Construction Law/Partial hand-over of civil works projects
We are implementing a school project which consists of two parts in one contract.
Due to client needs, we had to hand-over one part while the second is still in progress and requires a couple of months to be handed over. What is the best practice regarding the following:
1- The maintenance guarantee
2-the penalties or liquidated damages if there is a delay in the hand-over of the second part.
3-Payments against the handed over part in regards to the retention knowing that the items in the BoQ are not separated. Payments are usually issued for both given the same items.
Please specify the contract form of agreement, otherwise I am taking the opportunity to reply as per condition of FIDIC red book.
The Engineer may, at the sole discretion of the Employer, issue a Taking-Over Certificate for any part of the Permanent Works.
The Employer shall not use any part of the Works (other than as a temporary measure which is either specified in the Contract or agreed by both Parties) unless and until the Engineer has issued a Taking-Over Certificate for this part. However, if the Employer does use any part of the Works before the Taking-Over Certificate is issued:
(a) the part which is used shall be deemed to have been taken over as from the date on which it is used,
(b) the Contractor shall cease to be liable for the care of such part as from this date, when responsibility shall pass to the Employer, and
(c) if requested by the Contractor, the Engineer shall issue a Taking-Over Certificate for this part.
from the above reply are as below:
1. Maintetenance guarantee will be applicable from the date of partial taking over up to time span specified in the contract agreement.
2. The delay damages thereafter for completion of the remainder of the Works shall be reduced. Similarly, the delay damages for the remainder of the Section (if any) in which this part is included shall also be reduced. For any period of delay after the date stated in this Taking-Over Certificate, the proportional reduction in these delay damages shall be calculated as the proportion which the value of the part so certified bears to the value of the Works or Section (as the case may be) as a whole.
3. When the Taking-Over Certificate has been issued for the Works, the first half of the Retention Money shall be certified by the Engineer for payment to the Contractor. If a Taking-Over Certificate is issued for a Section or part of the Works, a proportion of the Retention Money shall be certified and paid. This proportion shall be half (50%) of the proportion calculated by dividing the estimated contract value of the Section or part, by the estimated final Contract Price.
Promptly after the latest of the expiry dates of the Defects Notification Periods, the outstanding balance of the Retention Money shall be certified by the Engineer for payment to the Contractor. If a Taking-Over Certificate was issued for a Section, a proportion of the second half of the Retention Money shall be certified and paid promptly after the expiry date of the Defects Notification Period for the Section. This proportion shall be half (50%) of the proportion calculated by dividing the estimated contract value of the Section by the estimated final Contract Price.
With due regards.