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Construction Industry/Time Extension in Service Contracts

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Question
Why there is no provision of extension of time and imposition of LD/delay damages in service contract administration?

Answer
Dear Rahman,

Apologies for the later answering of your question.It was due to the Eid holiday enjoyment. About your question, i think the issue of application of LD / extension of time depends upon how the contract is arranged and the terms and conditions attached to it. It may also be an optional thing. On a personal note, i have seen, experienced and oversee a services contract in which Penalty is included and also extension of time is granted. This is made possible because of the way the procurement of the contract was arranged. Firstly, service contracts may be arranged as lump sums or fixed percentage sums. Take for example, a service contract for Pre contract professional design and quantity surveying services could be arranged with delivery or completion dates for each milestones such as (i) concept design; (ii) Detailed design (iii) Tender documentation and Estimates. Here, if the design consultant fail to complete and submit the designs as planned (because there is usually a programme of services also similar to that of construction programme); then, the employer, if the contract has a penalty clause, can apply the clause accordingly. I have applied similar clause against design consultants in the course of my job.
Similarly, if the employer modify his brief and requested for additional services, probably adding one more floors to the design, then, the consultant will also be entitled to time extension and cost of additional services since the scope of services has changed. You can check FIDIC for consultancy service agreement - Model conditions 2006. Clause 4 in general dealt with this. You would see that the provision of clause 4.3 actually inform us of variation to the contract which may result in extension of time. Clause 4.4 and 4.6 dealt with delays though LD / damages is not stated but instead of outright termination of the consultant services contract as provided for in clause 4.6, LD/ damages can be included in the contract with a cap, this can be included in particular conditions depending on the clients agreement with the consultants at the beginning of the contract.

The reason why this is not common in service contract is because most client do not use FIDIC standard of conditions for service agreement as they do in Construction with contractors. Most clients use bespoke which may be lacking in this regard. Another reason could be that the client has opted not to include same.

Hope i am clear.

Thanks.
'Femi

Construction Industry

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Femi Alofe

Expertise

All questions relating to construction management, contracts management, contracts practice and standards and procedure compliance in contracts administration.

Experience

Contracts Administration, Construction & Commercial management within the Construction Industry.

Organizations
RICS (UK) AIQS (Australia) PQS (Canada) CCE (USA) CIOB (UK) NIQS (Nigeria)

Education/Credentials
B.Tech (QS) Msc (2013)

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