Extension of Time (EoT) in Construction Project presentation

Literature review on Extension of time (EoT) in Construction Project.

1. Literature Review
on
Extentionof Time (EoT)
in Construction Project

2. INTRODUCTION
EOTisoneoftheprovisionclausesinthe
standardcontractform.Thepurposeisto
preserveanemployer’srightinliquidated
damages.Inthecircumstancesthatthe
delaysarecausedbyinevitablereason,EOT
allowscontractortosetanagreedcompletion
date.[1]

3. Factors causing Extension of Time [2]
ImproperProjectFeasibilityStudy
DelayinInstructionsfromConsultants
ExtremeWeatherConditions
UnfavorableSiteConditions
PoorProfessionalManagement
DelayinInterimPaymentCertificates

4. Factors causing Extension of Time [2]….
LandAcquisitionProblems
DelayinIssuanceofDrawings
LackofBaselineSchedule
PoorDesign
MistakeswithSoilInvestigations
ImproperInvestigationofFoundationsatSite

5. Factors causing Extension of Time [2]….
LateDeliveriesofMaterials
LateVariationOrdersApproval
DifferencebetweenBuildingCode&Specification
DelaybySub-Contractors
SlownessinDecisionMaking
ShortageofFuel,MaterialsandEquipment
LackofCapableRepresentative
PoorSiteSupervision

6. LITERATURE REVIEW
Generalconditionofcontractclauseno.35
ofstandardbiddingdocument for
procurementofworkpreparedbyPublic
Procurementmonitoringofficestatethat:[3]

7. TheProjectManagershallextendtheIntended
CompletionDateifaCompensationEventoccurs
oraVariationisissuedwhichmakesitimpossible
forCompletiontobeachievedbytheIntended
CompletionDatewithouttheContractortaking
stepstoacceleratetheremainingwork,which
wouldcausetheContractortoincuradditional
cost.

8. TheProjectManagershalldecidewhetherandby
howmuchtoextendtheIntendedCompletion
Datewithin21daysoftheContractoraskingthe
ProjectManagerforadecisionupontheeffectof
aCompensationEventorVariationandsubmitting
fullsupportinginformationatleast21dayspriorto
theintendedcompletiondate.

9. IftheContractorhasfailedtogiveearly
warningofadelayorhasfailedto
cooperateindealingwithadelay,thedelay
bythisfailureshallnotbeconsideredin
assessingthenewIntendedCompletion
Date.

10. Standardcontractforms,especiallythatofthe
InternationalFederationofConsulting
Engineers(FIDIC)hasincludedExtensionof
Timeforcompletiononsubclause8.4.This
includes:[4]

11. TheContractorcanclaimsforanextensionof
thetimeforcompletionsubjecttosubclause
20.1[Contractor’sClaims]orduetodelayed
byanyofthefollowingcauses:
Variationduetochangeinquantityofan
itemofwork
Exceptionallyadverseclimaticconditions

12. Unforeseeableshortagesintheavailabilityof
personnelorgoodscausedbyepidemicor
governmentalaction.
Anydelaycausedbytheemployer,theemployer’s
personneloremployer’sothercontractors.

13. IftheContractorconsidershimselftobeentitledtoany
extensionoftheTimeforCompletionunderanyClauseof
theseConditions,theContractorshallgivenoticetothe
Engineer,describingtheeventorcircumstancegivingriseto
theclaim.Thenoticeshallbegivenassoonaspracticable,
andnotlaterthan28daysaftertheContractorbecame
aware,orshouldhavebecomeaware,oftheeventor
circumstance.

14. Within42daysafterreceivingaclaimoranyfurther
particularssupportingapreviousclaim,theEngineer
shallrespondwithapproval,orwithdisapprovaland
detailedcomments.Hemayalsorequestanynecessary
furtherparticulars,butshallneverthelessgivehis
responseontheprinciplesoftheclaimwithintheabove
definedtimeperiod.

15. IftheEngineerdoesnotrespondwithinthe
timeframedefinedinthisClause,eitherPartymay
considerthattheclaimisrejectedbytheEngineer
andanyofthePartiesmayrefertotheDispute
BoardinaccordancewithSub-Clause20.4[
ObtainingDisputeBoard’sDecision].

16. Prevailing Legislations
regarding Extension of Time in Nepal

17. Eligibility Conditions/Requirements for EOT:-
As per the section 56 of Public Procurement Act 2063, the
conditional requirements for EOTare: [5]
Provision of EOTmust be incorpotatedin Agreement
Document.
Force Majeure
Failure of the Public Entity to make available the materials to
be made available by it
Miscellaneous genuine reasons.

18. Procedure/ProcessforEOT:-[6]
Aspertherule120ofPublicProcurementRegulation2064,the
followingprocessmustbefollowedandfulfilledbeforethe
approvalofEOT.
ApplicationforEOTmustbesubmittedtoPEbefore21days
ofdeadlinebyContractor/Consultancy/Importer/Service
ProviderwithreasonsfortherequirementofEOT.

19. InvestigationbyPublicEntity'sresponsibleofficeroverthe
EOTapplicationandrespectivedocumentsonfollowing
terms:
Whethertheconcernedcontractorhasendeavoredhis/her
100%tocompletetheworkaspercontractagreementintime
ornot
Whethertheconcernedpublicentityhasprovidedthe
constructionentrepreneur,supplier,serviceprovideror
consultantwiththemattersrequiredtobeprovidedunderthe
contractornot

20. WhetherthedelayisduetoPE'stakingthe
requireddocumentsassociatedwithcontractor
forthepurposeofInvestigationornot.
WhetherthedelayisduetoForceMajeure
(Earthquake,Flood,Landslide,SoilErosion,
Pandemic/Epidemicornot.

21. ApprovalofEOT:-
Onrigorousstudyorinvestigation,ifthereasons
providedontheapplicationarefoundgenuine,the
approvalofEOTcanbedonebasedon:
FortheEOTofupto15%ofinitialProject
Duration,approvalcanbedonebytheOfficer
whohadapprovedtheProcurement.

22. FortheEOTofabove15%upto25%ofinitialProject
Duration,approvalcanbedonebytheDepartentalChief.
FortheEOTofabove25%upto50%ofinitialProject
Duration,approvalcanbedonebytheSecretariatofthe
ConcernedMinistry/Entity.
NoEOTofabove50%ofinitialProjectDurationcanbe
done.Forsuchrequirements,theContractshouldbe
terminated.

23. Liquidateddamages:
Thefollowingprovisionsmaybemadeintheprocurementcontract
inregardtotheliquidateddamages:
(a)Iftheworkundertheprocurementcontractcouldnotbe
completedwithinthetimespecifiedinthecontractduetothedelay
onthepartofthesupplier,consultant,serviceprovideror
constructionentrepreneur,heorsheshallpaytothepublicentity
liquidateddamages,generallyofzerodecimalzerofive(0.05)
percentofthecontractpriceperdaynotexceedingtenpercentof
thecontractprice;

24. however,heorsheisnotrequiredtopayliquidateddamagesifthe
performanceofworkordeliveryofgoodsisdelayedduetothe
occurrenceofaforcemajeureeventorwithoutanyfaultor
negligenceonhisorherpart,and
(b)Theconcernedconstructionentrepreneur,supplier,service
providerorconsultantshallnotbereleasedfromtheobligationof
performingtheworkundertheprocurementcontractevenupon
paymentoftheliquidateddamagesreferredtoinclause(a).

25. Rewardmaybegiventothosewhocompleteworkpriortotime:
1.Itmaybeprovidedthatthepublicentitymayrewardthe
constructionentrepreneurwhocompletestheworkpriortothe
periodspecifiedintheprocurementcontract.
2.Theamountofrewardreferredtoinsub-rule(1)shallbe
determinedonthebasisofsub-ruleforsuchanumberofdaysby
whichtheworkwascompletedbeforetheperiodspecifiedinthe
procurementcontract.

26. (3)Whiledeterminingtheratereferredtoinsub-rule(2),therate
shallbesodeterminedasequivalenttothesameamountthatthe
constructionentrepreneurhastopayasliquidatedamagestothe
publicentityondailybasisforfailuretocompletetheworkwithinthe
periodspecifiedintheprocurementcontract.
(4)NotwithstandinganythingcontainedelsewhereinthisRule,the
totalamountofrewardshallnotexceedtenpercentofthecontract
price.

27. REFERENCES
1.Lian,Y.L.,Hassim,S.,Muniandy,R.,&Ling,T.M.(2012).The
AssessmentofApplicationsforExtensionofTimeClaimsinMalaysian
ConstructionIndustry.IACSITInternationalJournalofEngineeringand
Technology,4,446-450.
2.Hanif,H.,Saleem,Y.,Shahid,Z.A.,Hanif,A.,&Zeb,A.(2014).
AssessmentofExtensionofTimeClaimsinHydropowerProjectsof
Pakistan.InternationalJournalofEngineeringandAdvanced
Technology(IJEAT),4,29-32.

28. REFERENCES
3.GON,P.P.(2019).StandardBidddingDocumentProcurementofWorks
NationalCompetitiveBidding(NCB).Nepal:www.ppmo.gov.np.
4.(FIDIC),I.F.(2010).ConditionofContractforCONSTRUCTIONFOR
BUILDINGANDENGINEERINGWORKSDESIGNEDBYTHEEMPLOYER.
Geneva:www.fidic.org.
5.ThePublicProcurementAct,2063(2007).(2019).Nepal:
www.ppmo.gov.np.
6.ThePublicProcurementRegulation,2064(2007).(2019).Nepal:
www.ppmo.gov.np.