We are currently engaged in an Option D Contract. Construction is ongoing and then Defects were found on constructed Bored Piles. The Bored Piling Works was Subcontracted. The Contractor says the cost of rectifying the defects will be covered by their Contractor's All Risk Insurance. But the Contractor shall pay the Insurance provider USD250,000.00 as Deductible Cost for every event. Does this cost should be charge to the project cost or should be charged to the Subcontractor of the Bored Piling Works? Note that Defect was cause by the Contractor not following a constraint on hoe he is to Provide The Works stated in the Works Information. The cost of correcting the Defect is a Disallowed Cost in accordance with Sub-clause 11.2(25) main bullet 5. But Item 7.2 in the Schedule of Cost Components includes The cost to the Contractor of procuring and maintaining insurances and any deductible as a consequence of an event.
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