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Forensic Claims Analysis

Subbies Penalty

In the Open Standard
Raphael Adeyemi, CCP, MNIQS, RQS, MQSiMember for 19 years 4 months
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Dear Senior Coleaques,

I am at lost as to what is the correct application of FIDIC Clause 47 (1) by Main Contractor to Sub-Contractor. The frequent copies of Subbies contract agreement coming to my desk put the maximum penalty or LD to 10% of the Main Contract Value. I considered this unfair. What of a situation where the sub-contract value is less than 10% of the main contract.

I guess it should be back to back contract with the subbies penalty of LD to 10% of subbies contract value.

Is any one there having a contrary opinion? HELP ME OUT PLEASE
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3 replies

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  1. 0
    J Venkatesh PMP PSP ACIArb ·
    #1
    I do with you...

    10% should be on the respective sub contract value only, not on the Main contract...


    Venkat
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  2. 0
    Raphael Adeyemi, CCP, MNIQS, RQS, MQSi ·
    #2
    Thank you Jaya, that is my thought too
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  3. 0
    A D ·
    #3
    But then, what the brownbook states, "CONTRCAT / SUBCONTRACT MANAGEMENT USER GUIDE".

    I have not referred this from long time. May be anybody from Contracts can elaborate further and I believe, it will be 10% of the contract value and not the main contract value.

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