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A helping hand for dealing with extensions of time and payment

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LEGAL MATTERS

One of the more difficult parts of an architect's job as contract administrator is to deal with claims for extensions of time and extra payment for delay and disruption.

The basic theory sounds easy enough. If the employer holds up the contractor for two weeks, which keeps the contractor on site and delays completion by two weeks, you grant a two week extension and authorise payment of two weeks' site costs. Simple.

In real life it is seldom so straightforward. The contractor says he was held up for two weeks, but you are sceptical, suspecting that the delay had more to do with their own shortcomings.

And irrespective of the employer's action, there was other work that the contractor could usefully have got on with to save time. So the facts are muddy. And what if there was no agreed programme - how then can you judge the effect of any particular delaying event?

What is worse, even the principles of the exercise can be controversial. On what principles do you deal with an extension of time or the compensation for concurrent delay, where the same delay is caused by the fault both of the employer and of the contractor? And to what extent do you take account of the contractor's planned float? The contractor says they put in the float to allow for their own slippage on their planned activity durations, not to allow for delays caused by the employer.

The good news is that fresh help is at hand.

Shortly before Christmas, the Society of Construction Law (SCL) published for consultation a protocol for Determining Extensions of Time and Compensation for Delay and Disruption . It is a considerable achievement. Its purpose is to provide guidance to all parties to the construction process when dealing with matters of time and delay. It deals head on with the controversial issues: who owns the float; what happens where there is concurrent delay; whether the contractor gets compensation when the float is used up but completion is not delayed; whether it is legitimate to use formulae for recovery of overheads;

and so on.

These are the sorts of issues that crop up in practice all the time, but which remain controversial because the standard forms of contract do not explicitly give the answers.People in the construction industry hold widely differing views about some of these issues.You may be wondering how the SCL drafting committee managed to solve them, if the standard forms do not adequately deal with them. What they have done is to give what they think is the right answer, or, where there is more than one possible right answer, they have opted for a compromise solution.

The protocol is a useful document. Any architect dealing with a time and delay claim is going to find it helpful. It is particularly good at explaining the concepts and clearing up some common misconceptions. If you are confused by talk of 'hammocks' and 'negative total float', or forget the difference between 'windows analysis' and 'collapsed asbuilt', the protocol will set you straight. But there are two endemic problems which will remain with us and which it cannot deal with.

One is the sheer variety of contract provisions. Standard forms vary one from another. Sometimes the parties include their own amendments. One-off contracts may say anything. In every delay claim, the legal entitlements depend upon the terms of the contract. The protocol cannot do more than give general guidance which will apply in many cases, but not all. The drafters recognise this. They suggest that to reduce uncertainty, the parties to a particular project could expressly agree that the protocol be used as an aid to interpretation of their contract.

The other problem that will stay with us is the frequent inadequacy of information for determining the true entitlement. Record-keeping is not a priority for contractors who want to get a job built.To keep the quality of records suggested by the protocol will cost money. It may prove worthwhile if there is a dispute, but that does not mean that contractors will do it.

To obtain a copy of the protocol, visit www.

eotprotocol. com

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