Holding a subcontractor to programme

A subcontract states a period, or dates, for the package. If the subcontractor overruns and that overrun delays the main contract, the main contractor has a problem it needs to pass down.

Whether it can depends almost entirely on what was recorded while the delay was happening.

What has to be established

1. The subcontractor had a defined obligation as to time.
2. It failed to meet it.
3. That failure caused delay to the main contract completion.
4. The main contractor suffered loss as a result.

Steps three and four are where these claims usually fail. On a job with several packages running late, showing that this package caused the delay to completion is a real evidential exercise.

The mirror problem

Subcontractors have their own extension of time provisions, and their own relevant events. A package delayed because access was not available, or because information arrived late, has a defence, and the main contractor is generally the party responsible for both.

Which means the main contractor asserting delay is frequently met with a claim that the delay was its own doing, and often with some justification.

What the file needs

• A subcontract programme, issued and acknowledged.
• Records of access given and areas released, with dates.
• Records of information provided, and of requests made.
• Progress records: what was actually achieved each week, by whom.
• Notices given at the time the delay was occurring, not afterwards.

That last one is decisive. A notice sent when the delay began is a record. A letter sent at the end of the job, setting out ten months of delay in one document, is an argument constructed after the fact and reads as one.

The practical response

Address it while the package is live. A meeting, a written record of what was agreed as recovery, and a note of what happened next. The commercial objective is usually to get the package finished rather than to build a claim, and the record that supports the claim is a by-product of managing the recovery properly.

Damages down the chain

Recovery of liquidated damages suffered upstream requires the subcontract to provide for it. Many do, through an indemnity. Establishing the causal link remains the hard part, and it is worth being realistic about that before a substantial deduction is made on the strength of it.