What remedies are available to the Project Manager if a Contractor refuses to extend his performance bond and what clause applies when the Contractor is to comply with a programme compiled by the PM?

  1. The Contractor does not have an accepted programme in place at the moment. The PM rejected it and stated his reasons for doing so. The PM requested the Contractor on numerous occasions to correct its programme after failure to do so the PM is now doing his own assessment.

In the meantime the performance bond expired. The Contractor does not want to extend his bond without an accepted programme. What remedies are available?

  1. Once the PM has completed his assessment of the programme which clause applies to have the Contractor to comply with the planned completion as per the PM’s assessment?
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What is the PM’s assessment of a realistic contract completion date? Does this show that the bond will expire before the extended completion date?

I presume that secondary option X13 applies. The ultimate force is clause 91.2 whereby the Employer may terminate because the Contractor has defaulted by not providing a bond or guarantee which this contract requires.

The wording of the bond itself is important usually the bond will be extended or only expire at the end of the contract?

There is always something afoot when a PM feels obliged to reject the contractor’s programme and make his own assessment. Certainly, a breakdown of the clause 10 “mutual trust and cooperation” is prevalent. The clause 31 for programme submittal is highly detailed in its requirements and if the will is not there, then there are always grounds for rejection , if the PM should so decide. Interpretation of the time risk allowances, float ownership as well as resourcing are all scope for dispute.

Thus , if the contractor sees the PM assessment as unreasonable, he may decide to seek an adjudication in which case it would also not be unreasonable under the circumstances to refuse or rather delay extending a bond , pending the outcome.