We are administering an ECC option C contract (target contract with activity schedule). WE would like to raise a query in regards to a repair to a contractor’s camera, damaged on site. Is this an allowable cost or disallowable? We can see the hire is allowable under clause 22 but can see no item whereby the repair is an allowable cost.
Answer
You have rightly identified this camera as equipment. The insurance table in clause 84.2 requires the contractor to insure loss or damage to equipment. The first bullet of item 7 of the schedule of cost components makes it clear that you deduct from cost the cost of events for which the contract requires the contractor to insure, and that includes this event. Therefore you do not pay for this. The fact that the damage will be below the excess on the insurance policy is the contractor’s risk.
