Our Ref: xxx
14 July xxx
To: xxx
P. O. Box xxx
1st Floor, xxx
xxx
Attention: xxx (Project Manager)
Project: xxx
Sub-Contract: xxx
Subject: Rejection of Notice of Delay
References: a) The Subcontractor letter ref. xxx
b) The Subcontractor letter ref. xxx
Dear Sir,
In reference to the Sub-Contract Agreement (Ref. xxx) entered between (i) xxx (L.L.C) (the “Main Contractor”) and (ii) xxx (the “Sub-Contractor”) in respect of Bathroom Pod Works (the “Sub-Contract Work”) for xxx (the “Project”).
The Sub-Contractor acknowledges receipt of the Contractor letter ref: xxx dated 13 July xxx and rejects its content in its entirety. The letter is factually incorrect and misleading, and The Subcontractor places its position formally on record as follows.
- Free Issue Materials and Manpower:
The Subcontractor production manpower at its facility is fixed. Output allocation per project (pod type, floor, and building) is governed strictly by materials availability not manpower deployment and follow a fixed plan & sequence. Any shortage in materials and/or change in sequence will disrupt production. It is the Main Contractor’s continuing failure to deliver Free Issue Materials and to provide the binding FIM delivery schedule formally requested in our previous correspondences reference (a) and (b) that has blocked the factory’s ability to execute production in accordance with the erection sequence.
Also, the 6 to 7 pods per floor cited in your letter represent approximately 40% of the pods per floor and cannot be characterized as a limited or minor shortfall. The Subcontractor does not operate its production on a reactionary basis whereby individual material deliveries trigger the sporadic completion of individual pods; production is executed systematically against a defined sequence, which the Main Contractor’s incomplete and unscheduled FIM supply has disrupted and continues to do so.
- Production activities Cycle Time:
The production methodology and baseline programme require that all Free Issue Materials for mass production batches be available before production of these batches commences, with a full production cycle of 18 working days. Partial, staggered, or unscheduled delivery of FIM does not allow pods production to proceed in accordance with the approved methodology, regardless of the duration of any single installation activity.
- Delivery and Installation:
The Pod Delivery Tracker figures cited in the Main Contractor letter are a direct consequence of FIM availability, continuous design changes, and change in sequence which are all governing production and subsequently delivery. It’s completely rejected to attribute these to internal inefficiency on the part of The Subcontractor.
With reference to the small number of pods (12 Nos) installed, the Sub-Contractor notifies that the installation on site are attributable strictly to the Main Contractor’s site conditions and the delay of the Main Contractor to provide written, signed MEP and civil clearances required prior to installation. These are matters entirely within the Main Contractor’s control and responsibility.
- Reporting:
The assertion that reporting is inadequate or lacks the necessary information is rejected. The Subcontractor provides detailed weekly reporting on the status of material shortages and their impact on production and the Main Contractor keeps on failing to arrange the necessary materials.
- Instructions and Deadlines:
The Subcontractor also rejects the 24-hour reporting demand and the instruction to deliver all pending pods for Levels 3, 4, 5, and 6 by 15 July 2026. As we have repeatedly informed and the Main Contractor continues to ignore that production can only be planned and committed once the Main Contractor provides a complete and binding Free Issue Materials delivery schedule.
In the end, we must put on record that your letter is clearly ignoring all the facts and earlier events from the continuous design changes to shortage in free issue materials and it evidence the Main Contractor bad faith in execution of the Sub-Contract by trying to reverse the liabilities and his own failure to The Subcontractor which is not acceptable under any circumstances. The Subcontractor rejects, in full, the threatened imposition of delay penalties, withholding of payments, reallocation of scope, engagement of third-party resources, and issuance of notices under Clause 25 and Clause 26. These threats are unsubstantiated, and without any contractual basis while the Main Contractor’s own outstanding obligations, including the FIM delivery schedule remain unmet. The Main Contractor is formally requested to refrain from issuing further notices of this nature. Should the Main Contractor proceed to act on any of the threatened measures, The Subcontractor will treat such action as a breach of the Sub-Contract Agreement and will respond accordingly.
The Main Contractor’s continuing failure to provide a firm and binding FIM delivery plan is causing direct damage to The Subcontractor production, is blocking its factory, and is resulting in loss of revenue, profit and other losses, for which The Subcontractor reserves its full entitlement to compensation.
The Subcontractor once again formally requests that the Main Contractor, within 3 days from this letter, to provide the full Free Issue Materials delivery schedule necessary to allow The Subcontractor to plan and revise its production accordingly.
All rights of The Subcontractor under the Sub-Contract Agreement and applicable UAE law are expressly and fully reserved.
Yours faithfully,
On behalf of The Subcontractor LLC OPC
xxx
Projects Director
