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steveaki 23-06-2015 12:45 PM

Opinions on an earthworks contractual dispute
 
Gents

Just after some opinions on the following contractual dispute:-

We have just recently completed a 400k soil stabilisation/cut fill project for a client, the scope of work was to strip the site of top soil circa 20k m3 and bund for reuse then move an existing stock pile of poor quality previously excavated clay 55km3 and lime stabilise in 300mm layers to a CBR of 5% to form the pad for the building. The job was finished 2 weeks early with no major issues and all CBRs were met and most exceeded.
When I priced the works I was looking for all available opportunity to extract some cash from the job and saw on the drawings that there were 2 large landscape areas to form with us material. So prior to us submitting our price I took a 20 tonner and dug some trial holes including going down 7 meters under the landscape areas. Test results showed the material was meeting the spec of 5% naturally hence no lime was needed.I submitted my price as per the scope (as if to lime the poor material) and won it. So obviously we started work in earnest and we dug out a huge clay borrow pit and filled back up with the stockpile of poor material, the job was done and every one should have been happy. However when it came time to cough up for the job the client decided I was going to make to much money out of them and held back 35k. The job was let to us on an NEC option B contract and rates were all agreed in said contract and both parties signed as so.
What should I do? I think what I did was fair enough that's how we make our profits.

Traxcavator. 23-06-2015 02:09 PM

Re: Opinions on an earthworks contractual dispute
 
They accepted your rates. They signed the contract. You engineered the earthworks to tested specification. If it had cost you more money up to the valuation amount they would have paid you up with no question from what you are saying. If the weather turned and you were out of pocket they wouldn't have paid you over and above the contract value would they !! If you have volumes and extensive as built drawings they havn't got a leg to stand on in my view. You took the risk you did well delivered contract to spec and early .... They are being very inflexible. Legally you are on the right side.

Davejcb 23-06-2015 06:15 PM

Re: Opinions on an earthworks contractual dispute
 
Have they given a specific reason for holding 35k back?( I can only assume you think they are holding it back for said reasons) If they have paid 365k without a genuine reason for holding the 35k back im sure a strongly worded solicitors letter would have them coughing up pretty quickly. The fact they have part paid already kinda screws any defence up...

Traxcavator. 23-06-2015 06:19 PM

Re: Opinions on an earthworks contractual dispute
 
Just had a thought is it retention ? At roughly 10% it maybe. Is there a retention clause in the contract ?

V8Druid 23-06-2015 07:45 PM

Re: Opinions on an earthworks contractual dispute
 
'Twas my first thought, but would be 40K if 10%. From experience, in my own field, retention is normally 3-5%?:confused:

If not I'd be sending 'em a very stiff letter threatening action if not settled in X days !!

It's a bit late to be quibbling, when they've paid up to date, with no quibbles or complaints,:mad:

lynchy 23-06-2015 08:17 PM

Re: Opinions on an earthworks contractual dispute
 
Just my two'penneth,tin hat n all that to the ready,but if I was the client n found out the job had been priced for stabilising/materials for an area you already knew would be ok,good bit of prep on your part non the less,id be bit unhappy,probs embarrased I hadn't picked up on it,guess depends how much you want to do in future with this client?

Eddiebackblade 23-06-2015 08:44 PM

Re: Opinions on an earthworks contractual dispute
 
Quote:

Originally Posted by lynchy (Post 121665)
Just my two'penneth,tin hat n all that to the ready,but if I was the client n found out the job had been priced for stabilising/materials for an area you already knew would be ok,good bit of prep on your part non the less,id be bit unhappy,probs embarrased I hadn't picked up on it,guess depends how much you want to do in future with this client?

I see exactly your point Lynchy, and yes it could be argued that to provide the client with the information before and an understanding to share the savings could have proved a winner in many respects.
But sadly so many armed with the information would take it elsewhere to drive the price down further.

I had exactly this situation on a much smaller scale, and I pointed out exactly what Tim is saying, if I hadn't have put a good plan in place, selected the right equipment and chose my window of weather well, nobody would have bailed me out.
I made decent money and earned it, so was entitled to my due reward just like this case.


Eddie.

lynchy 23-06-2015 08:54 PM

Re: Opinions on an earthworks contractual dispute
 
Hi Eddie,yeah probs why i don't jump into my own machine:D be interesting see how this pans out

Traxcavator. 23-06-2015 09:22 PM

Re: Opinions on an earthworks contractual dispute
 
Lynchy you have got a point. However look at it this way. You get invite for tender. You price the work and return the BOQ. You win the job. You carry out job and manage through you own skill and expertice to finish the job to specification and 2 weeks early. You carry out the job to the clients requirement. You priced to finish the job to a specification that you achieved. The client was willing to pay your price and he got what he wanted ....job done for the price agreed ..... your job ..... then they do this to you, how would you feel ?

Case of sour grapes I think.

However the BOQ is also to be viewed as a price list, with the separate items priced, so when you make application for payment you list your application as the BOQ with charges against the items as listed. Therefore viewing the case in this way the client has a claim against paying for an item if it was not executed.
If this job was priced in this way I think the client may well have a claim. I havn't looked up the law in this sort of case. Steve aki I think it may be a good idea if you do.

steveaki 25-06-2015 08:05 PM

Re: Opinions on an earthworks contractual dispute
 
Thanks for the input on this.
But I think Trax is right, it sour grapes.
I priced the job to a defined scope of works that was set out in a BOQ. It gave indicative quants and we had to do our own surveys on site prior to starting and take all risk on the quantities. We went lump sum fixed price all risk to us and this was all factored into the rates and agreed by the client. The retention rate was 2.5% the contract was signed as so.
I think the client knows legally there in a weak position but there trying the old card of accept the offer or you won't work for us again. Not that I'm bothered I can do without this sort of hassle.
I have given them 7 days to settle the account before I go legal. I told the M/D on the phone today that management only companies like them are in a win win situation, they have no financial commitment unlike us who worked 2m worth of plant on the job for 8 weeks and then to get nearly 10% of the project value stolen back from us it says a lot about the poor state of the UK construction industry.


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