Commercial, Contractual and Risk Review Services Provided to a Specialist Subcontractor

Type of Project – Prison in the South of England

The project consisted of a new build and some refurbishment. The subcontract was a standard form of building contract SPC 2000 (partnering) and amendments, and the subcontract sum was £7.3m.

Description of Issues

RM was appointed by a mechanical and electrical Specialist Subcontractor to resolve a multitude of commercial and contractual matters.

Entitlements or Liabilities

The entitlements and liabilities considered were the valuation of withholding by the main contractor, liability for a 35 week delay to the subcontract works and valuation of costs associated with the delays.

Assistance to the Specialist Subcontractor

RM established the whole of the subcontract agreement which ultimately amounted to 22 lever arch files, giving rise to RM being able to establish the specialist subcontractor’s entitlement.

RM established that the £750k set-off claim (withholding) was valued at circa £60k subject to further evidential material.

RM assisted in the preparation of a variation account worth in the region of £500k.

RM prepared a delay analysis supporting a claim for 35 weeks and defending additional preliminaries claimed by the main contractor valued at circa £875k.

RM assisted the specialist subcontractor in the preparation of a loss and expense claim of circa £400k.

Monies Involved

The sum involved was £8m.
The dispute involved was £2.5m.
The risk to the specialist subcontractor was £1.5m.

Financial Settlement

For financial reasons during the recession, the specialist subcontractor settled the account with an additional global payment of £600k for a walk away deal.