TBH Perth Internal Training Session

Society of Construction Law - Delay and Disruption

Protocol


Karim Motwashelh| DD/MM/YYYY
1. Introduction
2. Programme and records
3. Extension of Time
4. Float
5. Concurrent Delay
6. Mitigation
7. Delay Analysis Methodology
8. Link Between EOT and Compensation
9. Valuation of Variations
10. Global Claims
11. Acceleration
12. Disruption

CONTENTS
The Society of Construction Law SCL is a body of construction professionals
founded in 1983 to promote education, study and research in the field of
construction law , in the UK and overseas

The Society is very internationally minded, and works with construction law
societies in other parts of the world


1. INTRODUCTION
This Protocol has been prepared by the Society of Construction Law for
determining extensions of time and compensation for delay and disruption.
Published on October 16
th
2002, It exists to provide guidance to all parties to the
construction process when dealing with time/delay matters

The object of the Protocol is to provide useful guidance on some of the common
issues that arise on construction contracts, where one party wishes to recover
from the other an extension of time and/or compensation for the additional
time spent and the resources used to complete the project

The purpose of the Protocol is to provide a means by which the parties can
resolve these matters and avoid unnecessary disputes. It is not intended that
the Protocol should be a contract document
1. INTRODUCTION
Issues:

Do we need to have an updated programme?

2. PROGRAMME AND RECORDS

The Protocol recommends that the parties reach an agreement on the
programme, in particular to:

the interaction with the method statement (which describes how the
Contractor intends to construct the works);

the time within which the contractor should submit a draft programme for
acceptance;

Recommends the parties reach a clear agreement on the records to be kept;

a mechanism for obtaining the acceptance of the CA of the draft programme;
and,
the requirements for updating and saving of the accepted programme.

2. PROGRAMME AND RECORDS

Issues:

When is a contractor entitled to an EOT?
What is the procedure for granting EOTs?

3. EXTENSION OF TIME


3.1 Entitlement to EOT

The benefit to the Contractor of EOT is only to relive the Contractor of liability
for damages for delay (usually liquated damages) for any period prior to the
extended contract completion date. The benefit of an EOT for the Employer is
that it establishes a new contract completion date and prevents time for
completion of the works becoming at large

Applications for EOT should be made and dealt with as close in time as
possible to the delay event that gives rise to the application

The contractor will be potentially entitled to an EOT only for Employer Delay
arising from Employer Risk Events (causes of delay in for which the Employer has
assumed risk and responsibility)

The contractor will potentially only be entitled to an EOT for those events in
respect of which employer has assumed risk and responsibility (Employer Risk
Events)
3. EXTENSION OF TIME


3.2 Procedure for granting EOT

The programme should be up to date to the point immediately before the
delay event, and should be the primary tool for determining the amount of the
EOT

The EOT should be assessed on the extent that the delay event affected the
Completion date

The entitlement to an EOT should be based on the contract, not on the
question of whether or not the contractor needs an EOT in order not to be liable
for liquidated damages
3. EXTENSION OF TIME


Issue:

Who owns float?
4. FLOAT


Total Float is described as:

the amount of time by which an activity may be shifted in time without causing
delay to a contract completion date

It is recommended that ownership of float be addressed in the contract

A contractor should not automatically be entitled to an EOT merely because an
employer delay event used up the float for a particular activity.

An employer delay should only result in an EOT if it is predicted to reduce the
total float on the activity paths affected by the delay to below zero, i.e. The
Project/Principal owns the float.

4. FLOAT


Issue:

Where both the Employer and the Contractor are causing delay, does the
Contractor get an extension of time?
5. CONCURRENT DELAY



Contractors concurrent delay should not reduce any EOT due

Delay events which occur sequentially, but the effects of which are concurrent,
should not reduce the amount of an EOT due to the Contractor as a result of
Employer Delay

Any additional costs incurred by the Contractor as a result of concurrent delay
must be separately identified to apportion the additional costs caused by the
Employer Delay and the Contractor Delay. The Contractor is not entitled to
recover additional costs caused by the Contractor himself

Accurate identification of float and concurrency is only possible with the
benefit of a proper programme, properly updated
5. CONCURRENT DELAY



Issue:

To what extent shall the Contractor mitigate the effect of Employer Risk Events
on its works?
6. MITIGATION



The Contractor has a general duty to mitigate the effect on its works of
Employer Risk Events.

Subject to express contract wording or agreement to the contrary, the duty to
mitigate does not extend to requiring the Contractor to add extra resources or
to work outside its planned working hours.

The Contractors duty to mitigate its loss has two aspects first, the
Contractor must take reasonable steps to minimize its loss; and secondly, the
Contracotr must not take unreasonable steps that increase its loss.
6. MITIGATION



Issue:

When should retrospective analysis be used?
When should prospective analysis be used?
7. DELAY ANALYSIS METHODOLOGY




Prospective Analysis

Project is in progress

Known events are assessed on how they impact on the completion date

Estimate of the prospective situation is made and an EOT is considered
7. DELAY ANALYSIS METHODOLOGY




Retrospective Analysis

Project is complete

Events and their consequences have run their course

The impact of events that occurred are considered in hindsight (retrospect) in
order to determine if an EOT should be rewarded
7. DELAY ANALYSIS METHODOLOGY




7. DELAY ANALYSIS METHODOLOGY




Issue:

The Contractor has been granted an EOT, is he entitled automatically to
compensation?
8. LINK BETWEEN EOT AND
COMPENSATION





Entitlement to an EOT does not automatically lead to entitlement to
compensation

Under the common standard form of contract, the Contractor is nearly always
required to claim its entitlement to an EOT under one provision of the contract
and its claim to compensation for the prolongation under another provision

If the method used to asses the amount of EOT is prospective, and the method
used for prolongation compensation is retrospective, then the two assessments
of time may produce different results but this does not necessarily indicate
errors in either methods
8. LINK BETWEEN EOT AND
COMPENSATION





9. VALUATION OF VARIATIONS
Issue:

The Contractor has been issued a Variation, shall he proceed immediately with
the works?
9. VALUATION OF VARIATIONS
Where practicable, the total likely effect of variations should be pre-agreed
between the Employer and the Contractor , to arrive if possible at a fixed price of
a variation, to include not only the direct costs but also the time-related costs,
an agreed EOT and the necessary revision to the programme

It is not good practice to leave to be compensated separately at the end of the
contract the prolongation and disruption element of a number of different
variations as this is likely to result in the Contractor presenting a global claim
10. GLOBAL CLAIMS

Issue:

Should global claims be allowed?
10. GLOBAL CLAIMS

Global claim (in regards to delays):

Where a delay is said to have been caused by multiple causes for which the
employer is responsible, but where the extent of the delay attributable to each
of those causes is not isolated

Global claims are conventionally not allowed

Its flaw is that it is not possible to say what amount of time (or money) flows
from each of the causes

Therefore, the practice of contractors making composite or global claims
without substantiating cause and effect is strongly discouraged

11. ACCELERATION
Issue:

Shall the Employer instruct the Contractor to accelerate the works to reduce
Employer delay?
11. ACCELERATION
The Contractor cannot be instructed to accelerate to reduce Employer Delay,
unless the contract allows for this

Where the contract provides for acceleration, payment for the acceleration
should be based on the terms of the contract

Where the contract does not provide for acceleration but the Contractor and
the Employer agree that accelerative measures should be undertaken, the basis
of payment should be agreed before the acceleration is commenced

Where acceleration is instructed and/or agreed, the Contractor is not entitled
to claim prolongation compensation for the period of Employer Delay avoided by
the acceleration measures
11. ACCELERATION
Where a Contractor accelerates of its own accord, it is not entitled to
compensation

If it accelerates as a result of not receiving an EOT that it considers is due to it,
it is not recommended that a claim for so-called constructive acceleration be
made

Instead, prior to any acceleration measures, steps should be taken by either
party to have the dispute or difference about entitlement to EOT resolved in
accordance with the dispute resolution procedures applicable to the contract
12. DISRUPTION
Issue:

What is disruption?
12. DISRUPTION
Disruption is disturbance, hindrance or interruption to a Contractors normal
working methods, resulting in lower efficiency

Disruption to construction work may lead to late completion of the work, but
not necessarily so. It is possible for work to be disrupted and for the contract still
to finish by the contract completion date

In the above situation, the Contractor will not have a claim for an EOT, but it
may have a claim for the cost of the reduced efficiency of its workforce

The most common causes of disruption are loss of job rhythm (as, premature
moves between activities, out of sequence working and repeat learning cycles),
work area congestion caused by stacking of trades, increase in size of gangs and
increase in length or number of shifts
12. DISRUPTION
The starting point for any disruption analysis is to understand what work was
carried out, when it was carried out and what resources were used. For this
reason, record keeping is just as important for disruption analysis as it is for
delay analysis

The most appropriate way to establish disruption is to apply a technique called
the Measured Mile. This compares the productivity achieved on an un-
impacted part of the contract with that achieved on the impacted part

However, care must be taken to compare like with like, i.e. It would not be
correct to compare work carried out in the learning curve part of an operation
with work executed after that period


THANK YOU!!