Response to Notice of delay

Our Ref: xxx

Date:

To

xxx Contracting LLC

P. O. Box xxx

Dubai, U.A.E.

Attention            : Mr. xxx, Group Procurement Manager

Project                 : xxx Phase 2

Subject                 : Response to Notice of delay

Dear Sir,

References:

1. M/s xxx (Contractor Name) Letter xxx dated 15^th Sep xxxx.
2. BGC confirmation email subjected : xxx Programme of Works & Delivery Sequence dated 24 September xxxx
3. M/s xxx (Contractor Name) letter xxx dated 22^nd Nov xxxx
4. M/s xxx (Contractor Name) letter xxx dated 23^rd Nov xxxx

We are in receipt of your letter ref: xxx dated 19^th November subject “Delay in delivery of Pods” and we record our objection to your stated alleged delays based on the following.

Schedule of deliveries:

BGC is referring to the schedule submitted by M/s xxx (Contractor Name) under letter Ref (a) showing a duration of 71 for production and delivery with a start of production 16 September xxxx. The schedule includes a clear note which states “* the production starting date is based on the assumption that your approval to this Programme will be received by no later than 16-September-xxxx.”

BGC approval on the programme was received on 24 September xxxx, subsequently the start of this Programme is 24 September xxxx, with an end date of 4 December xxxx (not counting UAE official holidays).

Considering the above, M/s xxx (Contractor Name) is currently ahead of the Programme and not in delay as you seem to suggest.

Impact on other activities

Your statement that pod deliveries have caused delay to subsequent activities is incorrect.

Firstly, BGC’s is solely responsible for delaying the approval of the Programme consequently impacting the start of production.

Secondly, we record the following events which have caused and still cause major disruption to the sequence of deliveries and our ability to install the pods at their final location:

1. BGC were unable to provide the necessary loading platform to allow the delivery of pods to the respective levels for a period of more than one week from 11^th to 25^th October. (Refer to appendix 1). Pods had to be offloaded at ground floor and kept fully exposed and subject to damage until BGC made a platform available (appendix 2).
2. Till this date, the unavailability of the platform remains a problem. For example the level 4 pods in building 3 & 4 which were delivered by M/s xxx (Contractor Name) on schedule on 21^st & 23^rd November had to be off-loaded on the podium level since the loading platform on the 4^th floor was not ready. (appendix 3)
3. In addition to the above, and due to your platform issues, M/s xxx (Contractor Name) had and is still having to do duplicated works and incur extra cost to offload pods downside and later lift them to the respective level whenever the platform is made ready by BGC.
4. Till today, BGC has failed to provide us with any MEP clearance in any building on any floor to allow us to install the pods at their final location despite our several follow ups and reminders.
   This has severely impacted our work as well as our WIR submission and subsequent certification since the Engineer has rejected a number of WIRs due to the non-availability of MEP clearance by BGC even though POD MIRs were approved.  This has also drastically impacted our payment certificate for the month of October.
5. Up till now the site is not ready for pods installation in many areas as shown in the attached photographs, which clearly demonstrate that even though M/s xxx (Contractor Name) is ahead of the schedule in deliveries, any alleged delay or impact other activities is the sole responsibility of BGC and resulting from their own delays on site. (See Appendix 4)

Contractor’s default on Advance Payment

We refer to our letter Ref (c) and remind you that you have still not released our advance payment and you remain in in default on your obligations under the Subcontract.

We again reserve our rights for an Extension of Time (EOT) equivalent to the same number of days by which the advance payment is delayed (20 days).

Contractor’s default on Progress Payment

We refer to our letter Ref (d) and remind you that you have still not released the L/C documents for IPA-1 for the month of October xxxx and you remain in in default on your obligations under the Subcontract.

We again reserve our rights for an Extension of Time (EOT) equivalent to the same number of days by which the progress payment is delayed (20 days).

Finally, M/s xxx (Contractor Name) has diligently performed and continue to perform its obligations under the Subcontract and as mutually agreed during our management meeting on 13 September xxxx.

The allegations of delay included under your letter reference above are wholly rejected.

While M/s xxx (Contractor Name) has increased the rate of production to complete all deliveries ahead of schedule, in contrast BGC has failed to provide the necessary loading platforms, failed to provide M/s xxx (Contractor Name) with signed MEP clearances to allow the delivered pods to be installed, and in addition, defaulted on both the advance payment and on the first progress payment.

Failure to issue due payments has a direct consequence on our cash flow and in turn on our supply chain. Any consequence of such actions will be the sole responsibility of BGC. M/s xxx (Contractor Name) shall not accept any liability towards the above or towards any impact whether direct or indirect such actions by BGC may have on the site progress.

Again, we urge you to provide us with all signed MEP clearances for each individual pod location to allow us to proceed with the installation of pods already delivered, we also urge you to release immediately our advance payment and release the complete L/C documents for IPA-1 dated 20 October xxxx.

All rights are reserved

Yours faithfully,

On behalf of xxx LLC                                                                      

xxx

project Manager