MORE
ON THE DELAY AND DISRUPTION PROTOCOL
In January, we looked at the basics of
the “Delay and Disruption Protocol”,
released by the Society of Construction Law.
In this article, we examine some
of the recommendations in more detail.
The writer’s comments are given in parentheses.
Programme
The protocol recommends initial
agreement of a master programme, updated on a regular basis and as delay events
occur. For most projects, this should
be a critical path network, with the
parties using the same software. This
enables monitoring, updating and agreement on an electronic basis. The programme should show information
requirements and other critical dependencies, and be linked to a comprehensive method statement. The aim is a programme
which always reflects progress and the
current intentions of the project team, and shows how the completion date is to
be met. This provides a management tool
for analysing delays and agreeing any
extensions of time as the works proceed. (It
is very common for programmes to be superseded by events, with the job left in
a state of limbo. This is why so many
subcontractors are left in a position of “ad hoc” working, and claims for disruption costs. The
protocol’s attempt to reverse this
trend is in everybody’s interests.
However, this all presumes that every contractor has the necessary
planning resources).
Programme float
General
float in the programme is for
the benefit of the project , rather than “owned by the contractor”. A contractor wishing to allow for the possibility of his own
delays, should clearly identify such
allowances on his original programme, labelled as “Contingency for …..” against
specific activities. (Vague dotted
lines will not suffice. Clearly, any contractor who wishes to insert float for
his own use must take pains to show precisely when and where this applies, and
denote his claim to ownership, perhaps in an explanatory footnote).
The protocol suggests that delays which
intrude into “end of job” float (ie early finish) may entitle the contractor to
financial compensation, provided that, at the time of contract formation, the employer is aware of the contractor’s
intention, which must be realistic and achievable. (This appears to contradict current case law, which states that the employer has no obligation to assist the
contractor to achieve an early finish. I suggest that contractors proceed with
great caution in this area).
Records
Format and frequency of records should
be agreed at the outset. These would
include progress reports and photographs, delay notices, plant and labour
records, dayworks sheets, confirmation of instructions, information required,
with daily, weekly and monthly reports which summarise the above. (This is an excellent suggestion. The
contractor should take the initiative by asking at the outset).
Without this mechanism, the end client
could lose his rights to liquidated damages, if he committed an act of
prevention, since he would then lose the benefit of an enforceable completion
date and time would become at large. Therefore, all contracts should provide
for extension due to the client’s own
acts, omissions or defaults . (Some
bespoke forms of contract which, with the aim of “subbie bashing”, omit such a
reference, in fact leave the issuing party exposed). Secondly, an extension of time protects the contractor
against such damages. However, it does
not automatically give financial entitlements, nor is an extension always
necessary in order to qualify for financial compensation.
Applications for extension should be
submitted and dealt with at the time of the delay event. The award should be based on the
contractor’s true entitlement, not on whether an extension is needed for the
contractor to avoid liquidated damages. It is therefore wrong for the
architect to wait to see the final
effect of delays before making a decision. (In practice, it will be difficult to persuade architects to conform,
unless the terms of the contract insist).
Sometimes, after a period of end date over-run
due to the contractor’s culpable delay, an employer’s delay occurs (eg late
information, a variation etc). In
fact, any extension entitlement for
this isolated employer’s delay should be added back on to the previous
completion date. (This confirms
existing case law. The common belief amongst contractors that this “gets them
off the hook” is incorrect. Clearly, a sprinkling of late variations of minor nature
will not absolve a contractor for several months of culpable delay).
Conclusion
The protocol’s recommendations are
ambitious, and will cost money to operate.
Many smaller firms do not have the necessary staff. However, more
attention to these matters at the start and during the contract period, will
certainly save money in expensive end of job disputes.
Bi monthly article for
Electrical Times, May 2003.
John Russell
Construction Contracts & Training
Consultants (Established 1984)
Cheshire CW4 7DP Tel : 07770 986444
Email :
swsubbie@globalnet.co.uk Website:
www.jrconsultant.co.uk