Question 1

Can the CA rightfully dispute rates after they have been agreed to in writing?

Accepted Answer

QUESTION

Can the CA rightfully dispute rates after they have been agreed to in writing? Additional information:

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:

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.

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/

Question 2

What is the rate for liquidated damages?

Accepted Answer

QUESTION

I have a question about the interpretation of GC13.9 (no supplemental GC)

COMMENT

Liquidated damages are now set at $1000/day vis Platinum supplemental. GC 13.9 says the flat rate plus out of pocket costs.

Question 3

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

Question 4

What compensation are we entitled to if a client chooses to cancel our contract before it is completed?

Accepted Answer

QUESTION

I have entered into a MMCD contract with a client in BC. We have run into multiple items that extended the length of our project and the client is very unhappy about the cost of it and have not granted our company an extended time line. There was talk about cancelling our contract before being able to complete it.

COMMENT

GC16.2 and GC16.4 refer.

Question 5

What is included in the Overhead portion of a Force Account?

Accepted Answer

QUESTION

The contractor has currently claimed missing overhead associated with approved Changes as well as unavoidable delays. We had agreed at the beginning of the project to include overhead costs associated with Change Orders in a review at the end of the project if those costs materialized. I am now assessing their claim.

Force Account rates include direct costs, overhead and profit but what is typically included in the overhead portion of the Force Account? Does this overhead portion include office overhead?
What is considered applicable in overhead costs when the Contractor is working Force Account and gets 10% markup on materials/subcontractor work?

Generally speaking, where do site overheads typically fall? Items like portable toilets, trailer heating, electricity, street cleaning, fences, etc? Where do staff overheads fall like Quality Coordinators, Project Managers, etc? They are also an overhead project cost.

COMMENT

GC 1.3.8 refers

Question 6

How does MMCD address issues relating to contaminated material discovered during construction?

Accepted Answer

QUESTION

How does MMCD address issues relating to contaminated material discovered during construction? Should it be cost to be borne by contractor or extra pay by owner?

COMMENT

GC12.2 to GC12.5 refer

Question 7

Fire Hazard Rating increased to Extreme: Unavoidable Delay or Owner's Responsibility Delay?

Accepted Answer

QUESTION

During construction, the Fire Hazard Rating was increased to Extreme, and the District Fire Chief and the GM of Engineering issued a policy to all project managers that during extreme fire rating, all construction work was required to end at 3pm and a fire watch was to be implemented for 2 hours afterwards. Said contractor complied, and has now invoiced the Owner for the costs, but no time extension. The costs include labour for 1 worker, but also standby time for 2 machines. We are wondering if this should be considered Unavoidable Delay or Owner's Responsibility delays?

COMMENT

GC13.1.1 refers

Question 8

All tenders received were over budget. Can the project be retendered without alteration to the original tender package?

Accepted Answer

QUESTION

I am looking for guidance on the legalities of retendering a construction project that was previously tendered but all tenders were rejected as the costs were significantly more than the Engineer’s cost estimate and therefore over the allocated budget.

COMMENT

The GCs allow the owner to reject all bids, which they probably should do if they don’t have the funds to proceed.

Question 9

Does a delay caused by wildfires fall under Abnormal Weather?

Accepted Answer

QUESTION

Contractor was to mobilize to site today, but now will not be able to construct due to fires in area and are looking for compensation. Does this delay fall under abnormal weather?

COMMENT

GC 13.3 Unavoidable delay cites Abnormal Weather as something beyond the reasonable control of the Contractor.

Question 10

The sole bid received is over the approved budget. Can the Owner negotiate with the bidder?

Accepted Answer

QUESTION

The client received only one bid in response to the tender that is over the approved budget for the project.

COMMENT

Where there is only one compliant bid, the issue of violating conditions of Contract A with other bidders does not exist. The GCs allow the owner to reject all bids, which they probably should do if they don’t have the funds to proceed.

Then if the municipal bylaws permit negotiation without competition, the Owner can proceed to adjust the design and requirements to negotiate a price both can live with. Once a deal is reached, the documents are adjusted to suit and Contract B commences just as it would if there had been a normal process. I don’t think there is any violation of MMCD GCs or ITs if it is done this way. More likely the problem will be purchasing rules and restrictions.