acceleration of the works

Rajeev,



Although what you say is correct, the usual problem is that the Contractor doesn’t agree with the current completion date - either because EoT claims have been but in and no EoT granted which the contractor believes is incorrect, or there are EoT claims yet to be settled.



The Employer tries to make the contractor stick to the current completion date, the contractor can’t make the current completion date, or only can at considerable expense which he has no guarantee of getting back. Often after the job the Employer wants to charge LD’s from the current completion date and the contractor doesn’t agree with the date



- and before you know it, a dispute has started.



It’s the first sceanrio above that leads to interesting questions about acceleration, constructive or instructed.

The Contractor is only entitled to an EOT if the extra work will impact the current agreed or approved finished date.



He is compensated for the additional work ie. for all resources and cost including profit & overhead etc.. for performing the extra work.



It is his choice to use the existing resources or mobilize additional resource to perform this work.This may not constitute and EOT if it does not extend the current longest path.

Anoon,



There is no such thing as a standard contract. A contract is a legally binding promise by parties to do something - in the context of construction:



Contractor - promises to build what the Employer wants

Employer - promises to pay



The starting point is that the price the Contractor and Employer has agreed includes for EVERYTHING. But as we know, construction projects change or unforessen events occur. Therefore the time and cost of these risks are shared between Employer and Contractor - how that is done must be set out in the contract otherwise, (with a few exceptions), the risk is with the Contractor. Eg quantities are the Employers risk in a full re-measurement contract or under FIDIC, the first 15% change is with the contractor and any greater change with the Employer.



As all construction projects are different and Employers priorities are different, so each contract is different - even standard forms of contract are usually amended to reflect the Employers requirements.



How the programme fits into everything will therefore be a matter of the contract wording, as will the significance of changes to the programme.

one of the many things I don’t understand is the Contract, is there anything as a Standard Contract? or is there anything as a Standard Wants? (i.e. wants of the Client), is it possible to classify or categorize the Wants, the Needs, and the Allowable and Practicable?



If you consider the Contract as the "Wants", how do you consider the Program or the Schedule of Works?

in my humble opinion (though i’m not really humble), it is not reasonable to say that a Program or Schedule is a contract document by itself. I believe that it is an element (or an obligation as Andrew said) forming part of the contract documents.



Why? because basically a Contract is a promise, and Planning and Scheduling are always uncertain! (until it happened). How can you make a promise on Design/Engineering works beforehand?



For me, a Program or Schedule is a Deliverable! a complex one, which defines the whole deliverables!

But isn’t an updated programme, if different from the baseline programme, a change of the baseline programme?



If the updated programme if different, you must have departed from the original baseline programme!!!!!!



Not going to get into a great debate on this subject as the arguments really turn on the exact wording of the contract.

One needs to absolutely certain what is meant by "programme". Many get confused between baseline programme and update. Baseline programme, generally, can only be changed with proper approval process. But current programme or update is just the current status of the project. It may show late or early completion depending on status of the project. And it should. It is the crystal ball of the project.



Changing the baseline programme would be change in contract terms.



Change in current programme has nothing to do with contract terms. It is part of project management.

If the programme is part of the contract, and it can be, then for better or worse, it comes under excatly the same rules concerning a change to the terms of the contract, just like any change to any other term in that contract.



Which leads to some very interesting arguments!!!!!!!!!!!



Note - we are talking about a change to the contract terms here, not a change to the scope of works within the contract.

Andrew, I am definitely with you on this one.



Even if it is a "contract document", what does that mean?



If "contract document" means that each and every detail of it is some sort of a contract promise, and that any departure in any detail is some sort of technical contract breach, then it is ridiculous. A contractor will continuously be in this technical breach right from day 1, because things, hopefully only small things, change.



If not every detail, then saying "contract document" must be accompanied by a very strict specification of which details are the promises.



The idea that the contractor requires the permission of the client to change the program, in any respect at all, could only have been thought up by lawyers. Of course it’s in contracts, but it is ridiculous. The contractor has already assumed the risk of meeting a small number of specific promises, eg the handover date. If the client deprives the contractor of just about the only tool available to manage that risk, ie the program and the ability to plan and then revise the plan as frequently as necessary, the client is the main problem and is acting against his own interests. There may be some things that the contractor cannot change because they are not within his control, such as the dates that the client will supply equipment, and the contractor cannot oblige/force the client to change his dates to match some revision, but that’s all.

All,



I remember discussing this a while back - most standard forms of contract make the provision of a programme by the contractor a contractual obligation - this does not automatically make the programme a contract document.



In many standard forms the programme is NOT a contract document.

Donald,



I absolutly agree with you.



The Contractor needs Client/Consultant approval, in order to revise the time schedule (even in the form of acceleration). The hidden intentions can be shortening Provisional Sum Items, or earlier appointement of nominated subcontractors; in order to plan a Claim.



Moreover, as you said; CONTRACTUALLY, the Master Baseline is considered part of the Contract Documents; hence, alterations require approval of all parties.

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

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.

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.

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.

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!

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.

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?

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.

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.

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.

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

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.

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

James,



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

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.

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:



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.

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.

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

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"

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.

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.

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,



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.

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

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.

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...

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.

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

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.

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.

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.