The Contractor is only entitled to an EOT if the extra work will impact the current agreed or approved finished date.

He is compensated for the additional work ie. for all resources and cost including profit & overhead etc.. for performing the extra work.

It is his choice to use the existing resources or mobilize additional resource to perform this work.This may not constitute and EOT if it does not extend the current longest path.

one of the many things I don’t understand is the Contract, is there anything as a Standard Contract? or is there anything as a Standard Wants? (i.e. wants of the Client), is it possible to classify or categorize the Wants, the Needs, and the Allowable and Practicable?

If you consider the Contract as the "Wants", how do you consider the Program or the Schedule of Works?

But isn’t an updated programme, if different from the baseline programme, a change of the baseline programme?

If the updated programme if different, you must have departed from the original baseline programme!!!!!!

Not going to get into a great debate on this subject as the arguments really turn on the exact wording of the contract.

If the programme is part of the contract, and it can be, then for better or worse, it comes under excatly the same rules concerning a change to the terms of the contract, just like any change to any other term in that contract.

Which leads to some very interesting arguments!!!!!!!!!!!

Note - we are talking about a change to the contract terms here, not a change to the scope of works within the contract.

Andrew, I am definitely with you on this one.

Even if it is a "contract document", what does that mean?

If "contract document" means that each and every detail of it is some sort of a contract promise, and that any departure in any detail is some sort of technical contract breach, then it is ridiculous. A contractor will continuously be in this technical breach right from day 1, because things, hopefully only small things, change.

If not every detail, then saying "contract document" must be accompanied by a very strict specification of which details are the promises.

The idea that the contractor requires the permission of the client to change the program, in any respect at all, could only have been thought up by lawyers. Of course it’s in contracts, but it is ridiculous. The contractor has already assumed the risk of meeting a small number of specific promises, eg the handover date. If the client deprives the contractor of just about the only tool available to manage that risk, ie the program and the ability to plan and then revise the plan as frequently as necessary, the client is the main problem and is acting against his own interests. There may be some things that the contractor cannot change because they are not within his control, such as the dates that the client will supply equipment, and the contractor cannot oblige/force the client to change his dates to match some revision, but that’s all.

Donald,

I absolutly agree with you.

The Contractor needs Client/Consultant approval, in order to revise the time schedule (even in the form of acceleration). The hidden intentions can be shortening Provisional Sum Items, or earlier appointement of nominated subcontractors; in order to plan a Claim.

Moreover, as you said; CONTRACTUALLY, the Master Baseline is considered part of the Contract Documents; hence, alterations require approval of all parties.

In most contracts the contractor would recover prolongation costs but it’s not a given right too so all I’m saying is, don’t automatically expect that you can.

Probably! But not automatically.

A good case to read on this is Glenlion Construction v The Guiness Trust [1988] BLR 39 which deals in some detail the obligation of each party when the contractor shows an early completion date. Summarised below on that point:

Question:
(3) Whether there was an implied term of the contract between the applicant and the respondent that, if and in so far as the programme showed a completion date before the date for completion the employer by himself, his servants or agents should so perform the said agreement as to enable the contractor to carry out the works in accordance with the programme and to complete the works on the said completion date.

HELD:
As to question (3):

No: since it was not suggested by the contractor that he was both entitled and obliged to finish by the earlier completion date and if there was such an implied term it would impose an obligation on the Trust but not on Glenlion.

Per curiam: The unilateral imposition of a different completion would result in the whole balance of the contract being lost. The position would be no different if the obligation imposed on the employer was instead of being absolute, a requirement that meant that the employer should act reasonably.

The contractor does not have the "right" to finish early. A party must not hinder the other and must co-operate so as to allow the other party to comply with his contracrual obligations. If the contractual completion date is later than the contractors early date, the only obligation on the employer is not to hinder the contractor from finishing by the contract date.

The contractor may, subject to the wording of the contract, be able to claim prolongation costs if he can prove he has been kept on site longer by the employer, eg extra works, but the employer is under no obligation whatsoever, to ensure the contractor finishes by his early date. Unless of course, the employer has agreed to the early completion date.

All comes down to what’s been actually agreed between contractor and client - not what the contractor would like to think has been agreed by by simply showing an early date on a programme.

IMO, The construction is an interactive business, but it belongs to the owner at the end. So all contracts were regulating the works for the sake of the owner. Also the construction is not a matter of time only, but it is financial matter first degree. Therefore, the owner always prepare his payments according to the cash flow curve which is based upon the baseline program. So, the modified cash flow which is based on the accelerated works, wouldn’t be obligatory to the owner.
One can say that the final benefit will end to the owner, but it is unsatisfactory, as the works may depend upon another subcontractor, or supplier. consequently, the early completion date won’t help the owner.

On the other hand, the part of additional works, as we all know that the additional work don’t mean additional time. The only measure is the impact of time schedule, which mean that the float is owned to the project itself and doesn’t belong to any party.
To be continued.

James,

As always the parties want all the advantages of a contract, but non of the disadvantages, unfortunately it doesn’t work that way.

What an intriguing problem. I’m going to opinionate here....

imo Andrew makes a good point;

the contractor may have issued an accellerated programme but my guess is that neither he, nor the client, have formally comitted to it.

Ask the contractor if he would accept LDs in the event that he breaches his own accellerated programme (assuming the extras were not issued) but still achieved the baseline. In fact, I wouldn’t be surprised if the contractor hadn’t included such a caveat in his progress submissions to the effect that he’s not bound by the accellerated dates. On the other hand, assuming that the client were to get some benefit from an early completion (early rent etc), would he proactively share this with the contractor?

*chuckles*

In these circumstances, much as I sympathise with the contractor, I would suggest that the baseline schedule be used.

That said, the contractor has probably made an investment in the accelleration in order to free up his team and, if the client has no choice of other contractors, he should tread a little carefully. Afterall, the aim is a finished project not a courtcase! The contractor most likely wants to free up certain key personell and would accept a scheme that got the extra work done while allowing his PM or whoever to move off to the new job.

It’s more often about politics than contracts, really.

Ashraf:

The first thing is to make sure that the programme is actually part of the contract, not just referred to in the contract documents.

Normally the programme isn’t a contract document. Eg, if it was produced after the contract is made - therefore it didn’t exist when the contract came into being so can’t be part of it! If it is, ie was a document in existence when the contract was executed and incorporated into it, then a whole new set of fun and games emerges.

Armando’s along the right lines but two important points:

1. Just showing an early completion on a programme, whethter accepted or not does not automatiaclly entitle the contractor to finish early.

2. It comes down to what was agreed when the contract was made. If it was agreed that the contractor was going to try and finish early, it was a realistic possibility and the employer knew this, then the contractor would be entitled to use the early finish date to argue his case. The emphasis being on it something that was agreed. If it was not agreed, just something the contractor showed on his program and was hoping to do, then tough.

3. Just because the employer accepts a program showing an early finish date does mean anything on it’s own. He’s hardly likely not to accept the program on the basis that the project might finish early is he? And it works both ways - the employer can’t complain and charge LD’s if the the project merely goes beyond the early finish date and not the contractual date, the contractor can’t complain that he’s signed a contract allowing variations, which in the normal course of events he’d probably welcome, and the employer, quite correctly under the contract, orders variations, even if that keeps him on site longer.

Guys,

I seemed to agree with Garry, being the case as an issue of float ownership. In my opinion the float generated during the course of contract execution is not for the sole use of the party generating the float; but as a shared commodity to be reasonably used by either party.

Should the contractor specified in his baseline programme his intention of completing the contract earlier by indicating an early completion milestone dates and accepted by the client, then the contractor may demobilize his resources relative to the accepted early completion dates. In the absence of such, then early demobilization might not be given favorable acceptance by the client and may use his rightful share of the float generated by holding up contractual resources for his intended purpose.


Just an opinion guys!

Regards,

Arman

Correct Andrew, we are all just assuming, giving the general views and we cannot judge to say that the other posts are not valid.

Absolutely agreed if the variation falls within their scope of work and within the capabilities of the contractors as I have mention earlier then the contractor deemed to comply when necessary but negotiation are still within the favour of contractor specially if the client will benefit on it. Please note that “some” condition of contract also states the max limit for variation not more than 10% of the contract scope otherwise will be treated as new contract

oh by the way, the Client has found a clause in his contract, it states that: "All other items not included or not mentioned in the scope of works but are deemed necessary to complete the intent of the job, shall be borne by the Contractor". so he doesn’t have to pay for the additional works as requested...

Andrew,

There is certain limitation on the condition of contract. It is not always in favour of the client. It is also up to the contractor to accept the risk before signing their contract. I know there some condition that make it compulsory to accept variation but up to bearable boundaries and contractor’s capabilities. If the variation is outside that boundary it is contractors decision whether to accept or not the variation.

On the original post “contractor done the acceleration to the intent of relocating their resources on the other project and demobilized earlier than required”. There is no bridge of contract if they finished earlier than required and as a matter a fact it is the client who will benefit on contractor action and more often the contractor received bonuses by doing this.

On this scenario the client issued a variation to take advantage the opportunities. I often engaged on this kind of event and normally negotiated fairly to cover up the intention or the risk of losing another client. It is always contractor’s decision whether to accept the variation which normally ends up to signing another contract with new rates. For manageable changes it is normal to accept the variation for a reason that it is required and related to their scope of work. In this case EOT is not the issue but the value and risk or if they can deliver it on time.

Rodel

Gary,

The acceleration doesn’ have anything to do with the EoT. If the variation caused the contractor to go past the contract completion date, the contractor gets an EoT. If not he maybe entitled to prolongation costs but no EoT.

And the answer to the second point is no th Employer wouldn’t be entitled to LD’s unless the contract unusually allowed him to set another completion date prior to the original completion date.

The only contract that I know of that expressly gusrda the Contractors terminal float is the NEC. But then that would depend on what was shown on the Accepted Programme.

I believed that all views and explanations posted are all valid reasons. The only thing that have been missed is the contractors right to refuse or not accepting the variation if he wanted to. Usually because of good and long relationship between the client and the contractor that needs to maintain that is why variations are normally accepted without hesitation but it also processed on fair negotiations. As stated by Clive, time and cost are being looked at so it will be enough to contractor to cover the losses or his intensions. At the end it is still contractor’s decision to accept the variations. On my point of view, contractors will not live to lost another contract from different clients or suffer more if he will accept variation knowing that he will gained losses more money at the end.

Gary,

Are you in the habit of paying for something you haven’t asked for.

The Contractor made a decision, totaly for his own commercial benefit.

He was doing a contract, in that contract variations were allowed - there was always the risk that extra work might be ordered keeping his plant etc on site longer. It isn’t a rare thing for extra work to happen on a construction contract, if fact it’s almost an inherent certainty.

He had to weigh up the risks and make a decision - he did. This time it hasn’t worked in his favour but that’s the nature of being in business. Construction is all about risk management - you win some, you lose some.

The contractor will have to go and hire some more plant, source some labour from somewhere to start the other contract (or finish this one). Not the end of the world and a situation every contractor faces from time to time.

Andrew,

I think Khawaja is working for the commercial side of the Contractor. If he finish early and makes the Customer happy then he can negotiate for a bonus, but this is the Customer’s kindness (if not considered in the contract).

hi,
why can’t the contractor show this event on the base line program to show its impact on over all completion date.
If it does effect the project completion date ,contractor ,in my opinion has all the right to claim EOT.Though seeing actual staus of the project if however client feels that impact of the event in as built program does not effect the project completion date than eventually contractor has all the right to claim for the acceleration of work ......why ..bcoz the work which was accelerate dby the contractor for his own benifit will go to the owner.
This is a simple case ....but matters how it is presented.

If the Contractor has set his baseline program and have it approved by the Client in the first place, then it is his option to accelerate the works by adding his resources or improve his methodologies to increase his profits and finish the project ahead of schedule.

IMO, additional works requested by the Client that was not considered in the approved baseline schedule, is another story, whether or not it affects the time schedule.

I had an interesting problem like this some years ago
It was a reclamation project that relied heavily on dredgers.
The tender and contract programme clearly identified that the dredger was to carry out the works over a defined period and at the end of the works the dredger was to be demobilised to another project.
The dredger arrived as programmed completed its works as programmed and was demobilised to another location. The employer then issued an instruction for additional dredging works.
After considerable discussion it was agreed that the dredger would be remobilised when it became available and that the costs for remobilisation were to be included in the valuation of the variation. Equally it was agreed that the works could not commence until the dredger could be remobilised and that prolongation costs were required to be paid.
As I said in my previous post, the contractor clearly identified both at the time of tender and at the presentation of the works programme that he had commitments for the dredger

Ashraf
I have added my comment into your mail trust this helps

"In one of the running project, the contractor has accelerated the works him self without any instruction nither from the client nor from the engineer."

I believe the contractor can finish ahead of programme if he so desires without an instruction from the employer representative, NB the client should not be instructing the Contractor
I feel.

"The contractor was planning to complete some particulare activites ahead of time in order to demobilize the resources allocated for these activities from this contract and mobilized in another new contract."

Again the contractor is entitled to do this and hopefully he has made it clear in communications and programmes that this is his intention.

"The weekly up dated progress reports were showing that the contractor actual progress is ahead of program ."

From what you are saying this is a fair and reasonable position to be advising the Client.

"Sudenly the employer has issued some additional works which have no impact on the recent status of the project and can be completed within the original contract period but it will prevent the contractor from demobilizing the resources as he was entrnaly planned.

does the contractor has a right to claim for EOT or not and what are the justifibale reasons."


Please advise me.

This is where it gets interesting,
Firstly can the contractor claim an extension is probably not as important here as whether the contractor is entitled to additional expense and in what quantum for the additional works. My initial take on what you have said is as long as the contractor can complete these additional works within the contract period he may not be able to claim for an extension. However this very much depends on who and how the float is owned. A seperate link deals with this subject very well and I believe a visit to the society of construction law may well be worthwhile to download their excellent document on construction delay protocol.
Notwithstanding this the knub here is the valuation of the additional works, if the contractor could have finished his works early and has showed this in his progress reports and he intended to demobilise early and move to another committed project he would have in my opinion a good chance of placing a premium on these additional works. If I were the contractor and these additional works were likely to cost him a considerable loss I would refuse to accept the instruction unless the valuation terms were explicit ie possibly not using the rates in the bill but new negoitiated rates at this point the client can a)get somebody else to do the work but from what you are saying this may not be possible or b) negotiate a new rate.
However you have provided very limited info on a complex problem, more info will enable more answers to be provided.

Additional works but no impact on current status of proeject - this can happen only in client’s perspective because in theory extra work means extra effort, extra resource and extra time.

Just like Contractor’s hidden agenda, the Client has hidden agenda as well - in this case - he gets aware of the situation when the Contractor is getting ahead of schedule and then thinks he can use this time to get some additional work done.

If the Client has paid the Contractor to accelerate, then he could ask the additional works to be done in that "saved time". Otherwise, extra works mean extra time.