On-Site Talk: Contractor woes - Part 1

Hill International director Jeffrey Badman

In a two-part series, Jeffrey Badman, director of Hill International, discusses how acceleration measures can help a contractor in case of project delays.

The contractor has submitted his extension of time claim, some months have passed but no award or response has been forthcoming from the engineer — an all too familiar scenario experienced by most contractors at one time or another.

So what can the contractor do next? There are some initial practical avenues that can be taken in an attempt to secure an award:

After a reasonable time following the submission of final detailed particulars (6-8 weeks depending on the complexity of the claim) the contractor may wish to write to the engineer asking if he has had the opportunity to assess the claims.

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Whilst the contractor may be tempted to ask the engineer if he needs any further particulars in order to assess the claim, this should be resisted as it gives the engineer a reason for delaying his determination.

Try to arrange a consultation with the engineer to discuss the claim.

Having attempted to obtain a response from the engineer, the contractor may wish to write directly to the employer requesting that he instructs his engineer to determine the claim. This course of action may have greater effect where the conditions of contract stipulate a timeframe for the engineer’s determination, such as contained in Fidic 99.  

In the absence of an award the contractor faces a dilemma; on the one hand he wants to avoid liquidated damages and penalties, but on the other he does not want to spend substantial extra sums of his own money accelerating the works to finish on time.

It’s about this time that you hear cries of “time at large” from those who have experience of working in certain common law jurisdictions.

For those who are not familiar with this principle, time is said to have become “at large” when the obligation to complete within the specified time for completion is lost; that obligation then becomes to complete within a reasonable time.

However, the law in the UAE is entirely different and this principle is unlikely to have any application.

So what options are available to the contractor? The contractor may:

• Choose to continue in the hope that in the future he will be awarded the full extension of time claimed and decide not to implement any measures to mitigate the delays.
• Consider pursuing his claim through the contractual dispute resolution mechanism: arbitration or litigation. However, the decision or judgment will take some time, during which the resources will be tied up in the dispute resolution process rather than focusing on the progress of the project. As a first step if the contractor elects to follow this course of action, consideration needs to be given to whether a dispute has crystallised allowing the dispute resolution mechanism in the contract to be initiated.
• Implement measures to recover the delays in part or whole.

The option selected will depend on how confident the contractor is about the success of his claim.

If the third option is chosen, another cry is likely to arise from those from common law jurisdictions – constructive acceleration.

The Society of Construction Law’s delay and disruption protocol defines constructive acceleration as “acceleration following failure by the employer to recognise that the contractor has encountered employer delay for which it is entitled to an EoT (extension of time) and which failure required the contractor to accelerate its progress in order to complete the works by the prevailing contract completion date.

This situation may be brought about by the employer’s denial of a valid request for an EoT or by the employer’s late granting of an EoT.” Even in common law jurisdictions there have been very few successful constructive acceleration cases. Again, the law in the UAE is completely different and this principle is unlikely to have any application.

If you would like to write for Construction Week in this column, please email rob.wagner@itp.com