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Early Completion Bonuses and Ownership of Float

6 replies [Last post]
Thu, 2008-11-20 03:06
Brennan Westworth
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We have a contract where there is a bonus for early completion but it isnt specific about ownership of float.

My interpretation is that becasue of the early completion bonus, the contractor owns the float because it is worth money (yes I am on the contractor’s team:).

Further to this the contractor should still be entitled to early completion bonus if we can demonstrate that if not for the excusable delays we would have completed early.

Can anyone point me to any cases (preferably in Australia) where a precedent has been set on this issue?
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Replies

Fri, 2008-12-19 08:13
#1
Samer Zawaydeh
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Groups: Civil Engineering, Regional Representatives
Dear Brennen,

The most important thing is to make sure that your client is willing to pay the Bonus before you set out to prove that you are entitled to it.

Usually, the Bonus would go to the people working on the project. If the client is not willing to pay it after the work is done, and you have to prepare your claim folder and prove it, the team would have been disolved and scattered before the payment is due. This defeats the purpose of the Bonus.

Best,

Samer
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Wed, 2008-11-26 04:23
#2
Neil Tait
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If an early completion bonus exists I’d suggest that your programme as submitted under the contract should target and demonstrate a feasible plan to achieve the early bonus date. If such a programme is in place then you have a good basis to demonstrate that you were targeting the bonus date and would have achieved it, but for ...

If critically delayed by the client then, subject to the contract terms, you would be able to demonstrate the impact of the delay on the bonus date and could proceed with a cost claim for the lost bonus that would be difficualt to dispute on the clients part. Depending upon where the client delay takes you relative to the contract completion date the cost claim would be retricted in terms of prolongation.

If the programme you submitted under the contract targets the contract completion date then I’d suggest that you still have a case but a high chance of losing it as you have failed to demonstrate what was planned (& required - resource / expenditure) to enable your achievement of the early date. The client will thus be able to muddy the water with counter claims of progress delays (against the early date), lack of planning / resource allocation towards bonus date achievement, ...

As usual, limited facts are provided and as we dig deeper the story may change. In conclusion, to support your claim you need to demonstrate that you were targeting the earlier date and would have achieved it but for...
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Sat, 2008-11-22 05:02
#3
Samer Zawaydeh
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Dear Brennan,

Can you be more specific about the Bonus criteria? The clause for this agreement should be explain to us more in order to assist you.

Thank you,

Samer
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Thu, 2008-11-20 23:30
#4
Nestor Principe
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I do believe programmes are not contract binding except the key dates and/or completion dates. If this argument is correct, can we say the floats are irrelevant in this case.

Regards,
Nestor
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Thu, 2008-11-20 19:52
#5
Trevor Rabey
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What you are entitled to depends on the specifics of the terms of the agreement, not your self-interested opinion, or anyone else’s. Since you are necessarily biased, your opinion has less validity and credibility than it might have.

Float is worth money even if there is no early completion bonus. It represents the only thing that the contractor has at his disposal which he can use to manage the inevitable uncertainty and risks which will arise.

It is better not to get involved in an argument about float ownership because it is nonsense.

If the terms say that you get the bonus if you complete by a certain date and it doesn’t say anything else, and you don’t finish by that date, then tough.

No court will readily read terms into a contract that aren’t there, usually accepting that what the parties have written down is their intention.

But if the bonus is attached to a date that can be varied under specific circumstances, such as EOT, then better for you.
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Thu, 2008-11-20 03:20
#6
Ferdinand Fincale...
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Hello Brennan,

I am likewise with the contractor side. In our current project, we categorically specified to the client that the float in our work program is for our sole consumption. Of course, it has been contested by them saying that it should be for the benefit of the entire project. Anyway, until now there is no definite resolution yet as our specification still contains such claim.

Having raised that query, I myself will be waiting for the opinion of the experts in this great community.

Thanks.

Ferdinand
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