Everybody is claiming "supply chain problems" - for structural steel - that has always seems to take longer than planned - shouldn't that always be on the contractor? The pandemic is effectively over, shouldn't the associated claims be also? what is the cut-off date?
Who is the delay on for "Supply Chain" problems?
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Patrick.
Thoughts on key long lead single vendor supply contracts placed by Client prior to Main EPC contract with intention to novate to main EPC Contractor when let?
During Tender you have to go along with this strategy. Defines risks, critical path and tender price. Contractor has his own thoughts on performance of chosen vendors which, if negative, is difficult to share during tender process.
After award, novation via VO can be difficult if Client doesn't accept additional risk monies. Refusal to novate can cause friction.
John,
can become complicated if Client has dabbled in choice of supplier, terms - nominated, named, preferred, approved etc.
Classsic one is where Client has first, to approve bidder list for specific P&E items and secondly, even when approved he refuses to approve your chosen tenderer in the tender bid submission and you are asked to rebid the package becuase he doesn't like the technical solutions being offerred. No VO issued for that one.
Generally, the 'contractor' is responsible for the performance of the contract including its chosen suppliers and subcontractors. To overcome this general rule there needs to be justification for an extension of time (EOT) which will depend on the terms of each specific contract. Some possibilities include:
- Nominated and prime cost subcontractors (the client may have some liability for the performance of the contractor they nominate)
- Force majeure - Acts of God beyond the control of all parties
- Factors beyond the reasonable control of the contractor or that are of general effect (eg, national strikes).
Each of the above need to be unforeseeable at the time the contractor entered into the contract and made its promise to perform the works of the contract in accord with the conditions contained in the contract. To substantiate a claim the contractor has to:
1. Show the risk is a claimable event
2. Show the event was unforeseeable
3. Show the event actually caused a delay to completion.
Simply whining about 'market conditions' does not help!
There's some good guidance in the 'Delay and Disruption Protocol' for more see: https://mosaicprojects.com.au/PMKI-ITC-020.php