Frequently Asked Questions

We are a contractor on an NEC4 ECC Option C and wish to know whether certain people costs are defined cost or part of the fee. The people in question are based at our head office, occasionally attend the working areas and work on the contract for a large portion of the working week (doing planning, quantity surveying, contract administration etc.). They do this work at the head office as well as in the working areas. Are we only able to recover their time spent in the working areas or can we recover all the time spent on the contract regardless of where it is carried out, that is do they fall within the category of people under the schedule of cost components?
The answer to your question lies in section 1 of the schedule of cost components, because that is what determines how the defined cost of people is calculated, see clause 11.2(24). These people will be covered by the second bullet of the introduction to section 1. Their normal place of working is clearly not within the working areas, and therefore they will only be paid for the proportion of the time they spend in the working areas. So, they do fall within the definition of people, but only when they are working in the working areas. The cost of the remainder of their time is treated as being included in the fee, see clause 52.1.

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