With regard to the build up of cost to a quotation, the Subcontractor states that they are relying upon a secondary subcontractor for the labour content of the additional works. Are we entitled to ask for a copy of the secondary subcontractors quotation along with proof of the the material costs? The secondary subcontractor is supposedly including travel and hotel costs due to their location but this work is not specialist to that extent and can be done by a local company. Is our Subcontractor entitled to charge for using their intended secondary subcontractor on the basis that they ‘normally’ do such work for them? and should our assessment of the cost also allow for the travel and hotel costs in that instance?
The quotation should be based upon forecast Defined Cost, which should be at open market rates. If they are using a Subcontractor that is more expensive than the market rate than is necessary, the Contractor would be able to assess it at what they believe should be a fair true cost for that event. The fact that the Subcontractor has chosen someone who works so far away and they did not need to is not the Contractor’s problem and they should not have to pay for that. The intent of the contract is to encourage the Subcontractor to carry out those works as efficiently as possible so that they get the full recovery. Equally if that Subcontractor said that they need 10 days to do the work and the Contractor believes a reasonable proven output for that work would be five days, then it should be based upon 5 days.
The only caviate to that is that there may be a reason why they had to go to that subcontractor - e.g. they were the only ones who could provide certain material or work within a necessary time frame, in which case there may be a justifiable reason why a premium was paid. Subcontractor should prove this within their original quote (but it is unlikely that this is the case for what you describe in this instance).