Subcontract review and commercial controls for infrastructure works

We supported a specialist electrical contractor with subcontract review and commercial control advice for two packages on a major UK infrastructure project. With a combined value of around £1.4 million, the packages required careful consideration of both the terms being negotiated and the requirements the client would need to manage during delivery to ensure compliance.

Background

The client needed commercial advice for specialist installation work under two different subcontracts on the same development. Each had its own payment arrangements, change procedures and notice requirements. The client needed to understand where to seek amendments and which obligations would require attention during the work.

The commercial implications extended beyond the price. Payment depended on the application timetable and supporting information, while provisions on design, insurance, deductions and delay could create exposure disproportionate to the subcontract value. A useful review needed to explain the practical consequences of the wording and identify a realistic action for each point.

Our approach

We examined the subcontract documents and schedules, recording the relevant wording, its commercial effect, priority and recommended action. On one package, the review covered more than 30 substantive points. We assessed these against the client’s commercial requirements, distinguishing matters that could be managed through administration from terms requiring amendment, clarification or insurer confirmation.

Payment was a particular focus. We challenged a timetable that could cease to provide application dates while work was still continuing, and considered the payment period against the client’s requirements. We also identified provisions allowing sums arising on other contracts to be deducted from the account. These were specific issues for the client to address in discussions with its counterparty.

We developed proposed amendments and reviewed the responses received. The working record retained the counterparty’s comments, our further assessment and the status of each point. Where a response only noted a concern, we sought clarity on whether a change was actually agreed. We also identified wording that still needed updating, so an accepted principle could be followed through into the contract documents.

Alongside the review, we prepared separate commercial control schedules for the two packages. These linked the relevant provisions to the actions needed to administer each subcontract. The payment items covered application dates, required supporting information, treatment of variations, retention requests and the steps towards the final account.

For change, we set out the instruction and valuation requirements, the cost and time information to prepare, and the records needed to substantiate the work. This included requirements for advance estimates and daywork agreement where applicable. The time provisions were considered alongside the notice requirements, including the initial notification, follow-up particulars and supporting records.

Keeping each schedule specific to its subcontract mattered. The payment processes and formal communication requirements differed between the packages. The resulting documents gave the client a reference for the requirements identified for each account, while retaining the connection to the underlying contract wording.

Outcome

The review record documented agreement on several proposed changes as these were progressed through correspondence and discussion, including removal of cross-contract set-off and revised payment arrangements.

Together, the review and control schedules gave the client a structured basis for contract discussions and a practical reference for delivery. The work connected the commercial issues raised during review with the payment, change and notice actions the client would need to manage on each package.