Your position is the project manager for a general construction firm on a $100 Million college laboratory remodel and expansion project. Your demolition subcontractor had a competitive bid of $1 Million, just slightly lower than the second bidder. They mobilized quickly and performed the bulk of the original contracted demolition work ahead of schedule. Because of differing site conditions, the architect has requested pricing on numerous change orders affecting the demolition subcontractor’s work. The merit of these changes is not in question, but the quantum is. The subcontractor sees this as a “contracting opportunity” and has inflated their pricing on the changes, totaling an additional $1 million. The owner employed a third party estimating firm to prepare check estimates. The owner offered the subcontractor $500,000 for the changes which were yet to be performed. The subcontractor did not like the offer and demobilized from the project, having completed all of the base contract work. There appears to be little you can do to motivate them to return. The client has indicated that this is your problem as they made a fair offer for the extra work. What can you do now to remobilize this subcontractor? Should you bring on another firm to perform this work? How can you do this contractually? Can you assure that the pricing will be fair? Should you accept the $500k change order and hire another subcontractor on a T&M basis? Can the owner force you to perform extra work at a value less than what you have requested?

Answer rating: 100% (QA)

To mobilize the subcontractor I will offer him an amount of 500000 to make him sure that we are sinc... View the full answer