Delay and Disruption - Standard Forms and Programmes
© Daniel Atkinson 2001 22 November 2001
SUMMARY
The exact obligations of the parties as to programme are
a matter of interpretation of the contract.
if the programme is a
contract document then the status of the programme may transfer risk
unexpectedly in some contracts.
Standard Forms do not adopt a uniform
approach to programmes.
The standard forms make provision for the submission of programmes and their revision. Generally the
role of the programme is not clearly defined, the form it should take is not
described. Forms do not state a clear obligation to proceed in accordance with the programme, the exceptions being FIDIC Forms and IChemE Red Book.
SUMMARY OF LEGAL COMMENTARY on FIDIC FORMS
The
full role of the programme in the FIDIC form is not clear.
One role of the
programme in the FIDIC conditions is to allow the progress of the Works to
be monitored. Although not expressly stated, it is suggested that in
order to fulfill the functions required to monitor progress and predict
future delays under the Red and Yellow Forms, the minimum requirement is a Prediction
Programme in the form of a Linked
Bar Chart. It is suggested that the Silver Form only requires a Bar
Chart type of programme.
The programme is not used as a Compensation
Programme, although it will be evidence of actual progress and of the reasonable
time for issue of information. It is suggested that it would not be a
"fair determination" to ignore the results of an analysis of
extension of time based upon or using the Clause 8.3 programme.
The programme defines, if not creates,
time obligations, although not a contract document.
It is suggested
that Employers should consider specifying a Network Analysis Programme and
the form required as well as the software to be adopted, since this will
allow easier reporting and monitoring of progress as well as analysis of
compensation, particularly as each programme is required to be resourced.
As expected with a modern contract the Contractor’s obligation under FIDIC Forms is tied into a programme and progress reports.
It is suggested that the programme under the Red and Yellow Forms must
include Logic
Links to fulfill the specified function. This is not
necessary under the Silver Form where there is no Engineer and the Employer
has a less active role. Clause 8.3 (Red and Yellow Forms) requires the Contractor to submit a "detailed time programme" to the Engineer within 28 days of the notice of commencement.
The term "detailed time programme" is not defined, but Clause 8.3
lists details which are to be included with any programme submitted.
The Silver Form uses the term "programme" and requires the
programme to be submitted within 28 days after the Commencement Date.
All the Forms require the programme to include the order in which the Contractor intends to carry out the
Works, anticipated timing of various stages of work and the sequence and
timing of inspections and tests specified in the Contract. Importantly
the programme is required to include a supporting report which gives a
general description of the methods which the Contractor intends to adopt,
and the major stages, in the execution of the Works. The report must
also give details of resources. The term "programme" is
therefore not simply a list of activities and dates, nor just a
Bar
Chart, but includes the method statement and allocation of resources. The description of the programme in Clause
8.3 does not specify the form that the programme should take. Although
there is an obligation to submit a method statement, there is no obligation
to represent the method of working stated in the method statement on the
programme in the form of Logic
Links between activities, to show the construction logic.
It is suggested therefore that the obligation under Clause 8.3 can be
satisfied by a programme in the form of a
Bar
Chart, together with the supporting report. It is suggested further, that in order to fulfill the role
of the programme prescribed by Clauses 8.3, 8.6 and 4.21(h), and described
below, that the Red and Yellow Forms require a Prediction
Programme in the form of a Linked
Bar Chart. The first role of the programme under
the FIDIC Forms is to monitor the progress of the works by comparison of
actual progress with the programme (refer to the Article Monitoring
Role of Programme and particularly the Progress
Programme). Clause 8.3 provides that unless the Engineer (Employer under the Silver Form) gives notice that
a submitted programme does not comply with the contract, the Contractor is required to proceed in accordance with the programme, subject to his other obligations under the contract. The Employer is expressly entitled to rely on the programme when planning
his
activities. The Contractor therefore has an express obligation to
follow the programme, although this is stated to be subject to his other
obligations. The monitor role is expressly stated in Clause
4.21. Clause 4.21(a) provides that monthly progress reports are required to
include charts and detailed descriptions of progress. Clause 4.21(h) provides that monthly progress reports are required to compare actual and planned
progress. The monthly progress report does not expressly refer to the
programme, but it is suggested that planned progress is that shown on the
Clause 8.3 programme. There is no statement of the form that the
comparison should take. It is suggested that although not essential, a
Rate
of Progress TimeLine will satisfy this requirement. It is suggested that the role of the programme
in the Red Form, and to a lesser extent in the Yellow Form, is more
than simply to allow the progress to be monitored. The programme is
not a contract document but nonetheless defines (if not creates) the
obligations and rights of the parties by the dates for performance stated in
the programme. This may be demonstrated by examination of Clause 1.9
(Red Form) which deals with the contractor's right to be provided with drawings and
instructions. The same cannot be said of the Silver Form. Clause 1.9
(Red) requires the Contractor to give notice to the
Engineer whenever the Works are likely to be delayed or disrupted if any
necessary drawing or instruction is not issued to the Contractor within a
particular time, which shall be reasonable. It is suggested that if
the programme submitted under Clause 8.3 shows the date when instructions
and drawings are required, and is sent to the address required by Clause
1.3, that the programme will be sufficient to constitute notice for the
purposes of Clause 1.9. Clause 1.9 (Red) provides compensation to the
Contractor if the Engineer fails to issue the notified drawing or
instruction within a time that is reasonable, and the Contractor suffers
delay and/or incurs Cost as a result. It is suggested that one measure
of a reasonable time (although not necessarily the only measure) will be the times stated in the programme issued under
Clause 8.3. It is suggested that the Employer is under an obligation
to provide, or have others provide, information and drawings in accordance
with the programme and/or at such times as to allow the Contractor to
proceed in accordance with the programme. Unless the Contract
expressly states to the contrary, then a failure to do so will be a breach
of contract. A further example of the programme defining rights and
obligations, is Clause 2.1(Red and Yellow) which deals with the primary obligation of the
Employer to provide access. Clause 2.1 (red and Yellow) requires the Employer to give
the Contractor right of access to, and possession of, all parts of the Site
within the times stated in the Appendix to Tender. If no time is
stated then access and possession must be given contractor at such times as
will enable him to proceed in accordance with the programme submitted under
Clause 8.3. In that case a failure to comply with the access requirements in
the Programme will be breach of contract by the Employer under the Red and
Yellow Forms. Although not
stated expressly, it is clear that the programme issued under Clause 8.3 is
intended to comply with the Contract, so that specified access dates should
be shown on the programme as prescribed by the Contract. If the
programme does not, and the Engineer (Employer under the Silver Form) does not notify within the 21 days
required in Clause 8.3, then there may then be two conflicting obligations
to provide access - one stated in the programme and the other prescribed in
the Contract. It is suggested that the prescribed obligation cannot be
modified unilaterally by the Contractor's issue of the programme under
Clause 8.3, because of the clear wording of Clause 2.1 and the obligation to
revise in Clause 8.3. Clause 8.3 requires the Contractor to submit a
revised programme whenever the previous programme is inconsistent with the
Contractor's obligations, and this could include programme access dates
inconsistent with the prescribed dates. Clause 8.3 also provides that
at any time the Engineer may give notice that the programme fails to comply
with the Contract and the Contractor is required to issue a revised
programme. This will also apply where programme access dates are
inconsistent with the prescribed dates. It is suggested that a
programme which does not show the correct prescribed access dates will need
to be revised. The programme under Clause 8.3 is not only intended to
allow progress to be monitored, not only defines some of the time obligations of the parties,
but it also
records the actual progress of the Works. Clause 8.3 requires the Contractor is required to submit a revised programme when the Engineer gives notice
that the programme is inconsistent with actual progress (and the Contractor's
stated intentions under the Red and Yellow Forms). Clause 8.3 independently requires the Contractor to
submit a revised programme whenever the previous programme is inconsistent
with actual progress. The further role of the programme is to
provide a means of predicting the effect of identified events, and this role
is shown in the requirements of Clauses 8.3, 4.21(h) and 8.6. It is
suggested that for the Red and Yellow Forms this role as defined in the FIDIC Form requires a Prediction
Programme in the form of a Linked
Bar Chart, but not necessarily a Management
Programme and a Network
Programme although desirable. Clause 8.3 requires the Contractor to promptly give notice to the Engineer of specific probable future events or circumstances which may delay the execution of the
work. Under the Red and Yellow Forms, the Engineer may require the Contractor to submit an estimate of the anticipated effect.
In order to provide the estimate, it is suggested that a logical analysis
will be required based on an up-to-date programme - a Prediction
Programme. The Engineer may also require a proposal for a
Variation under Clause 13.3 under the Red and Yellow Forms. The Contractor is required to state
reasons why he cannot comply, or make a submission which includes a
programme for the proposed work and the necessary modifications to the
programme. It is suggested that any proposals for modification to the
programme must be based on a logical analysis of the effects of the proposed
work on the progress of the other work based on an up-to-date programme
showing actual and predicted progress. This again will require a Prediction
Programme. It is suggested that the role of the programme under
the Silver Forms differs in this respect from the Red and Yellow Form and
that a Prediction
Programme is not intended under the Silver Form. Clause 4.21(h) provides that monthly progress reports are required to
state details of any events or circumstances which may jeopardise completion in accordance with the Contract and crucially the measures being (or to be) adopted to overcome delays.
Although it is likely that a Network
Programme will be used on many projects to demonstrate the
measures to be taken to overcome delays, it is not a necessary requirement
of Clause 4.21(h). Clause 8.6 gives the Engineer (Employer under the Silver Form) power to instruct the Contractor to submit a revised programme with revised methods to expedite progress and complete within the Time for Completion. The power arises if the actual progress is too slow to complete within the Time for Completion, or if the progress has fallen or will fall behind the
programme. The Contractor is required to adopt the revised methods which are stated to include increases in the working hours and/or increase in resources and/or goods.
The measure of progress against the Clause 8.3 programme can therefore
define the right of the Employer to order acceleration and the obligation of
the Contractor to do so. Since each programme is required to include
resources, the increase in resources can be monitored. The revised methods are at the contractor’s cost and risk and he is liable for the Employer’s additional costs incurred in addition to any delay damages. There is no such power if the cause is one of the matters which entitles the contractor to an extension of time. Under
Clause 15.2(c), the Employer is entitled to terminate the Contract and expel
the Contractor from the Site, after notice, if the Contractor without
reasonable excuse fails to proceed with the Works in accordance with Clause
8. The obligations under Clause 8 include the following:
- the obligation to proceed with due expedition and without delay (Clause 8.1),
- the obligation to proceed in accordance with the programme (Clause 8.3),
- the obligation to submit revisions to the programme on certain events (Clause 8.3),
- the obligation to give notice of probable future events which may delay
execution of the Works (Clause 8.3),
- the obligation to accelerate if properly instructed (Clause 8.6).
In practice the measure of actual progress against the programme will be
cogent evidence of a failure to proceed with due expedition. The failure of
the Contractor to proceed in accordance with the programme will be
sufficient, without more, to terminate the Contract, providing that this is
"without reasonable excuse". The meaning of that term
is not further defined, but an entitlement to an extension of time will
clearly qualify. It is suggested that the "failure to
proceed" must be significant in terms of the overall contract or
a particularly critical activity for the project, and not simply a failure to
follow the timing of isolated activities on the programme. The Clause 8.3
programme is not the specified basis for evaluation of extension of time -
it is not a Compensation
Programme. The entitlement to compensation under Clause 8.4 arises
if
completion "is or will be delayed" by the particular cause.
The extension of time may therefore be retrospective or prospective.
In a retrospective analysis, the programme will only be cogent evidence if
it accurately recorded actual progress. If the programme includes Logic
Links as suggested above then it may form the basis for
valuation of the entitlement in a prospective analysis, but except in the
simplest situations a Network
Programme will need to be prepared from the Clause 8.3 programme. Clause
20.1 requires the Contractor to give notice of a claim for extension of time
and to provide particulars of the claim, including the extension of time
claimed. Any failure by the Contractor to comply with the contract
requirements in relation to the claim, can be taken into account to the
extent that it has prevented or prejudiced proper investigation of the
claim. The Engineer (Employer under the Silver Form) is required to
reach a "fair determination" under Clause 3.5 following
consultation and failure to reach agreement. There is a lack of
consistency in the FIDIC Form in the use of the Clause 8.3 programme.
The Contractor has the primary obligation to proceed in accordance with the
programme and to update the programme and the Employer has the right to
terminate for failure to follow the programme. In view of this, it is
not clear why the entitlement to extension of time should not be determined
by analysis of the Clause 8.3 programme. It is suggested that unless
the programme clearly does not accurately predict future progress, that it
would not be a "fair determination" to ignore the results of
analysis of the entitlement to extension of time based on or using the
Clause 8.3 programme.
SUMMARY OF LEGAL COMMENTARY on ICE 7th Edition
The
ICE 7th Edition does not give the programme a significant place in the
administration and management of the contract. The Contractor's report
on his method of working is distinct from the submission of a programme and
there appears to be no requirement to link the two. The Contractor's
obligation to progress the Works is not directly related to the programme.
The determination of any extension of time is based on actual delay and not
analysis of the programme.
It is suggested that in order to fulfill the functions required under
the ICE 7th Edition a Progress
Programme in the form of a Bar
Chart is all that is required.
Clause 14 requires the Contractor to submit both a programme and a method
statement. These are two separate obligations which are not
inter-related under ICE 7th Edition. Clause 14(1)(a) requires the Contractor to submit a programme for acceptance showing the order in which he proposes to carry out the Works, within 21 days of award of the Contract taking into account possession releases, access and specified order of construction prescribed in the Contract. At the same time
under Clause 14(1)(b) the Contractor is required to submit a general description of the method of construction.
The programme and the method statement are administered separately. Clauses
14((2), (3) and (4) relate to the programme. Clause 14(2) allows the
Engineer to request further information to satisfy the Engineer as to the
programmes reasonableness having regard to the Contractor's obligations
under the Contract. It is intended therefore that one role of the
programme is to be a measure of reasonable progress of the Works. It
is suggested that the comparison of actual progress to the programme will be
evidence of the Contractor's obligation to proceed with due expedition and
without delay under Clause 41(2). The programme is intended only to
fulfill the role of a Progress
Programme. A Bar
Chart will be sufficient to fulfill the function identified in the ICE
7th Edition, since it will show the order of carrying out the Works and
allow actual progress to be monitored. Clause 14(4) requires the Contractor to submit a revised programme showing such modifications to the original programme as may be necessary to ensure completion of the Works within the time for completion, if it appears to the Engineer at any time that actual progress
does not conform with the accepted programme. This requirement
emhasises the monitor role of the programme, since the obligation to update
ensures that the programme is an accurate statement of progress required to
achieve completion within the time for completion. The obligations as to
the method statement are set out in Clause 13(2), 14(1)(b) and 14(6).
Clause 14(1)(b) requires the Contractor to submit a general description of
the arrangements and methods of construction. Although required to be
submitted at the same time as the programme, there is no express requirement
that the programme should represent the method of working by showing Logic
Links between activities showing the construction logic. Clause 13(2) provides that the mode manner and speed of construction of the Works are to be of a kind and conducted in a manner acceptable to the Engineer.
Clause 14(7) prohibits the Contractor from changing the methods which have
received the Engineer's consent, except with further consent of the Engineer
which cannot be unreasonably withheld. The obligation under Clause 14(4)
to revise the programme only arises if actual progress does not conform with
the programme. Strictly, revision of the programme is not required if
the future method of working has been changed under Clause 14(7). In
that case the programme may no longer accurately represent the anticipated
order of carrying out the Works. It is suggested that the programme is not
intended to be a Prediction
Programme.
The programme is not intended to be a Compensation
Programme. The Contractor's entitlement to extension of time under
Clauses such as Clause 42(3) (possession), Clause 7(4) (information), Clause
13(3) (instructions) or Clause 44(2)(a), (3) or (5) is based on actual
delay. Clause 44(2)(a) requires the Engineer to consider all the circumstances known to him at the time of making his assessment of the delay suffered by the Contractor. Clause 44(3) requires the Engineer to consider if the delay suffered fairly entitles the contractors to an extension of the time for substantial completion of the Works.
The entitlement does not depend upon an analysis of the Clause 14
programme, nor do the Employer's obligations of possession and access
(Clause 42(2)) or supply of information (Clause 7(1)) refer to the programme.
Any entitlement is based on actual delay. The Employer's entitlement to
terminate and to expel the Contractor from Site under Clause 65(1)(j) is,
subject to notice, for failure of the Contractor to proceed with the Works
with due diligence. Whilst the programme may be evidence of reasonable
progress, failure to proceed in accordance with the programme of itself is
not sufficient under Clause 65(1)(j).
SUMMARY OF LEGAL COMMENTARY on ECC 2nd Edition
The parties obligations as to programme and the
role of the programme is established by Clauses 31, 32,
33 and 60.1 of the ECC 2nd Edition. Examination of these clauses shows that the
Accepted Programme is intended to fulfill a Dynamic Role functioning as a Management
Programme and that the appropriate type of programme is a Network
Programme. It is not clear, but it appears that the Accepted
Programme is intended to function also as a Compensation
Programme.
The Accepted Programme is an important tool in the
management and administration of the contract under the ECC Form and there
are extensive provisions for both the submission of programmes for
acceptance and their revision. Contract Data Part Two allows the
Contractor to identify the Accepted Programme with his tender and this
becomes the Accepted Programme, by the definition in Clause 11.2(14).
There is no requirement for the programme so identified to comply with the
provisions of Clause 31.2 described below. The identified programme is
the Accepted Programme simply by acceptance of the Contractor's
tender. Since "contract" is not defined in the ECC standard
form, the status of the identified programme is not expressly stated, but it
is suggested that it is a contract document unless the agreement or the
exchange of correspondence forming the contract states to the contrary. There
is no precedence for interpretation of contract documents, but it is
suggested that the identified programme should be used to interpret the
intention of the parties as any other contract document. If the
identified programme states tasks to be carried out by the Employer, or
limits the work to be carried out by the Contractor, then this will need to
be taken into account in the interpretation of the contract. The
definition of compensation events at Clauses 60.1(3) and (5) is in terms of
the Accepted Programme, so that it is envisaged under the ECC Form that the
Contractor may define these obligations in the identified programme, and if
the Employer accepts the tender it is suggested that he will be taken to
have accepted to carry out those obligations under the terms of the
programme. The term "programme"
in the ECC Form means more than simply a bar chart, but also includes a
method statement as identified at Clause 31.2. It is suggested therefore
that the programme identified may include the Contractor's method
statement. If the identified method statement is changed or cannot be
followed then this is a situation which has given rise to considerable
caselaw under the ICE Form in which it has been decided that the contractor
was entitled to compensation on the basis of the change being a variation
(see the article Programme
as a Contract Document). It is suggested that this would not be
the result under the ECC Form. Clause
19 which deals with illegal or impossible requirements refers to the Works
Information and not to the Accepted Programme. It is suggested that
the Contractor will be entitled to compensation for a change to his method
statement, only to the extent that the method statement is defined by the
Works Information. In this context the only relevant compensation
event is Clause 60.1(1) which is an instruction changing the Works
Information. If the Contractor's method statement cannot be followed
then it is suggested that this is not a breach of contract by the Employer,
unless and to the extent that the Employer may have warranted the accuracy
of information on which the statement was based. If
the Project Manager instructs a change to the Contractor's Method Statement
identified in the Contract Data Part Two, then it is suggested that this
will entitle the Contractor to compensation. If the Works Information
does not restrict or constrain the Contractor from carrying out the work in
accordance with his method statement, then the Instruction will of necessity
be a change to the Works Information giving compensation under Clause
60.1(1). If the identified method statement is contrary to the Works
Information, then the complicated issue is whether acceptance of the
identified method statement was intended to be an agreement to a change to
the Works Information. Since the identified method statement will be
produced later than the Works Information, it is likely that the identified
statement will be considered to more accurately reflect the intention of the
parties. If the
Contractor is not to submit a programme with his tender then it is for the
Employer to state in Contract Data Part One the period in weeks from the
Contract Date when the Contractor is to submit the "first
programme". Clause 11.2(14) defines the Accepted Programme as
either the programme identified in the
Contract Data or as the latest programme accepted by the Project Manager.
Clause 11.2(14) expressly states that the latest programme accepted by the Project Manager supersedes previous
Accepted Programmes.
The importance of the Accepted Programme is shown by the sanction at
Clause 50.3 which applies when no programme is identified in the Contract
Data. The sanction under Clause 50.3 is that one quarter
of the Price for Work Done to Date is retained in assessments of the
amount due until the Contractor has submitted a "first programme" to the
Project Manager for acceptance showing the information which the
Contract requires. Clause 31.3 provides a list of reasons for the
Project Manager not accepting a programme which includes reasons in addition
to the programme not showing the information which the contract
requires. It is possible therefore for a programme not to be accepted
so that there is no Accepted Programme, but the Clause 50.3 sanction will
not apply.
The ECC Form makes detailed provisions for programmes submitted for
acceptance. Clause 31.2 provides that any submitted programme is required to show key specified dates as well as a method statement for each
operation which includes resources, and the order and timing of operations the Contractor plans to do and planned completion.
Clause 31.2 lists the information that any submitted programme must include.
The Contractor is required to show on each
programme provision for:
- float
- time risk allowances
- health and safety requirements
and
- the procedures set out in the
contract
The reference to "float" and "time risk allowances"
suggests that the programme is intended to be a Network
Programme, since both provisions require the project dimension which
such a programme provides. The provisions for revision to the Accepted
Programme confirm this interpretation since the programme is clearly
intended to fulfill the role of a Management Programme allowing analysis of
the effects of events on future progress. So, for instance, Clause 32.1
requires the revised programme to show
- actual progress achieved and the effect on the timing of remaining work,
- the effects of implemented compensation events and of notified
early warning matters,
- how the Contractor plans to deal with any delays.
It is suggested that in order to show the effect of actual progress on
the timing of the remaining work, the programme must include the Logic
Links necessary to allow a predictive analysis. The programme is
intended to be more than simply a predictive model, since it must also
show how the contractor intends to deal with any delays. This
clearly shows an intention that the programme is required to be a Management
Programme. In order to fulfill this function, the programme must
be both realistic and accurate representation of the Contractor's
plans. This is confirmed by Clause 31.3 which lists reasons why a Project Manager may decide not to accept
a programme. They include the Project Manager`s subjective judgment that the
programme:
- shows that the Contractor`s plans are not practicable
- does not represent the Contractor`s plans realistically
There is no express statement that the
Contractor is required to follow the Accepted Programme or that the
Contractor is prohibited from changing the method of working without consent
and it is suggested no such obligations will be implied. The
provisions for revision to the programme under 32.2 will ensure that
programmes are updated to reflect actual progress and changes in the
Contractor's plans. It is suggested that the intention is to allow the
Contractor flexibility in the planning of the work subject to express
requirements in the Works Information.
If the Employer does not provide information
or carry out work in accordance with the Accepted Programme, then the
Contractor will be entitled to compensation, so that it would appear that
the Employer is under an obligation to follow the Accepted Programme.
So for instance, Clause 31.2 provides for the Contractor to
identify in the programme the dates when he will need Plant and
Materials and other things to be provided by the Employer in order to
Provide the Works in accordance with the programme. Under Clause
60.1(3) the failure of the Employer to provide something which he is to
provide by the date for providing it required by the Accepted Programme is a
Compensation Event. It is to be noted that
Clause 60.1(2) refer to dates "required by" and not
"shown on" the
Accepted Programme. It is suggested that the intention is that a date shown on the programme
is not sufficient on its own to establishes an entitlement
following default. Instead there must be some logical
connection (which may include float) between the date derived from the
programme and connected events. The "required date" will be
the latest date allowing for float derived from an analysis of the programme.
So for instance, Clause 31.2 provides for the
Contractor to show the order and timing of the work of the Employer and
Others either as stated in the Works Information or as later agreed with
them by the Contractor. Under Clause 60.1(5) the failure of the
Employer or Others to work within the times shown on the Accepted Programme
is a Compensation Event.
The obligation of the Employer to follow the
Accepted Programme is limited in the case of the obligation to give
possession. The limitation operates to prevent the Employer being
required to give possession earlier than the dates given in the Contract
Data. The dates on which the Contractor may enter
and take possession of the various parts of the site are stated in the
Contract Data and are the possession dates. The obligation of
the Employer under Clause 33.1 is to give possession of each part of the Site to the
Contractor on or before the later of its possession date and the date
for possession shown on the Accepted Programme. The Employer
cannot therefore be required to give early possession. Under Clause
60.1(2) the failure of the Employer to give possession of part of the Site
by the later of its possession date and the date required by the Accepted
Programme is a Compensation Event.
The Accepted Programme is also used to
establish the delay to the Completion Date and it is suggested is a Compensation
Programme. Under Clause 62.2 the Contractor is required to submit
a quotation for a Compensation Event which includes an assessment of any
delay to the Completion Date. Crucially if the "programme for
remaining work" is affected by the Compensation Event then the
Contractor is required to include a revised programme in his quotation
showing the effect. It is suggested that the clear intention is that
analysis of delay is intended to be based on the Accepted Programme revised
to take into account not only the delay but also time risk allowances for
the consequences of the Compensation Event. Clause 63.5 states that
the assessment of the effect of a Compensation Event includes time risk
allowances for matters which have a significant chance of occurring and are
at the Contractor's risk under the Contract. Clause 63.3
provides that a delay to the Completion Data is assessed as the length of time that, due to the compensation event, planned Completion is later than planned Completion as shown on the Accepted Programme.
It is suggested that the terminology used in Clause 63.3 confirm that the
compensation for delay is based on the assessment in the revised programme.
The revised programme may need to be modified to take into account Clause
63.4 when used as Compensation
Programme. Clause 63.4 is the early warning sanction. If the Project Manager has notified that the contractor did not give an early warning which an experienced Contractor could have given, then the event is assessed as if the Contractor had given an early warning.
The grounds for termination for default, do not include failure to follow
the Accepted Programme, but does provide for the Contractor's hindrance of
the Employer. Clause 95.3 provides that the Employer may terminate if the Project Manager has notified that the Contractor has substantially hindered the Employer and not stopped defaulting within four weeks of notification.
SUMMARY OF LEGAL COMMENTARY on MF/1 Rev 4 2000
The
MF/1 Rev 4 2000 Form does not give the Programme a significant place in the
administration and management of the contract. The Contractor's obligation to progress the Works is not directly related to the
Programme. The determination of any extension of time is based on actual delay and not
analysis of the Programme. Although the Engineer has power to order
revision of the Programme there is no express obligation to follow the
Programme.
It is suggested that in order to fulfill the functions required under
the MF/1 Rev 4 2000 Form a Progress
Programme in the form of a Bar
Chart is all that is required, subject to express provisions in the
Special Conditions. Absent such provisions it is suggested that it would
not be reasonable for the Engineer to require a Programme other than a Bar
Chart.
The term "Programme" is defined at Clause 1.1p as the programme
referred to in Clause 14. Clause 14.1 requires the Contractor to submit a programme within the time stated in the Contract, or if no time is stated within 30 days after the letter of Acceptance. The Programme is required to show the sequence and timing of the activities by which the Contractor proposes to carry out
Works, anticipated resources, the respective times for submission by the
Contractor of drawings and operating and maintenance instructions, and the
times by which the Contractor requires the Purchaser to provide information
and access, to have completed any necessary work, obtained permits etc and
provided site utilities. Clause 14.2 provides that the Programme shall be in such form as specified in the Special Conditions, or if not specified, as may be reasonably required by the Engineer. The
Programme therefore is intended to be a detailed document, although its role
appears only to be to allow progress to be monitored. The Contractor's
obligation to progress the work is stated in Clause 13.1 and 32.1 in terms of
due diligence and completion within the Time for Completion and not in terms
of progressing in accordance with the Programme. It is clear that the
Programme is required to be an accurate measure of actual progress since under Clause 14.5 the Engineer has the power to order the Contractor to revise the Programme if he decides that progress does not match the Programme. The Contractor is then required to revise the Programme to show the modifications necessary to ensure completion of the Works within the Time for Completion. If the modifications are required for reasons for which the Contractor is not responsible, the Cost of producing the revised Programme is added to the Contract Price.
In addition Clause 14.4 requires that the Contractor shall not make any material alteration to the approved programme without the Engineer’s consent.
The power under Clause 14.5 is limited and can only be exercised if actual
progress does not match the programme, not if for instance the future method
of working has changed. The role of the programme is clearly intended
only to allow the monitor of progress and not fulfil the role of a Prediction
Programme. It is suggested that a Bar
Chart is sufficient to fulfil the required role subject to express terms
to the contrary in the Special Conditions.
Clause 14.6 appears to give the
Engineer some power to manage progress. If he decides that the rate of
progress of the Works is too slow to meet the Time for Completion, and not due
to circumstances which entitle the Contractor to an extension of time, then he
can give notice to that effect. Clause 14.6 requires the Contractor following receipt of notice to take such steps as may be necessary and as the Engineer may approve to remedy or mitigate the likely delay, including revision of the Programme. The Contractor is not entitled to any additional payment for taking such steps.
The comparison of actual progress to the Programme will be evidence of the
Contractor's fulfilment (or otherwise) of his obligation to proceed with
diligence and the likelihood that he will complete by the Time for
Completion. The weight to be given to the Programme will depend upon the
accuracy of the Programme in predicting future progress. Failure to
follow the Programme will not be sufficient for the Engineer to exercise the
power under Clause 14.6.
The Programme is not intended to be a Compensation
Programme, since under Clause 33.1 the entitlement is based on actual
delay. Under Clause 33.1 the extension of time granted is such as may be reasonable and under Clause 33.3 the Contractor is required to determine what steps can be taken to overcome or minimise the actual or anticipated delay in consultation with the Engineer.
There is no mention of the Programme in Clause 33.
The Purchaser's right to
terminate and expel the Contractor from Site under Clause 49.1 is, subject to
notice, for failure of the Contractor to proceed with due diligence.
Whilst the Programme may be evidence of reasonable progress, failure to
proceed in accordance with the Programme of itself is not sufficient under
Clause 49.1.
SUMMARY OF LEGAL COMMENTARY on IChemE Red Book 4th Edition 2001
The
IChemE Red Book 4th Edition 2001 requires the Contractor to progress the work
in accordance with the Approved Programme in addition to the obligations of
time and to proceed regularly and diligently. The Approved Programme paradoxically
does not have a significant place in the
administration and management of the contract. The determination of any extension of time is based on actual delay and not
analysis of the Programme. The Engineer has power to order
revision of the Programme but there appears to be no requirement for the
Approved Progaramme to allow predictive analysis.
It is suggested that in order to fulfill the functions required under
the IChemE Red Book 4th Edition a Progress
Programme in the form of a Bar
Chart is all that is required.
The term "Approved Programme" is defined in Clause 1 as the
programme approved in accordance with Clause 13. Clause 13.3 requires the Contractor within
the time stated in Schedule 11 to prepare and submit to the Project Manager for approval a programme of work setting out in such manner as the Project Manager shall
reasonably require the sequence in which and dates by which the Contractor proposes to perform his obligations under the Contract. The programme is also required to show the dates by which the Contractor reasonably requires that the Purchaser should provide any further Documentation or information or take any action to permit the Contractor to perform his obligations. Clause
13.4 requires the Contractor to submit details of the personnel and other resources which he proposes to use, if required by the Project Manager and in
a form as the Project Manager reasonably requires. The Project Manager
is required to approve the programme if it complies with the specified dates
and is "otherwise reasonable". The Approved Programme is
therefore intended to demonstrate the progress that the Project Manager
considers could reasonably be made by the Contractor The Contractor's
obligations are stated in terms of the Approved Programme in addition to his
obligations to complete by the specified dates or periods (Clause 13.1) and to
proceed regularly and diligently. Clause 13.3 requires the Contractor to use his reasonable endeavours to perform his obligations in accordance with the Approved Programme.
Clause 13.5 gives the Project Manager power to require the Contractor either to take steps as may be practicable in order to achieve the Approved
Programme or to revise the Approved Programme, if the Contractor falls behind the Approved Programme or it becomes clear he will fall behind.
The Approved Programme is therefore required to be an accurate prediction of
likely progress. The power of the Project Manager can only be used if
the Contractor falls behind the Approved Programme and not if for instance the
progress is faster then programmed for some activities. Since the
Contractor is required to use reasonable endeavours to perform his obligations
in accordance with the Approved Programme, this does not prevent him adopting
a different method of working if that is reasonable in the
circumstances. In that case there appears to be no power for the Project
Manager to require the Approved Programme to be revised.
Clause 13.7 deals with the Contractor’s failure to revise the Programme
within a reasonable time or when the Project Manager does not approve the revised
Programme. In that case the Project Manager may instruct reasonable revisions to the Programme which the Contractor is required to implement. It
is suggested that the primary obligations are to complete by the specified
dates or periods and to proceed regularly and diligently and that the
obligation to follow the Approved Programme is a secondary requirement to
achieve the primary obligations. This interpretation can be seen in the
operation of Clause 13.3 described above and Clause 13.6 and Clause
43.2. Under Clause 13.6 the Project Manager may give notice that he
decides that the rate of progress is likely to prejudice the Contractor's
ability to complete in accordance with Clause 13.1 which is the primary
obligation of completion on time, if due to a cause for which the Contractor
is responsible. In that case the Contractor is required to use his best
endeavours to remedy the potential delay at his own cost.
Clause 43.2 allows the Purchaser to determine the employment of the Contractor on notice and continuing default for any material breach of the
Contract as well as failing to proceed regularly and diligently. Since the submission and revision of the Programme takes such prominence in the Form it is suggested that in some circumstances, particularly on complex sites, it could be argued that the Contractor’s
failure would constitute a material breach. The IChemE Red Book 4th
Edition 2001 has a rather ambiguous approach to the use of the programme.
The role of the programme is intended
only to allow the monitor of progress and not fulfill the role of a Prediction
Programme. It is suggested that a Bar
Chart is sufficient to fulfill the required role. The Programme is not intended to be a Compensation
Programme, since under Clause 14.1 the entitlement is based on actual
delay and indeed the resultant Variation Order is only given once the the
extent and consequence of any delay are known.
Clause 5.3.1.2 requires the Contractor to provide the Architect with two copies of his master programme for the execution of the Works. Within 14 days of the Architect’s decision to grant an extension of time by fixing a later Completion Date the contractor is required to issue two copies of any amendments and revisions to take into account the decision. The provision is optional and may be deleted. Clause 5.3.2 makes clear that nothing contained in the Master Programme or its revision shall impose any obligation beyond those imposed by the Contract Documents.
There is no indication in the Form what is required of a “Master Programme”. It is suggested that at the least the Master Programme should show the commencement and finishing dates of major activities. There is no provision for the Architect to approve or reject the Master Programme and it is not referred to in terms of monitoring progress nor in the assessment of extension of time. There is no requirement for the Contractor to proceed in accordance with the Master Programme.
Clause 5.4.1 refers to an Information Release Schedule and requires the Architect to issue information stated in the Schedule at the times stated in the Schedule. Under Clause 5.4.2 the Architect is required to issue other information, drawings and instructions to allow the Contractor to carry out and complete the Works in accordance with the Conditions. The failure of the Architect to comply with Clause 5.4.1 or 5.4.2 is a Relevant Event under Clause 25.4.6 and may entitle the Contractor to an extension of time and loss and expense under Clause 26.2.1.
JCT 1998 With Contractors Design makes no reference to a Master Programme or any programme. There is no reference to an Information Release Schedule.
The JCT 1998 Prime Cost Contract makes no reference to a Master Programme or any programme. There is no reference to an Information Release Schedule.
The IFC 1998 Contract makes no reference to a Master Programme or any programme. Clause 1.7.1 refers to an Information Release Schedule and Clause 2.4.7 lists failure to release information in accordance with the Schedule is a Event which may entitle the Contractor to an extension of time.
JCT 1998 Minor Works Contract makes no reference to a Master Programme or any programme. There is no reference to an Information Release Schedule.
Under Clause 3(1) the Sub-Contractor is deemed to have full knowledge of the Main Contract. Under Clause 3(2) the Sub-Contractor is required to carry out his obligations so as not to cause or contribute to any breach by the Contractor of any of his obligations under the Main Contract. Clause 7(2) gives the Contractor the like powers in relation to the Sub-Contract Works as the Engineer has in relation to the Main Works under the Main Contract. There is no reference to programme in the Form, but the Second Schedule does allow further documents forming part of the Sub-Contract to be listed.
Clause 11.1 of DOM/1 requires the subcontractor to complete the Subcontract Works in accordance with the details in Appendix Part 4 which provides for insertion of the notice period to commence work on site, the range of dates for the date of commencement and the period for carrying out and completing the Sub-Contract Works. Clause 11.1 of DOM/1 requires the subcontractor to complete the Subcontract Works reasonably in accordance with the progress of the Works. There is no reference to a programme nor to an Information Schedule.
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