60.1(4) PM instructs stop to work for 6 months. Is contractor entitled to loss of OH&P?

PM has instructed the contractor to stop works for a period of 6 months. Contractor claims that this leaves him with a void in his production/manufacturing schedule. Is the Contractor entitled to loss of contribution to Overheads and Profit for this period and to what extent? And what level of proof is required to justify this claim?

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The simple answer is that there is no mechanism in the contract for making a claim just for (off-site) overhead and profit. These are both wrapped up in the fee. Without some Defined Cost for the fee to attach to there is no recovery.

For the specific example could have different answers depending on the Main Option. Under Option A or B the Contractor could say the work is now different as it is in a different delivery window and increased idle time. Under Option C and D the Defined Cost forecast could take into account idle time caused by the instruction. If the PM doesn’t like that he could give an assumption that the gap in production will be filled (if it isn’t that’s a CE).

The level of proof would be for the Contractor to show that he has either turned away work in the original window or cannot now fill it or that there is a serious risk of either of these as per 63.6 (on the balance of probabilities).

One other option might be for the contractor to abandon the contract and say that this is a breach where damages are appropriate as the contract does not give a proper or any method to compensate for the harm done. A side agreement to compensate could be considered and Clause 91.6 is worth having a look at as such a long gap should give rise to a termination right (13 weeks is the maximum in the standard terms)

All of this will however be very fact sensitive so the above is just general outline guidance.