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EOT award not accepted

5 replies [Last post]
Thu, 2009-11-12 04:33
Chris James
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A contractor applied for an EOT of 150 days, I have awarded them an extension of only 100 days which I believe to be a fair assessment although they are not in agreement. I have asked the contractor to revise their programme based on the extended period of 100 days however they have refused. The project is now proceeding with the original programme clearly out of date and no real way of monitoring the works. It’s a Fidic 1987 contract.
Any ideas as to how I can insist that the contractor updates the contract programme to reflect the additional 100 days?
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Replies

Sun, 2009-11-29 15:26
#1
Samer Zawaydeh
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Dear Chris,

Since you are working under FIDIC, then the steps are all clear.

Contractor’s Claims are considered under 20.1 and the Engineer issues the Determination according to 3.5

In case there is a disagreement then you go to 20.2 and appoint the Dispute Adjucation Board.

During this time, you can review and settle the Dispute Amicably according to 20.5.

If you do not have a DAB, then you go to Arbitration according to 20.6.

The process is clear and it has time limits to solve the issues quickly and move on to the agreement of both parties.

With kind regards,

Samer
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Fri, 2009-11-13 10:47
#2
John Ralph
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Hi Chris
Heres my $0.02s worth.
Im unsure as to which FIDIC you are using so some of what I say may not be relevant as I base my remarks on Conditions of Contract for (i) Construction, Works designed by employer (ii) EPC turnkey projects. At the very least the process would be similar, even if the actual contract clauses differ.
It seems that there are two separate strands here.
Firstly a dispute exists concerning EOT. On the basis that the claim for EOT was properly brought through the claims process of the Contract- Cl 20.0 and reviewed and agreed or determined under Cl 3.5. then what happens going forward is proscribed by the contract. (DAB, Conciliation etc)
Secondly it appears that you have an issue with the quality of the programme. Assuming that a time programme has come into being under the rules of Cl 8.3 then you have the authority under Cl 8.3 to seek appropriate revisions or to seek a full revision under Cl 8.8.
You need not fixate on whether or not the Contractors programme shows completion by a certain date, rather that the programme in existence is realistic and achieveable and representative of the way the work is to be carried out. The Engineer has determined a new Time for Completion, (being the old one plus 100d), and if the Contractor completes outside of this he is taking on the risk of LD’s being applied should the dispute resolution process not support his claim for the balance of EOT (50d).
John
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Sat, 2009-11-14 07:57
#3
Rafael Davila
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Chris,

The following reference can provide you with additional guidance.

http://www.eotprotocol.com/

Of course I understand that if the request in some way is inflated then your responsibility is to deny the inflated time, late delivery has cost implications to the Owner. But the fact that Entitlement to an EOT does not automatically lead to entitlement to compensation (and vice versa) (see Guidance Section 1.6.2) can make it easier for you and the Owner to be flexible with regard to EOT.

Change Directive should be used only as a last resort option, a negotiated and mutually agreed option is better.

What if the contractor is already delayed by his own fault 50 days and on top of this you delayed him and only recognizes 100 out of 150, then he has to recover 100 days to avoid liquidated damages?

Best regards,
Rafael
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Fri, 2009-11-13 13:52
#4
Rafael Davila
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Chris

A contract is an agreement between two parts that can be modified either by mutual agreement or by other means as provided under the contract clauses. Because not always is possible to reach an agreement for a change order, contracts usually do provide for the owner to issue a change directive. Under a change directive the contractor is obliged to follow the change even when there is no agreement as to the final change to be applied.

The Owner can force the contractor to follow the directive but if latter it is proved that de delay was 150 days instead of 100 the uncovered part might be claimed by the contractor as acceleration and the cost can be substantially higher than the cost to the owner for granting the additional 50 days.

Keep in mind EOT does not necessarily means extra cost, the burden of proving extra cost relies on the contractor.

A change directive is a good tool when properly used, otherwise is a two edged knife.

The following paper can provide you with some guidance.

http://www.warnercon.com/articles/Article%2012%20-%20Recovery%20Schedule...

Best regards,
Rafael
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Fri, 2009-11-13 18:06
#5
Trevor Rabey
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Chris, the purpose of the EOT is to re-set the date on which the LDs kick in. The contractor has determined that he is entitled to 150 days and worked out that he needs 150 days, and demonstrated it by some calculation. He would be mad to settle for even 1 day less, especially unless you can demonstrate objectively that he is either not entitled to it all and/or doesn’t need it all. If I was in his position, I would refuse too. I think if you were in his position you would refuse too. It is like he asks for 150 litres of fuel to get from A to B and you only give him 100, and expect him to start the journey anyway. If he accepts, he is just exposes himself to a risk for no reason.
The questions of whether the program is valid and whether there is any valid claim for costs associated with the EOT are separate issues.
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