Mace is facing a legal claim for more than £800,000 following a second contractual argument with a supplier on British Land’s £340m 5 Broadgate scheme.
The dispute with bespoke plant room manufacturer Ellison AC centres around alleged promises of future contracts in exchange for a sizeable discount from the supplier on the City of London project.
According to documents filed with the High Court in Manchester, seen by Construction News, Ellison AC offered to reduce its fee for providing Mace with bespoke plant items for 5 Broadgate, including a boiler plantroom and an AHU condenser plantroom.
The £205,000 discount was offered on the condition that Ellison AC was given the contract for similar work on two other high-profile London sites on which Mace was main contractor: the South Bank Tower in Southwark and the Nova project in Victoria.
The case revolves around a series of emails in May 2014 between Mace MEP director Andy Hider and Ellison AC director and founder John Ellison.
In an email on 23 May 2014, before the pre-constructed plantrooms had been delivered to 5 Broadgate, Mr Ellison offered four options to Mr Hider, including a £205,000 discount in return for the award of contracts on South Bank Tower and Nova.
In its defence of the claim, also filed with the High Court, Mace said the exchanges did not entail “any enforceable agreement” contrary to a previously agreed contract settlement.
The contractor’s defence added that Mr Ellison’s offer was “an attempt to impose additional terms more advantageous to Ellison than those which were either available under the settlement agreement or under its standard terms and conditions”.
In a 20 May email to Ellison AC’s project director Neil Dodgson, copied to Mr Ellison, Mr Hider said the cancellation of storage costs incurred by the supplier “was provisional on the receipt of an order for Nova and a ‘best shot’ at South Bank” adding that “John [Ellison] confirmed that we have met this criteria”.
According to its defence, “Mace had no practical alternative but to submit to… [Ellison’s] demands in order to secure the release of the boiler plantroom.”
In its reply to Mace’s defence, Ellison AC said this was “untrue”, claiming that Mace had previously “threatened to obtain an injunction to secure the delivery of goods”.
The reply from Ellison AC’s legal team adds: “Mace was in breach of contract failing to pay the sums due, regardless of the position relating to withholding delivery”.
Ellison was subsequently awarded buildings 5 and 6 of Nova but did not win work on building 7 or on the South Bank Tower.
It is understood that a settlement offer by Mace has been rejected by Ellison AC.
Mr Ellison told Construction News: “I made an offer with consideration that we receive the next two projects [from Mace].
“They accepted in writing and told my company we had been appointed to those jobs.
“My company and I are not prepared to be bullied; the business can afford to absorb litigation costs.”
A spokesman for Mace said: “In the interests of fairness and confidentiality, Mace does not comment publicly on our ongoing relationships with stakeholders and suppliers.”
The City of London project, which will become the new London base for investment bank UBS was at the heart of another pay dispute between Mace and a subcontractor, revealed by Construction News in February.
In that earlier dispute, London-based mechanical pipework specialist SF Installations went bust after its costs on a £4.5m piece of work at 5 Broadgate climbed to £7m, according to an administrators’ report.
The report, compiled by administrator Antony Batty & Company and based on SF Installations estimates, said that Mace paid just £5m and owed the subcontractor “in the region of £1.3m” at the time of its administration.
However, the allegations made by SF Installations in the report were not upheld by an adjudicator.