Question 1

Can you please help me understand DELETION of work versus REJECTION of work, and to what the contractor is entitled in either case?

Accepted Answer

QUESTION

I am the CA for an MMCD Contract to which the nature of the work is using trenchless technology under 33 05 24.

The Owner has requested a particular type of treatment work related to the sewer interface at service connections be deleted from the contract in its entirety as the contractor has not been able to demonstrate good workmanship, best practices and meet the specifications to rehabilitate underground infrastructure.

The CA, as well as third-party QA review and testing on work completed to date on a separate item, agrees with the Owner to not peruse this item as work not performed in it entirety.

I have reviewed the document to help determine what the contractor is entitled to, to which my understanding is

Since the entire pay item is rejected in its entirety, the amount the Contractor should be entitled to is the bare cost of materials, plus freight, plus OH&P at 20% on those materials

If I could seek your opinion on how to better understand the deletion of work vs the rejection of work, and if an item is deleted or reject example exists (what is entitled to the contractor), as these examples were mentioned in Volume 1 but later supplemented with none? Also if you have any guidance as to my determination and its value are as per contract documents intentions.

COMMENT

If [we] understand your situation correctly, the contractor has done some work on the item the Owner wishes to delete in its entirety. The Owner’s motivation is a belief that the Contractor is incapable of meeting the project specifications. You wish to know if the deletion of the item is as simple as applying GC9.4.3.1 or if the lack of quality of the work to date means some other method is appropriate.

First let [us] clarify one point. Your comment “Deletion of the work the contractor is entitled to 20% of 85% of Tender value of the deleted item as per 9.4.3(1)” is not correct. Even if one were to use 9.4.3 (1), the Contractor must prove to the CA’s satisfaction the % of the line item bid price that was for overheads and profit. It does not default to 20%. That was simply the number chosen for the example in the User Guide. Similarly your comment about 20% later in your question is also incorrect.

To summarize, if [we] were to do this [we] would:

Again, [we] stress that your lawyer may have a different interpretation of this situation. Nevertheless, [we] would do this calculation to get an “order of magnitude” amount for discussion with the lawyer before finalizing an Initial Decision under either GC.

Question 2

Can a claim be made by a Contractor for lost overhead if the Client cuts out part of the work so that the final value of the contract is 25% less than the original lump sum contract?

Accepted Answer

QUESTION

If a lump sum contract valued at say $100,000 is signed with a contractor and the client cuts out part of the work so that the final value of the contract turns out to be $75,000, could a claim be made for lost overhead and profit that would conform to MMCD?

COMMENT

GC 9.4.3 covers the Contractors profit and overhead when quantities fail to meet the Threshold Variance

Can you please help me understand DELETION of work versus REJECTION of work, and to what the contractor is entitled in either case?

Can a claim be made by a Contractor for lost overhead if the Client cuts out part of the work so that the final value of the contract is 25% less than the original lump sum contract?

Not many results?