On-Site Talk: Contractor woes - Part 2

Hill International director Jeffrey Badman.

In the concluding part of the series, Jeffrey Badman, director of Hill international discusses how the effect of acceleration measures can be magnified.

Following on from part 1 of this article, in the event that a contractor considers he needs to take action to reduce his exposure to damages being imposed by the employer for delays to the project, despite having submitted an claim for extension of time, we suggest that the contractor:

• arranges for an independent review of the contractor’s claim to objectively assess its strengths and weakness, and likely magnitude of the award.
• updates the works programme to include the effects of all identified delays; employer’s as well as the contractor’s own delays. 
• identifies activities along the critical path to completion.

It is false economy to just throw additional resources at works, especially those which are not critical.

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To maximise the effect of any acceleration measures and minimise the contractor’s expenditure, the contractor should look at re-sequencing and/or reducing the durations of the activities on the critical path. 

Before implementing any acceleration measures the contractor should first attempt to obtain the employer’s written agreement.

This applies both to requested acceleration and constructive acceleration, as most forms of contract do not empower the engineer to instruct the contractor to accelerate the Works.

This agreement should include, inter alia, the associated costs and an allowance for any additional risks connected with the acceleration measures. For example, a contractor had intended assemble a steelwork frames on site section-by-section.

To accelerate the works the contractor proposed to pre-assemble the frames in the fabrication yard off-site, transport them to site on low loaders, and lift them into place using a tandem lift with two cranes. The proposed method is significantly riskier than the original method and the contractor should be allowed to include for this in his price.

In this example, the magnitude of this risk will diminish as the works proceed.

If there is no agreement and the contractor implements his acceleration measures, the employer will receive the benefit of the contractor’s increased risk, however, once the works are completed it is almost certain that employer will not recognise and pay for that increase in risk.

It is essential that the contractor keeps the employer fully informed at each step, advising him of the proposed and implemented measures, the related costs and their effects on the programme delay.

The contractor should maintain, where possible, separate records for the acceleration measures.

It should also be remembered that as the delays are recovered by implementing acceleration measures, the actual delay reduces and so does the contractor’s entitlement to recover extension of time. 

CURRICULUM VITAE

Jeffrey Badman is a civil engineer with 15 years construction and engineering experience: 12 years gained in the Hong Kong and Singapore, the balance in the UAE and Oman. He holds an honours degree in civil engineering; and an honours degree in law from the University of London. Jeffrey is also an associate member of the Chartered Institute of Arbitrators and has recently passed the accelerated membership programme.

He has been engaged on variety of commercial and claim management projects in the civil engineering, rail, tunnelling, power, oil & gas, mechanical and electrical and building disciplines.

Specialist experience gained from major international construction and engineering companies and contract consultancies includes: development of procurement strategies, contract drafting and reviews, contract administration, risk analyses, extension of time and cost claim/defence preparation, drafting contractual opinions, lenders advisory services, expert reports, delay analyses, dispute avoidance, management and resolution through negotiation and arbitration.

Project involvement includes: mass transit and light railways, power stations, foundations and geotechnical works, roads and bridges, tunnelling, wastewater & water treatment schemes, oil and gas, high-rise accommodation and hotels.