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EOT Claim - Contractor not providing electronic copy

22 replies [Last post]
Vamsi Gollapinni
User offline. Last seen 5 years 26 weeks ago. Offline
Guys

An EOT claim had come in from the contractor. As Engineers on the project, we have to determine the validity of the claim and Contractors entitlement.

The Contractor has submitted a Monstrous Document, highlighting the TIA procedure adopted by him but did not provide the electronic copy of impact schedules for delay events.

When we asked for the electronic copies they blatantly refused to give it to us. I could clearly see that they had manipulated the schedule to show results in their favor.

What is to be done in such a situation? Please advise. The contract is based on FIDIC 1987, reprinted in 1992 with amendments.

Replies

Andrew Flowerdew
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Samer,

Raphael is in New York and I doubt from what he said that he is using FIDIC.
Samer Zawaydeh
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Dear Andrew,

FIDIC 1999 clause 8.4 states 5 items that the Contractor can ask for Extension of Time for Completion:

a. a Variation
b. a cause of delay
c. Weather
d. Unforeseeable Shortages..
e. Employer delays.

The Contractor can’t ask for an Extension of Time for reasons that do not fall in one of the above categories.

With kind regards,

Samer

Andrew Flowerdew
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Lawrence,

The contractor can ask for an EoT for any reason - he’s only going to get one if the the reason is legitimate though.

Don’t think the US is any different, what you have described goes on the world over. My only comment is that the lack of any decision by the Engineer must be one of the biggest reasons for disputes going down the legal route, but hey, keeps me in a job.

More contracts are now taking the decision over EoT’s and valuations out of the Engineers hands and charging some other party not directly involved in the project with these responsibilities. Don’t know of any standard form contract that have adopted this approach yet but it is becoming more commonplace, (and not a bad idea in my opinion).
Lawrence Cuozzo
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Andrew -

When I stated that the onus is on the contractor to prove his case, what I meant is that the contractor has to supply all the back-up and a LEGITIMATE reason for asking for compensation. Maybe we do things differently here in the U.S., but if he doesn’t submit anything, I’m not going to offer him anything. Oh, I will do my own analysis and have a figure in mind just in case, but unless he can prove something, the "engineer" won’t even be bothered rendering a decision. Of course the contractor can go the legal route, but it has been my experience that most of those settlements are a "business decision" and all the analyzing and "forensic" stuff goes out the window based on a "deal" the respective attorneys have in mind. For most big projects in New York City, a contractor will not even bid a job where they are at the mercy of the "decison of the engineer". The standard contract nowadays calls for a mutually-agreed-to "independent arbiter" to settle disputes. And keep in mind, this "arbiter" does not necessarily have any knowledge of CPM scheduling.

Lawrence
Andrew Flowerdew
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Ahmad,

The Engineer is employed under an agreement with the Employer. Part of that agreement is to administer the main contract in accordance with the terms of the main contract - i.e, carry out those tasks that it is agreed between the Employer and Contractor under the main contract that the Engineer will carry out.

One of those tasks is to determine what EoT due. There is no intention, expressly or otherwise, in the main contract that anyone other than the Engineer will carry this task out.

It is 100% the Engineers responsibility to do this although there may be an obligation to consult and discuss, (get both sides of the story), with the Employer and Contractor prior to making that decision. This in no way relieves or alters the position that it is ultimately the Engineers job, and his/hers alone, to make the final decision.

In making a proper and valid decision I would suggest that it is inherent in the decision process that the Engineer assesses and analyse the project records.

Anoon,

It is long established that the Engineer may not be totally impartial - the contract provides a safeguard against this by allowing the Engineers decision to be challenged by the Employer or Contractor and then reviewed and set aside by some means.

Traditionally in construction an Engineers decision can been reviewed and if applicable, set aside by an arbitrator, but these days it could be one of many different processes.

It’s the main reason why you have clauses in a contract concerning dispute resolution and arbitration, or court, or dispute boards, etc, etc.

Whatever the process, it’s the parties chosen forum to challenge and have reviewed an Engineers decision, (amongst other things). It’s a very large part of the reason why any of these processes exist in the contract.
A D
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Well, in andrew’s post, the key point is in his last para:

If the contractor in not providing an electronic copy of the programme hinders the Engineer determination such that a lesser or no EoT is granted, then tough Mr Contractor, it isn’t an unreasonable request to make. If it ends in a costly dispute, as long as the Engineer has properly and impartially applied his mind to determining the EoT due on the information available, the dispute isn’t the Engineers fault.

As far as terminology is considered, it can be:
1. The Engineer, or
2. The Contract Administrator, or
3. Employer’s representative, or
4. Contract manager, or
5. Project manager, or
6. Architect, or
7. Employer’s agent.


But, definitely not the Client or the Contractor

:-)
Anoon Iimos
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Happy New Year to All,

"The whole idea is that someone other than the Employer or Contractor, (both interested parties in the outcome), will carry out these things in an impartial and reasonable manner." quote from Andrew

Someone - not necessarily the Engineer?
Ahmad Albirawi
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Dear Andrew
I would say that I do not agree on some instance (It is 100% the responsibility of the Engineer to do these tasks, not the Employers or Contractors) that the engineer should made his assessment for the EOT.
the employer enter a contract between him and the contractor and its signed between those two parties.on other hands, the engineer has a service agreement with the client which should not necessarily have an EOT analysis services.

Happy new year
Andrew Flowerdew
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Vamsi,

"Is Forensic Delay Analysis, in case of complicated disputes, a variation to the scope of Engineers work?"

Generally no as forensic delay analysis will only have to be carried out if the Engineer hasn’t done his/her job in the first place. In fact forensic delay analysis is often required as a result of a breach of contract by the Engineer.

Most standard form contracts between the Employer and Main Contractor are entered into based on the understanding that a third party, (Engineer, Architect, Contract Administrator), will reasonably and impartially determine certain contractual rights and obligations. The two most important ones being valuations and any EoT due.

It is 100% the responsibility of the Engineer to do these tasks, not the Employers or Contractors. The whole idea is that someone other than the Employer or Contractor, (both interested parties in the outcome), will carry out these things in an impartial and reasonable manner, (Yeh!!!!!!!!!! - well that’s the idea).

Contractually, in order to help the Engineer do this the Contractor is usually obliged to keep records to support his claim and submit these to the Engineer. Other than that there is usually no further obligation on the Contractor.

Based on this info and any other that the Engineer chooses to keep whilst the job progresses, the Engineer makes his decision - under most standard forms it is intended that the Engineer makes his decision during the project, not at the end.

Therefore the decision should be taken at the time of the delay, (or shortly afterwards), and no real "forensic" analysis is required - taking "forensic" to mean retrospectively looking into the facts long after the event. Basically, if the Engineer has kept appropriate records during the job and these are supplemented by the Contractor’s records, the Engineer should have enough info to analyse and make a decision.

That’s one of the job the Engineer’s employed to do and certainly not a variation.

If the Engineer fails to make a decision or makes a seriously wrong one and it all end’s in a dispute which then requires forensic delay analysis then I’ve always supported the idea that there should be some form of compensation due to both Employer and Contractor from the Engineer. It appears fair to me that if the Engineer actions or most often, inactions, have caused the dispute then there should be some form of compensation due.

Common law systems do not generally support this idea but civil law systems often do. For example, in France, if an Architect is responsible for more than 25% of any EoT due, (eg late issue of drawings or similar), then the Architect has to pay the Contractor compensation. But in France a lot of contracts are design and build rather than employer design, contractor build, therefore the basic relationship between Employer, Architect, (or Engineer), is different.

The bottom line is that it is 100% the Engineer’s job to determine EoT’s, he should keep such records that he thinks he will need and ask the contractor for further records in the event of a claim. If the contractor fails to provide them, he should make a reasonable and impartial decision during the progress of the works based on what he knows.

If the contractor in not providing an electronic copy of the programme hinders the Engineer determination such that a lesser or no EoT is granted, then tough Mr Contractor, it isn’t an unreasonable request to make. If it ends in a costly dispute, as long as the Engineer has properly and impartially applied his mind to determining the EoT due on the information available, the dispute isn’t the Engineers fault.
Samer Zawaydeh
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Dear Vamsi,

It depends on the Contract between the Owner and the Engineer.

You are talking about a possible lack of experience on the Engineer’s side to solve the issue. In which case the Engineer will ask the Client for additional support (variation order) like you mentioned.

Practically, this does not happen. Because the staff on Engineer’s side (at the Main office) will definitely have one or more experts in these/legal matters. They will step in and advice if it is a small issue, or the above option will be used.

With kind regards,

Samer
Vamsi Gollapinni
User offline. Last seen 5 years 26 weeks ago. Offline
Just a quick question since role of Expert Delay Analysts is being discussed in an EOT claim.

IS Forensic Delay Analysis, in case of complicated disputes, a variation to the scope of Engineers work?
I do understand that it is the responsibility of the engineer to determine an entitlement to the contractor based on his submitted claim. If the information provided is not sufficient and contractor refuses to submit further proof of his claim, a Forensic Delay Analysis will have to be undertaken by the Engineer to identify delays and their effects on the project.

Will this be a variation to Engineer’s scope of works? Can someone shed some light on this issue?
Samer Zawaydeh
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Dear Leon,

A lecturer on Arbitration once told us the same story, a dispute is like two parties pulling both ends of a cow with lawyers milking it in the middle. At the end of the dispute, both parties are exhausted and the lawyers get all the milk along the way.

With kind regards,

Samer
Se de Leon
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No wonder projects go to unnecessary disputes, arbitration and to some, it goes as far as litigation because parties are not cooperating. In this case, because one party does not want to provide the engineer with an electronic copy of the programme(seems like there’s a dispute).

I had been involved in an arbitration case just recently. From my experience, the only real winners in such situation are people who were not actually involved in the project such as delay analysts and lawyers.

Quite honestly, it’s not worth it.



Samer Zawaydeh
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Hi,

The submittal of the Claim should be according to standard acceptable practice. This might be a flexible term, but in essence, the request for time extension should be clear, supported by historical data and time analysis, and with results similar to the actual results that took place.

It is up to the Engineer to request the needed technical opinion to evaluate the supporting claim.

The determination of the Engineer is done after consulting both parties.

The job of detailed analysis of Extension of Time is left to experts. The presence of such expert depends on the size and complexity of project. The majority of projects have engineers with technical and managerial experience, not with detailed knowledge to solve Extension of Time issues. These issues are taken care of by experts who will study the submitted programs and results.

With kind regards,

Samer
Anoon Iimos
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Hi Samad,

If I were the contractor, is PDF copy enough for you? Supposing I was using another software (i.e. Spider).
Samad Mohd Abdul
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Hi everybody,

I am also facing the same problem; contractor is reluctant to submit the soft copy of his time slice programmes referred in his claim documents (although he has submitted the hard copy of the programmes).

However we have issued a letter advising the contractor to submit the same mentioning that absence of the soft copy of the programme is hindering the review process of EOT.

My question is can we delay in replying his claim in absence of the said information. Also is there any time frame within which the Engineer should reply to the contractr.
Andrew Flowerdew
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Under FIDIC and most standard forms, contrary to popular belief, it is not up to the contractor to prove his case. The wording of FIDIC is along the lines of:

"the Engineer shall determine the amount of such extension and shall notify the Contractor accordingly"; and

"within 28 days, or such other reasonable time as may be agreed by the Engineer after such notification submitted to the Engineer, the contractor shall submit detailed particulars of any extension of time to which he may consider himself entitled in order that such submission may be investigated at the time."

"Upon the happening of the event referred to..., the Contractor shall keep such contemporary records as may reasonably be necessary to support any claim he may subsequently wish to make. Without necessarily admitting the Employer’s liability, the Engineer shall ... inspect such contemporary records and may instruct the Contractor to keep any further contemporary records as are reasonable and may be material to the claim of which notice has been given."

"Within 28 days, or such other reasonable time as may be agreed by the Engineer,... the Contractor shall send to the Engineer an account giving detailed particulars of the amount claimed and the grounds upon which the claim is based."

"If the Contractor fails to comply with any of the provisions of this Clause in respect of any claim which he seeks to make, his entitlement to payment in respect thereof shall not exceed such amount as the Engineer or any arbitrator or arbitrators appointed ... considers to be verified by contemporary records (whether or not such records were
brought to the Engineer’s notice ....)"

The onus is on the Engineer to determine the extension of time and the contractor to provide such records to support his claim - that doesn’t actually include the contractor doing ANY form of analysis.

Contractually, it is up to the Engineer to gather sufficient information, which will include those submitted by the contractor along with asking for further information if required. It is then up to the Engineer to analyse all the information in order to come to a decision.

If the contractor fails to provide the information within the requested time, the Engineer should make a decision based on the information he has available - if that decision is no EoT or a smaller one than the contractor thinks he should have then tough - because the contractor has not provided the information requested! The contractor can supply the info and ask the Engineer to review it or go to arbitration.

Basically, it’s up to the Engineer to gather and review info, then make a decision. It is not up to the contractor to prove his case but merely to provide sufficient record to support his case.

Now we all know this rarely happens in real life. In real life the contractor usually does and submits an analysis plus records, the Engineer asks for further information which isn’t forthcoming and then makes no decision based on the premise that he hasn’t got the additional information yet. That’s not how the contract usually works, but sadly it is how many think it works.

Lawrence Cuozzo
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Vasmi -

Most contracts will have language that specifies what the contractor must submit to the owner in order to support his claim. Obviously, if the contractor is refusing to submit a contractually-required piece of information, he is in violation of the contract and his "claim" should be rejected as having "no merit". You should always do your own independent claim analysis, but the onus is on the contractor to prove his case.

- Lawrence
Vamsi Gollapinni
User offline. Last seen 5 years 26 weeks ago. Offline
Mike, Santhosh

Completely agree with you, and add to that none of their Notice of delay are within the time specified in the contract.

Gary

I believe it will be detrimental to their claim as when i started to do my own analysis, the results were completely different. Not aware of any Case where it happened though.

Thanks again

vamsi
Gary Whitehead
User offline. Last seen 5 years 37 weeks ago. Offline
A fellow planner once told me that refusal by a contractor to supply requested information that is readily available, and pertinent to the claim can reasonably be intepreted as an admission that this information would be detrimental to their claim.

I have no case law references to back this up. Just wondered if anyone knew if this was true, or a bit of bluster?
Santhosh kumar Na...
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Reject the calim and ask the contractor to re-submit the same with all substantiation including impact as Planned and actual schedule, documents etc in hard and sfot copy.
Mike Testro
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Hi Varsi

Reject the claim as being un reasonable then make your own assesment of the entitlement.

Best regards

Mike Testro