Any project faces delays and disruptions especially the more complex projects being undertaken with many interfaces. Proving delay and/or disruption is not an easy task and it is a time consuming process especially on the larger projects. There lots of details and interfaces with the involvement of many stakeholders. The different methods need to be derived from a recognized system. Proving delays in the larger projects, whose schedules contain many activities with many interfaces and lot of causes for delay and disruption is a complicated process and involves lots of details. When any degree of complexity in the project is examined, it becomes more difficult for the project team to record the delays and disruption events properly because they are always busy dealing with the site issues and other project pressures. In order for the contractors to be successful, a time extension claim or disruption claims should adequately establish causation and liability and assist in demonstrating the extend of time-related damages experienced as a direct result of the delay events relied upon. I cannot express the importance of accurate site records of who, what, when & why. These simple questions need to be part of the daily site process on all site activities.
There are a number of methods used in EOT claim analysis. The best simplest method that is consistent and is hard to disprove is the planned against actual. This approach consists of; (1) the baseline programme (planning stage), (2) programme updates, (3) accurate programme revisions, (4) defining the delays to the programme updates, (5) identifying the concurrent delays and splitting between the contractor and employer delays, (6) defining the contractual basis for the entitlement, and finally (7) preparing the evidences of delay.
Following these simple requirements will be the main information required in any EOT claim.
Identification of delay
Usually causes are categorized as contractor risk events, or employer risk events. Until any of these events are confirmed as having caused actual delay or intended to cause expected delay, they are only risk events. The type of the contract is a factor in defining the risk events and its allocation. For example, lump sum price and EPC contracts have the highest risks to the contractor and lowest to the employer while the re-measured contracts has the lowest risks to the contractor and the highest to the employer.
Contractor’s risk events in general are limited to the following:
- Wrong assumptions;
- Poor planning;
- Unrealistic activity duration or interrelationships;
- Low productivity of resources;
- Lack of manpower and machinery resources;
- Poor quality of work; (extensive remedies)
- Commitment to HSE requirement;
- Financial issues; and
- Late delivery of the required materials.
Any delays that can occur due to any such events are non-excusable and non-compensable delays and the contractor is responsible to recover such delays at its own cost otherwise the contractor will be subjected to the application of penalties or liquidated damage clauses as stated in the contract.
Employer’s risk events in general are the following:
- Delay in handing over the job site;
- Use or occupation by the employer of any part of the permanent works, except as may be specified in the Contract;
Different physical conditions from those provided during the tender stage;
- Changes to the original contract scope;
- Late engineering deliverable;
- Late procurement deliverables;
- Frequent revisions for engineering deliverable;
- Delay in approval above the contractual allowance;
- Delay in payment,
- Out of sequence for engineering and procurement deliverables;
- Suspension of the work;
- Adverse weather conditions;
- Changes to project specifications;
- Force Majeure (War, hostilities, invasion, act of foreign enemies’ revolution, terrorism, sabotage by persons other than the contractor’s personnel, or civil war within the country, etc.); and
- Existing underground utilities, which are not shown in the as-built drawing received by the contractor during the tender stage.
Any delays occurring due to such events are excusable and compensable delays but the contractor at the same time is responsible to mitigate totally or partially the impact of such delays.
In case of occurrence of any of the employer risk events, the contractor should take necessary actions to record the delay impact due to such events.
Proving delay and/or disruption is not an easy task and will be a time consuming process especially in the larger projects with many activities, lot of details and interfaces with involvement of many stakeholders. It needs a lot of effort especially the process of recording and analyzing each delay event. It is highly recommended not to follow the concept of “wait and see” which results in contractors submitting their claims for extension of time at the end of the project or after the contract completion date. The contractor is requested to submit the EOT claim whenever he believes that the delay event will delay the project completion date and the delay event is excusable and compensable. The contractor can submit more than one EOT claim based on the delay or risk events that the contractor might face.
Williams Planning can help out with new or existing claims. Tim has been involved with many extensions of time claims with two recent claims going to adjudication.
The key to being successful with EOT claims is to get Williams Planning involved early and not leave it to the end of the project. EOT claims should be dealt with as the project progresses. Over time memories fade and important documentation gets lost on a missing hard drive.
Contract Tim directly for an assessment of your extension of time claim.