Pre Tender Contract Review and Extensions of Time
It is important that all tender documents are thoroughly analyzed in terms of the EOT Risks and rights to identify the following :
- Grounds for EOT ( as base FIDIC or are certain conditions excluded)
- Is the Contractor obliged to mitigate delay
- Is the Contractor required to work in accordance with the Programme
- Does the Engineer require the approval of the Employer before EOT award?
These conditions should be concisely presented to the Tender Manager to allow the following mitigation measures to be assessed./ implemented
- Include “float” allowances with the Programme
- Prepare pre tender queries to “soften” the impact of any onerous conditions
- Consider inclusion in tender of conditions or assumptions
Pre Project Commencement Review and Extensions of Time for Project Implementation Purposes
Before commencement of any project, the following issues should be identified and confirmed to the relevant site staff to ensure that at least on paper out EOT rights and entitlements are maintained
- Submission timings for Master or Baseline Programme
- Content requirement for Master or Baseline Programme ( better to keep it simple ( if possible) )
- Conditions with regard to the issue of EOT notices and Particulars in terms of
- What are the timing requirements
- Are there special requirements in terms of Contents)
- Are they Condition Precedents ( i.e. is entitlement lost if the contract procedures are not followed)
Project Execution and EOT Strategy
The key starting point to any EOT Management Programme is the Programme of Works, often referred to as the Contract, Master or Baseline Programme or Schedule. In most contracts, the internal sequence and logic of the programme will not be binding on the Contractor, only the final completion date. This said it is this logic and sequence that will be referred to when determining the effects of a delay event(s) on the Time for Completion.
Therefore the careful preparation of this Programme is the vital first stage of an EOT Management Strategy. If possible we should show the minimum amount of detail on the programme that allows us to achieve the consent of the Engineer, this will give us increased flexibility to expand (to our Benefit) sequences as the project and areas of delay develop.
Thereafter we should attempt to implement the following procedure each month
- Incorporate actual progress into the programme. Where an activity is in part progress at the time of monitoring we should initially include for the proportional remaining time ( Show Example e.g. if the original duration shown 10 days and after 9 days we are only 50% complete then the remaining time should be a further 9 days ). In each instance, we should maintain the programme logic/activity inter-relationship of the original programme.
- When all the progress data is inserted (and the above adjustments made) the resulting completion date should be compared to the original date.
- In the event that a delayed completion is resulting from the month’s progress, we should attempt to track the critical path for that month and identify the cause (s).
Project Execution and EOT Strategy (contd)
- If the cause(s) are seen to be the responsibility of the Employer or an event for which EOT entitlement exists, then we should issue an EOT notice.
- If the cause(s) are seen to be Contractor caused delays then we should review the time overrun assumptions made in point 1 above and attempt to re-sequence future activities to “hide” the Contractor Culpable delays. (some people would refer to this as mitigation)
- The resulting programme (from either point 4 or point 5 above) will then become the impacted baseline programme for the subsequent month.
- This procedure should be repeated for each month of the project and will provide a monthly chronological cause and effect analysis of the project progress and the delays.
It is common on our projects for most designs to be incomplete ( or inconsistent / contain discrepancies/errors). Since most Engineers are slow to correct or complete the design it is recommended that on our projects we adopt a disciplined use of the principles to the benefit of our time position, as follows ;
- A schedule of design errors/discrepancies etc is regularly issued to the Engineer including a request for the Engineer to provide clarification/response. This request should state the time when the information is required ( and the effect on the Works if the issue is late )
- The status of this information request schedule (RFI) should be monitored at least every 7 days to check the actual receipt dates and the matters that remain outstanding.
Project Execution and EOT Strategy (contd)
If the Engineer fails to issue the requested information/clarification within the requested time the Contractor should issue notice of the requirement for an EOT . Thereafter, the Contractor can follow the particular contract’s procedures in terms of the submission (and regular updating as necessary) of the delay particulars.
Recommended actions if Engineer / Employer fail to follow the Contract Procedures in terms of EOT Determination
In the real world, the rights to an Extension of Time may be somewhat “blurred” by the actions of the Employer and his Engineer. In most of our Contracts provision is made for the Employer’s approval of any EOT which effectively prevents the Engineer from “fairly” determining the Contractor’s rights by himself
There is no easy answer for what should be done in this case but the following should be considered
- Use the EOT as a tool to negotiate for acceleration and recovery of delay ( in cases where completion is key to the Employer )
- Keep the cost and time claims separately.
- Use any of our “influential” subcontractors to discuss the matter with the Employer
- Follow the Contract procedures in terms of notices and particulars to prevent the Employer / Engineer rejecting entitlement due to late issue of notice/details
- Create other cost claims (Disruption / Non-Critical Delay) to use as a “bargaining tool” to achieve the EOT.
- Try to reduce exposure to LDs by arranging for partial handover of completed works
- Remember that the Employer wants his facility or building and be prepared to “withhold “ handover
- Be prepared to consider Formal Dispute Resolution (Arbitration) (this is why the maintenance of the Contract Procedures re particulars and notices is important).
In overall summary of the key points of an effective EOT strategy
- All projects should receive a pre-contract EOT related risk assessment
- Before commencement specific, EOT procedures are to be briefed to relevant project members ( in particular notice/particulars timings/requirements)
- Try to get Baseline Programme approved at an early stage
- Start EOT management from Day 1 of the Project, not just when the first delay event occurs.
- Maintain a regular disciple to monitoring actual progress against the baseline programme
- Ensure EOT notices/delay particulars are issued on time
- Make use of the fact that the Engineer’s design is incomplete and that it's his obligation to resolve discrepancies and to provide details
- Do not allow the Engineer or Employer to wait until the end of a project before awarding an EOT
Author: James Bristow