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Construction contracts generally allow the construction period to be extended where there is a delay that is not the contractor's fault. This is described as an extension of time (EOT).

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NO ORAL PROMISES

You must remember always, for every activity in construction specially instructions needs to have written instructions.

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RECORD KEEPING

Record keeping is generally required for protecting contractual rights and useful for some form of post-contract review. The importance of establishing a documentation system is that it ensures that both the employer and contractor maintain a complete, contemporaneous, chronological and provable record of what happened on site, the problems and their impact upon progress, schedule and cost.

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▪ Extend time

▪ Instruct for acceleration of works

Note: Neutral events also cause delays;

Force Majeure

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EOT RELATED CLAUSES IN

CONDITIONS OF CONTRACTS

Majority of construction projects worldwide are administered by the FIDIC forms of contract.

FIDIC recognises delay and related costs and has provisions related thereto. For example;

Sub-Clauses 8.4 & 20.1 (FIDIC 1999 Edition)

Clauses 44 & 53 (FIDIC 1987 Edition)

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▪ Variations.

▪ Exceptionally adverse weather.

▪ Civil commotion or terrorism.

▪ Failure to provide information.

▪ Delay on the part of a nominated sub-contractor.

▪ Statutory undertaker’s work.

▪ A delay in giving the contractor possession of the site.

▪ Force majeure (such as an epidemic or an 'act of God').

▪ Loss from a specified peril such as flood.

▪ The supply of materials and goods by the client.

▪ Strikes.

▪ Changes in statutory requirements.

▪ Delays in receiving permissions that the contractor has taken reasonable steps to avoid.

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THE FIDIC PROVISIONS

FOR EOTEVENT

The FIDIC Provisions define the conditions where delay may be claimed as the basis for an Extension of Time (EOT). Some examples are;

▪ Late provision of design or drawings

▪ Unforeseeable Physical Conditions encountered on Site

▪ Inclement Weather

▪ Variations instructed by the Engineer (Additional Works etc.)

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To retain a defined time for completion

To preserve the employer’s right to liquidated damages against acts of

prevention To give the contractor relief from his

strict duty to complete on time in respect of delays caused by

designated neutral event or by employer.

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▪ CRITICAL PATH- Longest path in the program. Commonly known as path along which float is.

▪ FLOAT- This is the period by which as activity can be delayed without delaying the subsequent activities (Free Float) or without delaying the Project completion date (Total Float).

▪ EXCUSABLE DELAY EVENT- Contractor eligible for EOT if it’s a delay of client. This is having two segments. i.e Compensable and Non-Compensable.

▪ COMPENSABLE EXCUSABLE DELAY- Means EOT will grant with cost.

▪ NON- COMPENSABLE EXCUSABLE DELAY- Means EOT will grant without cost.

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10 Tips for EOT

Preparation

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1. Make sure your application complies with the contract.

Any application for extension of time must relate to, and comply with, the provisions of the contract including any bespoke amendments. Each contract will potentially have slightly different requirements in respect of how any application should be made and some forms of contract even prescribe the methodology that must be used.

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2. Consider who will be reading the request.

Any submission comply with the requirements of the contract but consideration should also be given to who will be reading the request and making the decision.

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3. Demonstrate cause and effect.

The term ‘cause and effect’ is often used with little thought about what this really means. In reality, for an extension of time request to succeed you must clearly identify a specific discreet cause and the associated specific effect on the programme.

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4. Evidence your entitlement.

Any submission should be supported by contemporaneous records and facts to fully substantiate the claim(s) being made. This will not only help improve your submission but will also help to expedite any decision from the Contract Administrator or a third party.

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5. Support your application with common sense.

No matter what form of analysis is used, or what planning software is used, the submission must be underpinned by fundamentally sound, robust and sensible logic.

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6. Analyse all the relevant records available.

Too often only a sample of the records available are analysed and used for the preparation of any extension of time submission. If you claim a delay has occurred in a certain period of time but upon a subsequent review of the labourtimesheets it is found that operatives were in fact working on the task in alleged delay, you might end up having some explaining to do!

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7. Start from a strong baseline

If you perform an analysis on a programmeyou should ensure that the programmebeing used is robust and reliable. The programme should be stress tested prior to any analysis being performed to ensure that the logic is sound and complete.

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8. Consider any culpable delay (Faults entirely in

Contract’s side) periods and weak points carefully

It is rare for any contractor not to suffer some form of culpable delay during the course of the works. Rather than try to ‘brush it under the carpet’ it is often better to deal with it at that time of any submission. What was the effect of it, if any, on the completion date? What was done to overcome it? It is often found that if the proper attention is given to culpable delay periods the effects are often relatively small.

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9. Perform a suitable delay analysis

With extension of time claims being scrutinized more than ever it is vital to the success of any claim that a recognized form of analysis is used and executed correctly. The form of analysis chosen is often driven by the records available but the pros and cons of each of these should be weighed-up carefully before embarking on any analysis.

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10. Consider the likely submission response

Thinking about how the recipient or a third party might respond to any submission is a good way to strengthen your case. Do all the facts stack up? Are there facts missing? Are there any weaknesses in your baseline programme? What areas of criticism have there been / are likely?

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As-planned vs. As-built

01Impacted as- planned method

02As-Planned but for Method

03Collapsed as Built Method

04Time Impact Analysis

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This methodology simply compares the activities of the original CPM baseline

schedule with those of the as-built schedule for detailed assessment of the delays that

occurred. Under this method, all delaying encountered on the project (Excusable–

compensable delays (EC), Excusable–Non compensable delays (EN) and Non

excusable–Non-compensable delays (NN)) are depicted on the as-built schedule.

The difference between the as-planned and as-built completion dates is the amount of

time for which the claimant will request for compensation. The critical path is

determined once in the as-planned and again in the as-built schedule.

This technique and the net impact technique utilizing bar chart are similar in that they

all show the net effect of all claimed delays.

P.T.O

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In this method, first calculate the Sum of Non-excusable–Non-compensable delays

(NN). Then calculate the Sum of Excusable Compensable delays (EC).

Then Assume concurrent delay due to both parties (lower of NN & EC delays). Then

take the Owner responsible delays/Contractor responsible delays as the rest after

removing the concurrent delay.

Net Total Project delay is the difference between as planned project time and as built

project time.

Contractor responsible delays/Owner responsible delays are calculated by

subtracting the Owner responsible delays/Contractor responsible delays calculated

above.

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ADVANTAGES

▪ Simple to use

▪ In-expensive

DISADVANTAGES

▪ Suitable for only simple programs

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▪ The technique can be used for analysis of delay during and after project completion.

▪ It measures the effect for as-planned schedule from each delay event.

▪ Therefore the critical path is important for this method.

▪ Amount of delay = Completion dates after the impacts – Completion date before the impacts

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▪ As built information is not required.

▪ There is no hassle of arguments over correctness of program or update

▪ The extension of time is determined as per original intent of parties

▪ Any float in the activity comes in to effect as planned only.

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▪ This method is very theoretical since it does not take in to accounts the actual program is vary a lot compared to as planned program

▪ Any errors in the program creeps in to delay analysis

▪ Extension of time assessed may not be rational in the actual sequence or progress is substantially different to as-planned program

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▪ This method is performed quickly because it is not required to consider about actual progress of the work.

▪ This method is analysed according to contractor’s point of view and owner’s point of view.

▪ Contractor’s Point of View.

▪ The as-planned schedule is adjusted by adding the contractor-caused delays (non-excusable). Then the results are compared with the actual completion date and the amount of delay which the owner is responsible is calculated.

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▪ Owner’s Point of View.

▪ The as-planned schedule is adjusted by adding the owner-caused delays (non-excusable). Then the results are compared with the actual completion date then amount of delay which the contractor is responsible is calculated.

ADVANTAGES

▪ It can be performed quickly because there is no need to consider actual progress of the work.

▪ Consider the impact of delays on the critical path.

DISADVANTAGES

▪ Owner’s point of view and contractor’s point of view may yield different results resulting in disputes.

▪ It assumes that the planned construction sequence remains valid during the project duration.

▪ Does not consider the changes in the critical path schedule during the course of the project.

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In this method as-planned schedule is used as a baseline schedule. It involves removing the delays of each party from the as-built schedule so that the resulting schedule will give the completion date of the project but for the delays of the other party.

The results from contractor’s point of view and owner’s point of view are same in this method.

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COLLAPSED AS BUILT METHOD

ADVANTAGES AND

DISADVANTAGES

ADVANTAGES

▪ It takes in to account actual program, hence certainty of that delay analysis is based on the actual sequence of the work adopted in the project.

DISADVANTAGES

▪ The removal of the delays from the schedule could result in an unrealistic as-built but-for schedule.

▪ It ignores the circumstance at the time of the delay.

▪ The use of as-built information to prepare the as-built schedule is subjective and highly amenable to manipulation.

▪ Does not consider the changes in the critical path schedule during the course of the project.

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▪ Time Impact Analysis can be done either following two ways;

1. Snapshot Analysis

2. Window Analysis

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5.1 SNAPSHOT ANALYSIS

▪ This method recognized in Delay disruption Protocol-The Society of Construction Law in UK (https://www.scl.org.uk/resources/delay-disruption-protocol).

▪ This analysis normally used in contemporaneous delay analysis.

▪ i.e, taking the progress update on instance of occurrence of delay incorporating the effect of excusable delay in the progress update.

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https://www.scl.org.uk/resources/delay-disruption-protocol

5.2 WINDOW ANALYSIS

▪ In Window Analysis, the entire project is divided in to multiple time windows.

▪ Generally we can say 1 month time each portion.

▪ Each progress update is updated with or any change of sequence of work etc…

▪ This shall also include the effect of delay due to any excusable events.

▪ Each window is then compared with previous window to analyze the effect of valid delay events.

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▪ This method is most favored delay analysis recognized internationally.

▪ In each window, there are few activities with negative float, that needs to be analyzed to evolve the delay and therefore process and it’s more clearer than a global approach.

▪ It gives more realistic events, since it takes in to accounts the project status at the time of occurrence.

▪ Calculation of concurrent delay is more practical.

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▪ Accurate progress information to relate to each progress update needs to be maintained.

▪ This method is more time consuming than the other methods and required planning skills.

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▪ Prolongation Cost

▪ Disruption Cost

▪ Compensation for Concurrent Delays

▪ Compensation for Lost Float

▪ Acceleration Costs

▪ Claim Preparation Costs

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This is based on the actual cost incurred by the contractor: work actually done, time actually taken

up, or loss and expense actually suffered. Even if one agrees the rates of compensation which

reflected the anticipated activity on site at the time the contract is signed, these would have to be

recalculated every time a delay occurred, whether or not an extension of time was granted,

because delay inevitably affects the level of activity which the contractor undertakes.

Heads of Prolongation Costs:

▪ Salaries or wages of Indirect staff

▪ Site office costs

▪ Extended safety costs

▪ Bond and Insurance Costs

▪ Scaffolding costs

▪ Handling and material storage works

▪ Head office costs

▪ Subcontractor claims

▪ Delayed release retention/ Financing/delaying payments 39

What is Concurrent delay?

If the Client caused delay and contractor caused delay, affect the same activity or different activities on parallel activity paths which are equally critical, and as such the client caused delay and contractor caused delay would each have delayed the completion of the project, the delays are said to be concurrent.

The term ‘concurrent delay’ is usually understood to describe circumstances when different causes of delay overlap during a period of time.

Only entitlement would be EOT but no prolongation cost. Employer to bear LD & Contractor to bear Prolongation Cost.

The contractor should only be entitled to recover the proven cost of the delay caused to him by the employer. He must be able to separate the costs caused by the employer delay from those caused by his own delay. The effect of this approach is that, concurrent delay will give the contractor an extension of time but no compensation, even though the delay caused by the employer would have given rise to compensation, had it occurred on its own. 40

This happens when the employer delay has deprived the contractor of the benefit of his float. If the contractor had intended to complete any portions of the work before the scheduled completion dates but the employer delay means he only completes by the programmed completion date thus consuming the available float, then he should receive compensation for the extended period that he has been on site, being the length of the consumed float.

This can be applicable when the contractor is entitled to an extension of time may be agreed, and is paid such agreed sum, or a reasonable sum to compensate the contractor for the additional cost of the agreed measures to accelerate the work and the effect of those measures on other aspects of the work together with an allowance for profit. The net effect of the agreed acceleration order will be a variation to the contract.

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This is also usually the inherent discretion of the arbitrators or the courts to award

such costs. But where it can be shown that the contractor, or employer, has been put

to additional cost as a result of „unreasonable actions or inactions‟ in preparing or

defending claims, then these costs should be recoverable.

Disruption is defined as „disturbance, hindrance or interruption to a contractor‟s

normal working methods‟, resulting in lower working efficiency and productivity,

hindering and interrupting regular progress. When caused by the employer, it

should be compensated either under the contract or as damages for breach of

contract.42

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Path 1 Float = 3.5 Weeks


Path 2

Figure A - Accepted Contract Programme

Weeks

Path 1

Contract Start

Date

Contract

Completion Date

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

PRIOR TO EXCUSABLE DELAY (UPDATE WITH ACTUAL PROGRESS)



AFTER EXCUSABLE DELAY

Excusable Delay

Path 1 Float = 1.0 Week


<=Date of Excusable Delay

Figure B - Delay Impact 1

Weeks

Path 1

Contract Start

Date

Contract

Completion

Date

Path 2

(3) Compensation for Delay to Progress

(1) EOT Entitlement (2) Period of Prolongation Costs

(4) Other Compensation

Contract

Completion

Date

Impact on Path

1 = 2.0 Weeks

Path 2

Path 1

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22





Excusable Delay

Float = -0.5 Week

Contract

Completion

Date

Impact on Path

1 = 3.5 Weeks

Path 2

Path 1

Path 2





Figure C - Delay Impact 2

Weeks

Path 1

Contract Start

Date

Contract

Completion

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21





Float = -0.5 Week

Excusable DelayImpact on Path 2 = 6.0 Weeks


Figure D - Delay Impact 3

Weeks

Path 1

Contract Start

Date

Contract

Completion

Path 2

Path 1

Contract

Completion

Path 2



(4) Other Compensation 47

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22


Contract Completion Date

Float = -1.5 Weeks



Excusable DelayImpact on Path 1 = 2.0 Weeks

Float = -3.5 Weeks

Figure E - Delay Impact 4

Weeks

Path 1

Contract Start

Date


Path 2

Path 1

Path 2




1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22




Float = -1.5 Weeks



Impact on Path 1 = 2.0 Weeks

Excusable Delay

Float = -3.5 Weeks

Path 1

Path 2




Figure F - Delay Impact 5

Weeks

Path 1

Contract Start

Date

Path 2

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22




Float = -1.5 Weeks




Float = -1.5 Weeks

Excusable Delay = 3.5 Weeks

Figure G - Delay Impact 6

Weeks

Path 1

Contract Start

Date

Path 2

Path 1

Path 2




Presented by: 1 VINDIKA AMBAGAHAGE€¦ · Exceptionally adverse weather. ... EOT will grant...

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