Construction Dispute Resolutions/Delay in Possession of Site
Conditions of Contract: FIDIC for Work of Civil Engineering Construction - Fourth Edition 1987
Reprinted 1988 with editorial Amendment only.
Reprinted 1992 with further Amendments.
The present on-going Contract is composed of number of independent packages.
In the Letter of Award it has been stated that, the possession of one of the sites is delayed and has further advised not to incur any cost on it until the Contractor is instructed to do so. This delay was due to the intervention of a Third Party.
This warning was never given at the Time of Tendering. Therefore the Contractor had planned to commence all the packages simultaneously and
his Work Programme, Schedule of Resources, Deploying of Resources and Pricing of the Tender had been done accordingly.
As per the above warning issued at the Time of Awarding the Contact, the said site was awarded after one year of the Commencement of the Contract.
I am grateful, if you would kindly advice on the following.
1. Applicable Clause in the Conditions of Contract.
2. Basis of Claim.
3. Details of the Claim including the claimable points
4. The way, the Claim can be Evaluated and Assessed,
so that it will be a strong Claim which can not be rejected.
Thank you sir.
Having understood the issue, following is my reply,
As the warning was given to you at the time of awarding the work, you are expected to factor in this risk and prepare the program and resources mobilization.
Before making any claim, you should have built up the supporting documentation. You should have adequately proved the losses / damages due the delayed handing over of part of project.
You should have made the program and resources mobilization plan in such a way that you had scheduled to commence work simultaneously on all areas. If the engineer had not reverted within 28 days of your submission, you might have considered it as approved. and in due course of time, you should have notified the Engineer that because of non handover of part of site, your resources were idle and notified the consequences of impact on cost and time.
in the absence of continuous document build up like this, the success rate of your claim is very less. The engineer can vary well determine that you were notified of the risk at the time of award and prove that you had NOT incurred any loss due delayed handover of site. The Engineer can even determine from your rate of progress on other areas that even if the owner had handed over the part of site along with other areas, you would not have completed the project on time. Following are the direct answers to your questions:
1. There is no single clause that can straight away enable you to make your claim. There are collection of clauses supported by previous correspondences would make the claim complete. For example the clauses related to Program (8.3), Extension of time of completion (8.4), Rate of progress (8.6) and contractor's claims (20.1) are the few important clauses to refer in claims.
2. The basis of claim could be ONLY to compensate for the losses you incurred due to idle resources and extended deployment
3. To support the above basis, you need to build up / collect documents where you notified the Engineer / Owner about the idle resources and its consequences on overall time and cost. in this case idle resources and extended deployment are the ONLY points of claim.
4. Nobody has the power and authority to penalize and punish anybody in a contract. Even though it is termed as the penalty clause, it is only the mechanism to compensate for the losses/ damages suffered by other party. The engineer shall focus to identify the whether any losses were incurred by the contractor?, was he aware of the risks in the beginning? has he factored for the risks? has he communicated to Owner / Engineer about the potential losses as and when he became aware of / expected to become aware of? was it been acknowledged by Engineer? was there any possibility that the idle resources could have been utilized to make up for the delays already occurred in the rest of the areas? if at all any loss is incurred how much? whether owner incurred any losses? what is the net loss?
This is how the evaluation will be done.
in my opinion, you may get only extension of time with / without cost impact for the areas of delayed handing over, if you don't have adequate supporting documents to substantiate your claim.