Delay penalty due to failure to fulfil contractual obligations.
REF. No.: xxx/1016/SS-DOC/2022/2
Date: 31 October xxx
xxx DEWATERING & LAND DRAINING CO. L.L.C.
P.O. Box: 20782, Ras Al Khor, Dubai, UAE
Project:Proposed Residential Villa (B+G+1+R) on Plat No. xxx, Palm Jumeirah– Dubai, UAE
Client:Mr. xxx
Subject: Delay penalty due to failure to fulfil contractual obligations.
Dear Sir,
We refer to the lump sum fixed daily rate subcontract agreement ref. xxx-P1016-SCA-DW-2021-02 dated 17th November xxx, entered between M/s xxx Building Contracting LLC and M/s xxx Dewatering & Land Drainage Co LLC for dewatering works of aforesaid project.
Its standard practice in construction industry, formation level should be dry and in workable position within 3-4 days from commencement of dewatering system. Unfortunately, xxx got dry workable surface after 9 months of dewatering commencement date.
Following are the few correspondences among many of them sent through all available communication means, to showcase xxx dewatering negligence at site work, poor site coordination & supervision and improper action plan to control & maintain the water table as per the contract.
Event-01. Installation of buried system – xxx Dewatering has delayed 10 days (from 13th March 2022 to 23rd March 2022) from agreed duration to complete installation of buried system.
Event-02. Failed to control and maintain the water table level, upon completion of buried system, xxx asked for workable dry surface, but xxx dewatering were repeatedly failed to provide the same despite of lowering down pump to multiple position and increasing the number of pumps. As per the subcontract agreement and as specialist subcontractor National Dewatering is sole responsible to provide dry workable surface without asking any variation (time and cost) as the work scope has not changed from the tender.
xxx dewatering finally provides workable dry surface on 3rd September 2022; hence, this delayed the site for 164 days (from 24th March 2022 to 3rd September 2022).
Event-03. Delay due to shifting of pump from Raft. It was agreed that upon completion raft casting, the two numbers of pumps will be shifted up and to be placed outside of retaining wall. We xxx instructed to xxx Dewatering to shift those pumps on multiple occasions, but as of today National Dewatering failed to do so. This has delayed the site progress for al least 28 days and it continues.
To determine actual delay caused by the xxx dewatering, we hereby consider that the progress achieved during this period at site is casting of PCC and waterproofing horizontal works which is maximum 45 days works. However, to complete the said work xxx has deployed very number of manpower than the usual as continuous Workfront was not available and huge amount rework done due to dewatering issue.
Finally, the combined delay arose from all the three (3) delay events due to dewatering works is 202 days, andwork done achieved during this period is 45 days. Hence, actual delay took place due to dewatering is 157 days.
Therefore, pursuant to penalty clause in subcontract agreement Item F) under Article (1) Scope of work, MCM reserve its right to impose delay penalty and liquidity damage of AED 560375.00 (AE Dirhams Five Hundred Sixty Thousand and Three Hundred Seventy-Five) as per the attached breakdown.
Thank you.
Yours Sincerely,
xxx Building Contracting LLC