Fee (NEC): definition and example
In an NEC contract, the percentage added to Defined Cost to cover your overheads and profit.
By Jack Butler-Kettle · Updated
Guidance for England and Wales. Check the contract, amendments and facts that apply to your job.
What it means in practice
Read this alongside the NEC Dictionary of Terms.
In NEC terminology, Fee is calculated using the applicable contractual percentage and cost basis. It should be distinguished from a consultant's professional fee and from amounts already included in Defined Cost. The form, option and amendments govern the calculation and avoid double counting.
Show the cost basis and Fee separately. Compensation event recovery can help present a quotation with traceable components and assumptions.
Worked example
The facts
An illustrative compensation-event assessment has £10,000 of applicable Defined Cost and an agreed 8% Fee percentage.
What happens
The subcontractor confirms that the £10,000 is the correct contractual basis.
It calculates £800 of Fee and checks that overhead items have not been counted twice.
What this shows
The illustrative total is £10,800 before any other applicable adjustments; the percentage must come from the actual contract.
Sources
- NEC Dictionary of Terms. NEC Contracts.