YOTEK CONSTRUCTION PLC

DELAY & EXTENTION

OF TIME IN
CONSTRUCTION
PROJECTS
www.habconconsult.com

CLAIM MANAGEMENT

Basics:

Whats a Contract?

A contract is a legally binding agreement between the

parties identified in the agreement to fulfil all the terms and
conditions outlined in the agreement.
Contracts may be both
orally and
in writing.

But a contract is typically enforceable only when all the parties have
signed and agreed to the obligations and entitlements.
Legal
consequence

Duties and Claims of the contractual Partners

against each other
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Claim & Contracts on Site

Claims
Contract

Contract

Claims

Co
nt
ra
ct

Supplier
Co
nt
ra
ct

Contract

Employer

Contractor

Joint
Venture

Contractor

Contractor

Sub-Contractor
Contractor

Engineer

Sub-Contractor

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CONTRACT TIME
In order to have certainty a contract will have a
start and a completion date.
If the Employer does not hand over the site at
the start date then he immediately puts the
Contractor into delay for which he may then
become liable for granting extension of time and
prolongation costs.
By contrast if the project completes late then in
the absence of an extension of time award the
Contractor may be liable for the costs of the
delay.
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BUT WHAT IS THE CONSEQUENCE

TIME AT LARGE
Without a mechanism for extending completion
date, the Contractors obligation would be simply
to complete the works by the contract completion
date.
however If there was any act of prevention by
the Employer or anyone on his behalf, then time
becomes at large, and the Contractor would
have a reasonable period of time for
completing the works.
TIME AT LARGE happens ..
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CONTRACTUAL PROVISIONS RELATED

TO START & COMPLETION
CLAUSE 17. The Works to Be Completed by
the Intended Completion Date
17.1 The Contractor may commence execution
of the Works on the Start Date and shall carry
out the Works in accordance with the
Program submitted by the Contractor, as
updated with the approval of the Engineer, and
complete them by the Intended Completion
Date.
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The Start Date is a date given in DELAY
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Special

CONTRACTUAL PROVISIONS RELATED

TO START & COMPLETION
The Intended Completion Date is the date on
which it is intended that the Contractor shall
complete the Works. The Intended Completion
Date is specified in the Special Conditions of
Contract.
The Intended Completion Date may be
revised only by the Engineer by issuing an
extension of time or an acceleration order.
If sectional completion is specified in the
Special Conditions of Contract, references in the
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General Conditions of Contract to theDELAY
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CONTRACTUAL PROVISIONS RELATED

TO START & COMPLETION
SUBSTENTIAL COMPLETION
What is Substantial completion? Is there any
provision in PPA GCC?
A contractor cannot truly be said to have totally
performed the contract if a single item of work is
missing or defective.
From a practical point of view, however, to delay
the handover of a large building for a trivial
breach would cause enormous inconvenience.
As a result, most building contracts require the
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contractor to bring the works to a DELAY
state

CONTRACTUAL PROVISIONS RELATED

TO START & COMPLETION
SUBSTENTIAL COMPLETION.
There is no specific provision of PPA on
substantial completion. The available
provisions are
CLAUSE 55: COMPLETION
55.1 The Contractor shall request the Engineer to
issue a certificate of Completion of the Works,
and the Engineer will do so upon deciding
that the work is completed.
CLAUSE 33. Identifying Defects
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CLAUSE 35. Correction of Defects ..before

CONTRACTUAL PROVISIONS RELATED

TO START & COMPLETION
CLAUSE 48.2RETENTION
On completion of the whole of the Works, half
the total amount retained shall be repaid to the
Contractor and half when the Defects Liability
Period has passed and the Engineer has certified
that all Defects notified by the Engineer to the
Contractor before the end of this period have
been corrected.
The PPA, 2006 GCC defines Defect as A
Defect is any part of the Works not
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completed in accordance with the Contract.

PROCEDURES OF PROCESSING EOT

Proposed procedures for effective management of
EOT claim include the following steps:1. IDENTIFYING APPLICABLE CONTRACT
PROVISIONS
2. IDENTIFYING THE CAUSE OF THE DELAY AS
EXCUSABLE OR COMPENSABLE
3. NOTICE REQUIREMENTS
4. OBLIGATION TO MITIGATE
5. EVIDENCE OF DELAY
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6. EFFECT ON COMPLETION and PRICE

1. IDENTIFYING APPLICABLE CONTRACT

PROVISIONS
The first step in establishing whether to grant an
extension of time is
To determine whether the contract provides for such an
entitlement, and
The contractor should identify the contract provision
under which the claim is being made.

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GCC PPA 2006 B. Time Control /clause 28 Extension

of the intended completion period
Compensation event occurs or
Variation is issued

That makes impossible for completion

to be achieved by the intended
completion date with out taking steps
to accelerate the remaining works --causes the contractor to incur additional
cost ------ acceleration

Contractor to ask the eng for a decision upon

the effect of the compensation event/variation
+ submitting full supporting information

Eng to decide within 21 days:

1. Whether to extend the intended completion
date
2. By how much to extend the

NB: if contractor failed to give early warning of a delay or failed to cooperate in dealing with a
delay, the delay by this failure shall not be considered in assessing the new intended completion
date
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2. IDENTIFYING THE CAUSE OF THE DELAY AS

EXCUSABLE OR COMPENSABLE
Under PPA Contract, according to clause 28.1, the
Contractor is entitled to an extension
-if a Compensation Event occurs or a Variation is
issued
-which makes it impossible for Completion to be
achieved by the Intended Completion Date
-without the Contractor taking steps to accelerate the
remaining work, which would cause the Contractor to
incur additional cost.
The contractor must also provide proof of the events
that were allegedly responsible for the delay.
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GCC PPA 2006 D. Cost Control /clause 44 Compensation

events contd

The following are compensation events:

1. The employer does not give access to a part of the site
by the site possession date stated in the contractors approved work program.
2. The employer modifies the schedule of other contractors
in a way that affects the work of the contractor under the
contract.
3. The engineer orders a delay or does not issue drawings,
specifications, or instructions required for execution of
the works on time.
4. The engineer instructs the contractor to uncover or to
carry out additional tests upon work which is found to
have no effects
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GCC PPA 2006 D. Cost Control /clause 44 Compensation

events contd

5. The engineer unreasonably does not approve a

subcontract to be let.
6. Ground conditions are substantially more adverse than
could reasonably have been assumed before issuance of
the Letter of Acceptance: from the information issued to
bidders (including the site investigation reports), from
information available publicly, and from a visual
inspection of the site.
7. The engineer gives an instruction for dealing with an
unforeseen condition, caused by the employer, or
additional work required for safety or other reasons.
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GCC PPA 2006 D. Cost Control /clause 44 Compensation

events

8.

Other contractors, public authorities, utilities, or

the employer do not work within the dates and
other constraints stated in the contract, and they
cause delay or extra cost to the contractor.
9. The advance payment is delayed.
10. The effects on the contractor of any of the
employers risks.
11. The engineer unreasonably delays issuing a
certificate of completion.
12. other compensation events described in the SCC or
determined by the engineer
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GCC PPA 2006 A. General /clause 14 site investigation reports

& clause 20 - discoveries
.
Clause 14
site
investigation
reports

Clause 20 discoveries

9/23/16

In preparing the Bid, the contractor shall rely on

any Site Investigation Reports referred to in the
Special Conditions of Contract, supplemented by
any information available to the Bidder

Anything of historical, other interest, of significant

value unexpectedly discovered on the Site shall be the
property of the Employer.
The Contractor shall notify the Engineer of such
discoveries and carry out the Engineers instructions for
dealing with them.
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GCC PPA 2006 A. General /clause 21 possession of site

Employer to give
possession of site as
per the approved
program

Cost + time
(eng. to determine by
how much to increase
the contract price and by
how much the intended
completion date has to
be extended)

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If possession of part of the

site is not given by the
date in the approved
program

Compensation event!!!

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GCC PPA 2006 C. Quality Control /clause 34

1.
2.

The engineer shall check the contractors work and notify the contractor of any defects
that are found.
The engineer may instruct the contractor to search for a defect and to uncover and test any
work that the engineer considers may have a eefect.
If the test is not specifies in the
contract, and if the test shows
that it doesnt have any defect

If the contractor has not corrected

Any defect within the time specified
By the engineers notice

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Compensation event

1. Engineer will assess the cost of having

the defects corrected
2. The contractor will pay this amount

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EFFECT OF VARIATION ON COMPLETION TIME

Variation is defined as an instruction given

by the Engineer, which varies the Works. Are
u satisfied?
PPA 2011 & FIDIC Elaborates it more as
a) Increase, decrease or omit any part of the work under the contract,
b) Change the levels, lines, positions or dimensions of any part of the work
under the contract,
c) Change the character or quality of any material or work under the contract,
d) Execute additional work,
e) Change the program or order of the work under the contract,
f) Amend previously approved drawings,
g) Execute any part of the work under the contract outside the hours allowed
Care on variation beyond scope .CARDINAL C HANGE
HOW DO YOU ASCERTAIN WHETHER A CHANGE IS WITH IN THE SCOPE
OF A CONTRACT?
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EFFECT OF VARIATION ON COMPLETION TIME

There is a malpractice of Engineers issuing

additional time for executing the variation work
without the request of the contractor.
The practice of allocating the additional time is
through proportioning the amount of variation to
the contract amount and multiplying it with the
original contract time.
DO YOU AGREE WITH THIS METHOD OF
ALLOCATING TIME?
IF NOT WHAT DO YOU SUGGEST?
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EFFECT OF VARIATION ON COMPLETION TIME ..

The effect of issued variation orders on the

program of the work must be demonstrated by
the contractor on his claim for extension of time
that is caused by the variation.
The effect of variation on completion of the work
has no any relation with its monetary amount,
instead it must be analyzed through its effect on
the critical path of the work program.
Some instructions or variations may not have
monetary value but they may affect the
productivity and efficiency of the contractor
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through disrupting the order of performance

DISRUPTION OF ORDERLY PERFORMANCE

Disruption (as distinct from delay) is

disturbance, hindrance or interruption to a
Contractors normal working methods,
resulting in lower efficiency. If caused by the
Employer, it may give rise to a right to
compensation either under the contract or as
a breach of contract. (SCL)
Delay and disruption are two separate things.
They have their normal everydaymeanings.
Delay is lateness (eg delayed completion equals
late completion).
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Disruption is loss of productivity, disturbance,

3. NOTICE REQUIREMENTS

PPA condition of contract includes notice

requirements that must be met to establish an
entitlement to an extension of time. Clause 28.2
states that:... If the Contractor has failed to give early
warning of a delay or has failed to cooperate in
dealing with a delay, the delay by this failure shall
not be considered in assessing the new Intended
Completion Date.
Clause 32.1 also states necessity of Early
Warning as follows:CLAIMat
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The Contractor shall warn the Engineer
the

PURPOSE OF CLAIM NOTICE

Contractual terms require a contractor to give
prompt notice of delay serve a valuable purpose;
It enables matters to be investigated while they
are still current,
Furthermore, it gives the employer the
opportunity to withdraw Instructions when the
financial consequences become apparent
non compliance with such claim requirements
leads to the lapse of the claim, even though the
Employer is obviously aware of the fact that he
has caused disruption and additional cost.
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One reason for time bars and other procedural

4. OBLIGATION TO MITIGATE

A contractor has an obligation to mitigate

delays and any related costs. In PPA Contract,
this obligation is explicit.
Clause 32.2 requires , as a condition for an
entitlement to an extension of time, that The
Contractor shall cooperate with the Engineer
in making and considering proposals for how
the effect of such an event or circumstance
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5. EVIDENCE OF DELAY

A delay to a contract activity will not necessarily

cause delay to completion of the whole of the
Works or a Milestone if the affected activity is not
on the critical path.
Clause 28.2 of PPA states:The Engineer shall decide whether and by how
much to extend the Intended Completion Date
within 21 days of the Contractor asking the
Engineer for a decision upon the effect of a
Compensation Event or Variation and
submitting full supporting information.
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Contractors must be required DELAY
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DOCUMENTATION REQUIREMENTS
all documentation requirements have to be
followed by the contractor.
General rule: Document all deviations from the
plan!
Keep contemporary records if required by the
Contract
Delays
Increased costs
Unforeseen conditions and events
Oral instructions
Number and location of the work-force
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WHAT ADDITIONAL SET OF RECORDS

GLOBAL CLAIM
Global Claims are claims that show no
connection between the matters complained of
and their consequences in terms of time and
money are not spelled out.
The claimant must be specific as to the delay it
alleges to have been caused by a particular
event.
This requires proper presentation of a claim
based on contemporaneous records in order to
show a discernible link between the relevant
event and the delay.
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6. EFFECT ON COMPLETION

PPA condition of Contract requires the

Contractor to demonstrate that;
'....if a Compensation Event occurs or a Variation
is issued which makes it impossible for
Completion to be achieved by the Intended
Completion Date without the Contractor
taking steps to accelerate the remaining work,
which would cause the Contractor to incur
additional cost.'(Clause 28.1)
It is also stated under clause 32.1 that:'....The Engineer may require the Contractor to
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6. EFFECT ON COMPLETION contd

The assessment must be based on the merits of

the claim, within the terms of the contract,.
Where a contractors construction program
includes FLOAT, this should not be taken into
account in determining the extension of time
granted.
The extension of time granted is to be related to
the period over which critical activities are
delayed and should not be reduced because
completion could still be achieved by reducing
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the float in the contractors program. DELAY

PRESENTATION OF CLAIMS
Claims can be presented in a variety of ways, the
following outline suggests the general approach
for claim submission:
Summary of the claim briefly described at the
beginning of the claim presentation
It is quite common to start with a short
introduction giving an outline of the claim and to
substantiate the claim later.
substantiated not only the factual background
but also the legal background of the claim
state the relevant clauses in a logical context
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and to give further support on legal issues,

PRESENTATION OF CLAIMS
The claim should be presented in a clear and
logical manner, preferably including the following:
An introduction providing details of the parties involved in the claim
and all relevant dates and information;
A description of the claim events as they occurred and their effects;
An analysis of the facts showing the grounds upon which the claim
was based, with reference to the relevant provisions and clauses of
the contract;
A description and reference to the steps already taken by the
contractor, such as notices given;
A calculation of the cost impact based on a breakdown of actual
direct and indirect costs incurred; and
A determination of the claimed extension of time based on an
analysis of critical and noncritical delays;
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