4/20/2018 How to Deal with Delay Caused by a Nominated Subcontractor | Claims Class

DISTANCE LEARNING INTENSIVE TRAINING E-COURSES ABOUT PUBLICATIONS BLOG

Blog
Filter by Category
Published by
Andy Hewitt How to Deal with Delay Caused by a Nominated Andy's Blog
Date Subcontractor Announcements
July 19, 2017

Category Case Studies

Andy's Blog, FIDIC,
Industry Insights Construction
Claims
Construction
Contracts
Courses
Customer
Satisfaction
E-Courses
FIDIC
Guest Writer
Industry Insights
Nina's Blog
Press
Publications
Research
Top Tips Papers
Uncategorized

Search

Would you like to

Many years ago when I used to deal with the JCT forms of contract, if receive an email
a nominated subcontractor delayed the works, the contractor could notification when
use this as a legitimate reason to claim an extension of time. Either a new article has
things have either changed since then, or not all forms of contract take been posted?
this view.
Under the FIDIC Red Book form of contract, the Engineer may appoint a nominated Sign up now:
subcontractor, but once the Contractor has accepted the nomination, he becomes
responsible for the actions of the subcontractor and may not claim for any failures of the
Email Address
subcontractor.

In a situation where the Engineer nominates a subcontractor who has submitted a Subscribe
competitive price but is incapable of providing adequate performance (does this sound
familiar at all?) it seems inequitable to make the Contractor responsible when he has had
nothing to do with the selection of the subcontractor. Does the Contractor have any recourse
in such a scenario? Well, sort of, as we will see.

Sub-Clause 5.2 (Objection to Nomination) states that:

‘The Contractor shall not be under any obligation to employ a nominated Subcontractor
against whom the Contractor raises reasonable objection by notice to the Engineer as
soon as practicable …’

https://www.constructionclaimsclass.com/deal-delay-caused-nominated-subcontractor/ 1/3
4/20/2018 How to Deal with Delay Caused by a Nominated Subcontractor | Claims Class
The sub-clause goes on to list a number of criteria which would be considered as reasonable
grounds for objection. If the Engineer or Employer, after receiving an objection, still insist that
the subcontractor be employed, then there is an option that the Contractor may employ the
subcontractor if:

‘Employer agrees to indemnify the Contractor against and from the consequences of the
matter’.

Consequently, if this indemnity is agreed, then the Contractor may claim from the Employer if
the subcontractor causes the Contractor to fail in the Contractor’s obligations.

So, what happens if the Contractor is unaware that the subcontractor is not likely to perform
and does not raise a formal objection at the time of the nomination? Sub-Clause 4.4
(Subcontractors) provides that:

‘The Contractor shall be responsible for the acts or defaults of any Subcontractor, his
agents or employees, as if they were the acts or defaults of the Contractor.’

Consequently, as unfair as this may seem, the Contractor has no recourse against the
Employer for any defaults or damages caused by the subcontractor.

The Contractor may however be able to claim for damages against the subcontractor,
provided that the subcontract contains such provisions. Quite how this would work in the real
world, where the Employer imposes substantial delay penalties against the Contractor for
delay caused by the subcontractor if there is simply not enough in the subcontractor’s ‘pot’
for this to be pursued gainfully by the Contractor, is uncertain.

If contractors wish to avoid these type of situations, the message is very clear – they must
perform a thorough investigation of the subcontractor at the time of nomination and submit a
formal notice of objection if they have any doubts to the capabilities of the subcontractor.

Need a better understanding of the FIDIC forms of contract, the clauses and how to apply
them on your projects? Attend our 3-day Practical Use of the FIDIC Contracts Course in
Dubai, 16-18 October. Click here for further information. Early bird rates end 28th
September.

Read more from the Claims Class blog:

Crisis for Gulf Construction Companies

Do project consultants understand their obligations with regards to claims?

Like the article? Share this

Leave a comment 2 Reader Comments

Written by Commented by A Layman, on July 19, 2017

A Layman, It may be best – and the Employer can hardly object – if the Contractor asks the Nominated
on July 19, 2017 Subcontractor for references, especially for projects where the Employer also has been involved.
Questions of collusive behaviour may arise.

Reply

Written by Commented by David Kinlan, on July 19, 2017

David Kinlan, Part of the Contractors vetting process is to consider if the nominated subcontractors scope is on the
on July 19, 2017 critical path and to include provisions in the subcontract to take work off them if they are in delay.
Having to choose subcontractors for political reasons is a fact of life with some projects in developing
countries.

Reply

Leave a comment
Your Name required

https://www.constructionclaimsclass.com/deal-delay-caused-nominated-subcontractor/ 2/3
4/20/2018 How to Deal with Delay Caused by a Nominated Subcontractor | Claims Class

Your Email required but won’t publish

Website optional

Comment required

Submit comment

Would you like to receive an email notification when a new Blog has been
posted?

Notify me when new comments are added or someone replies.

REGIONAL PARTNERS CONNECT WITH US GET IN TOUCH WITH US

Become a Claims Class Call +971 (0)4 452 6086
Regional Partner. hello@constructionclaimsclass.com
About Benefits Contact Privacy Policy
© 2013 Hewitt Construction Consultancy FIND OUT MORE

https://www.constructionclaimsclass.com/deal-delay-caused-nominated-subcontractor/ 3/3