Delays to the Pod Fabrication and Site Delivery – The insufficient Production and Deliveries
Our Ref: xxx
Date: xxx
To : xxx Contracting Company LLC
P. O. Box xxx, Dubai, U.A.E.
Attention : Mr. xxx, Senior Project Manager
Project : xxx Tower, Dubai – U.A.E.
Subject : Delays to the Pod Fabrication and Site Delivery – The insufficient Production and
Deliveries
Dear Mr. Wissam,
This is in reference to your letter ref: xxx dates 18April xxxx.
Our response to the allegation of delays in pod fabrication and delivery has already been conveyed through our letter ref xxx dated 19 April xxxx (Appendix 1), and we again state for the record that any delay in the delivery of pods to site is directly the result of your failure to deliver the prerequisite Free issue materials to our factory, and the ongoing delays in providing us with approved drawings. Quite contrary to your statement, M/s xxx (Contractor Name) has been doing everything it can to support AGCEW.
It is disturbing to see that information is being inaccurately conveyed by AGCEW to the Engineer in your progress meetings as the attached Engineer’s letter seems to suggest. I will take this opportunity, as I did in our meeting on site with the Engineer and the Client on 20 April xxxx to clarify M/s xxx (Contractor Name) position.
With reference to point (a) of the Engineer’s letter
- M/s xxx (Contractor Name) has repeatedly made it clear, in writing, that the mentioned period of 12 days is not applicable for mass production. This clearly recorded in our Email dated 14 Jan xxxx (Appendix 2) and recorded again in our Email dated 02 Feb xxxx (Appendix 3).
- For the purpose of clarity, we have issued a first a complete programme of work (rev.0) on 15 October xxxx (Appendix 4) which was based on the arrival of Free Issue materials on 04 January xxxx.
- During the meeting on site with the Engineer on 7 December xxxx AGCEW confirmed that the revised date at which the Free Issue Material would be released to M/s xxx (Contractor Name) factory is on 30 January xxxx (Appendix 5). Based on this confirmation, M/s xxx (Contractor Name) has released a revised tentative programme (rev.1) which was submitted on 27 December xxxx. (Appendix 6)
- This programme, which was agreed by both parties, clearly highlights that the production cycle for pods is 22 not 12 days. Additionally, the programme also lists two critical milestones: Firstly, M/s xxx (Contractor Name) requires 42 days from the approval of the drawings to the date of first delivery, secondly, Unipod requires 22 days from the receipt of all Free Issue material in factory until first delivery.
- The undeniable fact is that Free Issue Material was not received on 30 January xxxx in M/s xxx (Contractor Name) Factory as committed by AGCEW, or on 21 March xxxx as wrongly reported ty AGCEW in your enclosed letter. Still, until today, after more than three months AGCEW has still failed to deliver all the Free Issue Material which are required by M/s xxx (Contractor Name) to start fabrication or complete the pods. (please refer to Appendix 7 for a summary of delivered FIM)
- It is also a worth reminding you that as a result of the numerous incremental comments and changes to the design drawings which included changes ranging from modifying bathroom details to complete layout changes (i.e. conversion of disabled bathrooms to normal bathrooms) pod shop drawings which were planned to be approved on 10 January xxxx as required in the programme were only approved on 28March xxxx, 15 April xxxx, and 18 April xxxx, respectively.
With reference to point (b) of the Engineer’s letter
M/s xxx (Contractor Name) factory capacity allocation for each project is dependent on its planned start and its allocated slot in the production line in conjunction with other running production lines. We remind you that production was planned at the end of January xxxx based on your prior confirmation that Free Issue Materials will be received on 30 January xxxx.
While we will support you in an effort to boost production, we have to consider the impact on other production lines during this revised period.
With reference to point (c) of the Engineer’s letter
In order to support AGCEW in recovering delays on Free Issue Materials and drawing approvals, M/s xxx (Contractor Name) has shared a tentative production plan with AGCEW on 18 April xxxx, after we have received a copy of the of the approved drawings. This plan is conditional on the receipt of all Free Issue materials before 18 April xxxx.
We again remind you that all Free Issue Material should be received in factory prior to start of pod fabrication. If you continue to have difficulty in procuring your Free Issue Materials, M/s xxx (Contractor Name) can support you where possible, and deliver pods to site missing some of these items if feasible. However, we remind you that installation of free issue material on site will be subject to additional cost based on our daily worker rates. If there is any objection to this agreement, please advise in return within 2 days.
With reference to point (d) of the Engineer’s letter
M/s xxx (Contractor Name) provides all it’s reporting in full transparency to AGCEW.
M/s xxx (Contractor Name) has now shared over 7 quality reports addressing a number of issues related to the quality of Free Issue Materials including a major issue with the tiles which is forcing our production team to remove workforce from the production line in order to do extensive sorting on the received tiles.
Moreover, we remind you that in accordance with out Subcontract agreement, the pods have to be inspected and approved in factory prior to delivery to site. The same has been discussed and agreed during the meeting held on 7 Dec xxxx with the Engineer as recorded in the minutes of meeting issued by M/s xxx (Contractor Name) by email on 10 Dec xxxx (appendix 5). This is also reflected in the Inspection Test Plan approved by the Engineer (Appendix 8).
While we will continue to support AGCEW as per your instruction to deliver pods on the basis that approval will be given on site, M/s xxx (Contractor Name) will not be responsible for any subsequent rejection of pods on site and any pod delivered to site shall be fully certified. If there is any objection to this agreement, please advise in return within 2 days, in order for us to revert back to the terms stipulated in our Subcontract.
Finally
We will continue to do everything we can to support xxx, however moving forward we urge to ensure that all missing Free Issue Material is delivered to our factory to allow us to maintain production and sustain a consistent level of deliveries.
At the same time, we refer you to our letter xxx dated 05 April xxxx and remind you that you are in default of your payment obligations in the release of our advance payment.
M/s xxx (Contractor Name) will not be responsible for any impact the above may have on the production and delivery of pods to site, and we further reserve our rights under the Terms of our Subcontract Agreement for an Extension of Time (EOT) equivalent to the same number of days by which the Free Issue material is delayed in addition to the number of days our advance payment is delayed.
Yours faithfully,
On behalf of M/s xxx (Contractor Name) LLC
xxx
Projects Manager