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Time Impact Analysis

11 replies [Last post]
M Colon
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A contractor has submitted a claim for time and moey for an additional work order that was approved under this project. He injected a serues of activities to the CPM that have become critical due to the original duration time. This activities are in progress.

Should I wait to see the extent of actual work before processing the claim for time?

Replies

Mohammad Abdul Ba...
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hi to all can anybody give a picture of the format of EOT primavera schedule...

thanks
Oliver Melling
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Additional work is work that was not agreed in the project scope.
A change order is required for anything not it the project scope document/contract.
The impact of the change can only initially be assessed by the contractor as depending on the type of contract, only they know what the original estimate was based upon.

Thus initially the contractor should price up the change in terms of BOTH cost and time. An EOT might not mean any extra coal-face working hours for tradesmen, but the project, site management and hire cost will continue to rise. Also, delays that cross over financial years could attract different rates of pay.

The change order then needs reviewing by the stakeholders and agreeing / re-negotiating until both parites are happy.

After that it can be incorporated into the baseline and then stuffed into well labeled project file.

Time is always money, even if you close the project booking numbers staff will book to overheads and money will be lost out the back pocket.
Hesham Arafa
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I agree with Mr Ronald Winter and finally cost and time impact evaluation will depend on negotiation
David Bordoli
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I couldnt agree more Ronald!

It always amazes me that everyone seems to expect costs to vary during a construction project but as soon as time moves there is a massive uproar and the exact consequences have to be determined.

I am sure that this is a historical problem in the UK at least. For so long the construction industry has been under the control of Quantity Surveyors who think they can dtermine everything in terms of money. Now that time is becoming far more important, especially in the last ten years or so in the UK, the rules are having to be rewritten.

I agree the same rules should (and do?) apply that the cause of a delaying event can oly be determined on the balance of probability and hopefully reasonable people will treat delaying events and resultant delays in a reasonable way.

Regards

David
dbordoli@burofour.co.uk

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Tomas Rivera
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Well said Ronald!

Tomas Rivera
Ronald Winter
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People often state, “We can’t settle the exact time extension because we are not sure of exactly how long it will take to fix this problem.” While this is true, it is not helpful.

You will never be sure of the time impact of a delay. It will always be an estimate, even years after the project is complete. If a delay goes on long enough, work-arounds will be employed, lessening the delay’s impact. The exact mix or work, delayed work to non-delayed work, additional uncompensated work to scheduled work is never perfectly known and this knowledge fades over time.

Why should we treat time adjustments any different that cost adjustments? Do you think that a cost estimate made by the contractor is perfect? What happens if he ends up spending less for labor and materials than he envisioned? Are you going to put out a Deductive Change Order to take back the difference from the earlier Change Order and the amount you figure he really spent?

No. You ask for an estimate in the cost and time adjustment for adding the extra work caused by a delay. You evaluate and even negotiate those estimates. Then you draw-up and sign a Change Order to fix the problem and move ahead with the project. If the numbers seemed right to you when you signed the order, then stop whining and move on. You don’t build a monument out on the construction grounds, name it after the delay and all agree to go visit it every month.
David Bordoli
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I thought that an extension of time was given to fix a new completion date and therby to relieve the contractor of the risk of liquidated and ascertained damages and to ensure time doesnt become at large.

Costs are, or should be, totally distinct from the time aspects and should be valued seperately. As you are aware some events that cause result in delats and extensions of time to dont attract costs.

Regards

David
dbordoli@burofour.co.uk

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Clive Holloway
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Under most contracts EOT can be awarded based on the likely effect of a relevant event, and so claims for EOT should be made ASAP. The trouble is, that the likely effects are based on planned programmes which are forecasts and so dependant on how good the programme is.
Under most contracts Prolongation costs are based on actual costs. However, provisional figures can be estimated and used, and then finalised later on. The problem is that actual costs are generally not incurred until the dispute is settled, and so there lies the problem.
Forum Guest
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In my experience, almost all clients (the useful ones) make the inclusion of programme rates, a pre-requisite to the formal programme approval - for that very reason.

It gives weight to both sides defense when disputes arise.

Jason.
Se de Leon
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No I don’t think that’s fair to both parties. This is the reason why a submission of productivity rates is very essential prior commencement of construction. These rates shall be the basis of the schedule submittal of the contractor and also the basis for claims. If an activity is relatively new activities compared the original activities prepared, you can agree on a Productivity/Cost data to be used such as RS Means.

In summary, anticipating such situation can be solved by specifying a standard productivity/cost data as basis for claims and scheduling.
Roger Gibson
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In respect of time (i.e. an extension of time) No. Under most forms of contract, a contractor’s entitlement to a possible EOT is when the delay event starts, e.g issue of a variation order. Any EOT assessment should take place as of this date.

In respect of money; most forms of contract refer to actual costs, i.e actual cost incurred as a result of the event. This can only be done when the delay event has ’ran its course’.

If you require any further information, please contact me direct.