Very few construction projects (possibly none) ever complete on time and exactly as planned. Even with the best construction engineers managing the works, construction is all about the environment and human behaviours, and these give a lot of headaches & uncertainties.
In this section, we will provide guidelines on how time extension can be assessed and how contractors can benefit from time management.
To begin with, you must already have an accredited or accepted Work Programme for the Contract Works as this will form the basis of all activities. A deviation from this planned work programme or activity is what caused variations and thus delays. Many contractors failed to appreciate the importance and contractual effect of an approved Work Programme, so much so, that they will get just any guy who appears familiar with MS Project or Primavera, to prepare a beautifully charted Work Programme when in reality they are just that : beautiful charts of no relevance. Conversely, the Work Programme should be prepared by the most senior construction manager who will be involved in charting the Works from beginning to end, and a well versed construction planning engineer who will monitor and update ALL data on a regular basis therefrom, daily or weekly depending on the complexities and importance of the each work activity. Monitoring and data update is just a part of construction management, which is useless if not used properly to manage the works. More on How to Prepare a Work Programme, and How to Manage a Construction Project Using Work Programme.
What is Time Extension ?
We should first define what is Time Extensions. In any Contract Works there is a Start Date and a Completion Date. The Work Site is handed over to the Contractor to Start Work and is termed the Date of Possession of Site, and this is an important date to observe most carefully. Completion Date is a simple definition but have varied & complex applications; it is usually defined as the date when the Certificate of Practical Completion is issued by the Consultants (and/or Employer), or the date when all parties agreed that the Works are completed and acceptable to be used. As in almost all contract works, completion on time based on the original contract completion date is seldom achieved, even for the best managed projects, for many reasons. If the Contractor failed to complete on time, he will be penalised, usually in monetary terms as "Liquidated and Ascertained Damages". This is not beneficial to the contractor and is not justified if the fault in delays are not attributed to Contractor. Time Extension is really the Additional Time (in days), that the Consultants (and/or Employer) agree to give to the Contractor, (for whatever reasons) to complete the Contract Works without any penalty imposed. Simply put, if Contract is supposed to complete on 1st January, and Time Extension is approved for 10 days, then the Agreed Revised Time of Completion or Certificate of Practical Completion is extended to 10th January, without penalising the Contractor.
Calculations for Time Extension ?
Keeping good and detailed records of all matters affecting the Contract Works is an important part of Construction Management and in particular for calculations of Time Extensions, for all parties. It would help your contract if you know exactly what can constitute Time Extensions so you can pre-empt all these relevant data and information.
The more common issues which can constitute Time Extensions (also termed as EOT – Extension of Time) can generally be categorised as follows :-
- Due to Contractor’s Faults.
- Due to Employer’s Faults.
- Due to Consultant’s Faults.
- Due to Third Parties’ Faults.
- Due to Unexpected/Hidden Causes
- Due to Matters Beyond the Control of Contractor
- Due to Nature Causes.
- Due to Additional Works.
- Due to Changes in Contract Scopes and Specifications
If you categorise and keep detail records, extraction of data for EOT calculations is easy. Depending on your role as a Contractor, or Consultant or Employer, your data would be different in each case, and thus how you use them to Claim for EOT for a Contractor, or to Agree to EOT for a Consultant and Employer.
You can use a spreadsheet like Excel to tabulate activities, dates, duration and used in conjunction with an Approved Work Programme.
Some important aspects of EOT need be taken into account :-
- For EOT to be reasonably applied, the Overall Critical Path need be evaluated first. As critical path changes when work programme changes, critical paths need be re-evaluated at each case of EOT evaluation. This implied that a continuous assessment of Critical Paths is required.
- Since Works are incremental or segmental, EOT can be taken as incremental or segmental.
- Only duration which affects the Critical Path of the Work Programme incrementally need be considered for EOT for the whole contract, unless Segmental Completion is permitted in the Contract, then segmental EOT can be considered.
- Works can overlap and so can EOT in Segmental programme. Thus overlap duration need be incorporated into all the EOT assessments.
A simple example for an Time Extension Calculations using Excel Spreadsheet is as shown in the chart below
A more comprehensive chart can be prepared just using spreadsheets. Do note that it can be very simple as shown above, or very complicated, but a simple approach which everybody involved can easily understand is always preferred to any complex charting. Having said that, you can always use a complex integrated software like Primavera if you are familiar with their usage, however, you would still need to translate the results into an easily understood chart for non technical audience.