Employer as part of the Works Information stated that the Contractor had to provide the Employer with office space on site from a certain date with desks, IT etc. It was never identified as a Key Date, just a requirement in the Works Information to do so. The Contractor was late in providing the office space for the Employers team by some four weeks. The Employer had to use very expensive temporary accommodation for their team, but did not tell the Contractor that is what they did until after the event. Had the Employer told them they were going to have to go into this expensive accommodation, the Contractor says they could have made space in their head office for them at considerably less cost. Neither party notified an early warning about not providing the offices in the first place, and then the cost of the temporary offices the Employer went ahead with instead.
Couple of things that should have happened with hindsight – but given that they didn’t, where does the Project Manager now stand? The Employer has incurred this cost, but are they entitled to claim it against the Contractor, and more importantly which specific contract clause/s (following this very specific sequence of events) allows them to recover that cost against them?
In hindsight a Key Date would have been the preferred option, but notwithstanding this the Contractor is obliged to Provide the Works in accordance with the Works Information under clause 20.1.
Clause 25.2 provides a remedy of sorts where either Party does not provide ‘services and other things’ as stated in the Works Information, which you could argue is what the Contractor is obliged to provide, although this matter seems to be a question of timing rather than not providing something at all.
If 25.2 does apply, then the cost incurred by the Employer could be argued as being ‘excessive’ by the Contractor, also accounting for the fact that the Client should mitigate any such expense.
An early warning would presumably be related to a matter which ‘could increase the Contractor’s total cost’ and would have certainly been a sensible forum to discuss this issue.
I suppose this situation highlights the importance of the Employer giving consideration to what is important to them, when drafting the contract documentation, and how the contract will assist with such issues if things don’t go according to plan. After all it is their Works Information.
The non provision of the office space is a Defect i.e. clause 11.2(5) “part of the works not in accordance with the Works Information”. The Employer has the right to recover additional costs in respect of this Defect (clause 45.1) however in order to do so the Project Manager would have firstly needed to notify the Contractor of the Defect.
The best remedy for both the Parties at this stage is to agree that the Defect does not need to be corrected under clause 44.1 and agree a reduction to the Prices and / or an earlier Completion Date under clause 44.2.