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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
Hello Dan.  

Thanks for the question(s) – they are very, very intense.

1. What if the s/c is delayed by m/c more that the EOT granted to m/c?
Answer-1:   It seems the quoted sub-contract clause, "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," already contains the answer to your question.  I hope you gave proper procedural notice and files particulars on time or obtained a waiver from such requirement.
From personal experience though, the M/C's EOT shall not be limitation on the ETO grant under S/C, it is not flow-down, or as Brits call it “back-to-back” provision, and the two EOT analyses can be based on different fact patterns.

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?
Answer is in Q-1.

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?

Answer-3:  It depends on the aggressiveness of the M/C and bargaining power on site between 2 entities, but if the M/C has not suffered LD due to the actions of the S/C, application of LD on the innocent S/C is inequitable and can be refuted with facts.  Generally, the law maxim of "no damages, no recovery" will stand in your favor, based on what fact you stated here.  
In applying the float analysis, see who owns the float, and on what level.  It the contract is silent, then the party who gets to use the float first usually gets the ownership.  But I can’t tell you more without knowing more of the relevant facts.

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’?
Answer - see above.  It is the same question in Q-1, though phrased differently.

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?
Answer-5:  Sadly enough, I have seen this happen before, and it is purely fact specific.  depends on the personalities involved, egos, and any amount of good faith left between parties.  But remember, although every enforceable contract is premised on inextricable requirement of good faith, there is no requirement in law to be moral or good willing.  Given certain level of animosity on site, backhanded tactics often occur, and subs are often not informed of reduction of penalties on M/C. Seek paper, paper, paper.
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?
Answer-6:  I believe the subcontract limits the amount of recovery to 10% of the sub-contract price. Check the Special (Particular) Conditions.  In general, the amount of recovery for fault is limited, and can’t equal to the full-contract price – I venture a guess, it would be overturned on any level of subsequent review / appeal.

7. What if s/c is delayed by m/c does he get EOT & cost from m/c?
Answer-7:  If the delay is by M/C, the S/C can get the costs arising from the extended presence on site = EOT:  direct, indirect, incidental - anything that can be documented and shown to arise from liability of the M/C.  If M/C refuses to settle, the only viable option for S/C is to litigate/arbitrate, as specified in the S/C agreement.

8. Delays in ordering material, advance payments, Bill of Lading/LC issue. Who is responsible for these delays
Answer-8:  These are so site-specific and fact-specific that I can’t answer without knowing more.

Although my answers are mostly predicated by insufficient information, or rather very site-specific fact not provided, please understand that the way you posed the question makes it very difficult to answer with the context of this forum.  It seems your S/C needs a good lawyer working full-time to protect his interests.  
I hope the answers could be at least somewhat helpful.

Respectfully,

Gerry Sverdlin.

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Gerry Sverdlin

Expertise

Questions I can answer or provide assistance to reflect the following subjects: contract terms and conditions, interpretation of ambiguity, construction management and practices, claims for costs and time, variation / change orders, disputes, dispute resolution techniques and organizations, claims for extra work or materials, delay analysis, disruption or interference, defective design and negligent supervision, construction risks and mitigation, warranties and insurance. Questions I can NOT answer: too numerous to list here.

Experience

Mr. Sverdlin provided over 20 years of services in dispute resolution and expert opinion of complex construction claims for extra work, delay & acceleration, defective design & installation, unauthorized deviations, differing site conditions, productivity loss, labor & material shortage, owner’s interferences, force majeure, bonding, warranties and insurance coverage. Mr. Sverdlin participated in dispute resolution proceedings regarding 10 mile sub-aqueous outfall tunnel at Deer Island Treatment Plant – Boston Harbor Project, and claims arising out of construction of the South Boston / South Bay Interchanges for the Central Artery/Tunnel Project in Boston, Massachusetts, USA, and multiple proceedings Middle East. Specialties: Mr. Sverdlin established expertise in construction contract preparation under EJCDC, AIA, FIDIC and agency-specific bespoke contract frameworks: procurement administration, resolving defects in scope of work coverage, specification and estimates, change order processing, project controls & cost recovery. Engineering practice encompasses design & procurement management of highway & rail transportation systems, wastewater treatment and drainage networks, key performance indicator regimen.

Organizations
2011 - CIArb Member Grade 1999 - Attorney at Law – Massachusetts Bar, BBO # 642980 1992 - Registered Professional Engineer - PE: Lic. MA-36839 - Civil Affiliated Memberships: MBA - Massachusetts Bar Association DRBF - Dispute Review Board Foundation TASA - Technical Advisory Service for Attorneys

Education/Credentials
2010 - 2011 - American University in Dubai -Grad. Sch. of Business Administration Construction Contracts, Means & Methods, Claims & Changes, Project Controls March 2009 - Chamber of Commerce, Colombo, Sri Lanka – Construction Management Seminar Changes & Claims, EOT/Delay Damages, Loss of Productivity – Measured Mile 2000- 2007– Boston Architectural Ctr & Wentworth Inst. of Technology - Construction Law 1991- 1993 - Northeastern University, Boston, MA – Land Surveying, Sewage Disposal System Numerous continuing education specialty courses Suffolk University Law School - Juris Doctor, law -1993 – 1997 Northeastern University - MS, Construction / Public Works Management - 1993 Polytechnic University - BS, Civil Engineering 1982 – 1985

Past/Present Clients
Representative Projects Dubai International Airport UAE Muscat & Salalah Int'l Airports Oman South River Dredging Mechanical Scituate, MA Permitting / Boundary Dispute (Title V) Worcester, MA Hazardous Material Site Assessment New Bedford, MA Groundwater Pollution Monitoring Burlington - Woburn, MA Hazardous Material Disposal - Site Clean-up Wrentham, MA Sewer Rehabilitation Project – STEP Abu Dhabi, UAE Dubai Metro - Road & Transportation Authority, Dubai, UAE Boston Harbor Project - Deer Island MWRA - BHP Winthrop, MA 1,200 MGD Waste-Water Treatment Plant Doha North Sewerage Treatment Works Ashghal, Doha, Qatar 254K m3/d STP, 25-km triple force mains, 33-km Interceptor Sewers 10,000 l/s PS Central Artery / Tunnel Project - MHD / MTA Boston, MA 116 lane-miles Old Colony Railroad - Commuter Rail (Boston, MA 70+ mi) Cherry St. Reconstruction Full-Depth Bridgewater, MA 2.1 mi Scenic Roads Reconstruction Town-wide Wayland, MA 8.7 mi Strawberry Hill Rd Reconstruction Full-Depth Concord, MA 1.7 mi Craigsville Beach Rd Reconstruction Full-Depth Hyannis, MA 3.4 mi Water Main Replacement Southborough, MA EMAAR – Gulf III Towers, Dubai, UAE Mixed-Use Hi-Rise Peabody Properties Residential Hi-Rise Lynn, MA Bristol Properties Shopping Mall Attleboro, MA May Institute (children w/special needs) Institutional Randolph, MA Bear Hill Executive Park Commercial Waltham, MA Prospect Hill Executive Park Commercial Waltham, MA Residential Community Subdivision 128 lots Hopkinton,MA Retirement Community Subdivision Residential – 126-lots Warren,MA Independence Mall Retail Kingston, MA Mashnee Village Subdivision Residential – 54-lots Buzzards Bay, MA Hyannis Industrial Park Heavy Commercial

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