ALTON BY-PASS (MAIN CONTRACTOR) V EARTHWORKS (SUBCONTRACTOR)

  1. The case involved a main contractor, Alton By-Pass, and the subcontractor, Earthworks. The two failed to reach an agreement on the subcontractor account with regard to extensions of time and claims for additional payment. The issue was raised to adjudication where an independent expert was expected to provide a summary statement as well as offer recommendations for an award. 
  2. A review in the subcontractors’ contract indicated the conditions under which the subcontractor could be receive an extension for the completion of the works. These include; in case of additional work, exceptionally adverse climatic conditions, delays caused by the main contractor, or other special circumstance that do not result from breaching of the contract by the subcontractors. As per the contract, the main contractor had the right to make variation of the form, quality, or quantity of the work as he deems right and have the mandate to request the subcontractor to increase or reduce the quality of any work in the contract, omit such portions of work or change the position and dimensions of any part of the work. 

Subcontractor’s entitlement to additional time / or payment 

  1. For the delays caused by the inconvenience of the main contractor, the subcontractor is entitled for an additional time to cover up the time lost in the delay. This is actually provided in the subcontractor’s contract that states that “any delay, impediment or prevention by the Main Contractor will fairly entitle the subcontractor to an extension of the time for completion of the works.” The subcontractor had intended to begin his works on mid-July. However, the Main Contractor is said to have experienced resourcing problems that caused the subcontractor to delay the commencement of his work by two weeks. For this, he deserved an extension in time to compensate for that lost time. The Main contractor was also involved in causing delays to the operations of the subcontractor. 
  2. The initial subcontract’s plan had indicated that the plant would be moved between different areas through the bridges. Both bridge 6 and 14 had delays in completion by ten and eight weeks respectively. Bridge 14 was scheduled to built by the main contractor. The delayed completion of bridge 14 meant that the subcontracts have to use road to move the plants which in a way caused delays as well as increment in costs. The Main Contractor was to provide the granular material to be used by the subcontractor in making the area three at the rate of 50m3 per hour to be deposited at the point of deposition. The main contractor acknowledges that of this agreed delivery, he was only able to deliver 50% of the agreed material which in a way justifies the need for an extension to the subcontracts. 
  3. The subcontractor’s contract also provided that, “exceptional adverse climatic conditions, would fairly entitle the subcontract to an extension in the time for completion. In this case, it has been indicated that the material being excavated and reused in Area Three was a difficult task due to the high levels of moisture levels. This slowed down the pace at which the subcontractor was able to place the material as only could handle 1m thick layers and then leave it for a period of 2 days to allow it to continue with the process of embankment. This implies that as per the contract, the subcontractor should be granted some extension. 
  4. There were also other delays caused by third parties and the burden should not be placed on the shoulders of the subcontractor. One of the third parties is the statutory authorities who were late in carrying out the ground services. This negatively affected the efficiency of the supervision as well as fuel distribution. This caused the subcontract not to complete the work on Area One by the end of the first season as the plan had been. Bridge six was another component of the project that had a delay of 10 week. This ultimately inhibited the movement of the plant.

The extension of time

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  1. The subcontractor had made earlier plan of not being engaged in the work during the winter period.to achieve this, the subcontractors aimed at achieving the intend work in two seasons with a 6 months period for winter being set aside between these periods. Through negotiations with the engineers, main contactor gave instruction to the subcontractor to continue working even on winter without taking the planned break. 
  2. The subcontractor should be granted an extension equals to the number of weeks in delays that were not as a result of the action or inactions of subcontractor. Some of this include 2 weeks delays for the commencement of the project, 10 weeks due to delays in completion of bridge, and 16-week delay in the completion associated with failure of having the granular being delivered at the required rate. 

Entitled payments

  1. The nature of engagement of subcontractor requires some payments be accorded to subcontractors as a way of ensuring fairness and equity. The first payments should be based on the normal agreed payments amounting to 648,000. The main contractor should also compensate the subcontractor for the period spent during the winter for a period of 26 week. This will be charged at 60% of the output resulting to 130,000. There had also been delayed associated with incorrect material classification that lead to uneconomical work being done. The monetary impact involved in this was $350000. For the resoiling of the adjacent areas to the three sections, the subcontractor had agreed to do the landscaping at no additional cost but the client would pay for the final resoiling of these areas that would take approximately 100,000m2.

Recommendations

  1. While it is true that the subcontractor was late in finishing up the works, it is also worth noting that for part, there was no breach of the contract. As it has been indicated above, the delays were mostly caused by factors that had been considered in the contract as potential causes that may cause a consideration to the extension of time for completion. 
  2. I would recommend that the subcontractor be awarded 130000 for the uneconomical winter working which was not part of his pre-contract plans. The contract only gave the Main contractor powers to change the magnitude of work but not the timelines earlier agreed. This therefor implies that the Main Contractor needs to compensate for the engaging the subcontractor during the winter. It is also worth noting that the need to continue working during the winter was caused by incompleteness of area one by the end of the season as it had been planned. This was noted to have been caused by other factors identified in the contract as opposed the subcontractors breach of contract.
  3. For the slow supply of blanket, and the loss of output, I would award the full suggested amount at 35000. This is because this was a failure by the Main Contractor that caused a delay of about 16 weeks. This delays clearly came with financial implications to the subcontractor the needed to be catered for.
  4. For the incorrect material classification leading to uneconomical work, I would not award any payment to subcontractor. The Main contractor clearly indicated that the materials supplied were as per the description of the contract. This implies that the subcontractor should have considered this before engaging in the project. 
  5. For resoiling, the agreement had been reached of the client making payment for the 100,000 m2 final works on the adjacent area. It thus only fair to make the 5000 payments. The main contractor had main suggestions to consider the cost saved to the subcontractors for the use of this area. He however never any figures that we would have used in making the final amount due. 

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