Construction Law/Notice to Claim

Advertisement


Question
QUESTION: Dear Mr. John,

We are using FIDIC 1999 First Edition.

I am working with the Contractor, and we are now delayed by one month. The delay and disruption is caused by the employer risk event due to late approval of shop drawing. We are hesitant to give notice to the Engineer because our As-Planned programme or baseline is not yet approved.

Q1 - Can we still submit our notice to claim in accordance with Sub-Clause 20.1 of the condition of contract even our baseline programme is not yet approve?

Q2 - Are we still entitle to the extension of time claim even without the baseline approve?

Thank you in advance.

Best regards,

Aryan

ANSWER: Dear Aryan,

Thank you for this question.

For the purpose of this answer I assume that you are using the FIDIC 1999 RED book form of contract. Please advise if this is an incorrect assumption and I will be happy to revie based upon more accurate information.

Under the FIDIC form and in particular sub-clause 8.3, the Contractor has 28 days from the Commencement of Works in which to submit its programme and the Engineer has a further 21 days in which to reply to that programme. If you are beyond that 49 day period and the Engineer has not given approval of stated, with reasons, his disapproval, you can rely upon your programme.

Even if you are within the 49 day period you can and should issue the notice of intention to claim. What you cannot do at this time is detail your claim based upon an approved programme; you can make an interim assessment only.


I hope that this assists you.

Kind regards,
John Dowse

Follow me on Twitter: @CernoOrg

For my regular industry newsletter e-mail to info@cerno.org, stating SUBSCRIBE in the subject line

Training and consulting services are available, bespoke to companies and individuals.

John Dowse can be contacted by e-mail to info@cerno.org (When e-mailing, please include “AllExperts” in the subject line.)


---------- FOLLOW-UP ----------

QUESTION: Dear Mr. John,

Thank you so much for your quick reply. We are using FIDIC 2005 RED Book - Conditions of Contract for Construction - MDB HARMONISED EDITION 2005.

The Engineer gives notice to us (Contractor) stating to which our programme does not comply with the Contract requirement and it is therefore REJECTED.

We have already submitted a notice of intention to claim stating that "In accordance with Sub-Clause 20.1 of the conditions of contract, we hereby give notice to claim for our contractual entitlement as a result of the corresponding delays due to late approval of shop drawing”.

However, after two (2) days the Engineer replied stating with reference letter no. xxx your notice to claim is hereby rejected due to non-approval of your baseline programme.

Q1 - My Question is can we still give or submit our Notice of Intention to Claim even without the Engineer’s approval to the programme? Because according to Engineer’s reply we cannot submit our notice due to the absence of the baseline programme.

Q2 – In what particular clauses in the conditions of contract that we (Contractor) can rely on with regard to this situation? Can you please elaborate in detail?

Many thanks.

Aryan

ANSWER: Dear Aryan,

Thank you for this question.

Q1 - Yes. The fact of a claim and the consequent entitlement is not dependent upon the existence of an approved programme. The programme is a mechanism by which an entitlement might be measured. In the absence of agreement a reasonable assessment must be made.

Q2 - There is no specific provision in this respect; indeed there is no need for one. The two issues are not directly connected. However I suggest that you refer in your correspondence to sub-clause 8.4.

The Engineer should give notice of how the programme fails to meet the contractual requirements; it is not reasonable merely to reject the programme. Indeed sub-clause 8.3 requires the Engineer to state the extent to which the programme does not comply. Further sub-clause 20.1 requires the Engineer to respond to the contractor's detailed particulars of claim, stating detailed reasons for any disapproval. The Engineer does not have grounds to reject a simple notice of intention to claim. To do so indicates a prejudice against the claim before it has been detailed.  

Sub-clause 8.4 details the type of events that give rise to a prima facie entitlement to claim. If the event falls within that list the entitlement exists and only the quantum should be in dispute.


I hope that this assists you.

Kind regards,
John Dowse

Follow me on Twitter: @CernoOrg

For my regular industry newsletter e-mail to info@cerno.org, stating SUBSCRIBE in the subject line

Training and consulting services are available, bespoke to companies and individuals.
John Dowse can be contacted by e-mail to info@cerno.org (When e-mailing, please include “AllExperts” in the subject line.)


---------- FOLLOW-UP ----------

QUESTION: Dear Mr. John,

Thank you so much for your resourceful and very informative response.

If you don’t mind I have a follow-up question, if in case the sub-clause 8.3 [programme] is not yet approved by the Engineer until such time we intend to give a final claim in accordance with sub-clause 20.1(c), and we (Contractor) wants to measure our entitlement in terms of extension of time claims (e.g. 60 calendar days), in what way or in what basis do we present our extension of time claim without the approved baseline? Since we are utilizing a PM software to show our entitlement as mechanism to measure our EoT claims and accordingly the programme must be accepted by the Engineer in order to demonstrates and substantiate our EoT entitlement.

My second question, this is in regard to sub-clause 8.3 [Programme], I did not find any words stating to the extent that the programme must be cost-loaded and resource-loaded.

What I noticed in this sub-clause 8.3 is in (d) a supporting report which includes: (ii) details showing the Contractor’s reasonable estimate of the number of each class of Contractor’s Personnel and of each type of Contractor’s Equipment, required on the Site for each major stage. In other words, is this what so called a resource-loaded programme?

Thank you again for your effort and time. Happy Blessed and Prosperous New Year!

Best wishes,

Aryan

Answer
Dear Aryan,

Thank you for this question.

In the absence of an approved baseline programme the Contractor can still use his proposed programme to measure the delay and claimed EoT entitlement. The result will not be accepted by the Engineer but the Engineer will still be obliged to state why he considers the result to be flawed and to provide his own determination.

Regarding sub-clauses 8.3, the programme itself does not have to be resource loaded unless this is specified through the specification or the particular conditions; however modern software often includes the facility of detailing planned resources within the programme and generating a report for same.



I hope that this assists you.

Kind regards,
John Dowse

Follow me on Twitter: @CernoOrg

For my regular industry newsletter e-mail to info@cerno.org, stating SUBSCRIBE in the subject line

Training and consulting services are available, bespoke to companies and individuals.

John Dowse can be contacted by e-mail to info@cerno.org (When e-mailing, please include “AllExperts” in the subject line.)

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

©2016 About.com. All rights reserved.