Sunday, January 26, 2014

Delay and Extension of time Application in construction project

Extension of time (E.O.T) is one of the contract clause which is helpful to all contractor to prevent the Liquidated and ascertained damages (L & AD) being imposed to them due to delay. Not to say that with the Extension of Time, contractor do not incurred losses, but in actual fact it did minimised it. With the granted of Extension of time, Contractor still need to extend the work insurances and other overhead cost such as rental of site office,site support staff and ect. but it do stop the L & AD being imposed.

Practical Contract Management

Application of  Extension of time, base on the contract clauses is always base on what does it allow for. Some of the reason that allow are as follows;

1. Delay due to Superintending Officer instruction which was issued under certain clause in the contract
2. Exceptionally increment weather,
3. By force majeure
4. Delay in giving site possession to contractor,
5 Delay by other contractor engaged by employer in executing parts of the work which for part of the contract
6. by the contractor in ability for reason beyond his control and which he could not reasonably have foreseen at the date of closing of tender of his contract,
7. by reason of  any action due to civil disturbance

and any reason allow in the particular contract.

However to make an application,  normally, there are clauses in the contract that contractor need to satisfy or follow. For example, Delay due to Superintending Officer instruction (which was issued not due to contractor negligence), in which a stop work order was issued due to design change for certain works which affecting other works and will resulted in delay of the project completion. This reason, for sure it is not due to contractor negligence. As such contractor is entitle for extension of time and also possibly entitle to claim loss and expense ( if allow in the contract).

Also part and parcel of the application is the supporting document. As contractor, all the significant event shall be properly documented and recorded. For example, some of the following document might be necessary.

1. Master and detailed work program (A work program in which shows the sequence and logic of works) before the event.
2. Revised work program ( Work program which show when will the new expected completion date for the project after incorporated the event)
3. Official instruction from Superintending officer (letter)
4. Notice from contractor with regard to the event which mentioned that the event will caused delay.( if the instruction is going to be issued after or few days before the date of start work for the particular work as planned or schedule in original master work program or original detailed work program)
5. The event chronology
6. Photos (if any)
7. calculation on number of days that contractor entitled for.
8. Site diary 
9. minutes of meeting
10. contract clause which mentioned that contractor are entitle for the Extension of time.

However, contractor need to be aware on the other clauses in the contract in which contractor need to fulfilled. For example; notice to superintending officer shall be submitted with-in 7 days from the date of the event.

Not all contract having the same clauses or requirements, thus. contractor need to know what is allow in their contract. For instant, time frame to submit notice to superintending officer due to an event. Some contract might specified that the notice shall be submitted with in 14 days from the even occurred, some might be 30 days but other might be 7 days. Hence we need to be aware of those clauses.

A Guide to the Project Management Body of Knowledge, Third Edition (PMBOK Guides)
Enterprise Contract Management: A Practical Guide to Successfully Implementing an ECM Solution Practical Contract Management

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