Is the entry for the working areas important?

Yes. Simplifying*, if the Contractor is incurring costs within the Working Areas, then it can be reimbursed them directly as Defined Cost to which the fee percentage is then applied. (Under options A and B, Defined Cost is only reimbursable when compensation events occur, while for C to F, it applies to this and original work). On the other hand, if a cost is incurred outside the Working Areas, then it is treated as being not directly reimbursable – i.e. not a Defined Cost – and in the Fee.

Contractors therefore want as much area as possible to be referenced as working areas as this gives the potential to have more costs reimbursed directly and more Fee paid to them: a double upside!
Consequently, before entering the contract, the Client should make sure that the areas referenced satisfy the criteria of clause 11.2 (20) in which the term ‘Working Areas’ is defined. If not, the areas should be removed from the entry.

_{* The simplification is that persons and rates for manufacture and fabrication outside the Working Areas and design outside the Working Areas are excluded from the following statements}