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Should client approve recovery schedule/mitigation plan

12 replies [Last post]
Thu, 2009-04-09 16:18
deys nassah
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Hi Guys!
What are your views on whether the Client or his PMC/Engineer should approve a contractor’s recovery schedule and/or mitigation plan?

Secondly, when is a recovery schedule (RS) not a recovery schedule? - Is contractor obliged to issue an RS which mitigates all incumbent delays on the project.

Rgds
Deys
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Replies

Wed, 2009-04-15 05:05
#1
Nestor Principe
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Hi R,

Good luck to your brilliant ideas.

Cheers,
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Wed, 2009-04-15 00:54
#2
R. Catalan
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Nestor,

As I’ve mentioned earlier, one is when the Client has decided to take the agrument to court. There are costs to the Contractor to pay for claim analysis, mediation, lawyers, etc.

Also, keeping key staffs for extended duration in one project affects the business strategy of the Contractor company-wide. This affects their bidding strategy, allocation of resources to other new or near critical projects, and the list goes on.

When a Contractor is awarded an EOT and prolongation costs, it doesn’t mean that its another profit-taking for them. It could possibly the other way around if you consider other factors of the company’s business strategy.

Best regards,
R. Catalan
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Tue, 2009-04-14 09:18
#3
Nestor Principe
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Hi R,

I respect your opinion but for the sake of discussion:

"Both the Client and the Contractor bear the consequences of the delay" if the delay is caused by the Client why the contractor will bear the consequences?

Best Regards,
Nestor
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Tue, 2009-04-14 01:28
#4
R. Catalan
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Nestor,

Definitely it’s not fair to the Contractor and there are clauses in the contract that guides to resolve this issue.

Project delays favors no one. Both the Client and the Contractor bear the consequences of the delay. Hence, delays should be communicated urgently to determine impacts, limit its causes, and determinations agreed by all party to avoid dispute resolution by court. The costs of going to court will not bring back the project time that was lost.

Best regards,
R. Catalan
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Mon, 2009-04-13 12:39
#5
Samer Zawaydeh
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Dear Nestor,

At any point in time, you can say that you have a dispute about the instructions or determination of the Engineer, and you will have the chance for your case to be evaluated with experts in their field. Of course, you will pay money and spend time on this issue.

Best Regards,

Samer
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Mon, 2009-04-13 08:36
#6
Nestor Principe
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Hi R,

Let’s get it to the worst scenario, say the Contractor and the Engineer can’t reach any agreement. The Engineer issued instruction to contractor to submit recovery schedule, no eot granted and no mitigation cost paid. Is it fair to contractor?

Best Regards,
Nestor
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Mon, 2009-04-13 07:02
#7
R. Catalan
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Nestor,

If there’s a delay caused by Client/Engineer, the Contractor shall provide a prompt and suitable notice to the Client/Engineer in accordance with Clause 20.1

The Engineer shall make fair determinations as per Clause 3.5. In such point the Engineer found that the delay can be recovered thru a schedule revision, hence, the Engineer shall consult each party to reach an agreement on his proposal. If the Contractor agrees, then thru Engineer’s Instruction he will be oblidge to submit the said schedule.

Best regards,
R. Catalan
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Mon, 2009-04-13 05:36
#8
Nestor Principe
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Hi Samer,

"The clause states that the Program must be approved by the Engineer". Are you refering to baseline programme or the recovery programme?

Hi R,

"Is contractor obliged to issue an RS which mitigates all incumbent delays on the project.

- Yes, clause 8.3 if using FIDIC 99".

Even the delays are caused by the Client/Engineer?

Cheers,
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Sun, 2009-04-12 10:14
#9
Sherif Fam
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Deys,

As Samer mentioned; it depends on the Contract Conditions.

I just want to point out that there is a difference between "Recovery Schedule" and "Revised Schedule".

A "Recovery Schedule" is used when the Contractor is asked to demonstrate how he is going to recover the delays and complete the job within the Contractual Period. I usually prefer "Recovery Strategy" rather than "Recovery Schedule"; as using faster method statements; additional shift; overlapping activities; etc. (crashing and/or fast tracking). However the schedule is the same; and the delays are reduced gradually. In most forms of contracts; the Consultant / Client are not obliged to approve the recovery strategy/schedule. However; if they are not convinced about it; they can alert the contractor that these measures will not allow him to complete the job on time; and either give notice for Contract Termination if no progress enhancements are achieved; or wait till the expiry of the Contractual Period in order to apply the Liquidated Damages or the LADs if applicable.


A "Revised Schedule" is used when there is approved extension of time; significant changes from the Contractor in the method of construction where the original schedule becomes not applicable anymore; introducing new Contractual Milestone (which will be a variation), etc. Here; the Client /Consultant have to approve the schedule (as they will be contractually affected by it; for issues such as approving submittals and providing design details, etc.) The Revised Schedule becomes the new project Baseline Schedule; and used for any claims and delays analysis for events occurring after its approval. In NEC3 Contracts; usually "Revised Schedule" is prepared each month; and claims / delays / etc. are sorted out on monthly basis (or on agreed regular time intervals); rather than keeping them pending till the project completion.

Regards,

Sherif
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Sun, 2009-04-12 02:40
#10
R. Catalan
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Deys,

What are your views on whether the Client or his PMC/Engineer should approve a contractor’s recovery schedule and/or mitigation plan?

- I agree with Samer (Post #3), if FIDIC 99 applies you need to read clause 8.3

Secondly, when is a recovery schedule (RS) not a recovery schedule?

- If it doesn’t suggests recovering lost time.


Is contractor obliged to issue an RS which mitigates all incumbent delays on the project.

- Yes, clause 8.3 if using FIDIC 99

Best regards,
R. Catalan
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Fri, 2009-04-10 01:40
#11
Samer Zawaydeh
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Dear Deys,

You will need to read your Conditions of Contract well before we start answering these questions. If the Contract is silent about them and the General Conditions of Contract under FIDIC apply, then you will need to read clause 8.3 about the Program of Works.

The clause states that the Program must be approved by the Engineer. And whenever the Program does not represent the actual progress at site, then it should be revised by the Contractor and approved again by the Engineer.

If you need to issue a Time Variation because of the Recovery Schedule, then it must be recommended by the Engineer and Approved by the Owner.

With kind regards,

Samer
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Thu, 2009-04-09 19:00
#12
Nestor Principe
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"What are your views on whether the Client or his PMC/Engineer should approve a contractor’s recovery schedule and/or mitigation plan?"
If the intention of the contractor is to recover the cost of the mitigation plan, yes the RS must be approved by the Engineer. While the contractor has obligation to implement mitigation that will not involve additonal cost.

"Secondly, when is a recovery schedule (RS) not a recovery schedule?"
In my opinion, recovery schedule is not only meant to recover time. Preventing further delay is also recovery schedule. If a recovery schedule cannot recover time or prevent further delay will you call it recovery schedule?

"Is contractor obliged to issue an RS which mitigates all incumbent delays on the project."
If all the delay is caused by the contractor, yes.
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