Re: EARLY WARNING AS PER CLAUSE 34 OF GCC - WORKS

Eng. Mathias Galibona Wed Feb 27, 2013 12:36 am

RJM
Thank you for your reply. I am still scrutinizing your advice and I will be back soon.

**RJM** Tue Feb 26, 2013 3:41 pm

As a background, the main premise of the system is for parties to raise early warnings where there is an issue. The parties then talk about the problem and collectively minimize (or eradicate altogether) the effects that this event could have. Only when all that is done is it necessary to consider who is liable under the contract for this event. What the Parties should understand is that the early warning should NOT be considered as a commercial tool – not automatically compensation events (construed as the claim notification, simple because there is no claim at the time, rather it is an “early warning notice”). These matters are things that MIGHT or COULD be an issue and are not yet a certainty. In other words an event COULD affect time or cost, not that it WILL.

Eng Mathias, in this aspect you are quite right as time to respond such notices is not expressly stated. Impliedly, good practices call for promptly act on the notices – this could be at least within seven days from the date of notice. I have to admit that this is a vacuum which can lead to dispute when responsible party does not act within reasonable time. In order to fill this void, the New Engineering Contract (NEC) Standard Bidding Document – United Kingdom has provision address this clearly - Clause 61.4 provides that “…If the Project Manager does not notify his decision to the Contractor within either; one week of the Contractor’s notification or a longer period to which the Contractor has agreed, the Contractor may notify the Project Manager to this effect. A failure by the Project Manager to reply within two weeks of this notification is treated as acceptance by the Project Manager that the event is a compensation event and an instruction to submit quotations. Eng. Mathias should PPRA customize the respective Clause in the SBD to be expressly on the aspect you have touched on.

Another shortfall in this clause is that it not expressly stated that PM can give early warning. I think it should have been either partly can give notice for early warning for the best interest of the project.

Eng Mathias wrote

When should the Contractor start counting the time delay in case of the Extension of Time (EOT) Claim

.
Eng Mathias, here is where the program of work become absolutely critical tool to assess to what extent the effect of earning warning in the entire work program. SBD for Medium & Large Works Clause29.1 provides that “Within the time stated in the Special Conditions of Contract, the Contractor shall submit to the Project Manager for approval a Program showing the general methods, arrangements, order, and timing for all the activities in the Works”. Assuming after early warning PM accept that such notice as “Compensation Event” and will have impact to the work program and order the contractor to revise the program, in this case it will depend how early warning is integrated and change the work program. Clause 29.2 of the referred SBD further provides “An update of the Program shall be a program showing the actual progress achieved on each activity and the effect of the progress achieved on the timing of the remaining work, including any changes to the sequence of the activities”. The revised the work program will give an indication as to the amount of floats this early warning has at that point (float being the amount of time that any given activity can be delayed before affecting the critical path). If the program does not have floats this implies every activity is in critical path. However, sometime ownership of floats is a bone of contention as it complicates analyses of delays. On the other hand, assume that PM determines that the situation will not occur or could be dealt with before the contractor starting working in the respective section as in your case; this implies the contractor will continue working as per available work program. In case that the situation is not dealt with on time as determined by the PM, its repercussion will be serious as will attract extension of time, cost of rectifying the situation and may as well attract extra cost for changing the sequences of activities (Disruption/Loss of Productivity/Suspension Costs).

Based on the explanations above, it is very difficult one to say when the contractor start counting the extension of time although logic may tempt one to say it should start the date when he was supposed to work in the respective section. But using revised work program and take into consideration issue such as a float, concurrent delays, excusable (client or their agents are the major cause of the delay in the project – compensable events) and non-excusable (contractor’s fault - delays) delays the result could be different from the common sense.

Eng. Mathias Galibona Thu Feb 21, 2013 5:26 pm

The Contractor is required to warn the Project Manager (PM) at the earliest opportunity of a specific likely future events or circumstances that may adversely affect the quality of the work, increase the Contract Price or delay the execution of works.

My concern about this Clause is that it doesn't specify the time when the Project Manager has to work on the early warning from the Contractor and consequently, when should the Contractor start counting the time delay in case of the Extension of Time (EOT) Claim.

For example: during construction of road there is a building within the construction corridor which need to be removed inorder to attain the desired road width. The Contractor informs the PM one month ahead his schedule to work on the respective section and it takes another month for the building to be removed. Is it proper for the Contractor to claim EOT from the date he informed the PM or should he claim from the date when it was scheduled to work on the respective section?

Secondly, if the Contractor is working behind schedule (i.e. the program of works is not updated) and encounter the same scenario above and inform the PM accordingly, then what is the proper time to start counting the building obstructing the works?

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