IACCM Contract Management Forum

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ATCO Electric
2014-01-18 14:26:39

Stand-by time Claims

What are options available with project owner to avoid standby claims, in case owner is delayed in supply of matrials under his scope. In additions, please give your suggestions to reduce to reduce the amount of claim.

 •   2014-01-22 19:20:56
1. Include the right to reorganise schedule in the contract.

2. Include clause of net cost under stand by.

3. Renegotiate the contract in advance when aware of owner delay. 

 •  Meggitt Sensing Systems - OECO, LLC  •   2014-03-07 11:56:58
Identify standby time as an hourly rate line item in the RFP, along with an estimated max quantity. The competitiveness of the procurement could drive down the rate, and the max establishes the reasonableness of the expectation.
 •   2014-05-14 13:33:35
Gail stated, it is key to have rates established for standby, hourly is often preferred but depending on the nature of the work and other elements day rates, unit rates etc may be better suited.

Before providing an answer with further detail to this question I would need to know what the commercial structure for the Contract and also what the agreed to commercial terms of the Contract are.

For example, if it is a lump sum contract which includes verbiage along the lines of "lump sum price is inclusive of all non-productive time howsoever caused" maybe you can argue that the Contractor included contingency for late delivery of material, or "lump sum price is inclusive of all non-productive time caused by Contractor or its Subcontractors" if this is the case you probably want to track delays caused by the owner but negotiate the delay settlement at the end. The reason for this is that the price and schedule included contingency/risk for Contractor or its Subcontractor caused delays. If the contract is completed within the time frame of the baseline schedule, with no additional hours worked, and no additional labour or equipment added, it could be argued that the late delivery of material had no cost impact to the Contractor and no standby charges are paid. The stanby charges could also be offset due to Contractor and its Subcontractor caused delays.

 •  -  •   2014-09-05 04:14:37
The suggested option/s available to owner to minimize standby claims :
1)To have adequate level of inventory as stand by measure at start of project and/or

2)To get quote or include an item rate in BOQ with material supply by contractor as an alternative to the items with client supply of material.
Replies: 4
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