We are a subcontractor currently working on an NEC3 Engineering and Construction Subcontract (ECS) main option E (cost reimbursable contract) and attempting to recover agency placement fee invoices for staff recruitment that we have had to employ to complete the project. We cannot seem to find anything in the contract that says this is specifically recoverable or not. Can you advise please?
Section 1 of the schedule of cost components deals with the cost of people. We assume that the people that you recruited worked for you directly and therefore the costs you will recover are set out in items 11, 12 and 13 of the schedule of cost components. Recruitment costs for people are not listed here and therefore they are not paid, and are assumed to be in your fee. It is not that they are a disallowed cost, they are just not ‘allowed’ in the first place because they do not form part of the definition of defined cost.
Under option E you will be paid for the defined cost of the works plus your fee – see clauses 50.2 and 11.2(29). Defined cost is a defined term (see clause 11.2(23)) and is calculated using the schedule of cost components. The schedule of cost components therefore sets out what you will get paid and how it will be calculated. Clause 52.1 makes it clear that any cost not included in the schedule of cost components will need to be allowed for in the fee, that is the fee percentages you quote in the contract data part two of the ECS (see clause 11.2(8)).
Section 1 of the schedule of cost components deals with the cost of people. We assume that the people that you recruited worked for you directly and therefore the costs you will recover are set out in items 11, 12 and 13 of the schedule of cost components. Recruitment costs for people are not listed here and therefore they are not paid, and are assumed to be in your fee. It is not that they are a disallowed cost, they are just not ‘allowed’ in the first place because they do not form part of the definition of defined cost.