Very few construction projects seem to progress without at least one general disruption or delay time impact that affects schedule milestones, and requires trades to accelerate in order to keep to schedule, or at least minimize – mitigate – or recover impacts. In most cases, total recovery is not possible. Float erosion is water over the dam. Trades will tender their extension of time claims (EOTs) to give themselves more room to operate, and to avoid being penalized for late performance.
With an approved extension of time, trades can decompress site logistics and sequence of installations, minimizing compromise of their risk position, as well as other trades they interact with. However, compensable extension of time claims are a rare circumstance – seldom awarded without tedious negotiation and litigation. Ownership is traditionally parsimonious in awarding extension of time claims – compensable or not. Contractors understand this, which is the reason few bother to make a claim until it becomes egregious.
Most compensable extension of time litigation results in no award owing to failure of the plaintiff, or trades, to substantiate or make coherent arguments that bolster their arguments. For this reason, most delays and disruptions are absorbed by the trades who realize the futility of a potential EOT.
It’s of primary importance that a trade understands the nature of his EOT. EOTs are representations of either delay or disruption impacts. A delay claim is easier to represent, as it will have a finite start and end period where there is no activity. A disruption claim is trickier, because impacts are variable, and more difficult to quantify. Disruption requires comparing baseline production with actual production – seldom a simple equation.
Ownership is not responsible for Acts of God, nor for cross-trade impact (they can back charge each other.) Nor does ownership control the flow of work and interactions of trades. The trades are expected to congeal and coordinate the work, along with the GC’s superintendent. This, an earthquake or flood impact does not fault ownership or anyone else. The shortlist of acceptable extension of time claims is offered below:
Variations instructed by the contract administrator on behalf of the client
Failure of the client or their consultants to provide information
Delay on the part of a nominated sub-contractor
A delay in giving the contractor possession of the site.
Force majeure (such as an epidemic or an ‘act of God‘).
Loss from a specified peril such as flood.
Changes in statutory requirements.
Delays in receiving permissions that the contractor has taken reasonable steps to avoid
(https://www.designingbuildings.co.uk/wiki/Extension_of_time_EOT_in_construction_contracts)
I can relate from experience, that with little effort, most EOTs that I have been presented for evaluation can be summarily dismissed for failure to demonstrate cause and effect, and inability to make coherent calculations. Claims will be presented with unsubstantiated calculations that only serve to elevate the likelihood of swift rejection. Those who come to their conclusions honestly will fare better – they might get a time extension, but not the overhead and general conditions they feel entitled to.
Thus, challenges that preclude such arguments are by and large the fault of the trades making the claim, and will inform as to how EOT claims routinely fail. I discuss below, some of the obstacles to trades making a compelling EOT claim – with or without compensation, as well as strategies for success:
Failing to represent quantifiable impact of cost
In order to demonstrate cost impacts, there needs to be an agreed upon production baseline, or cost basis with which to compare with. For example, a tradesman may say that he allotted five-days for an activity, but through no fault of his own, was impacted by another five-days. In theory, it may be a logical argument, yet in practice – it is not so simple. For instance, suppose – either by design or ignorance – the tradesman had grossly understated the expected duration to begin with? The impetus for delay and disruption must also be considered before any calculation can be made.
Failure to represent time impacts in a valid schedule
In order to represent schedule delay, it is necessary to have both an (agreed) baseline schedule, and an agreed forward-pass schedule that would include progress to date. Most trades do not maintain a schedule and are therefore hard-put to generate a comparison or impact schedule. In that event, they must rely upon the general contractor’s schedule – typically the ‘contract schedule. If they do not possess a native P6 or other file, they will be forced to recreate the schedule from scratch – with dubious result.
Failure to prosecute the extension of time under the contract
Most acceptable forms of construction agreements have a clause(s) intended to regulate and provide a scheme for delays and disruption. These include both penalties and/or liquidated damages, and EOT clauses. It is important that a trade follows the guidelines of filing his extension of time – especially timely issuance. One of the easiest to adhere to – timely issuance of an EOT, happens to be the prevailing rejection of the majority of EOT claims: claims are dismissed on technicality before they are even considered.
Herewith, strategies to improve the rate of being awarded an EOT claim:
Understand the risks of your projects: where are you most vulnerable for time impacts. Monitor these risks closely, and on a regular basis.
Tender your EOT as early as possible. Initially, it need not be quantified, and may not be quantifiable until later. That is an acceptable position. At some point, when a finite delay can be calculated or assessed, the EOT must be quantified. First, the number of delayed work-days must be known. If the EOT claim includes a claim for compensation, that calculation may be done sometime after the delay terminates.
For example, an excavation is hindered by a surprise encumbrance – a live utility pipe – requiring immediate cessation of work in that area. The ensuing process should follow:
- Advise in writing of the encumbrance
- Issue an RFI (this puts the ball in ownership’s court)
- Advise if the encumbrance is known to immediately impact the schedule or scope of work
- If a time impact is immediate, or inevitable, state how long, if known, and state when the impact begins. The termination of an impact can be trickier to gauge then the beginning.
Any project with delay or disruption risk should be monitored with an in-house or ‘shadow’ schedule that uses the contract schedule logic. Barring that, a contractor can recreate an impact schedule using the contract schedule milestones and constraints, with a filter for his trade, and any trades that impact his work. As a delay expert, I have successfully represented delays using that technique in several litigations. Such reporting can be done efficiently by contractors who keep consistent and accurate records.
