Management of Sub-Contractors, CE and potential delay to the prigramme

NEC3 and NEC4 Contracts
1

Hello, I was wondering if you could help me.

We currently have a scheme on site and the programme has been accepted.

The subcontractor undertaking the specialist surface finish has been delayed on a previous scheme due to not being able to lay in poor weather conditions (this previous scheme is for another organisation), the principial contractor is now submitting early warnings/compensation events to notify of the change in programme completion due to the sub-contractor not starting on time.

The sub-contractors work form part of the critical path.

The question is should we, as the client, be incurring and pre lim/additional costs because the sub contractor is delayed on another job?

2

Liam

you should not be paying for this

best

Mike

3

Hi Mike

Thanks for your reply, is there any section within the NEC contract which I can call upon? Which would help me in my response to the contractor

Many Thanks

Liam

4

@liam.brady as Mike implies subcontracting is the Contractor’s risk, not the Employer’s / Client’s. The Contractor notifying this as an early warning is acceptable, however the event is not a compensation event and as such the PM should decline it. Generally for an event to be a compensation event it has to comply with a reason under clause 60.1 and this is not one of them!

1 Like
5

Adam

I would need to see the contract and relevant documents. You will appreciate that I cant give out specific advice on here. Regards

6

Hi Liam, you should be reminding the Contractor of the fact that they signed up to clause 26.1 and that they are responsible for Providing the Works as if they had not subcontracted. As Neil points out below, for there to be a compensation event the event has to be one of those listed under clause 60.1, 60.4, 60.5 60.6, also check the Z clauses to see if there are any additional CEs there or other pertinent amendments to the published conditions.
As to whether you as Client pay for the delay or not all depends on the main Option, if it is an A or B then no, if it is C, D, E or F, then maybe. The PM will need to check the various subcontract documents, which the PM should have accepted under clause 26.3 and see if the costs are payable to the Subcontractors or not. Refer also to clauses C, D, E11.2(26) & F11.2(27). [all clauses references are NEC4]
Happy to discuss, good luck.

7

Thanks for all your help and providing such detailed responses.

It has been a massive help.

Many Thanks