Ex-Wembley chief in Multiplex swipe

Former Wembley National Stadium (WNSL) chief executive Bob Stubbs and Multiplex have become engaged in a war of words.

The former alleges that the contractor may find it difficult to recover money from the client should the dispute come to court: he argues that the condition of WNSL’s contract with its financial backers West LB was that there could be no major variations to the contract by the client.

Multiplex denies this, arguing that there were variations that meant it has legitimate claims to extensions of time.
Stubbs, who oversaw the contract until work started on site in 2001, said his understanding was: “There was no allowance in the contract from the financiers to make any wild variations to the building element of the project as this would have had an impact on costs.

“From what I understand, there have only been a total of 500 variations on fixtures and fittings, such as the size and type of televisions used in corporate boxes.”

A Multiplex spokeswoman said: “This is not correct. Multiplex has notified its client of what it believes to be legitimate extensions of time and entitlements on the project.” And she “utterly” refuted Stubbs’ claim that the project had been run “very smoothly” by the client since work started.

Stubbs claims Multiplex must have known what it was getting into: “Multiplex went into the contract with its eyes wide open. What hasn’t been stated is that Multiplex had been able to work on the early details of the project and the contract conditions for 15 months before it was awarded the contract. This was based on a partnering approach with the client. One issue discussed was the buildability of the arch.”

Multiplex refutes any claim that contract variations were not accounted for and said: “If a contract is delayed or varied in any way by the client, then there are mechanisms in place in that contract to deal with them.”

Stubbs described the circumstances surrounding the contract award: “The banks had demanded that the risk be taken fully by the contractor. Given the situation Laing had faced on the Millennium Stadium project, we had very little interest from contractors. We were left with just the Multiplex/Bovis joint venture as serious contenders.

“Both worked on the project for nine months before the JV broke up. Bovis wanted a cost buffer of £100m [taking the project value to £425m] if it was to take on the risk. We couldn’t go above the £350m mark and our QSs said it could be done under that price.

“However, Multiplex came back to us soon after and said it would take all the risk and offered the contract at a guaranteed maximum price of £326.5m.

“It was a huge gamble for the contractor. Some of us were surprised that Multiplex took on the contract for a margin which worked out at around 3% to 4%.”

Multiplex stated: “The risk was limited and the scope of works defined. The margin was in line with market pricing at that time.”

Stubbs’ comments echo those made by current WNSL chief executive Michael Cunnah a few weeks ago: “If you come back to the big items – the concrete, the foundations, the roof and the steel – Multiplex is not going to be
able to come up with anything that shows we had an impact on that.”

Multiplex’s UK managing director Martin Tidd refuted Cunnah’s claim: “A fixed-price contract was entered into with the WNSL reflecting a defined scope of works.

“The contract is adjustable in the event of change by the client. On a project of the size and complexity of Wembley, it would be unprecedented for no changes to have been made.”