Page 208 - Civil Engineering Project Management, Fourth Edition

Civil Engineering Project Management
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sub-contract. It is true that, under Clause 59(1) the contractor has to have a
‘reasonable objection’ for refusing to employ a nominated sub-contractor, but
this constraint is of little value in practice. There can also be refusal of either
party to accept the other’s terms for payment – although Clause 59(7) of the
ICE Conditions endeavours to protect a nominated sub-contractor by provi-
ding for direct payment to him if the main contractor fails to pay him.
If the contractor or nominated sub-contractor will not enter a contract
between them for any reason, the nomination fails. The engineer then has to
nominate another sub-contractor, or ask the contractor to do the work himself
or find his own sub-contractor. This mixing of responsibilities between the
employer and main contractor for the performance of a nominated sub-
contractor leads to frequent disputes. If the nominated sub-contractor fails to
do the work or goes into liquidation, the employer must take action without
delay, since the main contractor has no duty to carry out the work himself
and will claim for any delay in getting it done. Further, if the sub-contractor’s
work proves unsuitable or not fit for its purpose, the main contractor will deny
responsibility (unless he was expressly charged in the terms of the sub-contract
to take such responsibility – which is unlikely) since he had no choice in the
selection of the sub-contractor or the product.
The extensive disputes which have arisen over the years on these matters,
more particularly in building work with its wider use of nominated sub-
contractors, has led many engineers to take the view that use of nominated
sub-contractors in civil engineering should be avoided wherever possible.
The problems most often arise from late completion or defective perform-
ance by a nominated sub-contractor which affects the contractor or his other
sub-contractors. A possible way to avoid this is to specify the work in detail,
providing for its payment by measure under appropriate bill items. Or, if spe-
cially skilled or experienced workers are required to do the work, there is no
reason why this cannot be specified by calling for particular craft skills and
requiring evidence of same. Alternatively, if only one firm can provide the spe-
cial techniques required, the letting of a separate contract for such work can be
considered. Although the organization of separate contracts has to be efficiently
managed (as described in Section 5.6), the advantage is that the engineer retains
direct control over the specialist’s work and can act to avoid or solve problems
arising from late delivery or defective work. Where a nominated sub-contractor
is to supply only certain items, the employer may be persuaded to order the
materials direct and store them in advance of being needed; or the contractor
may be instructed to order them early and can be paid for offloading and
storing them on site under items provided in the bill of quantities.

15.9 Prime cost items

When a nominated sub-contract is intended but not yet chosen, a prime cost
item can be inserted in the bill of quantities by the engineer to cover the work