Frequently Asked Questions

We are a consultant bidding for an NEC4 Professional Service Contract (PSC). When determining the cost of people in the schedule of cost components, reference is made to, ‘dividing the total of the following payments by the total of the time recorded, with the resulting amount multiplied by the time recorded for work on the contract. Time recorded is that shown on the consultant’s time recording system.' When undertaking this calculation, is it expected that the total of the time recorded will include for time spent on contracts and non-productive/non-fee earning time?
The wording of this part of the contract is clear. The first sentence refers to the divisor as the ‘total time recorded’ and the second sentence makes it clear that both sides of the division come from your time recording system. It is normal for such systems to include both productive and non-productive time. There is no suggestion in the contract that this non-productive time should be removed from the total referred to in the first sentence. Therefore, using the natural meaning of the word ‘total’, such non-productive time is included in the divisor. This is confirmed in the NEC4: Managing a Professional Service Contract user guide.

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