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Question #1

Dear Streetwise,

On a recent contract, the Contractors Contract manager agreed to provide some minor items of hired in plant and I agreed that they could deduct the cost from the final account.

They duly provided copy invoices, with which I am in full agreement, but the QS has also added a 20% mark up, justifying this by saying that as I mark up anything I provide, so can he.

Can he do this? Should he be doing this?

The QS has also said that he will only release my final payment if and when I send him a credit for the full amount, including the 20%. I have so far only sent him a credit for the nett amount + VAT.

The Contract Manager has confirmed over the phone today, that he agreed to provide the plant at nett cost, but he has since left the Contractor.

The 20% only amounts to a couple of hundred quid and the final payment is about £10K, but the phrase “thin end of the wedge” comes to mind.

The QS is a blustering, unpopular bully (you probably wont be too surprised to hear!), who I dont get on with. He had to agree in advance to some accelleration costs, to get us to accelerate at very short notice and now says that as I “held him to ransom, its payback time.” I should point out that he passed the acceleration costs onto the client and didnt have to stand them himself!

Your opinion and advice will be most welcome, even if its not the answer I want!

Thanks in advance.

Richard (Control Systems Company)

Read Answer

Question #1 - Answer

Hi Richard

Your problem highlights the importance of agreeing everything clearly in writing! That way the doubt that now surrounds who agreed what, would be removed.

You do not say “why” you agreed that they would provide the plant, or whether it was used for your original contract works, a specific variation, or indeed to facilitate the acceleration.

If the Contract’s Manager is prepared to give you a Witness Statement that the plant was to be provided at nett cost then that is the best evidence you can get under the circumstances. If he isn’t then it’s your word against there’s.

In the overall scheme of things it might be simpler, and indeed more economical to accept that that particular battle isn’t worth fighting and concentrate on the all important issue of getting paid.

As regards payment;

  1. The QS does not need a credit note to value your works.
  2. Your entitlement to payment stems from the contract, and the QS can’t unilaterally decide “when” payment will be made.
  3. If this is a “Construction Contract” as defined by the Construction Act then there are various provisions that should help you to get paid, but in oreder to find the solution, we need a few more facts.

The bottom line is that you are entitled to be paid and we can help you resolve that situation. Please take a look at our Entry Level Membership, and I will give you a call shortly.


Question #2

We recently undertook an air-conditioning installation for XXX, on a Primark. During the commissioning stage of the project, when our equipment was powered up, we noted the 2 of the PCB’s within the units we installed had been damaged.

We informed XXX, and they gave us a written instruction to proceed with the rectification works, however looking back the email was quite brief – cost to be agreed etc

We undertook the rectification works, at a cost of £4k, added the variation to our invoice and issued it to XXX.

We then issued photos of the damage to the manufacturer of the equipment who confirmed that the damage was caused by an electrical connection fault – We did not undertake any electrical connections. We passed this on XXX to prove that their appointed electrical contractor had damaged the A/C units.

Over the last 2 months, we have exchanged a number of emails with XXX, detailing our argument and evidence, and today they have written back to us confirming that the feel the blame lies with the equipment manufacturer and we should look to the equipment manufacturer to claim our monies back….

This equipment manufacturer is Mitsubishi Electric, a multi billion pound world wide organisation, who don’t send faulty equipment out of their factories.

Can you advise me on any next steps we can take to claim the monies owed to us?

Mark Fairhurst

Read Answer

Question #2 - Answer

Hi Mark

Firstly, I would agree that the likelihood of the units having been supplied defective is almost nil. However, do you have any test documentation or quality control documentation, or any other evidence that confirms that the equipment was in full working order when installed?

If you do then that is very useful evidence to prove that they were damaged post installation.

Secondly, do you know what XXX’s motivation is for seeking to not pass these costs on to their appointed electrical contractor? Indeed is there any evidence that they have even sought to do so?

If you can show that they have an ulteria motive for not doing so, then that is again useful evidence to have.

As regards the solution, then it seems to me that it is time to escalate the matter and demonstrate to XXX that you arserious about recovering your £4k. However, as the work has been carried out as a variation to a much larger contract, then I would need to see the terms of the contract before I can advise you further.

Please feel free to give me a call on 01773 712116 for some initial free advice.

Best regards

Barry


Question #3

We have a sub-contract with a main contractor under which we are fitting a product specified by the architect .

The ultimate client is stating that the product is not fit for purpose, even though the manufacturer ourselves and the main contractor have proven that the product supplied and fitted is fit for purpose.

Subsequently the supplier of the goods has spoken to the ultimate client directly and cannot agree a solution. As a result the supplier has fallen out with the client and subsequently has offered us a credit for the materials only and is now stating that the goods are now his and he is within his rights to remove them from site even though the materials are fixed.

Removing the materials will cause serious consequences.

My question is this: Is the supplier legally entitled to take fixed materials off the site? in addition we have not necessarily accepted the suppliers credit note.

Gary Bigg

Specialist Cladding Contractor

Read Answer

Question #3 - Answer

Hi Gary

It’s an interesting question and one that involves a very well established legal principle. That principle being;

“What’s fixed to the land belongs to the land.”

In other words fixing almost anything on a construction project means that the land owner now owns whatever has been fixed, irrespective of whatever else anyone’ contractual arrangements might be, and irrespective of whether or not anyone has been paid.

So, removing the materials would be both theft and an act of criminal damage!

The question of fitness for purpose and what could and should be done is much more involved and we would need more information to be able to comment further.

Please feel free to give me a call for some initial free advice on 01773 712116.

Best regards

Barry

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