What important points should I cover when striking a deal with my subcontractor to accelerate completion of his works?

Question

The sub-contract is for M&E installation, is based on a traditional JCT Std form and includes some CDP elements.
The project is behind schedule and I need to make up lost time to meet an important customer handover deadline which has substantial penalties attached if I miss it.
My sub-contractor says he can make up the required time by taking special measures and adding resources but he requires a considerable extra sum of money for doing so.
I am slightly frustrated because I suspect some of the lost time was actually his fault but I have no proof of this and I cannot afford to miss the deadline.
There are 3 other sub-contractors on the project who also have work to complete alongside the M&E sub-contractor.
Can you suggest the important points I should deal with in an acceleration agreement ?

Nick Cheetham · Answer

As the contract is a JCT Contract a key consideration is how you intend to instruct and implement the acceleration agreement. Schedule 2 contains provisions for acceleration which can be utilised In certain circumstances. Alternatively this could be addressed in a side agreement which is outside of the executed terms.

To instruct outside the contract could make dispute resolution difficult in the future as this could be viewed as a separate contract so resolving a dispute could be problematic.

Another key consideration is how are you going to measure success. As the instructing party you would usually want success to be completion by a date, however this may not be palatable to the subcontractor as ultimately it could fail because of another’s actions / inaction and after incurring significant costs it could recovering nothing.

The most equitable approach is to share the risk by agreeing a two part agreement, 1. Performance of certain actions (labour numbers etc) and 2. A sum for achieving the set date for completion.

Thereafter Tom’s practical points would all apply and the key is ensuring you have commitment from all those involved to aim for the date in question.

What important points should I cover when striking a deal with my subcontractor to accelerate completion of his works?

Acceleration

Sub-contract

MEPH

Steve Hardy

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