Engineers should be given deadlines to assess claims
Jeffrey Badman, associate director, Hill International, explains why the engineer should be bound to make his determination of an extension of time claim within a fixed time period.
Generally, most modern standard forms of contract conditions contain clauses which provide for contractual remedies in the event of certain circumstances or breaches arising. Possibly the best known of these is the provision for claiming extension of time; thus on the occurrence of a prescribed event, resulting in a delay, the contractor may be entitled to an extension of time.
Some forms of contract compel the contractor to submit both notice and detailed particulars to the engineer within stipulated time periods in order to enforce those rights; others go further and are expressed as conditions precedent requiring the contractor's strict compliance. Given that the contractor is bound to such procedural timetables in order to maintain and enforce his rights, then surely the engineer in performing his duty in determining an extension of time entitlement should be bound by a similarly prescribed time frame?
Once the contractor has made his claim submission - what happens next? In the ideal world, the engineer should assess the claim, determine and award an extension of time within six to eight weeks, depending on the complexity of the claim. However, more often than not this does not happen, but why? Some possibilities have been considered below:
- The engineer may be directly responsible for some of the delays, an admission of which may damage his position with the employer;
- The engineer does not fully understand his duties under the contract;
- The engineer does not consider it to be a priority;
- The engineer lacks the experience to assess the claim and make a determination;
- The engineer may consider that with an award of extension of time there would be no need for the contractor to mitigate the delays;
- The engineer does not want to make a determination for fear of being seen to be siding with the contractor, which may jeopardise future work with the same employer;
- Interference from the employer; or
- The engineer wants to wait to see how much time the contractor actually needs at the end of the project.
Whatever the reason, at the end of the day the engineer is duty bound under the contract to make a determination and his failure or procrastination promotes uncertainty of the contract completion date and ultimately abuses the contractor's rights under the contract.
Without an award, the contractor appears to have two choices: work towards the completion date he considers he is entitled to at the risk of the employer imposing liquidated damages or penalties, or alternatively take it upon himself to accelerate the work in an endeavour to achieve the original completion date, with the hope of trying to recover his costs at a later date.
Currently, very few standard conditions of contract provide for a fixed period in which the engineer has to make his determination; and some make no provision at all. From an examination of the pertinent provisions within the International Federation of Consulting Engineers (FIDIC) Fourth Edition, dated March 1987, as amended in 1988 and 1992, it is observed that there is little assistance provided to the contractor to insist the engineer makes a determination within an ascertainable time frame.
Sub-clause 1.5 provides, inter alia:
"Wherever in the contract provision is made for the giving or issue of any...determination by any person...Any such...determination shall not unreasonably be withheld or delayed"; and
Sub-clause 44.3 provides, inter alia, in respect to ongoing delays where the effects of an event have not ceased:
"On receipt of such interim particulars, the engineer shall, after due consultation with the employer and the contractor, without undue delay, make an interim determination of extension of time and, on receipt of the final particulars, the engineer shall review all the circumstances and shall, after due consultation with the employer and the contractor, determine an overall extension of time in regard to the event."
It is suggested that this imbalance may be redressed by the incorporation of a provision similar to that below, within the extension of time clause, and may be included as a tender qualification.
"...the engineer shall, after due consultation with the employer and the contractor, determine the amount of such extension of time without undue delay and in any event within 56 days of receipt of detailed particulars in accordance with sub-clause..."