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Understanding the Principals behind the Program

7 replies [Last post]
Tue, 2010-08-17 05:09
Jason Lightley
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I have been involved with many claims but unfortunately there are many individuals, current boss included, that don’t understand the importance of the using the program as the main basis when compiling a claim, whether it be an EOT, Cost or Cost plus profit, and in some cases it could be a combination of two. I recently attended a FIDIC course run by Axel-Volkmar Jaeger, a man instumental in the writing of the FIDIC form of contract, and he raised some very important issues regarding Programs (Clause 8.3) and how to go about using the document to maintain your contractural rights. The most interesting item that he mentioned was that "the float in your program belongs to the client and not the contractor" which I found rather confusing as I have always understood that the float belongs to the contractor and this has got me thinking on how best to make all my activities "start as late as possible" or "zero float" everything and thus hide all my float in the activity duration and therefore maintaining my contractural rights to EOT as everything will be on critical path. Any thoughts on this matter will be appreciated.
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Replies

Wed, 2010-08-18 07:21
#1
Jason Lightley
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Hi Mike,

Thanks for the welcome and your thoughts on the matter, greatly appreciated.

I work for the Main Contractor and I build up float in my projects through the logic and the types of links I use, and in most cases develope quite a bit of float in that manner as is really up to us on how we go about carrying out the works ie. adding more resources to certain activities to reduce durations etc.

I have a scenario on how he (Axel Jeager) would go about determining a claim for EOT: Activity A is not on Critical Path and has 10 days float and then you suffer a delay of 10 days caused by an outside influence. You put in a claim for the 10 days EOT however the determination is you had this float therefore no EOT would be entertained, you get nothing. On the otherhand it has now put this activity on the Critical Path as it now has zero float which now opens up the door for more claims due to time being at large - it’s abit of a double edged sword!

Kind Regards,

Jason Lightley

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Wed, 2010-08-18 01:45
#2
Mike Testro
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Hi Jason

Welcome to planning planet.

The current thinking is that float belongs to the project on a first come first served basis.

I would not advocate artificially adjusting the task durations to use up float.

Alap programming just puts the float at the begining of the task rather than the end.

It is good planning practice to put in a Contractor’s time risk buffer task at the end of the project or at key stages.

This will be retained for your own risk and the client cannot touch it.

Best regards

Mike Testro
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Wed, 2010-08-18 09:08
#3
Mike Testro
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Hi Jason

You are correct that in your scenario there would not be an entitlement to an extension of time.

But a notice should be issued to the effect that the event has now changed the critical path.

This would be done by using the Impacted As Planned Method and the new programme issued to the Client.

If there had been a Contractor’s Time Risk Buffer of say 5 days at the end of the task sequence then there is a chance that an EoT would be valid.

Best regards

Mike Testro
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Thu, 2010-08-19 06:36
#4
Bryan Russell
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One of the major problems in forensic examination of contract programmes is that they have almost always been done with a view to look into the future and distribute resources and activities over the contract period.
When variations and delays have taken place, the principles behind the programme may not be valid at all and any revisions of the critical path may be such as to render a nonsense.
The Scottish appellate division recently held in City Inn v Shepherd Construction that "The relevant event must be likely to have or actually delayed the Works; Causation is to be decided by applying common sense rather than "philosophical" principles of causation. If a dominant cause of delay can be identified , other causes will not be considered and where it is not a relevant event, the claim will fail.
Their Lordships all agreed that it is not necessary to have a critical path analysis to determine an EoT. A lack of a critical path is not fatal to a claim for EoT. Where there are concurrent delays, irrespective of when the events started or finished, in the event of no particular event being dominant, a fair and reasonable award of EoT may involve an apportionment exercise.
Food for thought!!

Best Regards

Bryan Russell
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Thu, 2010-08-19 10:32
#5
Mike Testro
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Hi Bryan

That was a Scottish case and has not yet been tested in an English Court.

The current rules on concurrency in England still stems from the Brompron case where the critical path is required.

Another point is that the City Inn v Shepherd was based on a colapsed as built analysis which failed.

Best regards

Mike Testro
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Thu, 2010-08-19 11:20
#6
Bryan Russell
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Absolutely correct Mike; however us lot in the colonies, [South Africa], without the benefit of too much local precedent, have to rely on decisions made in other jurisdictions being accepted as persuasive.

I thought the case had been going so long everyone had forgotten the original pleadings!


All the best

Bryan Russell
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Fri, 2010-08-20 12:05
#7
Samer Zawaydeh
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Dear Jason,

If FIDIC wanted to comment on the ownership of float, they would have done so during the past 50 years. But FIDIC is Clause 8.3 silent about this.

Subsequently, you will revert to the Engineers determination and the DAB. And that is dependent on the industry and location, and of course the experience of the people working in the field.

What you have described is case specific and is not the FIDIC requirement. Simply because it is not writen in FIDIC clause 8.3.

With kind regards,

Samer
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