Frequently Asked Questions

We are the contractor on an NEC4 Engineering and Construction Contract (ECC). My question is where under the schedule of cost components would we be entitled to claim the cost for information technology (IT) equipment such as laptops, mobile phones, printers, software, e-mail account costs, building information management software and licenses?

As this technology is being used as part of providing the works and communication, would it be an allowable cost under item 3 plant and materials?

We assume you are referring to an ECC contract using Option C or D (target cost contracts) or E (cost reimbursable contract) and whether or not these items fall under the definition of defined cost. They will not be included as plant and materials because that refers to, ‘items intended to be included in the works’ (clause 11.2(14)). We assume that the IT items are owned or leased by you and will be removed once the works have been completed. However, the hardware you refer to (computers, mobile phones and printers) will fall under the definition of equipment, see clause 11.2(9). But we do not think that the software licences, email accounts costs and so on would be as we are not sure it would be an ‘item’.

In that case, the costs for the equipment will be calculated in accordance with the relevant rules in item 2 of the schedule of cost components. The items, whether they are leased or owned by you or one the your related companies, will be charged under item 22 and therefore you will need to have discussions with the project manager as to what the market rates are for these items. Also note that consumables such as paper and ink will be paid for under item 25.

Finally, it is important to note that the treatment of IT equipment in NEC4 contracts has changed from that in NEC3 contracts. In the latter these would have been treated as being included in the working areas overheads percentage that the contractor quoted in the contract data and are therefore not paid for twice in defined cost. However, there are no working areas overheads in NEC4 contracts and therefore these hardware items will be included under equipment.

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