Time and Contract Management

Programs
The contractors program needs to incorporate the programs of subcontractors. Ideally the subcontractors have input into the contractors program. Programs also need to include activities such as design, documentation, client/owner approvals and off-site matters. The owner can use the program for monitoring the contractors performance, and assessing claims for extensions of time. If a program is accepted as part of the tender then strictly speaking it forms part of the contract and any change from it is a change in the contract. Problems programs can cause for the owner are: a contractor may devise a program to develop claims against the owner, the times may not be the same as elsewhere in the contract documents, and an accelerated program increases likely-hood of delay claims. Programs allow the contractor to do the work at his preferred sequencing and pace, but failure to meet the program may be a breach of contract. Timetable for information Information to be supplied needs a timetable. The contractors must supply: Designs Documents Materials The Principal must supply Drawings Instructions Nominations Approvals Possession of parts of the site This timetable may be part of the tender documents, or by agreement between the owner and contractor during post-tender negotiations. Time Contingency A contractors program may include a time contingency. General feeling is that this is for the benefit of the contractor and not to be used by the owner. Contactors are obligated to minimise the effects of delays. However, this does not include significant recasting of operations. Extensions of time are granted where the owner causes a delay, or a delay stipulated in the contract occurs, where the delay is to a critical activity. The EOT is based on the expected change in the date for practical completion. (Thus noncritical activities may be critical due to resource constraints.)

Project Planning and Control

Lecture 12

Page 1

As Executed Programs
As-executed (as-built, as-constructed, as-implemented, factual) programs indicate changes to the original program including delays and variations, and agreed changes, crossreferenced to files on this information. The concept is similar to an as-built drawing.

Work changes and delays can be argued on a more sound footing using a network as a basis. This enables responsibilities to be correctly ascertained for critical delays. The factual network should be supported with site records. Maintenance of the program rests with the contractor. Subcontractors may have a say in where they fit in or may be advised when to appear. Definiteness in these times helps subcontractors to organise themselves and promotes harmony.

Delays
If a delay is caused by the owner, then the contractor is entitled to an extension of time and full costs. If a delay is caused by the contractor, then the contractor is not entitled to an extension of time or costs. If a delay is not caused by the owner or contractor (neutral delay), then the contractor is commonly entitled to an extension of time but not costs. This last may depend on the contract where specific clauses may say who is responsible for what. Time delay claims require substantiation. A network is the most straightforward way to do this. Float in the contractors program is generally accepted to belong to the contractor. Claims for EOTs generally are required to be made within 28 days. Responses are also required in 28 days. Individual clauses in contracts may change this. Timely reaction to delays enables alternative approaches to overcoming the delay to be considered.

Project Planning and Control

Lecture 12

Page 2

Considerations for Extensions of Time (i) (ii) (iii) (iv) look at the effect of surrounding circumstances if the sole cause is ordering of work then the EOT should be agreed on at the time of ordering the work if the duration is uncertain then factors affecting the EOT must be established and the extension given within a reasonable time of this. Sometimes it is difficult to determine the extension. It may be desirable to leave a final decision until practical completion. The contractor should still be informed and consequences agreed if possible.

A contractor may have a right to claim acceleration if an EOT has not been granted if he can show that: (a) (b) (c) (d) (e) There was a delay that entitles the contractor to an EOT The contractor applied for the extension The extension was refused The contractor was ordered to keep to schedule The contractor has evidence of acceleration

Costs
Wherever possible the contractor should take steps to mitigate delay costs. Delay costs paid may be actual costs or a pre arranged amount. Actual costs require substantiation. Costs can include on site overheads but not offsite overheads or profit. If there is a breach of contract then damages apply. Damages can include opportunity costs, profits and offsite overheads.

Disruption
Disruptions can be handled similarly to delays.

Progress
Late completion is commonly remedied by liquidated damages. This should be a reasonable estimate of the loss incurred by the owner due to not having possession of the completed works. Remedies may also be specified for contractors failing to proceed with due expedition Acceleration may be instigated by the contractor or requested by the owner. If requested by the owner then reimbursement of additional costs is expected. If instigated by the contractor then the owners approval is required.

Reference
Hinds, K. J. (1989), Claims for Extension of Time, Delay costs and Assessment of Liquidated Damages, Building Construction and Law, December, pp 246-269.

Project Planning and Control

Lecture 12

Page 3