DELAY AND DISRUPTION REVIEWS FOR EMPLOYERS AND CONTRACTORS
In light of the current crisis many of our clients (both Contractors and Employers) are likely to be faced with delays arising from the fallout of Covid-19.
Fairway’s forensic planning team are experts in delay analysis. We have developed an outstanding reputation for providing clear advice and objective opinion as to whether ‘extension of time’ (“EOT”) claims have been submitted appropriately, and/or assessed fairly and reasonably, according to the terms of the particular contract in place.
The purpose of an EOT:
“The benefit to the Contractor of an EOT is to relieve the Contractor of liability for damages for delay (usually liquidated damages or LDs) for any period prior to the extended contract completion date and allows for reprogramming of the works to completion. The benefit of an EOT for the Employer is that it establishes a new contract completion date, prevents time for completion of the works becoming ‘at large’ and allows for coordination/planning of its own activities.” SCL Protocol 2nd edition
In most construction contracts, there is a mechanism in place for extending the time for completion, i.e. an EOT. Successful EOT claims are based on certain entitlement criteria having been met, and they are usually subject to the receipt of a compliant and notified claim document that is accompanied by an appropriate level of evidential back-up.
For an event to give rise to a claim for an extension of time, the event has to create a ‘delay to completion of the works and/or a section as appropriate’ i.e. its ultimate effect is to extend the progress of the critical activities and the contractual date for completing the contract/project.
If the event only delays work on site which, due to the presence of activity time contingency (float), is not likely to (or did not) affect the project completion then this is characterised as a ‘delay to progress’ (otherwise known as disruption) which will not generally give rise to an EOT.
In any event, it is important that a structured and systematic approach be taken to reviewing an extension of time claim in order that the recipient is seen to be acting fairly and reasonably in line with their contractual obligations.
Our reviews would consider the following:
1. Contractual Requirements
- Delay ‘Notification’ requirements: e.g. form, method of delivery and timing; whether a condition precedent; possible effect of non-compliance;
- Provision of particulars and substantiation: e.g. timing and form of initial and periodic updates; possible effect of non-compliance;
- Evidential back-up: (1) ‘Particulars’ e.g. detail of narrative and supporting analysis required, (2) substantiation e.g. type, quality and quantity of records relied upon;
- Method of EOT demonstration required e.g. prospective (forecasted), retrospective or contemporaneous; and
- Review as to whether the above criteria have been met (in terms of the claim submitted).
2. Contract (Baseline) Programme
- Review for compliance to the requirements stated within the contract (e.g. content, format, type and frequency of updates);
- Review for quality, content and suitability for a forensic delay analysis to support an EOT, including, but not limited to:
- Number of activities (detail of the programme);
- Length of the activity durations;
- Logic linking and credibility of an ‘as-planned’ critical path;
- Activity constraints and activity calendars (which can distort the critical path);
- Robustness of the critical path method activity logic linking;
- Resource loading i.e. labour, plant and materials or planned installed quantities; and
- Whether critical design and procurement activities have been adequately planned.
- Review for activity contingency i.e. the presence of:
- Total float & Free float;
- In-built float (float embedded in the activity duration e.g. Time Risk Assessments); and
- Terminal float.
- Review of the ‘Planning Narrative’ (execution strategy, basis and assumptions document) that should be provided with the Contract (Baseline) Programme.
3. Programme Updates – especially those issued before, during & after the delaying event
- Assessment as to whether the items as reviewed in the Contract (Baseline) Programme, as described in item no. 2 above, are also present within the updated progressed programmes;
- Consideration as to whether the updates are reliable records of progress, e.g. if the progress ‘rules of credit’ are robust and auditable;
- Review that any programme alterations are compliant and reasonable, e.g. logic, activity addition/removal; and
- Compare the actual labour, plant and materials being employed (and their productivity) to the Contract (Baseline) Programme – assessment of ‘slow down’ and ‘disruption’.
4. Critical Path Analysis
- Assessment of the ‘as-planned critical path’;
- Review of the ongoing ‘forecasted’ critical path within the (regular) programme updates; and
- Identification of the likely ‘as-built critical path’, if necessary, for completed projects.
5. Prospective and/or Retrospective
- Assessment of delay and EOT either prospectively or retrospectively as required by the contract, and/or the prevailing circumstances and information available.
6. Consideration of Contemporaneous Documentation
- For the EOT analysis, depending on the time available for review, we would consider any appropriate contemporaneous documents for cross checking the veracity of the planned and progressed programme data e.g. Daily Site Diaries, Progress Reports and Meeting Minutes.
7. ‘Cause & Effect’ or ‘Effect & Cause’
- Assessment can be undertaken by assessing either the ‘Cause and Effect’ (identifying and describing an event (a cause) and then seeking to establish its impact (the effect)) or by ‘Effect and Cause’ (identifying critical delay (an effect) and then seeking to establish what might have caused that delay).
- Consideration whether reasonable mitigation of the delay has been adequately demonstrated.
9. Pre-existing Delay, Parallel Delay & Delay Concurrency
- Consideration whether (and, if so, how much) delay was pre-existing prior to a delay event; and
- Review if there had been delay in progress due to other events before, during, after or overlapping with the delaying event being claimed i.e. competing causes of delay.
10. Forms of Contract
- We have experience of undertaking EOT claim analyses under the provisions of most of the major standard forms, such as JCT, FIDIC, NEC, ICE, IChemE and ICC, and also under bespoke forms of contract.
- Assessment of programmes submitted in many planning software packages can be undertaken e.g. Primavera, Asta Powerproject, Microsoft Project, CS Project and Synchro Pro.
We would issue a detailed information required list at the outset, manage information flow and produce a report tailored to the Client’s specific requirements. Our reviews would not include advice on legal or technical matters.
Fairway’s Quantum team are experts in the ascertainment of loss and expense due to delay (prolongation) and/or disruption (loss of productivity) and can work either concurrently with Fairway’s forensic delay analysis team, or after the delay review.
Fairway provides expert support in the delivery and dispute phases of domestic and international construction and engineering projects.