Construction Law/Standby Resources for Contractor
QUESTION: Dear Sir
I have communicated with you before and your relies were really useful and quick. Our bespoke Contract allows for payment of Standby resources to the Contractor in case of delay attributable to the Employer. In addition, the contract contains a Schedule of the hour rates for personnel and equipment to be used in the evaluation of variations when based on hours consumed by labour and equipment AND meanwhile the clause of the Standby states that the same schedule can be used to calculate the Standby Costs for each person or equipment get idle. The Variation clause has a subclause states clearly that the hour rates of people only engaged in the variation work from he laborer up to the first level of supervision such as technician and foreman shall be included however personnel such as manager, superintendent, time keepers, HSSE engineer and QA engineers shall not be included. My question is: When the Contractor submits to me as the Contract Administrator of the Engineer the list of Standby Crew included pipe fitters, welders, electrician, foremen and HSSE engineer/ QA & QC engineers ,The HSSE & QA engineers are entitled to the Contractor as Standby or not entitled as they would not be entitled in case of a work done as variation.
Sorry for the long message but i wanted to explain in detail.
ANSWER: Dear Mr. Khaled,
Thank you for coming back with another question.
As far as i can understand your question, you have some difficulty in applying hourly rates given for evaluation of changes for a varied item to idled charges of the contractor to calculate standby cost of man power and equipment. The contractual provision stating, "the contract contains a Schedule of the hour rates for personnel and equipment to be used in the evaluation of variations when based on hours consumed by labour and equipment AND meanwhile the clause of the Standby states that the same schedule can be used to calculate the Standby Costs for each person or equipment get idle" is quite clear and both scenarios need to be dealt with similarly. it means personnel such as manager, superintendent etc. are not to be paid in idled scenario also. I hope this answers your question. Additionally, head office overhead charges are normally a percentage of the contract value and is normally inclusive of such supervisory manpower.
Regards and best wishes
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QUESTION: Thank you Sir, as usual your answers are helpful.The incidence of Work interruption caused to the Contractor was that the Contractor sent his Pipe Fitting and Welding crew (which consists of pipe fitters, electricians, welders, laborers, foremen, HSSE engineer, QA/QC engineer) to work in the field where there their work has been stopped by the landowner because he didn't get the Compensation from the Employer yet. When I reviewed the Claim submitted by the Contractor I cancelled the HSSE and QA engineers exactly as you advised but the Contractor still have his excuses about this can be OK if the work was performed in a Variation but here is a case of work not performed and the difference arises from that those engineers have also other work to do other than managing or controlling the Fitting/Welding works which was stopped and the landowner when stopped the work he stopped all other works may be done by those engineers so the C is entitled to be compensated also for them. How can I convince the Employer that I am the right person not the Contractor?
Dear Mr. Khaled,
Thank you for coming back.
I feel you should explain your view point and provision in the contract to the employer very clearly saying that as Engineer you cannot amend or change the contract provisions unless an amendment is issued after signature and agreement of both parties. The contract is very clear as i have stated above and hence you should have a strong case. Otherwise please prepare an amendment to the contract and have it signed by both sides before taking action as suggested by employer