Extension of Time (EOT) & Related Costs in Construction - Presentation Slides

Extension of Time (EOT) and Related Costs
in Construction
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•Time is of Essence
•Delays are inevitable on construction projects
•The only project to have completed on time is a Mosque. Divine
intervention (or God’s help) was understood to be the force behind the
timely completion of this Mosque.
•Time and Money go hand-in-hand. When projects get late, additional
costs are incurred.
•This makes it imperative to take control of project delays; timely and
effectively.

•Majority of construction projects worldwide are administered by the
FIDIC forms of contract.
•FIDIC recognises delay and related costs and has provisions related
thereto. For example;
 Sub-Clauses 8.4 & 20.1 (FIDIC 1999 Edition)
 Clauses 44 & 53 (FIDIC 1987 Edition)
FIDIC
FIDIC
FIDIC
FIDIC
FIDIC

The FIDIC Provisions define the conditions where delay may be
claimed as the basis for an Extension of Time (EOT). Some examples are;
 Late provision of design or drawings
 Unforeseeable Physical Conditions encountered on Site
 Inclement Weather
 Variations instructed by the Engineer (Additional Works etc.)

Meanwhile the principles of how delay and related
costs should be calculated are not defined by FIDIC.
This leads to issues; issues which are usually
contentious due to various 'schools of thoughts' and
varied interpretations existing worldwide.
Disputes are the usual outcome.

Contentious Issues in Delay Analysis
resulting in Disputes
– Critical Path
– Who owns the Float?
– Concurrent (or Contractor) Delays and how these effect
Entitlement
– EOT and its relation with Compensation for Delay
– Which is the best Method of Delay Analysis?
» As-Planned Vs. As-Built Comparison
» Impacted As-Planned
» Collapsed As-Built / But-For
» Time Slice / Sub-Networks / Time-Impact
» Etc.

In order to eliminate disputes or facilitate settlement of
disputes, there are now certain standards used worldwide.
The leading standards are;
 Society of Construction Law’s
Delay and Disruption Protocol (SCL Protocol)
 AACE 29R-03 (Forensic Schedule Analysis)

The SCL Protocol was
finalized in October 2002 after
several years of deliberations
and considerable debate and
agreement between experts
from different backgrounds

The objective of the SCL Protocol
was to bring reasonableness and
fairness into the delay assessment
process and to eliminate
widespread manipulation of
complex delay issues

The SCL Protocol tried to standardize
the issues such that disputes would be
reduced or eliminated

It is recommended that;
should be adopted as a Standard
and should be, where possible,
incorporated in the Construction
Contracts

The SCL Protocol can be downloaded from:
www.eotprotocol.com

The remaining slides of this lecture will
review and discuss the basic Principles
suggested and recommended by the
SCL Protocol

Basic Principles
suggested and recommended by
the SCL Protocol

The Principles suggested by the
SCL Protocol are simple.
Some of the key principles suggested
by the Protocol are;

RULE NO. 1
If there is an Employer’s delay, which is beyond the Contractor’s
control, and if this delay impacts the Completion Date of the Works,
the Contractor should be entitled to receive an
Extension of Time (EOT).
[This will effectively result in an extended Time for Completion and will
relieve the Contractor from having to pay penalties for delay (or
Delay Damages under FIDIC)]

RULE NO. 2
For the case of recovery of delay (or prolongation) costs incurred due to
the Employer delays, the Contractor must be able to prove that there has
been no other delay, which is in his own control, and which is equally
(or partly) contributing for delaying the Time for Completion.
This category of delay is called a ‘Concurrent’
(or Contractor’s) Delay
[In order to win a Delay Costs Claim, the Contractor must be able to
prove that he has not been responsible for Concurrent Delays to
the Time for Completion]

RULE NO. 3
Where Contractor’s Delay to Completion
occurs concurrently with Employer’s Delay
to Completion, the Contractor’s concurrent
delay should NOT reduce any
Extension of Time (EOT), which is due.
[Result of Rule No. 1 will not change and is irrespective of the result
of Rule No. 2]

The foregoing Rules proposed by the SCL Protocol are
meant to bring fairness and reasonableness into the
delay assessment process.
[The emphasis of the SCL Protocol is that no one Party
should benefit from default of the other Party]

The Illustrations demonstrating the principles of the SCL
Protocol are contained in the following Figures A to G

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Path 1 Float = 3.5 Weeks
Path 2
Figure A - Accepted Contract Programme
Weeks
Path 1
Contract Start
Date
Contract
Completion Date

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
PRIOR TO EXCUSABLE DELAY (UPDATE WITH ACTUAL PROGRESS)
AFTER EXCUSABLE DELAY
Excusable Delay
Path 1 Float = 1.0 Week
(a) 2.0 Weeks (a) 5.5 Weeks
(b) 1.0 Weeks (b) 0 Weeks
(c) 0 Weeks (c) 1.0 Weeks
(d) 5.5 Weeks (d) 2.0 Weeks
(a) 2.0 Weeks (a) 0.1% of Contract Price
(b) 1.0 Weeks (b) Direct Costs of Excusable Delay
(c) 0 Weeks (c) NIL
(d) 5.5 Weeks (d) (a) plus (b)
<=Date of Excusable Delay
Figure B - Delay Impact 1
Weeks
Path 1
Contract Start
Date
Contract
Completion Date
Path 2
(3) Compensation for Delay to
Progress
(1) EOT Entitlement (2) Period of Prolongation Costs
(4) Other Compensation
Contract
Completion Date
Impact on Path 1
= 2.0 Weeks
Path 2
Path 1

Principles & Provisions of the SCL Protocol
relevant to Figure B
Core Principle No. 7 - Float as it relates to time
Unless there is express provision to the contrary in the contract, where there is remaining
float in the programme at the time of an Employer Risk Event, an EOT should only be
granted to the extent that the Employer Delay is predicted to reduce to below zero the total
float on the activity paths affected by the Employer Delay.
Guidance Section 1.12.1
If as a result of an Employer Delay, the Contractor is prevented from completing the works
by the Contractor’s planned completion date (being a date earlier than the contract
completion date), the Contractor should in principle be entitled to be paid the costs
directly caused by the Employer Delay, notwithstanding that there is no delay to the
contract completion date (and therefore no entitlement to an EOT), provided also that at
the time they enter into the contract, the Employer is aware of the Contractor’s intention to
complete the works prior to the contract completion date, and that intention is realistic and
achievable.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Excusable Delay
Float = -0.5 Week
(b) 3.5 Weeks (b) 0.5 Weeks
(c) 0 Weeks (c) 3.5 Weeks
(d) 5.5 Weeks (d) 0 Weeks
(a) 3.5 Weeks (a) 0.15% of Contract Price
(c) 0 Weeks (c) (a) plus (b)
(d) 3.0 Weeks (d) NIL
Contract
Completion Date
Impact on Path 1
= 3.5 Weeks
Path 2
Path 1
Path 2
Progress
Figure C - Delay Impact 2
Weeks
Path 1
Contract Start
Date
Contract
Completion Date

Core Principle No. 4 - Procedure for granting extension of time
The EOT should be granted to the extent that the Employer Risk Event is
reasonably predicted to prevent the works being completed by the then
prevailing contract completion date…..The goal of the EOT procedure is
the ascertainment of the appropriate contractual entitlement to an EOT; the
procedure is not to be based on whether or not the Contractor needs an
EOT in order not to be liable for liquidated damages.
Core Principle No. 5 – Effect of delay
For an EOT to be granted, it is not necessary for the Employer Risk Event
already to have begun to affect the Contractor’s progress with the works,
or for the effect of the Employer Risk Event to have ended.
relevant to Figure C

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Float = -0.5 Week
Excusable Delay
Impact on Path 2 = 6.0 Weeks
(a) 0 Weeks (a) 5.5 Weeks
(c) 0.5 Weeks (c) 6.0 Weeks
(a) 3.5 Weeks (a) (d) minus (c)
(b) 0.5 Weeks (b) Direct Costs of Excusable DelayNIL
(c) 6.0 Weeks (c) Direct Costs of Excusable Delay
(d) 3.0 Weeks (d) 0.2% of Contract Price
Figure D - Delay Impact 3
Weeks
Path 1
Contract Start
Date
Contract
Completion Date
Path 2
Path 1
Contract
Completion Date
Path 2
Progress

Core Principle No. 4 - Procedure for granting extension of time
The EOT should be granted to the extent that the Employer Risk Event is
reasonably predicted to prevent the works being completed by the then
prevailing contract completion date…..The goal of the EOT procedure is
the ascertainment of the appropriate contractual entitlement to an EOT; the
procedure is not to be based on whether or not the Contractor needs an
EOT in order not to be liable for liquidated damages.
Core Principle No. 5 – Effect of delay
For an EOT to be granted, it is not necessary for the Employer Risk Event
already to have begun to affect the Contractor’s progress with the works,
or for the effect of the Employer Risk Event to have ended.
relevant to Figure D

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Contract Completion Date
Float = -1.5 Weeks
Excusable Delay
Float = -3.5 Weeks
(d) 0 Weeks (d) 1.5 Weeks
(a) 3.5 Weeks (a) (c) plus (d)
(d) 0 Weeks (d) 0.1% of Contract Price
Figure E - Delay Impact 4
Weeks
Path 1
Contract Start
Date
Path 2
Path 1
Path 2
Progress

…an EOT should be granted to the extent that the Employer Risk Event is
predicted to prevent the works being completed by the then prevailing
contract completion date. This process requires consideration of the
available float…
…Where there has been Employer Delay, this may prevent the Employer
charging the Contractor with LDs for failure to achieve a contract
completion date…
relevant to Figure E

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Float = -1.5 Weeks
Excusable Delay
Float = -3.5 Weeks
(a) 2.0 Weeks (a) 0 Weeks
(d) 0 Weeks (d) 1.5 Weeks
(a) 3.5 Weeks (a) (c) plus (d)
(d) 0 Weeks (d) 0.1% of Contract Price
Figure F - Delay Impact 5
Weeks
Path 1
Contract Start
Date
Path 2
Path 1
Path 2
Progress

Where an Employer Risk Event occurs after the contract completion date, in a
situation where failure to complete by the contract completion date has been caused
by Contractor Delays, the principle set out in Section 1.4.7 above should apply,
except where the Employer Risk Event is a non-compensable Employer Risk Event.
In such an event, no EOT (or compensation) should be due. Where an EOT is due
after the contract completion date, the Employer Risk Event does not exonerate the
Contractor for all its delays prior to the Employer Risk Event occurring. The effect
of the Employer Risk Event should be assessed as described above and any EOT
found due should simply be added to the contract completion date.
relevant to Figure F

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Float = -1.5 Weeks
Float = -1.5 Weeks
Excusable Delay = 3.5 Weeks
(a) 2.5 Weeks (a) 0 Weeks
(a) 0 Weeks (a) (b) plus (d)
(c) 3.0 Weeks (c) NIL
(d) 3.5 Weeks (d) 0.2% of Contract Price
Path 1
Path 2
Progress
Figure G - Delay Impact 6
Weeks
Path 1
Contract Start
Date
Path 2

Where Contractor Delay to Completion occurs concurrently with Employer Delay to
Completion, the Contractor’s concurrent delay should not reduce any EOT due.
Where Employer Risk Events and Contractor Risk Events occur sequentially but
have concurrent effects, here again any Contractor Delay should not reduce the
amount of EOT due to the Contractor as a result of the Employer Delay.
Concurrency (Appendix A – Definations and Glossary)
True concurrent delay is the occurrence of two or more delay events at the same
time, one an Employer Risk Event, the other a Contractor Risk Event and the effects
of which are felt at the same time. The term ‘concurrent delay’ is often used to
describe the situation where two or more delay events arise at different times, but
the effects of them are felt (in whole or in part) at the same time. To avoid
confusion, this is more correctly termed the ‘concurrent effect’ of sequential delay
events.
relevant to Figure G – Slide 1/2

Core Principle No. 9 - Concurrent delay – its effect on entitlement to extension of time
Where Contractor Delay to Completion occurs or has effect concurrently with Employer
Delay to Completion, the Contractor’s concurrent delay should not reduce any EOT
due.
Core Principle No. 14 - Link between extension of time and compensation
Entitlement to an EOT does not automatically lead to entitlement to compensation (and
vice versa).
Core Principle No. 10 - Concurrent delay – its effect on entitlement to compensation for
prolongation
If the Contractor incurs additional costs that are caused both by Employer Delay and
concurrent Contractor Delay, then the Contractor should only recover compensation to
the extent it is able to separately identify the additional costs caused by the Employer
Delay from those caused by the Contractor Delay. If it would have incurred the
additional costs in any event as a result of Contractor Delays, the Contractor will not be
entitled to recover those additional costs.
relevant to Figure G – Slide 2/2

Although the programme should be the primary tool for guiding the
CA in his determination of EOT, it should be used in conjunction
with the contemporary evidence to ensure that the resulting EOT is
fair and reasonable. It will also be necessary for the parties to apply
common sense and experience to the process to ensure that all
relevant factors are taken into account, and that any anomalous
results generated by the programme analysis are managed properly.
Key Guideline, Suggestion and Advice of the
SCL Protocol

Figure No. Question 1 Question 2 Question 3 Question 4
B (c) (b) (a) (b)
C (a) (b) (d) (b)
D (c) (d) (d) (c)
E (b) (a) (d) (c)
F (a) (b) (d) (c)
G (c) (a) (a) (b)
Correct Responses for Figures B to G

Congratulations we
have come to the end of
the Lecture.
You are now a
Qualified and Certified
Delay Claims Analyst
and Expert.

FIDIC and Construction Solutions
thank you for your attendance and contribution.
We wish you all Good Luck.

THANK YOU!

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Extension of Time (EOT) & Related Costs in Construction - Presentation Slides