THE
DISPUTE
WITH
WIMPEY
i) Developments so far
46. The Council's contract with Wimpey specified
a contract completion date of February 1995. In October 1994 Wimpey
asked for an extension to that date[73]
and the Council extended the role of Rose Project Services, their
Employer's Agent, to include the identification and resolution
of all risks to the project's completion, including the notified
delays.[74]
47. We asked the Council when they expected to resolve
their dispute with Wimpey. They said us that they were holding
£2 million in liquidated damages and that, as far as
they were concerned, the final cost of the building was £49.6 million.
There was a dispute between Wimpey and their subcontractor, Matthew
Hall, over the costs of the mechanical and electrical part of
the building. The Council were watching the development of the
dispute, but were taking no action themselves. They had appointed
a team of legal advisers who had prepared a brief should there,
at a future date, be an approach by Wimpey. However their legal
advisers thought that there was no case.[75]
The Council have spent £53,400 on legal advice; and have
assured us that future legal costs will be kept under constant
review and tight control. But, since future costs depend upon
the action taken by Wimpey, the Council maintain that it is impossible
to forecast the extent of their legal costs.[76]
ii) Conclusion
48. We note the Council's position on their dispute
with Wimpey and that they have taken legal advice. We wish to
be advised on the outcome of the dispute.
73 C&AG's Report, paragraph 3.14 Back
74 C&AG's
Report, paragraph 3.16 Back
75 Q14,
Q102-103 Back
76 Q123-125
and footnote Back
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