Question
You are an advisor for the Faculty of Engineering and Architecture who is in the process of renovating all of its classrooms. As such, you
You are an advisor for the Faculty of Engineering and Architecture who is in the process of renovating all of its classrooms. As such, you hired a contractor for a lumpsum fee of $2 million. Part of the work is to replace all light fixtures (total of 1,000). The specifications, which the contractor agreed to, call for fluorescent light fixtures with an expected life of 10,000 hours. Such fixtures are not available locally and have to be ordered from Europe (each fixture costs $60 including delivery and installation). Upon starting the project, the contractor comes to you and claims that ordering these fixtures will take a long time and might jeopardize the project's schedule. Instead, he suggests buying local incandescent fixtures which can be delivered faster. The expected life of the local fixtures is 1,000 hours. You don't think it is fair and therefore are thinking of imposing a penalty in the form of payment reduction. How much percent reduction in the contract amount are you entitled for?
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