In our ongoing project, defective works were encountered due to Contractor not complying with a constraint on how he is to Provide the Works stated in the Works Information.
My questions are as follows:
1.) It is clearly stated in the Contract that costs for correction of the above-mentioned Defects may be disallowed by the PM. How about additional costs incurred as a consequence of the performance of repair/replacement works, can they be disallowed as well? (for example, formworks has to be rented for a longer time and some equipment are on standby since succeeding activities cannot proceed until after repair works have been completed, additional testing has to be done, 3rd party consultants have to be hired to check the repair/replacement works)
2.) If the insurance / subcontractor was not able to fully or partially cover the costs of repair/replacement works, can the Contractor argue that the unrecovered costs should be part of the project’s defined cost, i.e. pain to be shared by Employer and Contractor? There is a provisional amount in the Target Cost that covers disputes with Subcontractors.