1. Introduction

The provisions on the subcontractor's obligation to coordinate and the general contractor's right to intervene are included in NS 8417 paragraph 21, which deals with progress and coordination. The corresponding provisions of the execution centers are included in the matrix below.

We have dealt with the first three provisions on progress and progress plan in a separate article.

2. Overview of the rules

3. About the obligation to coordinate

It follows from NS 8417 paragraph 21.4 that the subcontractors “has an obligation to coordinate its progress and execution with side contractors and other stakeholders in the project”.

In a project, there may be several dozen lateral contractors, and there may be a number of dependencies between these.

Either directly because subcontractor C is to build on subcontractor B's works, or indirectly in that delays somewhere in the project as a result of subcontractor A can have sequential consequences for B and C.

It will be the general contractor who has the risk of delays with A and/ or B respectively, so that B and C will be able to demand an extension of the deadline if these are hindered.

On the other hand, not all subcontractors can require all other subcontractors to adhere to the plan that is ideal for them.

Accordingly, both A, B and C are legally obliged to coordinate themselves and their progress with the needs of the others, and to a certain extent without being able to make any claim for an extension of the deadline or adjustment of remuneration for that reason.

The assumption is that coordination occurs “within the limits reasonably foreseeable by the contract, the nature, scope and progress of the work, as well as the contract's information on the number and progress of the side contractors”, cf NS 8417 paragraph 21.4, first paragraph.

The same applies in execution conversions, see NS 8415 paragraph 18.3 and NS 8416 paragraph 17.1.

If the tolerance limit for too much that one is obliged to coordinate is exceeded, it follows from the second paragraph of NS 8417 paragraph 21.4 that the subcontractor may invoke this as a change. In this case, he must notify in accordance with the rules about irregular changes, cf. NS 8417 paragraph 32.2.

The same applies to contracts governed by NS 8415, cf. paragraph 18.3, second paragraph, but there it is referred to the provision on ordinary change orders.

The bottom line is that all subcontractors are required to coordinate their progress with the other side-ordered contractors in the project.

The more subcontractors, complex and extensive a project is, the more extensive the coordination obligation can be. Since the tolerance limit is seen in the light of the information that individual subcontractors received from the general contractor prior to the conclusion of the contract, it is important that the general contractor provides as much information as possible in its tender or competitive basis.

4. On the right of the general contractor to intervene

If the general contractor is delayed and incurs daycare liability vis-à-vis the builder, the financial consequences for the general contractor can be very extensive.

Daymulch responsibility is objective in the sense that it does not presuppose anyone is to reproach. At the same time, there is also no condition that the builder has suffered a financial loss. Either way, a daymulch can become very burdensome for a total or general contractor.

A delay can be caused by a number of circumstances, and not infrequently it is due to the circumstances over which one or more subcontractors have dominion.

In order to prevent a subcontractor from placing a general contractor in such a situation that the latter risks becoming liable to the builder, NS 8417 paragraph 21.5 has a provision allowing the general contractor to intervene in the subcontractor's work.

A similar provision is also found in NS 8415 paragraph 18.4 and NS 8416 paragraph 17.2.

It goes without saying that such an intervention can have major, and partly very negative, consequences for a subcontractor.

Consequently, there are two strong and protectable interests that need to be balanced.

This has been attempted by setting quite strict and unambiguous requirements for when intervention can be carried out.

If we take as a basis NS 8417 paragraph 21.5, the first paragraph, the first condition is that the general contractor becomes “substantially hindered in its progress”, and the second condition is that this is due to a specific subcontractor.

There must be a causal link between the subcontractor's conduct of any inaction and the delay that the general contractor is about to incur towards the builder.

In addition, the overall progress of the general contractor must be “substantially hindered”. In other words, there is a requirement of materiality.

When assessing the delay of the subcontractor, this must be done in a relatively objective manner by comparing actual progress with the progress plan of the subcontractor in question.

It is not sufficient that the subcontractor is slightly behind its own progress plan. The deviation must be “substantially”.

In other words, a materiality requirement is made in two dimensions; the overall progress of the general contractor (vis-à-vis the builder) must be impeded “substantially”and secondly, this must be explained by the fact that a particular subcontractor is “substantially” delayed in relation to its progress schedule.

To determine whether these materiality requirements are met, an overall assessment must be made where several points may be relevant, and this assessment can be quite complex.

One can imagine, for example, that the subcontractor is 30 days late in his delivery to the general contractor, while the consequence is only that the general contractor is delayed by two days vis-à-vis the builder.

Then the materiality requirement will probably be met in relation to the subcontractor, but not met in the relationship between the general contractor and the builder.

Then you can turn to the example. The subcontractor is two days late in relation to its own progress plan, but the consequence for the general contractor is 30 days delay to the builder.

Even if it were possible to establish a causal relationship between the subcontractor's delay of two days and the consequence of 30 days in relation to the builder, the materiality requirement will not be met.

If, on the other hand, the situation is that the subcontractor is delayed by 25 days and this delay causes the general contractor a delay of 20 days, it will presumably be possible to conclude that the materiality requirement has been met in both relationships.

This is with the proviso that a concrete and comprehensive assessment must always be made.

If, first, the conditions for intervening are met, it follows from NS 8417, paragraph 21.5, second paragraph that the subcontractor must obtain a “reasonable deadline to rectify the relationship” before intervention can be taken.

It is important to note that this deadline must be given in the form of a “written notice”. Then it follows from NS 8417, paragraph 5, first paragraph that the notification must be sent to the representative of the subcontractor or to the address agreed.

In the same way that the materiality requirement must be subjected to a concrete and comprehensive assessment, the same must be done when deciding what constitutes a “reasonable deadline”.

If the delay can be recovered by staffing up, the subcontractor must be given some time to acquire more personnel.

At the same time, this should be relatively simple.

If it turns out that the general contractor has personnel available and every day counts, the time limit “reasonably” could be relatively short.

On the other hand, we have the situation where the delays are due to challenges with material or equipment deliveries. Then it is not certain that an intervention will have any effect - at least not in the short term - and it may mean that the subcontractor will have to be given a more spacious deadline.

What is a reasonable deadline will probably also be related to the subcontractor's handling of the situation in isolation.

If the subcontractor does nothing but point out problems and challenges without taking visible and effective action to get at the height of the situation, it can probably play into the assessment of what is a reasonable deadline.

If the general contractor has to intervene and the conditions are met, the general contractor may require that the subcontractor must reimburse the general contractor's additional costs if these have been necessary, cf. NS 8417, paragraph 21.5, second paragraph.

The liability of the subcontractor is limited to 50% of the contract amount, cf. NS 8417 paragraph 21.5, third paragraph.

Such a limit, in our view, is quite dramatic since the bulk of the contract sum is the cost of materials and labor. A replacement must therefore be paid out of money from the “bottom line” and consequently a subcontractor will incur a significant loss if an intervention is justified.

There is therefore every possible incentive to avoid a situation in which the general contractor has to intervene.

For the record, it is mentioned that the limitation of 50% of the contract amount does not apply in cases where the subcontractor has acted grossly negligently or intentionally.