Return visit loss & expense

Good morning, I have recently moved from an NEC3 option c (cost reimbursable) to a JCT 2016 design and build lump sum contract, and as such we must be prudent with the variations we agree too as they are more difficult to recover.

We have recently received a number of claims for out of sequence working (return visits). In short, the Subcontractor in question has sequenced their works into 3 separate visits with the later 2 visits relying on the completion of the works of Others. Within the contract scope of works we have 3 leave down areas (areas to be left and continued in a return visits) which have been marked up and included as a contract document. However, given the nature of construction, the recurring design delays we have incurred, and delays caused by others we decided to include the below modification into one of the numbered documents which reads:

“The Sub-Contractor shall carry out and complete the Sub-Contract Works and such works in any Section in accordance with the Sub-Contract, with due diligence, regularly and diligently, so as to prevent and not to cause any delay and/or disruption to the progress and/or completion of the Main Contract Works and in accordance with any requirements, sequences and/or directions of the Contractor. No guarantee or warranty of continuous or uninterrupted working is given by the Contractor.

And

“The Contractor may provide to the Sub-Contractor further or amended details, requirements and/or arrangements in relation to the programme and/or progress and/or sequence for the carrying out and/or completion of the Sub-Contract Works and/or such works in any Section including without limitation further or amended details, requirements or arrangements in respect of the information set out in item 5 of the Sub-Contract Particulars.”

The Sub-Contractor has expressed their lack of desire to carry out such return visits and has stressed that they will pick them up with later visits if they can, (I.E leave downs from visits 1 picked up within visit 2 or 3), at no additional cost. However, there has been a few occasions whereby a leave down location has become urgent in order to progress with other works. The Sub-contractor has expressed that this is severely impacting their productivity and as such, has carried out an exercise to calculate their loss and expense as a result of productivity loss. Whilst we acknowledge the urgent return visits are not ideal for either parties, we believe that the above clause in the contract was inserted to cover this and therefore such the Sub-contractor should have made reasonable allowances within their rates. In my past experience, we have paid for return visits by comparing the programme outputs against what was actually achieved. The difference in labour cost was paid as loss of productivity due to return visits. The key difference, and the reason I believe the same cannot be achieved here is as follows:

  • There was a contract amendment inserted into this contract specifically to ensure the Sub-contractor made reasonable allowances for it.
  • The Sub-contractor has not issued a programme to date despite repeatedly asking for one. Therefore, the impact of delay cannot be assessed fairly and accurately.

Is the event considered as a Relevant Event, Relevant Matter or neither?

There is a lot of potential advice needed and a lot will turn on the facts. On the face of it, I would say that any instructions you give to the Sub-Contractor that impacts upon how they do the work would be subject to a claim for extension of time and/or loss and expense if they are delayed or disrupted.

I note the amendments you have made, but I do not believe they make a difference in this situation as, whilst it they require the Sub-contractor to work to specific requirements (presumably those known at tender) the clauses do not exclude your liability if those requirements later change.

The absence of a programme from the Contractor will make it more difficult to make an assessment and more difficult for the Contractor to prove an entitlement.

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