M&E contractor claims 鈥榬easonable costs鈥� on White City job after it failed to sign a contract with employer

M&E contractor Haden Young is suing Bovis Lend Lease for 拢6.5m after claiming it was underpaid for its work on a BBC office block in White City, west London.

Haden Young claims in the writ that Bovis owed it 拢26.8m for its work on the office鈥檚 M&E systems but paid it 拢20.3m. The specialist is also claiming an additional 拢1.2m in interest on the unpaid amount.

In its writ, Haden Young says Bovis valued the works on an inaccurate basis. Haden Young is claiming that the work should be valued by the 鈥渞easonable costs鈥� of labour, plant, equipment and materials, together with a reasonable amount for overheads and profit.

The writ implies the dispute arose because no formal contract was agreed for the works. Haden Young delivered the work on the basis of letters of intent, which did not form an official subcontract, but stated that if no binding contract was agreed the M&E firm would still be paid.

Haden Young says it received eight letters of intent between November 2001 and 9 September 2003 assuring it that it would receive full payment for its work. The company says that, although it did not sign or return the letters, it carried out significant work for Bovis, and as such is entitled to payment.

A Bovis spokesperson said: 鈥淲e are still engaged in discussions with Haden Young鈥檚 senior management over the amount of the claim. We shall be defending our position.鈥�

The writ implies the dispute arose because no formal contract was agreed for the works

Haden Young was unavailable for comment.

The row is the latest to hit the BBC鈥檚 construction programme. In February 2003, bidders for the 拢250m redevelopment of its Broadcasting House in Portland Place accused the BBC of unfairly favouring eventual winner Bovis because of its work on White City.

Bovis had been brought onto the White City scheme mid-project when the BBC entered into a property partnership with Land Securities Trilliam, replacing Balfour Beatty subsidiary Heery International.

The BBC denied claims of unfair tendering, but later faced further controversy in March when the National Audit Office launched a probe into the corporation鈥檚 property development.