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Allowances - misunderstanding

Maryland

As the article says: "Even worse, what if the allowance is too small? Does the contractor eat the difference, or will they go to the owner or project manager or additional funding? Will they be willing to pay?" This is happening to us. The sub-contractor states the allowance for temporary generators needs to be 3x greater than it is. My position is: why was there no RFI? They accepted the contract as presented and bid it competitively; now they want more. They must not be making best use of time, so they need more use of temp gen sets. I realize you may not have the whole story here, so feel free to ask for any holes to be filled-in. Thanks so much for your dedicated time to helping others! In need of temp help...

3 replies

Jan 1, 2021

Were there delays beyond the control of the subcontractor? That could be one reason for the extended need for temporary generators, and a reason it would not be the fault of the subcontractor.  

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Jan 4, 2021
Jose, thank you and any delays in schedule should not be tolerated! Great point. Our sub is basing the need for larger allowance off their schedule of work, and with a GC contract we can not dictate how they staff their work, correct? So generic example: if they could do work by two labor teams in half the time, why should they if they can only use one labor team with the generator in twice the time; assuming the generator cost and fuel is paid by others. If we allow the projected higher allowance, it could be an empty pit.
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Jan 4, 2021

A subcontractor should be held to a schedule from the bid itself, and extensions to that schedule should only be provided for matters that are not the fault of the subcontractor. Increase in contract price for schedule extensions should only be provided when someone else is paying for it, ie, the owner on account of an owner delay.  

As we all know, time is money, and schedule delays and who is responsible for the associated costs are very fact-specific, case-by-case situations. The contract is the number one determinator of who is to bear the costs, so without knowing what the contract says I cannot really give any more specific response.

You are welcome to contact me privately to further discuss once we can do a conflicts check.

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