QUESTION

Can the CA rightfully dispute rates after they have been agreed to in writing? Additional information: · Rates were paid in several prior instances. · Over 5 months had passed from the time the rates had been submitted and first approved. · It was not requested or agreed by the contractor to change the agreed rates.

Is the CA right to not pay for items mentioned above (training, pension, daily travel, and other benefits paid to employees) even though the contract states "including all amounts paid for labour.... and all employee benefits"?

COMMENT

10.1.1 Payment for Force Account Work shall be calculated as follows:

1. labour at the actual cost to the Contractor, including all amounts paid for labour and all related taxes, assessments payable as required by any statutory scheme such as Workers’ Compensation, unemployment insurance, holiday pay, insurance, and all employee benefits. A markup of 3% on the foregoing shall be allowed for all Small Tools. A markup of 10% on the total of the foregoing shall be allowed for overhead. A further markup of 10% on the total of the foregoing including the markup for overhead shall be allowed for profit.

10.3.1 The Contractor shall keep an accurate, complete and up-to-date record, in a form satisfactory to the Contract Administrator, showing on a shift-by-shift basis all labour, equipment, materials and subcontractor costs of all Work to be paid by Force Account. The Contractor shall submit such Force Account reports to the Contract Administrator daily, before the end of the next Day for certification by the Contract Administrator. The Contractor has an obligation (GC 10.3.1) to submit daily reports for force account work to the CA, who is expected to certify them. The CA should approve the format and content of the daily force account report before the first submission. There is no time period specified for certification of the daily submissions by the contractor to the CA, but it seems a golden opportunity for the CA to highlight any discrepancies or disagreements about the force account claims by the Contractor. The intention of GC 10.1.1 is that the labour rate should be calculated as ”labour at the actual cost to the Contractor, including all amounts paid for labour and all related taxes, assessments payable as required by any statutory scheme such as Workers’ Compensation, unemployment insurance, holiday pay, insurance, and all employee benefits."

GC 16.3.1 (2) outlines the Contractor’s rights when the Owner fails to pay the Contractor for amounts certified by the CA.

MMCD “Contract Considerations” discusses Force Account work at https://www.mmcd.net/resources/video-resources/