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Construction Law/Extension of Subcontractor’s Time for Completionc

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Question
Hi
I am working with one of the well-known MEP sub-contractor in UAE. Our Contract is based on FIDIC – Conditions of subcontract for works of Civil Engineering Construction (1st Edition 1994) with little amendments. Our Main Contract is based on FIDIC 1987 reprinted in 1992.

We have some issue with EOT and the Main Contractor is interpreting the clause 7.2 and 8.2 in different ways. I want to know what is the relief for the Sub-Contractor

m/c – Main Contractor
s/c – sub Contractor
TFC – time for completion
LD – Liquidated damages
EOT – extension of Time

1. What if the s/c is delayed by m/c more that the EOT granted to m/c?
2. Sometimes EOT to m/c will be 100 days while the s/c Time for completion (TFC) will only be  50 days, how will m/c decide how much EOT to grant to s/c?
3. What if there is enough float in the m/c programme and s/c delays beyond the s/c TFC, but it does not delay the m/c and m/c does not suffer a LD, will m/c apply a penalty on s/c?
4. What happens when ‘the extension shall not in any event exceeds the extension of time to which the Contractor is entitled under the Main Contract’?
5. If m/c negotiates a penalty with the employer and succeeds in reducing it, will he pass on the reduction to the s/c?
6. If m/c is delayed by s/c and is liable for 10%CP penalty and 10%CP is >= CP of s/c, how much will m/c recover?
7. What if s/c is delyed by m/c does he get EOT & cost from m/c?
8. Delays in ordering material, advance payments, Bill of Lading/LC issue. Who is responsible for these delays


7.2 Extension of Subcontractor’s Time for Completion
If the Subcontractor shall be delayed in the execution of the Subcontract Works or if applicable, any Section thereof by any:
a) circumstances in regard to which the Contractor is entitled to receive from the Engineer an extension of his time for completion of the Main Works under the Main Contract,
b) instruction pursuant to Sub-Clause 8.2 to which paragraph (a) of this Sub-Clause does not apply, or
c) breach of the Subcontract by the Contractor or for which the Contractor is responsible,

then in any such event the Subcontractor shall be entitled to such extension of the Subcontractor's Time for Completion of the Subcontract Works or such Section thereof as may in all the circumstances be fair and reasonable.

Provided that the Subcontractor shall not be entitled to such extension of time unless he has submitted to the Contractor notice of the circumstances which are delaying him within 14 days of such delay first occurring together with detailed particulars in justification of the extension of time claimed in order that the claim may be investigated at the time and, in any case to which paragraph (a) of this Sub-Clause applies, the extension shall not in any event exceed the extension of time to which the Contractor is entitled under the Main Contract.

Provided also that, where an event has a continuing effect such that it is not practicable for the Subcontractor to submit detailed particulars within the period of
14 days referred to in this Sub-Clause, he shall nevertheless be entitled to an extension of time provided that he has submitted to the Contractor interim particulars at intervals of not more than 14 days and final particulars within 14 days of the end of the effects resulting from the event.
 
8.2 Instructions under Subcontract
Subcontractor shall take instructions only from the Contractor. The Contractor shall have the like authority in relation to the Subcontract Works to give instructions as the Engineer has in relation to the Main Works under the Main Contract. The Subcontractor shall have the like obligations to abide by and comply therewith and the like rights in relation thereto as the Contractor has under the Main Contract. The said authority of the Contractor shall be exercisable in any case irrespective of whether the Engineer has exercised like authority in relation thereto under the Main Contract.

Thanks & Regards
Dan

Answer
Dear Dan
Hello, Happy new year.
Sorry for delaying in reply.
1. What if the s/c is delayed by m/c more that the EOT granted to m/c?

If any work delayed due to any reasonable reason and EOT granted on that reason to m/c, then s/c is liable for that EOT also as per contract of s/c.  
2. Sometimes EOT to m/c will be 100 days while the s/c Time for completion (TFC) will only be  50 days, how will m/c decide how much EOT to grant to s/c?

For the reasons of delay, EOT granted to m/c. m/c will decide the EOT for s/c on the basis of reasons pertaining to the s/c.
3. What if there is enough float in the m/c programme and s/c delays beyond the s/c TFC, but it does not delay the m/c and m/c does not suffer a LD, will m/c apply a penalty on s/c?

No,Provided that the Subcontractor shall not be entitled to such extension of time unless he has submitted to the Contractor notice of the circumstances which are delaying him within 14 days of such delay first occurring together with detailed particulars in justification of the extension of time claimed in order that the claim may be investigated at the time.

4. What happens when ‘the extension shall not in any event exceeds the extension of time to which the Contractor is entitled under the Main Contract?
s/c will not be liable for such EOT.
5. If m/c negotiates a penalty with the employer and succeeds in reducing it, will he pass on the reduction to the s/c?
Yes
6. If m/c is delayed by s/c and is liable for 10%CP penalty and 10%CP is >= CP of s/c, how much will m/c recover?
m/c will be liable to recover equal to 10% CP on M/c.  
7. What if s/c is delayed by m/c does he get EOT & cost from m/c?
Yes,Subcontractor shall be delayed in the execution of the Subcontract Works or if applicable, any Section thereof by any:breach of the Subcontract by the Contractor or for which the Contractor is responsible.


8. Delays in ordering material, advance payments, Bill of Lading/LC issue. Who is responsible for these delays.
Main contractor or otherwise depending upon the condition and nature work was sub contracted.

I hope this will help you. if any doubt,please come to me again for clarifications.
With best regards
Sanjay Khandelwal  

Construction Law

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Sanjay Khandelwal

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I can answer related to the various construction contracts forms related with disputes and claims.Expertise in to evalute the extension of time,cost and profit claims.I can answer regarding the contract management in civil works.

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I have the experience of construction industry, as a consultants,executor of construction activities of infrastructure development like road and buildings. I have the experience of various software related to design of highways and quantity evaluation.

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My educational qualifications are as below: I am engineering graduate from MITS, INDIA,1987 I have completed my Post graduation from NIT,INDIA,2011

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