Subcontract : Option A
We have a subcontractor under an option A Contract. No Start Date but Access Dates.
The Contractor has a 3 week cancellation period to defer these Access Dates written into the Contract Data Part 2.
If the Contractor defers the Access Date by 6 months in line with the 3 week cancellation period; does the subcontractor have grounds to claim prelims for the period of deferment even if they were not ready to start on the original Access Date?
Subcontract : Option A
I’m not clear what is written in to Contract Data Part 2. Failure to allow access by the later of the access date or the date shown on the accepted programme is a standard compensation event under 60.1(2). Unless the provision has been amended by a Z clause, if access has been deferred the mater is a compensation event and should be assessed as the change in Defined Cost ie the Defined Cost including the CE v the Defined Cost had the CE not occurred. If the subcontractor had not been ready to start then that cost is not attributable to the CE. You will however need to get to the facts.
Thanks for the reply Dave.
The Subcontractos Contract Data Part 2 stipulates an Access Date, but also gives the Contractor the option to cancel or defer the access date giving a 3 weeks notice period. Which we did. However, the Subcontractor is claiming that even though the Access Date was deferred within the time scales they could not re-allocate the staff so are claiming additional prelims for the duration of the deferment, which was six months under 60.1(2) There is no other provision in the Contract for the Subcontractor to recover costs should the Access Date be deferred
MGundry - As with any compensation event you assess the cost that the Subcontractor will incur as a result of (in this case) that the deferment of access has caused. However, you would have to consider that six months delay to access they would have been able to deploy those resources elsewhere after a relatively short period of time – especially if it was known from the outset it was going to be such a long delay. If you delayed them week on week for a duration of six months then I could maybe understand the entitlement but otherwise no. This compensation event should consider a reasonable period it would have been taken to relocate those resources but that would be it.