ECC Option C - Contract

The Contractor experiences two problems on Site.

A steel staircase has been positioned incorrectly and is misaligned with the first-floor stairwell by 0.5m. This results in expensive remedial work.

To compound problems, the Contractor has tiled walls when the temperature was too low for the grout to set properly and some tiles have cracked and are coming away from the wall. The Works Information provided by the Employer expressly stated that tiling should not be undertaken unless the temperature exceeded 5 degrees Celsius but the Contractor (to overcome time pressures) ignored this constraint on several cold days.

How are these two issues dealt with in the contract and how will they affect the amount due?

The Contractor had been forecasting a 50/50 gain share of £73,000 (i.e. total of £146,000). However, in light of the above problems the projection is now less. The Employer is further frustrated.

Is there any guarantee of the share to the Employer ? How are costs forecast during the contract? When and how is the Contractor ’s share calculated?

As always, you will need to check any a specific contract amendments but based on the standard contract.

Both issues are Defects because the work is not in accordance with the Works Information/Scope. The Defect should be notified either by or to the Contractor and the provisions of clauses 43, 44 and 45 followed.

Based on the information in the question, the remedial work to misaligned staircase would be Defined Cost and part of the Price for Work Done to Date. The Employer/Client and Contractor sharing the additional cost under the share mechanism.

The remedial work to the tiles could be considered a disallowed cost because it results from the Contractor not complying with a constraint stated in the Works Information/Scope. The Project Manager should consider all of the facts when making its decision.

The Contractor’s share, clause 53, is initially assessed at Completion and then at the final amount due. The provisions for assessing the share are set out in clause 53.

The final Price for Work Done to Date should be updated regularly in accordance with the intervals stated in the Contract Data Part 1 for forecasting the Defined Cost. The forecast should be based on known matters and estimates such as programme, resources, rates, outputs etc.

There is no guarantee of the share to the Employer. The share will depend upon the final PWDD, total of the Prices and the share ranges and percentages.

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