Form Letter: Subcontractor Not Performing

The selective use of form letters by construction industry organizations may not only save substantial time and expense but also may become valuable evidence in the event of a dispute. Many businesses maintain a catalogue of form letters to cover frequently recurring situations.

Therefore, from time to time, the Briefs will suggest forms for consideration by readers with the caution, however, that users should study their particular circumstances and contractual arrangements involved to deter mine whether the form proposed fits the circumstances.

In the not-unusual situation where a subcontractor is failing to make timely progress, the following form letter might work:

Dear Subcontractor.

As a framing subcontractor on the M.T. Office project, your company has consistently failed to furnish sufficient skilled workmen or the necessary equipment or materials to make timely progress with your work on the project.

As you know, a delay in completion of the project beyond the presently-established October 1, 1984, completion date may result in the imposition of liquidated damages of $1,000 per day by the project owner . Based upon the construction schedule for the project, your company’s work is now two weeks behind schedule and appears to be falling further behind.

Accordingly, this letter is to place you on formal notice that unless within three working days following the date of this letter you have increased your crew size, provided the necessary scaffolding and arranged for timely material deliveries to demonstrate an ability to meet your scheduled completion date, we will determine what actions our company must take to assure timely completion of the framing work on the project.

Such action may involve the termination of your contract and the engagement of others to complete your company’s work. In that event, your company would be responsible for any additional costs incurred for completion of your work as well as any and all damages we might sustain because of your company’s failure to make timely progress.

On September 18, 1983, at 10:00 A.M., our project superintendent will meet with an official representative of your company at the jobsite for the purpose of determining whether your company has the intentions and ability to comply with the requirements of this letter. Please arrange to have your official present at that meeting.

In addition, take notice that we will hold your company responsible for any and all loss, damages or extra expense we may incur as a result of the delays in the completion of your work on the project.

Very truly yours,

Naturally, if there are any relevant provisions of the contract agreement which would govern the circumstances or if any other time 1imitation or remedies apply, this particular form should be modified accordingly.

Use of this type of letter under the circumstances would, of course, later prevent the subcontractor from denying that he had notice of his delay or that he was given an opportunity to correct his problems. Some subcontract agreements actually require written notice of this type, frequently referred to in the trade as a “three-day notice.” One valuable theory: “Write a letter and write the last letter.”

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