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Expert: John Dowse - 4/13/2009

Question Hi John We are an EPC Contractor and we have a Subcontractor whose name is specifically mentioned in our Main Contract to carry out a particular portion of the work. Now that Subcontractor is in a long delay ultimately delaying our other works without which we cannot obtain our Substantial completion Certificate form the Client. This Subcontractor is belonging to the same group of the Client and the name had to be accepted by us from the bidding stage for which we have credible documents to prove. The acceptance had to be made despite the fact that the commercial offer of a competitor to this Subcontractor was even cheaper by 30%. Can we claim Extension of Time from the Client due to the delay from the Subcontractor recommended by the Client? There is no express provision of definition of Nominated Subcontractor in the EPC Contract. I thanks you very much for taking trouble to go through the question and I would be thankful in advance for the kind advise. Get the answer below

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Thank you for your question. I note that you refer to the sub-contractor as being a nominated sub-contractor. However on the facts I think the sub-contractor was only a named body. Some of the special circumstances under which a sub-contractor can be considered as having been nominated include: - The Employer has a significant input in specifying the sub-contractor's scope of work; - The Employer often agrees the price and programme with the sub-contractor; - The Employer instructs the Main Contractor as to the terms of appointment of the sub-contractor; Even if the sub-contractor was nominated, it is only in special circumstances that the Main Contractor does not take the risk of the performance of the sub-contractor. Accordingly the standard interpretation of liability for delay and entitlement to time will apply: - If the sub-contractor is delayed for reasons which are his own liability then he is liable to you and you are, in turn, liable to the Employer. You will not have any entitlement to an extension of the Time for Completion. - If the sub-contractor is delayed for reasons which are your liability but for which the Employer is not liable, you will not have an entitlement to an extension of the Time for Completion but you will have a liability to the sub-contractor. - If the Employer is liable for the delays, which affect you and your sub-contractor then you will have an entitlement to an extension of the Time for Completion and a liability to your sub-contractor. Given the special circumstances, of the sub-contractor being closely related to the Employer, this clearly present a very difficult situation for you. Has the position been discussed with the Employer in advance of you making any claim? I hope that this assists you in your further consideration of the problem. Kind regards, John Dowse John Dowse can be contacted by e-mail to courtroom@hotmail.co.uk

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John Dowse
Expertise
Legal; contract interpretation; quantum; delay analysis.

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Twenty-eight (28) years experience in building and construction, at all levels both within contracting and consulting organisations. Organizations Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Publications Various UK and International construction and legal publications. Education/Credentials LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb Barrister

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