Category: Contractor’s Letters

Outstanding Payments / Missing Items

M/s xxx Pojects Co.

P.O. Box xxx, Riyadh, K.S.A

Tel : xxx

Fax: xxx

Attention: Mr. xxx

Chief Executive Officer

Cc: Eng. xxx

Sr. Project Engineer

Eng. xxx

Project Manager

Project: xxx Project -KSA

Subject : Outstanding Payments / Missing Items

Dear Sir,

We acknowledge receipt of your email dated 16^th February xxx along with the lists of apparently missing items which is in response to our letter related to the outstanding payments of retention money for the above referred project. While we acknowledge receiving the list of alleged missing items, we are surprised that these materials are planned to be back charged to Xxx(Name of the Sub-Contractor) Interiors.

Please be informed that Xxx(Name of the Sub-Contractor) Interiors has completed its works on this areas long time ago and handed over to the Client, subsequently, the Client has taken over the completed works without any notice of rejection on the completed works. Moreover, the premises has been occupied and used for its intended purpose which indicates that the handed over works have been satisfactorily accepted by the Client, consequently, the works have been paid by the Client in full with the exception of the retention money and the variation works.

Contractually, after acceptance of the works by the Client and utilization of the premises, any damages or missing items that may occur shall not be the responsibility of Xxx(Name of the Sub-Contractor) Interiors as this does not fall on faulty workmanship which is guaranteed under the contract. As previously stated on our previous correspondence, “in accordance with the Article 6.3 of the contract agreement, in case of any rejection by the Employer on delivered goods, the Owner shall notify the Vendor of such rejection within a reasonable time which shall not be more 30 days” which is not the case on the notification issued to Xxx(Name of the Sub-Contractor) Interiors. The notification issued to Xxx(Name of the Sub-Contractor) Interiors is related to missing and damaged items after the premises has been occupied and utilized.

In addition to the above paragraph, Article 15.1.1 Notice of Claims clearly states that “claims by either party must be initiated by written notice to the other party within 21 days after occurrence of the event giving rise to the claim or within 21 days after the claimant first recognizes the conditions giving rise to the claim….”. Moreover, as per Article 15.1 last sentence clearly states that “the responsibility to substantiate the claim shall rest with the party making the claim”, hence, unless and until proven that the missing and damaged items are the responsibility of Xxx(Name of the Sub-Contractor) Interiors, we will not be in a position to accept any deduction that may be applied on our account.

In view of the above, we reject any deduction that may be applied in our account due to the missing or damaged items as listed on the list provided, as the responsibility already resides with Client due to its occupancy of the premises and this is not under a faulty manufacturing or workmanship, rather it is due to any third party which is not guaranteed under the contract, therefore, we request for the immediate release of our due payments as per below details.

PHASE I: (Scope of Works under the Contract)

Description	Amount (SAR)	Amount (AED)
Release of 10% Retention (Original Contract)	8,414,036.17	8,245,755.45
Release of 5% Retention (New Variations)	99,874.99	97,877.49
Total Amount Receivable to Date	8,242,487.00	8,077,637.26

PHASE II: (Scope of Works – Repainting, under separate Purchase Orders)

Description	Amount (SAR)	Amount (AED)
Total Balance Receivable	574,870.56	563,365.12

Note: Attached herewith is the Statement of Accounts for Phase I & Phase II

This is for your information and necessary action.

Best Regards,

For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.

xxx

Commercial Manager

27/10/2023

Outstanding Payments

M/s xxx Pojects Co.
P.O. Box xxx, Riyadh, K.S.A
Tel : xxx
Fax: xxx
Attention:       Mr. xxx
                        Chief Executive Officer
Cc:                  Eng. xxx
                        Sr. Project Engineer
                        Eng. xxx
                        Project Manager
Project:          xxx Project -KSA
Subject            :           Outstanding Payments
Dear Sir,
We are writing to you in relation to the contract and works that we have carried out for the Xxx Hotel & Resort project in Riyadh, KSA under Manafea For Investment & Tourism Real Estate Development Company. In 2012, we, Xxx(Name of the Sub-Contractor) Interiors under the Al Rajhi Holding has entered into an agreement with Manafea For Investment & Tourism Real Estate Development Company to carry out the Joinery Fit-out Works for the Xxx Hotel Guest Rooms and Public Areas which we have successfully completed.
The works have been carried out and completed in accordance with the contract and the premises has been taken over by the Client and subsequently utilized it for its intended purpose, notwithstanding the completion of the works and the subsequent occupation and utilization by the Client, no official Taking-Over Certificate has been issued to Xxx(Name of the Sub-Contractor) Interiors.
However, despite the non-issuance of the Taking-Over Certificate (TOC) by the Client, the project has been considered successfully completed and duly accepted by the Client, due to the fact that our original contract amount has been fully paid and there was no notice of rejection that has been issued to Xxx(Name of the Sub-Contractor) Interiors which is required by the Contract in the event that the works is not acceptable to the Client.
In view of all the aforesaid, as the premises have been permanently occupied and used for its intended purpose, we have requested from Manafea For Investment & Tourism Real Estate Development Company the release of our retention money which is already been due, however, despite sending them several letters regarding the same, our request has not been answered.
Consequently, we would like to seek your assistance in the release of our due payments as our communications with Manafea For Investment & Tourism Real Estate Development Company turns out negative and the continuous delay in the release of our retention money has greatly affected our cash flow situation.
We have attached to this letter, the correspondences that have been issued to Manafea For Investment & Real Estate Development Company for your information and reference; and we look forward to your positive and favorable assistance on this matter.
Best Regards,
For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.
xxx
Commercial Manager

27/10/2023
Completion of Work at xxx

M/s xxx Pojects Co.
P.O. Box xxx, Riyadh, K.S.A
Tel : xxx
Fax: xxx
Attention:       Mr. xxx
                        Chief Executive Officer
Cc:                  Eng. xxx
                        Sr. Project Engineer
                        Eng. xxx
                        Project Manager
Project:          xxx Project -KSA
Subject            :           Completion of Work at xxx
Dear Sir,
We refer to our recent meeting on 21^st December xxx at Manafea Office in Riyadh where we have discussed Xxx(Name of the Sub-Contractor) Interiors outstanding retention amount for the above project and to your subsequent email dated 21^st December 2015 where you have listed the alleged uncompleted works by Xxx(Name of the Sub-Contractor) Interiors which came as a surprise to us as we have not received any official notification previously regarding those alleged outstanding issues.
Please be informed that although we have understood that there is no Taking Over Certificate issued for the project, it is however, surprised us to receive such a long list of apparent outstanding issues which were not raised prior to the actual occupancy of the premises. It is a fact that in the absence of any snag list issued prior to the occupancy of the premises, that Xxx(Name of the Sub-Contractor) Interiors completed works have met the Client’s satisfaction; otherwise, all the issues recently raised should have been highlighted earlier. Please refer to Article 6 – Section 6.3 of the Contract Agreement where it is mentioned that “if the Owner rejects all or any portion of the delivery, the Owner shall notify the Vendor within reasonable time, which shall not be more than 30 days after the date of the inspection pursuant to Section 6.2 of the contract”.
Furthermore, in accordance with the Article 15 – Section 15.1.3 it is stated that “the Vendor and the Owner waive Claims against each other for consequential damages arising out of or relating to this Contract. The mutual waiver includes damaged incurred by the Owner for rental expenses, losses of use, income, profit, financing, business and reputation, and for loss of management or employee productivity or of the services of such persons”.
Therefore, the deduction of SR 1,000 per room per day in our account as mentioned in your email is totally unacceptable and not in accordance with the contract terms and conditions. Rest assured that we will do our best to cooperate with the Owner in the rectification of works which is proven to be due to faulty manufacturing and workmanship, however, any rectification that is due to normal wear & tear, abuse of used and damages caused due to improper usage will be rectified at additional cost.
In view of the foregoing, we request for the immediate release of our retention amount as any delay in the release will have an impact on our cash flow situation.
We look forward to your understanding and consideration regarding this matter and we really appreciate your positive and favorable response.
Best Regards,
For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.
xxx
Commercial Manager

27/10/2023

Project History and Payment Summary

M/s xxx Pojects Co.

P.O. Box xxx, Riyadh, K.S.A

Tel : xxx

Fax: xxx

Attention: Mr. xxx

Chief Executive Officer

Cc: Eng. xxx

Sr. Project Engineer

Eng. xxx

Project Manager

Project: xxx Project -KSA

Subject : Project History and Payment Summary

Project Brief History:

The Project was awarded to Xxx(Name of the Sub-Contractor) Interiors in April xxx by M/s xxx for the Supply and Installation of Joinery Fit-out Works including Additional Works to Hotel Guest Rooms and Public Areas of the xxx Hotel & Resort located in Riyadh, Saudi Arabia.

The Contract Value is SAR 79,631,913.76, as the project progressed the Client had awarded some additional works, which has been carried out, and to date the revised contract amount stands at SAR xxx.

As of to date, there are still some variations under progress which were not part of the claimed amount and the value of these variations which are not claimed is SAR xxx.

Conditions in Retention Release:

As per the contract agreement 5% retention were to be released on practical completion of the project and 5% within one year from date of final completion (DLP). Although the original contract has been completed, Xxx(Name of the Sub-Contractor) Interiors were not issued a Taking over Certificate (TOC) by the Client/Engineer probably due to the late variations that has been instructed to Xxx(Name of the Sub-Contractor) Interiors to add on the original contract. However, although no TOC has been issued to Xxx(Name of the Sub-Contractor) Interiors, the Client has taken over the premises whatever areas that have been completed and it was operational.

In view of the above, the physical taking over and subsequent used of the areas that have been completed constitute an acceptance by the Client that the works has practically been completed.

The retention of the New Variation has not been requested by Xxx(Name of the Sub-Contractor) Interiors to be released, only the retention of the original contract as mentioned in our Payment Application No. 20 which we have submitted.

Current Statement of Account is detailed hereunder;

DESCRIPTION	AMOUNT
DESCRIPTION	SAR	AED
Contract Details:
Original Contract Value	79,631,913.76	78,039,275.48
Approved VO (Package 2)	4,648,108.90	4,555,146.72
Approved VO (VO-1 to VO-53)	1,658,102.59	1,624,940.54
Approved VO (VO-54 to VO-110)	2,296,965.81	2,251,026.49
Omission (Japanese Restaurant & Glass Sculpture at French Rest.)	(1,797,763.56)	(1,761,808.29)
Total (Revised Contract)	xxx	xxx

Payment Summary Details:
Progress Claim to date (99.65% of above total)	86,137,861.52	84,415,104.29
Advance Payment Received	(19,834,539.80)	(19,437,849.00)
On Account Payment Received to Date	(57,960,959.73)	(56,801,740.54)
Retention Amount @ 10% (Original Contract)	(8,414,036.17)	(8,245,755.45)
Retention Amount @10% (New Variation)	(199,749.98)	(195,754.98)
Total Balance Receivable – (Overpayment on Accnt.)	(271,424.16)	(265,995.68)
Release of 10% Retention (Original Contract)	8,414,036.17	8,245,755.45
Release of 5% Retention (New Variations)	99,874.99	97,877.49
Total Amount Receivable to Date	xxx	xxx
Note: 1 AED = 1.0204 SAR

Best Regards,

For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.

xxx

Commercial Manager

27/10/2023

Confirmation of Cancelled Variation

M/s xxx Pojects Co.
P.O. Box xxx, Riyadh, K.S.A
Tel : xxx
Fax: xxx
Attention:       Mr. xxx
                        Chief Executive Officer
Cc:                  Eng. xxx
                        Sr. Project Engineer
                        Eng. xxx
                        Project Manager
Project:          xxx Project -KSA
Subject            :           Confirmation of Cancelled Variation
Dear Sir,
We refer to the attached variation xxx dated 3^rd June xxx regarding the additional requirement at Cabin Crew Area with a comment that it is cancelled.
This serves as a confirmation that the aforesaid Variation to Contract No. 101 is cancelled.
The same is for your information, reference and records.
Best Regards,
For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.
xxx
Commercial Manager

27/10/2023
Payment Status
M/s xxx Pojects Co.
P.O. Box xxx, Riyadh, K.S.A
Tel : xxx
Fax: xxx
Attention:       Mr. xxx
                        Chief Executive Officer
Cc:                  Eng. xxx
                        Sr. Project Engineer
                        Eng. xxx
                        Project Manager
Project:          xxx Project -KSA
Subject:           Payment Status
Dear Sir,
We refer to our works for Movenpick Project and to several meetings and exchanges of emails where we have agreed that our claim for 5% retention on the original contract shall be released, however, as per the weekly meeting on July 14, 2015, Manafea informed Xxx(Name of the Sub-Contractor) Interiors that the 5% retention being claimed will not be released until the completion of the additional works which is contrary to what was previously agreed.
Please be informed that our claim for the 5% retention has been submitted on 24^th May 2015 in which has been subsequently approved on 27^th May 2015 by Mr. Mark Davies of Hill International and Mr. Ashraf Naguib of Manafea, and this approved retention should not be held against the progress of the newly requested and approved additional works as the original retention amount are not related to the newly requested and approved works.
Furthermore, please be informed that the pending works to date are only the following;
Original Scope of Works:
- 2 nos. waiter station for the French Restaurant which we are waiting for Movenpick reply
- 30 sets pull handle and push plates
- 20 pcs pull handle hook for the back of the chairs in the rooms
- 1 pc SS movable luggage rack
- 4 nos round end table to arm chair 500mm diameter
- 1 no rectangular desk
- French Restaurant Carpet will be ordered soon
- Pantry rectification works in levels 2 & 1 for South Tower
- 65 pcs gold leaf fretwork, only levels 2 and 1 need installation
- Repairing the damaged chairs 6 nos. and sofa 4 nos. in public area and 4 chairs in the rooms
Additional Works:
- Meeting Room replacement of damaged carpet (cancelled by Movenpick)
- 28 nos. Artworks in several locations
- South Tower Corridor wooden box, only levels 2 & 1 need installation
Notwithstanding the aforementioned, we request Manafea to release the 5% retention claim which has been approved, for us to be able to sustain and complete the additional works, as Xxx(Name of the Sub-Contractor) Interiors LLC has already suffered losses to the original scope of works due to the prolongation of the program completion of the project which is out of our control.
In the event that the approved payment claim will not be released, Xxx(Name of the Sub-Contractor) Interiors will not be in a position to continue with the pending works, as it will be difficult for us to sustain all the expenses for these works, and we will start to pull out from the site starting on 10^th August 2015. Rest assured that Xxx(Name of the Sub-Contractor) Interiors will be responsible for the original contract and we are always ready and available to carry out any maintenance works required.
We look forward to your positive and favorable assistance in this regard.
This is for your information and necessary action
Best Regards,
For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.
xxx
Commercial Manager
27/10/2023
Controlled Environment in South Tower and North Tower

M/s xxx Pojects Co.
P.O. Box xxx, Riyadh, K.S.A
Tel : xxx
Fax: xxx
Attention:       Mr. xxx
                        Chief Executive Officer
Cc:                  Eng. xxx
                        Sr. Project Engineer
                        Eng. xxx
                        Project Manager
Project:          xxx Project -KSA
Subject:           Controlled Environment in South Tower and North Tower
Dear Sir,
We would like to draw your attention regarding the absence of a controlled environment in the rooms and corridors of South Tower at the 1^st to 7^th Floor Levels which is affecting the Joinery Works especially the veneer finishes as well as the Painting Works, and this has a great impact on our handing over of the project.
Please be informed that the continuous absence of proper air controlled room will damage the Joinery works and slow down the drying time of the paint works which shall not be attributed as delay of Xxx(Name of the Sub-Contractor) Interiors in handing over the project on the agreed time. Moreover, we reserve our rights to claim for additional cost and time for any required rectification should damage occur on the installed joinery work, as the proper air controlled environment is out of our control.
We request you to instruct the concerned parties to take the necessary action in order to avoid any damages and delays which we shall not be held responsible and liable.
This is for your information and necessary action
Best Regards,
For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.
xxx
Commercial Manager

27/10/2023
Air Condition

M/s xxx Pojects Co.
P.O. Box xxx, Riyadh, K.S.A
Tel : xxx
Fax: xxx
Attention:       Mr. xxx
                        Chief Executive Officer
Cc:                  Eng. xxx
                        Sr. Project Engineer
                        Eng. xxx
                        Project Manager
Project:          xxx Project -KSA
Subject            :           Air Condition
Dear Sir,
With reference to the above mentioned subject, we would like to inform you that the Air Conditioning system is not working properly in the South Tower and the Corridor which greatly affects our paint work as it is not drying in the required time frame due to hot ambient temperature.
In view of the above, any delay in our paint works and any damages that will occur due to warm environment will not be our responsibility and will entitle us to claim for additional cost due to re-work that may occur.
This is for your information and action.
Best Regards,
For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.
xxx
Commercial Manager

27/10/2023
5% RETENTION MONEY

M/s xxx Pojects Co.
P.O. Box xxx, Riyadh, K.S.A
Tel : xxx
Fax: xxx
Attention:       Mr. xxx
                        Chief Executive Officer
Cc:                  Eng. xxx
                        Sr. Project Engineer
                        Eng. xxx
                        Project Manager
Project:          xxx Project -KSA
Subject             :           5% RETENTION MONEY
Dear Sir,
In reference to the Contract of the above project, and the satisfactory completion of our contractual obligation, we request the release of 5% retention money in the amount of SAR 4,272,478.55 equivalent to AED 4,179,916.00 (Four Million One Hundred Seventy Nine Thousand Nine Hundred Sixteen Dirhams Only).
We affirm our request will be given your preferential attention and release the above amount immediately.
Should you require any further information, please do not hesitate to contact the undersigned.
Best Regards,
For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.
xxx
Commercial Manager

27/10/2023

Quotation for Re-painting Works

M/s xxx Pojects Co.

P.O. Box xxx, Riyadh, K.S.A

Tel : xxx

Fax: xxx

Attention: Mr. xxx

Chief Executive Officer

Cc: Eng. xxx

Sr. Project Engineer

Eng. xxx

Project Manager

Project: xxx Project -KSA

Subject : Quotation for Re-painting Works

Dear Mr. Davies,

With reference to the above subject and further to your instruction and earlier agreement with Mrs. Mona, herein we would like to qualify and submit our revised price for the amount of SAR1,600,000 (for 14 floors) for Re-painting works of all installed fixed Joinery items as per below details:

Description	Unit	Amount
Supply and apply new paint finish to all fixed Joinery items for all Rooms and Corridors at South Towers for 7 floors x SAR 114,285.71 per floor.	Lump Sum	800,000.00
Total Amount in Words: *(Eight Hundred Thousand Saudi Riyals Only).*

Terms & Conditions

Xxx(Name of the Sub-Contractor) Interiors will have the right to claim for an extension of time against the re-works.

Payment Terms

50% Advance payment
50% Against progress payment

Kindly grant your approval to proceed further.

Best Regards,

For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.

xxx

Commercial Manager

27/10/2023