acceleration of the works

Additional works but no impact on current status of proeject - this can happen only in client’s perspective because in theory extra work means extra effort, extra resource and extra time.

Just like Contractor’s hidden agenda, the Client has hidden agenda as well - in this case - he gets aware of the situation when the Contractor is getting ahead of schedule and then thinks he can use this time to get some additional work done.

If the Client has paid the Contractor to accelerate, then he could ask the additional works to be done in that "saved time". Otherwise, extra works mean extra time.

Ashraf,

The right to claim by the Contractor is inherint in the contract. We have to accept this whenever in the opinion of the contractor has the right to claim.

However, whether the claim is valid or not, that should be in the opinion of the client’s representative or by the client itself.

The contractor may not be happy by the opinion of the client’s representative or by the client itself, still the contractor has a lot of options in the contract.

So now, i have no opinion to give further since i do not know the details.

Cheers,

Charlie

Ashraf,

Interesting one, as Clive said, not really enough information but the starting point is the Contractor has taken on the contract, which presumably allowed for variations, and therefore tough.

His decision to accelerate and finish early to start another job is his own, a commercial decision which he bears the responsibility for, not the Employer.

As long as the variation properly falls within the contract it is to be valued under the terms of the contract with no regard to anything else. If the contract hasn’t been varied, ie the Employer hasn’t agreed to the early completion then the Contractors taken a risk and this time it hasn’t paid off.

If no express consent from the Employer has been given then the only circumstance in which it might be different is if the Contractor can somehow imply the Employers consent to an earlier completion date, ie that the contract has been varied. Given the Employers desire to instruct the extra work then I think this probably would be difficult.

If the Contractor refuses to carry out the work, validly instructed under the contract, then he is in breach of contract and the Employer can claim damages against him. Oh, and if the Contractor can still complete on time then he is not entitled to an EoT.

What the Contractor is entitled to however, is a fair valuation of the additional works in accordance with the contract and possibly (probably) prolongation costs for the Employer keeping him on site for longer than he would have been. For the details of this, you’ll have to digest the contract and see what it says. I’m sure there are a variety of arguments the Contractor can put forward to enhance the price if he puts his mind to it.

In any case, it is up to the Contractor how he sorts out his other work commitments, it is of no interest to the Employer of this contract.

Might seem abit tough, but at the end of the day the Employer is paying and his interest is in seeing that his contract gets completed, not that Joe Bloggs contract down the road gets started.

Contracts are generally written to ensure performance or that the Employer has sufficient recourse (LD’s, termination rights, bonds, set off provisions, company guarantees, retention, indemnites, condition precedents, insurance) to pay for the work to be completed should the Contractor fail in his performance.

You could end up in a big mess by trying to be accomodating on this one, however tempting and reasonable it would appear. Following the contract might also end up in a different mess but the Employer should at least CLEARLY know where he stands and what remedies are available, should the Contractor dissappear

Clive,

And there in lies the difference:

"the contractor clearly identified both at the time of tender... that he had commitments for the dredger"

If the contract was clearly agreed on that basis then that was the agreement, but it doesn’t appear to be the case below.

If the Contractor has set his baseline program and have it approved by the Client in the first place, then it is his option to accelerate the works by adding his resources or improve his methodologies to increase his profits and finish the project ahead of schedule.

IMO, additional works requested by the Client that was not considered in the approved baseline schedule, is another story, whether or not it affects the time schedule.

And generally, the Client is under no obligation to help the Contractor finish early - only to ensure the Contractor can comply with his contractual obligations to finish on he contract completion date.

hi,
why can’t the contractor show this event on the base line program to show its impact on over all completion date.
If it does effect the project completion date ,contractor ,in my opinion has all the right to claim EOT.Though seeing actual staus of the project if however client feels that impact of the event in as built program does not effect the project completion date than eventually contractor has all the right to claim for the acceleration of work ......why ..bcoz the work which was accelerate dby the contractor for his own benifit will go to the owner.
This is a simple case ....but matters how it is presented.

Khawaja,

If the extra works affected the completion date then yes the Contractor would be due an EoT, but in the information given, we’re assuming it doesn’t.

Why should the Employer be obliged to pay for the acceleration - it’s something he hasn’t instructed or asked for?

If the Contractor had not accelerated but finished on the proper date could the Employer ask for a saving because the Contractor didn’t finish early!!!!!!!!!!!!! I think not.

Andrew,

I think Khawaja is working for the commercial side of the Contractor. If he finish early and makes the Customer happy then he can negotiate for a bonus, but this is the Customer’s kindness (if not considered in the contract).

Gary,

Are you in the habit of paying for something you haven’t asked for.

The Contractor made a decision, totaly for his own commercial benefit.

He was doing a contract, in that contract variations were allowed - there was always the risk that extra work might be ordered keeping his plant etc on site longer. It isn’t a rare thing for extra work to happen on a construction contract, if fact it’s almost an inherent certainty.

He had to weigh up the risks and make a decision - he did. This time it hasn’t worked in his favour but that’s the nature of being in business. Construction is all about risk management - you win some, you lose some.

The contractor will have to go and hire some more plant, source some labour from somewhere to start the other contract (or finish this one). Not the end of the world and a situation every contractor faces from time to time.

I believed that all views and explanations posted are all valid reasons. The only thing that have been missed is the contractors right to refuse or not accepting the variation if he wanted to. Usually because of good and long relationship between the client and the contractor that needs to maintain that is why variations are normally accepted without hesitation but it also processed on fair negotiations. As stated by Clive, time and cost are being looked at so it will be enough to contractor to cover the losses or his intensions. At the end it is still contractor’s decision to accept the variations. On my point of view, contractors will not live to lost another contract from different clients or suffer more if he will accept variation knowing that he will gained losses more money at the end.

Rodel,

It is normal that the conditions of contract make it compulsory to accept the variation, there isn’t an option unless the Contractor wants to pay the Employer damages.

Gary,

The acceleration doesn’ have anything to do with the EoT. If the variation caused the contractor to go past the contract completion date, the contractor gets an EoT. If not he maybe entitled to prolongation costs but no EoT.

And the answer to the second point is no th Employer wouldn’t be entitled to LD’s unless the contract unusually allowed him to set another completion date prior to the original completion date.

The only contract that I know of that expressly gusrda the Contractors terminal float is the NEC. But then that would depend on what was shown on the Accepted Programme.

Gary,

IMHO, it’s not a question of who owns the float? but who prepared the program that calculates the float? Float is simply a product of logics and relationships of activities which is speculative. And most of the time, the Contractor is the one who’s preparing the program / schedule based on his methodologies, strategies and resources which makes the float his reserve.

If I am working with the contractor side (luckilly i’m not), I’ll see to it that my program / schedule has no float at all. If ever there is, I would hide it so that the Customer wouldn’t know about it.

Andrew,

There is certain limitation on the condition of contract. It is not always in favour of the client. It is also up to the contractor to accept the risk before signing their contract. I know there some condition that make it compulsory to accept variation but up to bearable boundaries and contractor’s capabilities. If the variation is outside that boundary it is contractors decision whether to accept or not the variation.

On the original post “contractor done the acceleration to the intent of relocating their resources on the other project and demobilized earlier than required”. There is no bridge of contract if they finished earlier than required and as a matter a fact it is the client who will benefit on contractor action and more often the contractor received bonuses by doing this.

On this scenario the client issued a variation to take advantage the opportunities. I often engaged on this kind of event and normally negotiated fairly to cover up the intention or the risk of losing another client. It is always contractor’s decision whether to accept the variation which normally ends up to signing another contract with new rates. For manageable changes it is normal to accept the variation for a reason that it is required and related to their scope of work. In this case EOT is not the issue but the value and risk or if they can deliver it on time.

Rodel

Rodel,

Certainly not a breach of contract for finishing early and the coments are on the assumption that the variation is within the scope of the original contract.

If it isn’t (it is something that is so different from the original contract as not to be considered part of it) then a new contract would be needed - at which point both parties need to agree terms on price, time, etc, etc like any other new contract.

Most contracts have something along the line of "the contractor SHALL forthwith comply with instructions, variations issued...." along with another clause saying "no instruction, variation shall vitiate the contract....." or similar words to the same effect.

Put together they make a variation compulsory - assuming it’s within the scope of the contract in the first place.

I’d be surprised if the contract hasn’t got something like this as one of the fundamental aims of most contracts is to get the work completed or give the Employer a way of finishing if the contractor fails to complete.

oh by the way, the Client has found a clause in his contract, it states that: "All other items not included or not mentioned in the scope of works but are deemed necessary to complete the intent of the job, shall be borne by the Contractor". so he doesn’t have to pay for the additional works as requested...

It’s never simple is it!!!!

Depends what the variation is as to whether it can be "deemed necessary".

It would have to have been "deemed necessary" at the time the contract was entered into, not with hindsight now.

And if it is something so different as not to fall within the scope of the original contract, he needs a new contract anyway.

Absolutely agreed if the variation falls within their scope of work and within the capabilities of the contractors as I have mention earlier then the contractor deemed to comply when necessary but negotiation are still within the favour of contractor specially if the client will benefit on it. Please note that “some” condition of contract also states the max limit for variation not more than 10% of the contract scope otherwise will be treated as new contract

Rodel,

There’s a infinite number of provisions that a contract could contain or combinations thereof. A single word in what would otherwise be two identical clauses can have a significiant effect on the meaning of it.

Always the problem on this site, never get to see what’s actually written or the other parties side of the story.

Correct Andrew, we are all just assuming, giving the general views and we cannot judge to say that the other posts are not valid.

Rodel and Andrew

You both are correct. It is always advised here that better to seek whatever your contract provisions stipulate and then you proceed accordingly rather than based on assumptions. We cannot implement the same judgment because it varies from contract to contract.

Dear All,
Still the case under study and the resoution of minor commtee for disputs still not issued yet.
the contractor refused the engineer judgement to analise the impact of the additional works on the updated programme and the contractor has submitted the impact on the base line programme which has shown an impact of 3o days and now the contractor is asking for EOT 30 days with assiocated cost in addition to that the cotractor is asking for new rates for the additional works based on the average market prices for each item separetly .
The additional works as well as the orginal scope of works have to be copleted on the original contract duration due to the high imporancy and urgency of the said project.
I have sujested to make an amikable settelement with the contractor and we are studing all the possible alternatives in order to avoid raising this case to the court.

Hi Everyone,

I just wanted to ask , what if the scenario went the other way whereby the client issued some additional works but the contractor was behind the schedule???

Please expand on that one.

Thanks in advance.

1-Before issuing the addetional works ,get the up date program to specify the contractor’s own delays.

2-see the impact of the addetional works on the approved base line program.

by compairing the results of 1 &2 you can evaluate the contracor’s entitlments.

Samy,

The principles for working out the EoT entitlement would be generally exactly the same, just applied to the different circumstances. The contract determines these but unless there’s something out of the ordinary then the overriding principle to have in mind is:

"what is a fair and reasonable aggregate period of time from the commencment of the works, for the contractor to complete all of the works"

Guys,

I seemed to agree with Garry, being the case as an issue of float ownership. In my opinion the float generated during the course of contract execution is not for the sole use of the party generating the float; but as a shared commodity to be reasonably used by either party.

Should the contractor specified in his baseline programme his intention of completing the contract earlier by indicating an early completion milestone dates and accepted by the client, then the contractor may demobilize his resources relative to the accepted early completion dates. In the absence of such, then early demobilization might not be given favorable acceptance by the client and may use his rightful share of the float generated by holding up contractual resources for his intended purpose.


Just an opinion guys!

Regards,

Arman

Hi,Armando

That is reasonable opinion.

REGARDS

Armando’s along the right lines but two important points:

1. Just showing an early completion on a programme, whethter accepted or not does not automatiaclly entitle the contractor to finish early.

2. It comes down to what was agreed when the contract was made. If it was agreed that the contractor was going to try and finish early, it was a realistic possibility and the employer knew this, then the contractor would be entitled to use the early finish date to argue his case. The emphasis being on it something that was agreed. If it was not agreed, just something the contractor showed on his program and was hoping to do, then tough.

3. Just because the employer accepts a program showing an early finish date does mean anything on it’s own. He’s hardly likely not to accept the program on the basis that the project might finish early is he? And it works both ways - the employer can’t complain and charge LD’s if the the project merely goes beyond the early finish date and not the contractual date, the contractor can’t complain that he’s signed a contract allowing variations, which in the normal course of events he’d probably welcome, and the employer, quite correctly under the contract, orders variations, even if that keeps him on site longer.

Hi,Andrew

As understood,the progam of work is part of the most important contractual documents.

in the light of the above , there is a dispute about your statement that:-
1-showing an early completion on a programme, whethter accepted or not does not automatiaclly entitle the contractor to finish early.
2-because the employer accepts a program showing an early finish date does mean anything on it’s own.

can you varify your opinion contractually assuming that that the contractor for any reasons has submitted his program showing an early finish date .

Ashraf:

The first thing is to make sure that the programme is actually part of the contract, not just referred to in the contract documents.

Normally the programme isn’t a contract document. Eg, if it was produced after the contract is made - therefore it didn’t exist when the contract came into being so can’t be part of it! If it is, ie was a document in existence when the contract was executed and incorporated into it, then a whole new set of fun and games emerges.

Andrew,
The program is part of the condition of contract(Clause 14).
Without submitting the program the contractor can not get the advance payment in the begining of the project.
any claims for EOT to be analised and assessed based on the approved program.
Monitoring of the progress during the construction stage is depending on the approved program and the actual % completed of the activites at cetain date.

What an intriguing problem. I’m going to opinionate here....

imo Andrew makes a good point;

the contractor may have issued an accellerated programme but my guess is that neither he, nor the client, have formally comitted to it.

Ask the contractor if he would accept LDs in the event that he breaches his own accellerated programme (assuming the extras were not issued) but still achieved the baseline. In fact, I wouldn’t be surprised if the contractor hadn’t included such a caveat in his progress submissions to the effect that he’s not bound by the accellerated dates. On the other hand, assuming that the client were to get some benefit from an early completion (early rent etc), would he proactively share this with the contractor?

*chuckles*

In these circumstances, much as I sympathise with the contractor, I would suggest that the baseline schedule be used.

That said, the contractor has probably made an investment in the accelleration in order to free up his team and, if the client has no choice of other contractors, he should tread a little carefully. Afterall, the aim is a finished project not a courtcase! The contractor most likely wants to free up certain key personell and would accept a scheme that got the extra work done while allowing his PM or whoever to move off to the new job.

It’s more often about politics than contracts, really.

Ashraf,

Just being lazy, rather than reading all the previous posts, what conditions of contract are they. The provision of a programme is probably a contract condition, that doesn’t make the program a contractual document though.

James,

As always the parties want all the advantages of a contract, but non of the disadvantages, unfortunately it doesn’t work that way.

Guys,

I would like to add up the ff that might help for a better understanding of my views and hoping not to confuse anybody further:

A contractor’s proposed early project completion milestone is unconstrained date to represent its early completion date. But this unconstrained date is not a release from contracturally required finish date,but is left unconstrained to allow the schedule logic to calculate without hindrance.

Andrew, it really sounds new to me to hear a programme being normally not a contract document. It’s really quiet interesting.

Regards,

Arman

IMO, The construction is an interactive business, but it belongs to the owner at the end. So all contracts were regulating the works for the sake of the owner. Also the construction is not a matter of time only, but it is financial matter first degree. Therefore, the owner always prepare his payments according to the cash flow curve which is based upon the baseline program. So, the modified cash flow which is based on the accelerated works, wouldn’t be obligatory to the owner.
One can say that the final benefit will end to the owner, but it is unsatisfactory, as the works may depend upon another subcontractor, or supplier. consequently, the early completion date won’t help the owner.

On the other hand, the part of additional works, as we all know that the additional work don’t mean additional time. The only measure is the impact of time schedule, which mean that the float is owned to the project itself and doesn’t belong to any party.
To be continued.

in the US I worked a couple cases where if the contractor indicates in their baseline schedule that they plan on finishing early then that is the date they are shooting for. If the owner delays the contractor delays the contractor from achieving that date the owner can expect a claim for extended overhead and can expect to pay for it.

I’ve seen some owners put in their scheduling specs that no early completion is allowed in the baseline schedule to counter this early completion arguement

All comes down to what’s been actually agreed between contractor and client - not what the contractor would like to think has been agreed by by simply showing an early date on a programme.

a contractor has the right to finish early unless it is stated otherwise in the contract. If the contractor can show they can finish early then the owner should be careful not to delay that early completion date.

The contractor does not have the "right" to finish early. A party must not hinder the other and must co-operate so as to allow the other party to comply with his contracrual obligations. If the contractual completion date is later than the contractors early date, the only obligation on the employer is not to hinder the contractor from finishing by the contract date.

The contractor may, subject to the wording of the contract, be able to claim prolongation costs if he can prove he has been kept on site longer by the employer, eg extra works, but the employer is under no obligation whatsoever, to ensure the contractor finishes by his early date. Unless of course, the employer has agreed to the early completion date.

ok play along with me. a contractor says we have developed a reasonable baseline schedule that shows us finishing 18 months early. the contractor anticipates finishing early and saving a lot of money on the reduced field overhead,ect. the baseline is accepted but the owner notes that it does not agree w/ the early completion date that it is too optimistic. the project has problems with the design and these problems delay the critical path of the project. the project does meet the contract completion date but finishes 18 months late in the contractors mind. is the contractor due any damages for the owner causing him to miss the early completion date?

Probably! But not automatically.

A good case to read on this is Glenlion Construction v The Guiness Trust [1988] BLR 39 which deals in some detail the obligation of each party when the contractor shows an early completion date. Summarised below on that point:

Question:
(3) Whether there was an implied term of the contract between the applicant and the respondent that, if and in so far as the programme showed a completion date before the date for completion the employer by himself, his servants or agents should so perform the said agreement as to enable the contractor to carry out the works in accordance with the programme and to complete the works on the said completion date.

HELD:
As to question (3):

No: since it was not suggested by the contractor that he was both entitled and obliged to finish by the earlier completion date and if there was such an implied term it would impose an obligation on the Trust but not on Glenlion.

Per curiam: The unilateral imposition of a different completion would result in the whole balance of the contract being lost. The position would be no different if the obligation imposed on the employer was instead of being absolute, a requirement that meant that the employer should act reasonably.

maybe it’s just an american thing (we’re always causing trouble)

but I’ve seen at least two owners but language in their scheduling specs barring the contractor from showing an early completion on the baseline schedule for just this reason. and recently saw an owner lose big on a case similar to the example I used.
Thanks!

In most contracts the contractor would recover prolongation costs but it’s not a given right too so all I’m saying is, don’t automatically expect that you can.

ANY AGREEMENT SHOULD BE WRITTEN AND AGREED BY ALL PARTIES FIRST. SO THE CONTRACTOR CAN’T CHANGE THE BASELING PROGRAM HIMSELF. HE HAS TO PLAY WITHEN THE TEAM GOAL, NOT HIS OWN GOAL.

i do not think that there is any contractual clauses in the condition of contract can prevent the contractor from accelerating the works by his own wish and no body can object if the weekly up dated progress report is showing that the contractor progress is ahead of program.

As I said before, there is no body hate to finish his project earlier. But, if there are some dependant activities based upon the main contractors activities, so increasing progress won’t help the onwer.
on the other hand, the finacial issues related to the progress will not enforce the owner to pay more than what is planned earlier.

Dear all

we can conclude that the following are the driven activities
in this case:_
the condition of contract.
the approved construction program.
the time of issuing the instruction.
the up dated progress report at the time of given the instruction.
the contractor acceptance /rejection to this instruction.
the contractor;s notification regarding this instruction.
the contractor justification for his case.
the availability of supporting documents and conteporary records.
the client and engineer understanding to the contractor claims

ACTUALLY ASHRAF THERE IS ... THE OBLIGATION.

MOST FORMS OF CONTRACT PLACE THE PROGRAMME AS A CONTRACT DOCUMENT WHICH MEANS IT HAS TO BE COMPLIED WITH BY THE CONTRACTOR AS PART OF HIS PERFORMANCE ...

WHILST IT MAY BE TRUE THAT THERE PERHAPS MIGHT BE NO OBJECTION TO GOING FASTER THIS HAS A LOT OF RAMIFICATIONS...NSC’S FOR ONE ...WHOSE TIMING IS FIXED BY THE ENGINEER.

THUS, ANY CHANGE TO THE TIMING (I.E. ACCELERATION) IS CLASSIFIED (MAYBE) AS A CHANGE AND ONE PARTY CANNOT CHANGE A CONTRACT WITHOUT THE OTHERS CONSENT.

ACCELERATION IS THE SAME AS ANY OTHER CHANGE OR VARIATION, EXCEPT BY THE CONTRACTOR NOT THE EMPLOYER / ENGINEER