We have a subcontractor who has finished their work but has not provided operation and maintenance or as-built documentation. This has significantly delayed final payment from the project owner, which means we and all of our other subcontractors are held hostage waiting for our final payment. I am wondering if anyone has a clause in their subcontracts to assess damages to the subcontractor for a significant delay in required documentation.
Through the limited amount of research I've done, I've read that it is customary to withhold the offending subcontractors payment (which we are doing) and to have a subcontract clause to pass on any penalties or liquidated damages assessed by the project owner if they are caused by the subcontractor. My research did not find a clause to allow for assessing penalties to a subcontractor if they cause a delay in final payment due to a lack of required documentation.
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Stephanie Magenau, CCIFP
Vice President of Finance
Construction Engineers, Inc.
Grand Forks, ND
(701) 792-3200
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