Subcontractor’s Claims under the FIDIC Red Book Subcontract

“Timely, proper and persuasive execution of the Claim Process has a significant impact on the performance of the Construction Project.”

Subcontractors are often impacted by events and actions beyond their control.

In our case; the Subcontractor encounters delay which is caused by the Main Contractor.

At the beginning, the Subcontractor reviews the subcontract.

Afterwards the Subcontractor demonstrates that the delay is excusable and compensable under the governing contractual provisions.

And, at the end the Subcontractor submits a claim for extension of time and the delay related costs including the contractual references, factual causation and quantification of the impact.

In this document, you will find the key issues and the procedure to be followed for successfully submitting the Subcontractor’s claims in accordance with the Red Book Subcontract [1].

1   Notice of Claim

If the Subcontractor believes he is entitled to Extension of Time and/or Additional Payment; 

1.1 (21 Days) Time Limit for the Subcontractor

1.  The Notice of Claim is to be given within 21 days after the Subcontractor became aware or should have become aware of the claim related event.
2.  If the Notice of Claim is not given within 21 days, the Subcontractor is not to be entitled to any additional payment, extension of time for completion. And the Contractor is to be discharged from any responsibility regarding the claim related event.

2   Submitting the Fully Detailed Claim

2.1 (35 Days) Time Limit for the Subcontractor

The “Fully Detailed Claim” is to be submitted;

Within 35 days after the Subcontractor became aware or should have become aware of the claim related event.

Or, within such a time period, agreed with the Contractor.

2.2 Scope of the Fully Detailed Claim

A detailed description of the Claim related event.

A statement regarding the contractual/legal basis of the Claim.

All the records which the Subcontractor relies on.

Detailed documentation of the Additional Payment and/or Extension of Time claimed.

3   Contractor’s Response

The Contractor may respond in two ways;

3.1 Agreement

The Contractor is to consult with the Subcontractor to reach an agreement on;

Extension of Time for Completion

Additional Payment

3.2 Decision

If there is no agreement within 49 days after receiving the Fully Detailed Claim or other particulars submitted by the Subcontractor upon Contractor’s request or within such time period agreed, the Contractor is to;

Make a fair decision regarding the Claim.

Notify the Subcontractor, with reasons, of the Additional Payment (if any) and Extension of Time for Completion (if any).

Make the Additional Payment (if any) and grant the Extension of Time (if any).

FOOTNOTES

1. FIDIC Conditions of Contract for Construction 2011

This information is provided for your convenience and does not constitute any “Legal Advice”. This document is prepared for the general information of the interested persons. This should not be acted upon in any specific situation without appropriate legal advice.

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