Our client/PM wishes to remove a specialist item of work from our activity schedule and enter into a direct contract with the specialist. They have advised that we will not receive the sub-contractors fee on the specialist values, but as principal contractor, we should still manage the specialist as we are being paid our preliminary costs.
Can they do this? I cant find any precedent or provision within the NEC to facilitate this move.
As the specialist works is in your contract, you could argue that they have no legal right, under contract law, to take it out and give it to another Party i.e the Subcontractor and thereby deny you fee percentage (profit and other margin) for managing the work.
If they are doing this at the tail end of the contract i.e. the last bit necessary to achieve Completion, I have previously argued successfully for a Contractor that this amounted to termination for which the Contractor got paid for the work done, costs committed and fee percentage applied to the work taken out.
Your circumstances may be different though.