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Construction Law/subcontracting works


QUESTION: Hello Mr. Testro

we are consultant in Uzbekistan, supervising concrete pavement construction. shortly to say, the contractor is refusing to nominate a subcontractor even though 70% of the works have been subcontracted to other organization. the contractor is refusing to name the subcontracted organization as subcontractor but naming it only a material supplier, however the latter does 70% of the works except concrete placement. but we are requesting the contractor to nominate it as subcontractor. now the material supplier is refusing to proceed further unless it is named a subcontractor. the project is at risk. one of the reasons also is that the contractor has witheld money due to the material supplier for the works executed, because we have some unresolved claims between the contractor and us. my question is is the contractor right to refuse nominating subcontractor under FIDIC bank harmonized edition 2005?
and the second question is is it ok for the contractor to subcontract 70% of the works to the external organization without officially naming it a subcontractor.
thank you very much.

ANSWER: Hi Mansur
Your Contractor has been very clever but maybe a bit too clever.
It appears that they are procuring the concrete from one supplier and laying it with another.
A sub-contractor would usually take on the resposibility for both sections.
The provision of the raw concrete to the place of pouring is not a sub-contract function but a material supplier and does not come under FIDIC sub-contractor rules.
I would ask who is installing the rebar and forms?
The dispute between the contractor and the concrete supplier is a domestic matter that does not concern the Employer.
The Contractor takes the full risk of the performance of thw works and he should be given a warning notice to sort the problem out.
I would not advise the Employer to get involved with the Contractor's own issues.
Best regards
Mike T.

---------- FOLLOW-UP ----------

QUESTION: Mr. Testro thank you very much for your kind response.
I have to make some stuff here clear
the contractor is building unreinforced concrete pavement 50 km, using slip form pavers and concrete is field produced at the two batch plants installed at the site. so called "material supplier" cl.4.4(a)of the FIDIC contract. the concrete is being placed by the Contractor himself and other works have been subcontracted. as per cl.4.4 can we push him somehow to nominate the subcontractor since so called material supplier is in fact doing the bottom layers : subbase, earhtworks and etc.
we have several times asked the contractor to sort the problems regarding nominating the subcontractor since the work except PCCP placement, which is done by the contractor, are subcontracted. however the contractor is paying zero attention. first time the contractor nominated the subcontractor but then next day it reversed its decision and namend its ex-subcontractor a ""suppliyer of solely materials.
it has cuased some confusion.

Hi Mansur
You do indeed have a mess.
Has the Contractor named the Earthworks Sub-Contractor?
It still remains that a Sub-contractor is carrying out the earthworks and sub base and a Supplier is providing the batch concrete.
The fact that the same company is doing both functions cannot combine them into one sub-contract.
If the Contractor has place one sub-contract order for both operations then you may have a case to challenge him but I suspect that he has placed one sub-contract for the earthworks and another for the batched concrete supply.
If the two order scenario is correct then you have little chance to challenge the Contractor.
Sorry not to be more supportive.
Best regards
Mike Testro

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Mike Testro


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45 years in the Construction Industry 15 Years as a consultant delay analyst - I now hold myself to be expert in this field.

Society of Construction Law Adjudication Society ex Planning Engineers Organisation

6 articles on the relevance of the India Contract Act 1872 and its relevance to modern construction in India. Waiting Publication

Associate Member of the Institue of Building

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Currently employed in India by Punj Lloyd as expert delay analyst. Engaged in ongoing arbitrations and EoT claims. Prior an Indepenent consultant in delay analysis.

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