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Time Entitlement vs Own Delay

12 replies [Last post]
Sat, 2004-11-27 04:54
Kim Leigh
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Dear fellow planners
Please comment on the following issue:

26 months building construction contract (Start 2 Jan 04, End 2 Feb 06).
Now is approximately 11th month, the project status based on Approved Baseline is -69 days (4 April 06 projected completion).

Various delays encountered, prospective time analysis based on 11th month done.
Projected completion as a result of the added delays is now 3 May 06.
This is 98 days from original contract completion.

1. FROM THE BUILDER’S SIDE, SHOULD I CLAIM THE FULL 98 DAYS OR 29 DAYS (98-69)?
2. HOW DO YOU VIEW THIS IF YOU ARE ASSESSING THIS CLAIM FROM THE CLIENT SIDE, WHAT IS THE ENTITLEMENT?
3. IS THERE ANY GUIDELINE FOR ASSESSMENT OF THIS?

Appreciate comments from all
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Replies

Mon, 2004-12-06 06:54
#1
Stuart Ness
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Jaco,
I am intrigued. Can you specify the type of information that a Contract may specify in regard to the nature and presentation of a claim?

Thanx

Stuart

www.rosmartin.com
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Sun, 2004-12-05 00:18
#2
Jaco Stadler
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Good Morning
Well it brings me back to what does the contract say. Some contract reqeust this as part of the claim.


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Sat, 2004-12-04 08:30
#3
Roger Gibson
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Jaco,

I agree with Stuart. Keep with EOT and costs, whether delay or acceleration, totally separate. Persuade the Employer to give an extension of time; then put forward the delay cost element and raise the issue of acceleration. As Stuart said, it is not easy to convince an Employer that the project can be accelerated.

Roger Gibson
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Sat, 2004-12-04 06:52
#4
Stuart Ness
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Jaco,
The Contract may say nothing on the matter other than that the Contractor may be entitled to an EOT for reasons not attributable to himself.

I would counsel against offering the Client a choice between accepting delay costs or acceleration costs. The first thing that Kim has to do is convince the Client that he (the Client) is responsible for the excusable delay of 29 days. That in itself may be difficult enough without confusing things by adding in a menu of costs.
Furthermore, there is a lot of water to pass under the bridge before March 2006, so the Client will not be convinced at this stage that he has to pay for acceleration, in the hope that the Contractor will simply use up his float in the interim to get back on track. (which is the most likely scenario!)

Besides that, if acceleration is to be undertaken, it should be clear that it is carried out by a clear instruction from the Client, otherwise it is likely that it will never get paid.

In terms of sequencing, Kim should:
1. prove that he has an excusable delay of 29 days to the CP that impacts the completion date; and
2. demonstrate his time related costs that flow from the 29 days delay.

If the Client decides that – from his own commercial point of view – he would like his project completed 29 days earlier than it otherwise would be, then it is up to him to instruct the Contractor to accelerate together with an undertaking that he will pay the Contractor for the acceleration.

Cheers,

Stuart

www.rosmartin.com
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Sat, 2004-12-04 05:16
#5
Jaco Stadler
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Strange nobody asked what does the contract say ??.

Not being an expert I would suggest keeping the two matters seperate. First take the owners delay and work out the extension of Time. Ask the qeestion why the owner delayed the project.

(If it has to do with the approval period of documentation make sure that the amount of time specified in the Contract is the same amount as per the approved schedule)

If is to do with Late issue of Document again have a look at the contract don’t always believe that what is specified on the approved schedule is correct.


I would not be surprised if the owner ask you to accelerate the schedule for the "29 Day’s" assuming these are Calender Days.

From a costing option I would calculate two options for the client.

1) = Acceleration
2) = EOT

This would give him the choice. But remember if the owner agrees to pay these I would suggest that you finish on time or you would have the owner looking for some money.



Cheers.


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Fri, 2004-12-03 13:30
#6
Stuart Ness
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Very true, Stephen, and the situation that you describe may yet happen post-3 March 2006; unless, of course, you have crystal balls that allow to to see that far!!

Stuart
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Fri, 2004-12-03 07:43
#7
Stephen Lowsley
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Hello Kim

Stuarts reply is quite correct and the eot entitlement is the nett delay - that is 29 days rather than the gross delay - 03 May. This is a well adopted princible and the legal precedence set in the UK was by the case of Balfour Beatty -v- Chestermount a copy of the transcript can be found on the web - not very thrilling reading though!

I would add however that if the employers delay was from the contract date of completion through to 03 May there may be some argument to suggest an eot entitlement to 03 May. This would be on the basis that the contractors own delay was wholly concurrent with the employers delay, That is to say had the contractor not delayed himself because of the employers delay the contractor would still have been prevented from completing until 03 May. This may suggest a period of eot without cost - all gets a little complex.
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Sat, 2004-11-27 22:56
#8
Kim Leigh
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Hi Stuart
Thank you very much for the answer and confirmation.
Cheers
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Sat, 2004-11-27 13:25
#9
Stuart Ness
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Hi Kim,

If I have understood you correctly, you have a 69 day inexcusable delay caused by the builder (you say this is due to the slow progress of the builder), and this brings you to a due completion date of 4 April 2006. Then you have an additional event that causes an excusable delay for the Contactor of a further 29 days, thus giving an end date of 3 May 2006.

From the point of view of entitlement of the Contractor to additional time, the inexcusable delay of 69 days attributable to the Contractor’s own slow work is irrelevant. The contractual EOT will only be based on the extent of excusable delay added on to the end of the original Contact Period. Consequently, if the Contractor is to be granted an EOT, then this could only be for the period of +29 days after the original completion date, i.e., until 3 March 2006.

If the Contractor is to be awarded costs, however, they should be based on contemporaneous time related costs, and not what his costs will be in February/ March 2006.

Incidentally Kim, you may wish to look again at the date reached when you add 69 calendar days on to 2 February.

Hope this helps,

Stuart

www.rosmartin.com
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Sat, 2004-11-27 12:25
#10
Kim Leigh
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Thanks guys for the quick response.

Of course these sequential delays (with defined period substantiated) are excusable delays and on the contemporary critical path.

And there are other concurrent excusable delays that are not on the contemporary critical path, which hence the delay analysis shows the result I mentioned.

Given the above (that we are able to show that, delays have impacted on the contemporary critical path), during the 11th month, the status is -69 days due to slow progress of the builder.

After impacted the delays, it shows -98.

What is the builder’s entitlement.
(if we talk about delay must be on the critical path, what is the point of specifying float ownership in the program, again, if mentioned, it never clearly say that float as in the Baseline Day 1 program or contemporary program)

Cheers everyone.
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Sat, 2004-11-27 07:34
#11
Naveed Tariq, PE,...
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Dear Kim!

Stuart replied rightly, it needs more input. Specifically was the delay on critical activities. Float is owned by whom etc. etc.

But bottomline is this claim can be made if delay has occured on critical activities by client for which u can present a documentary proof.

Regards
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Sat, 2004-11-27 05:58
#12
Stuart Ness
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Kim,
We need more input!!

Are there defined periods of excusable delay (that is delay caused by the Client)?
Are there defined periods of inexcusable delay (that is delay caused by the Contractor)?
Are any of these periods of delay concurrent (that is run together in the same time frame)?

Does your Contract require that the Contractor give a Notice of Delay within a specified period?

With answers to the above, we may be able to move forward!

Cheers,

Stuart

www.rosmartin.com
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