Construction Law/Termination of Main Contractor
I am working as an QS with Engineer, we are working on one hospital project and the contract is based on Fidic 87. The Main Contractor are in delays, the project is in 7th month and the progress is behind by 50% to date. The Client has asked as for options including Terminating the Contractor. Please clarify the following.
1)Please advice in Fidic 87, do we need to issue notice of termination because in particular conditions it say notice will be given but does not mention notice of how many days. Can we mention any xx days for notice.
2) If we appoint the new contractor, does the difference in price shall be deduction from the current contractor's dues.
3) Can we hold the Contractor Plants such as cranes and offices until the project is completed by the other Contractor to save the mobilization time again.
Awaiting your response
1- Yes you have to issue a notice for Termination. On the other hand you shall have issued letters to contractor for their delay. You will need these letters as a supporting document to your Termination. If there is no letter for delay you shall first issue letter for delay and only after a period you shall issue letter of notice for Termination. As you mentioned the delay is 50% and it is not reasonable to request to catch the program with the Termination notice. You may only request their plan to catch the program with the Termination notice so you can give 7 days to the Contractor to submit their plan and actions they plan to catch the program. If you are not satisfied with their submittal you may proceed with Termination.
2 - After termination you will withhold any deliverables and bonds of the Contractor until final certificate. Please check you particular application if other is specified and you may in that case can deduct the cost difference of new contractor.
3- It is a legal issue that I do not have detailed information. I can say that you can hold any material delivered to site until final account settlement but it may be different for Contractor asset.