of cost components. Presumably this means the use of fair market rates or rates in the subcontract, if the subcontract is based on option B.

However, options B and D (using the similar wording as option A) in NEC3 ECC has dropped the reference to the bill of quantities. Presumably this opens up the assessment of compensation events under option B to the use of fair market rates or rates in a subcontract.

Reference to fee has been dropped in the relevant options B and D clauses between ECC2 and ECC3. Is this to allow the fee to be added subject to the actual basis of the lump sum or rates used? If market rates a
Minutes of meetings as communications

Could minutes from a project progress meeting be deemed to form a communication under NEC3 ECC?

Time limits on compensation events

On compensation events, under clause 61.3 of NEC3 ECC option A, does the limit of the 8 week notification period also apply in the event the project manager could have issued an early warning?

Dealing with contingencies

I have a tender deadline looming and there are some unknowns and uncertainties to be allowed for. How can I best include for such in my tender document, giving the contractor as much information as possible for it to make due allowance within its tender?

 

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