In the construction industry things rarely go exactly according to plan. Unforeseen delays, such as adverse weather conditions, suspended works or even encountering obstructions on the ground, can lead to a Change Order being issued to a contractor by their Employer’s Representative under any standard Public Works Contract. However, these delays inevitably expose subcontractors (Mechanical, Electrical, etc.) to additional costs. They may need to have personnel and machinery on site for long periods of time beyond what was initially budgeted. The question subcontractors often have therefore is how can they recoup their losses?
It is crucial that subcontractors keep themselves informed of the relevant provisions of the contract relating to the timeframe for serving notice of any delay events, lest they leave behind sinful amounts of money. It is too often the case that subcontractors miss the deadline for serving notices on the contractor in the event of a delay event. That can prevent them from bringing a successful claim for recovery of costs they have incurred as a result. A thorough understanding of these key provisions of the contract by subcontractors can help them to avoid being taken advantage of by contractors.
“Real questions must be posed about the tender process in such projects and about the competence of contractors. The counter argument is that there has been a failure to put in place proper guidelines aimed at ensuring that considerations of cost are prioritised. Who drafted the legal documentation? Are provisions not supposed to be in place to tackle the matter of unexplained overruns?”