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Construction Law/Extension Of Time claim

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Question
Dear Alina,
Good Day Greetings..,
We have two separate contracts; the first one is over and the second one is about to finish, but in both of them the contractors failed to complete their scope due to their weak performance and about 30% due to the Employer's procedures, my questions as the Engineer:
1. If the contractor did not submit his claim according to clause "20.1", what shall the Engineer do, shall he officially inform him about the expiry of the contractual period?
2. Shall the Engineer notify the other contractor about the contractual expiry date in advance or the Engineer should wait for the contractor's claim.
3. In this case and if the contractor submit his claim according to clause 20.1 and the Engineer reject his claim, how the contractor can extend the performance guarantee without getting EOT.

P.S: Our contract adopt FIDIC Red Book, 2005

Answer
Hi, Izzaddin,
Greetings to you, too!
In the FIDIC Contract the Engineer is not obliged to teach the Contractor about the Contract provisions. It is a contract that the Contractor signed, and it has the power of the law of the Parties - the Contractor and the Employer). It is presumed that the Contractor knew what he signed, as well as the Beneficiary/Employer knew, also, what he signed. The duty of the Engineer in case of a claim of the Contractor is described in the Sub-clause 20.1: the Engineer shall respond in 42 days after the notice of Contractor's claim if he accept or reject the principle of the claim, and can ask more details, if not enough submitted by that time for the Engineer to determine the quantum (time and money). Then, after having all the details, the Engineer is to proceed according to the Sub-clause 3.5 to agree or determine the claim.
1. when the claim will be notified by the Contractor, in the notice of claim it should be mentioned, according to 20.1, the event or circumstance giving rise to the claim. At that moment the |Engineer will know what is the moment when the Contractor considers that the event or circumstance occurred, and judge if they are indeed the relevant event/circumstance for that claim, and if the 28 days rule is complied to, so that the claim is valid or not. Maybe at the first sight the Engineer considers certain event or circumstance - this is related to your question 1, if the Engineer should notify the Contractor about the expiring of the 28 days period - but the Contractor may rely on other event or circumstance, or put it in other way. So, warning or informing the Contractor, as per your question 1: a) in not the Engineer's duty, and b) may be usefulness, due to not "guessing" the Contractor;s intentions or strategy, as shown above.
2. should wait the Contractor's claim, as per the explanations above
3. the guarantee shall be valid as per the Sub-clause 4.2 (basically, up to the finalization of the works), irrespective when this will be. The works are to be done until the contractual Completion Date. If there are delays caused by the Employer or other events that are not in the responsibility of the Contractor, and if the provisions of the Sub-clause 20.1 are complied with, the Engineer will determine the extension of time to be granted to the Contractor, and the Employer will grant this EOT. If there are delays because of the Contractor, or because of things in the Contractor's risk, or if the provisions of 20.1 are not complied with by the Contractor, the Engineer and the Employer cannot give extension of time to the Contractor, but still the works are to be finalized, and the performance guarantee shall be valid up to the finalization of works, whenever this will be, inside the Completion Period, or outside it. If it is outside the Completion Period, the Employer is entitled to apply delay damages according to 8.7, 2.5 and 3.5.
So. EOT is only when the delay is determined as not to be in the risk of the Contractor, and if the provisions of 20.1 are complied with, and the performance guarantee is to be prolonged up to after the actual completion of the works, according to 4.2.
Hope it helps.
Best regards,
Alina
P.S. Congratulations for the clear way in which you address the questions!

Construction Law

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Alina Valentina Oprea

Expertise

I can answer to questions regarding FIDIC 1999 contracts, including practical use of these conditions of contract, as well as to questions regarding dispute boards, both from theoretical and practical point of view. I cannot answer to questions related to other kind of contracts or to procurement process, except to some (limited) extent.

Experience

Implementation of works contracts (FIDIC 1999) financed by different financial institutions, including European Union; claims and disputes; dispute boards See more on www.alinaoprea.com

Organizations
Dispute Resolution Board Foundation

Publications
see http://alinaoprea.com/publications/ ; DRBF Forum Newsletter; Drumuri si Poduri; Revista Constructiilor; SIDiR Newsletter

Education/Credentials
Graduated the University of Civil Engineering Bucharest, Faculty of Railways, Roads and Bridges (1985-1990); Trained under Mr. Gwyn Owen’s pupilage program for arbitrators/adjudicators under FIDIC mentoring program (2006 – 2007)

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