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Nominatation and Commencement Date

11 replies [Last post]
Sun, 2009-11-15 09:07
Rami Al Haddad
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Dear All,

I have a simple question, and I hope that you’d help me find an answer.

So the Employer slected a Nominated Sub-contractor, issued him a letter of acceptance and/or notified the Main Contractor to enter into agreement with the NCS.

The main contractor had some clarification with repect to the NCS scope and some time later, say a Month, things were resolved.

The Emplyer sends the main contractor a letter of the resolved items and reminds them with their original Instruction to enter into agreement with the NCS. One week later the main contractor finally signs the agreement with the NCS.

My question is, which date is shall be considred the commencement date for the NSC; The date the sub-contract agreement was signed, or the date the emplyer sent the reminder of getting into agreement. You should probably know that in terms of precedense, the Sub-contract agreement states: 1) sub-contract Agreement 2) original emplyer Instruction & the second (reminder of) Instruction.

Cheers,
Rami
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Replies

Tue, 2009-12-29 13:42
#1
Samer Zawaydeh
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Dear Raphael,

The duties and responsiblities are outlined in FIDIC chapeter 5 for "Nomintated Subcontractors".

Also, the client can have special Conditions of Contract with the MC pertaining to the NSC.

With kind regards,

Samer
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Tue, 2009-12-29 01:02
#2
Raphael Adeyemi, ...
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I agreed with Mike,as subcontractor the Main Contractor is reponsible for directing your operations with regards to the commencement and this must have been planned in the mater construction programme.

I am of the opinion that you ought to receive directive for your subcontract work commencement from the Main Contractor and not from Client or his agents.

In essence as Mike had earlier pointed out, your contractual relationship lies with the main contractor ad you follow suite

Cheers
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Sun, 2009-12-06 08:29
#3
Mike Testro
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Hi Rami

This is the 1st time you have told us that you are the Nominated Sub-contractor.

I for one would have responded differently had you told us this at the start.

The essential point is that you are a Sub-Contractor - whether nominated or not.

You contractual involvement started when you you signed the sub-contract.

The difference of opinion between the client and the main contractor about your start date does no affect you since you have no contractual relations with the client.

Your contract start date is the one that is stated in your sub-contract which is what you signed for.

Best regards

Mike Testro
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Sun, 2009-12-06 06:51
#4
Rami Al Haddad
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Dear Samir,

Thank you for the reply.

I represent the Nominated Sub-Contractor.

I’m quiet aware that the MC must have showed on his schedule the nomination process and if the client have caused any delays he would claim against his baseline.

My question was, as a nominated sub-contractor, what triggers my commencement date:

1) Client’s Letter of Acceptance of the Nominated Sub-contractor offer

2) Client’s Letter of Sub-contractor Nomination addressed to the MC, which asks the MC to get into a sub-contract agreement with the Nominated Sub-Contractor.

3) The Date of signing the sub-contract agreement between the MC and NSC.

The Contract Admin argues that the commencement date is point 2; however, I argued that since:

1) The MC has the right to object to a nomination per sub-clause 59.2,

2) The contract requires a back to back sub-contract agreement between the MC and the NSC

the commencement date is the date of signing the sub-contract agreement.

having said that, it brings me to another question which just flashed my mind! does the NTP bears any contractual significance as for the MC and/or NSC!

Cheers,
Rami
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Sun, 2009-11-29 14:36
#5
Samer Zawaydeh
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Dear Rami,

The Main Contractor is responsible for completing the works because he has an agreement with the Client.

The client issue here is the delay of approval of the Subcontractor by the Client. This is a time issue. The agreement signature and the start date might be important only if the whole process is clearly documented in the Conditions of Contract.

I would consider the approval of the subcontractor like any other Material Submit activity. You will have a planned duration by the Contractor, a review and approval cycle. If this is delayed by the Client due to some reason or another, then this will be shown in the Schedule accordingly.

The activities following the approval process should be clearly reviewed and understood.

If the Contractor has a claim due to the two month period that you mentioned, then the best way is to document it and claim it under clause concerned with the Contractor’s Claims.

With best regards,

Samer
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Sun, 2009-11-15 13:11
#6
Rami Al Haddad
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one more things I forgot to mention, the contract is Fidic 98, 4th edition contract.

My understanding is the Contract Commencement Date for the NSC is the Date of Signing the Sub-contract Agreement between them and the Main conractor.

To clear any doubts; and this is an argument I’m facing right now, I want to know if the date of the Employer’s Letter of Nomination to the Main Contractor instructing them to get into a sub-contract agreement with the NSC the NSC’s contract commencement date.

Cheers,
Rami
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Sun, 2009-11-15 14:29
#7
Mike Testro
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Hi Rami

You seem to have answered your own question when you said:

"Contract Commencement Date for the NSC is the Date of Signing the Sub-contract Agreement between them and the Main conractor."

What is the significance of the Sub-Contract Start date that is causing you such concern.

Best regards

Mike Testro

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Sun, 2009-11-15 09:44
#8
Mike Testro
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Hi Rami

The sub-contract work would have been on the contract programme with a planned start date and showing float/criticality.

Both parties would be aware of the date when the sub-contract agreement had to be signed to allow the sub-contract work to start on time.

If it was signed in time then there is no problem.

If the date was missed then deciding who actually caused the delay will be an interesting dispute process.

Best regards

Mike Testro
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Sun, 2009-11-15 12:59
#9
Rami Al Haddad
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Hi Mike,

Thank you for reply, ít’s just that this is not exactly what I meant by my question, obviously you are right, what I meant by Commencement Date thought, is the Contract Commencement Date, and not the works commencement date on site.

Thank you,
Rami

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Sun, 2009-11-15 23:22
#10
Rami Al Haddad
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Hi Mike,

I’m trying to understand the significance of the Letter of Acceptance (LOA) and/or the Letter of Nomination (LON) to the NSC commencement; There was almost 2 months of negotiations with the Main Contractor (MC) before we (NSC) finally entered into an agreement with them. The Contract Administrator insists that the date of commencement is the date of the LON (by the client) and not the date of the Sub-contract agreement between the NCS and MC.

BR,
Rami
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Sun, 2009-11-15 23:49
#11
Trevor Rabey
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Give us the various dates.
Surely, nothing can start until there is a signed contract, and everything before that doesn’t count.
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