Question 2

You are the Project Manager involved in a complex refurbishment of an historic building. This has been procured under Option A of the ECC. Delay
damages are included. A first programme was identified in the Contract Data. The project includes extensive work by other specialist Contractors
employed by the Employer.

a. Describe how the contract recognises such specialists that are directly engaged by the Employer? What obligations are placed on the
Contractor to liaise and incorporate their work into their own plans?

[6 marks]

If the Employer want to directly engage specialists to carry out some works in a project, a very clear description including but not limited to the duty
of the Contractor to co-operate with Others, any services to be provided by one to another, or by or to the Employer and responsibility for the
provision and maintenance of facilities such as access roads, welfare, power supplies etc shall be stated in the Works Information. Besides, the
interfacing details such as timing and programming arrangement should also be given in the Works Information. In addition, the health and safety
requirements, with which each contractor is required to comply, should be stated in the Works Information [CC 25.2]. However, the Contractor is
not responsible for the failure of Others to carry out their works in accordance with the Works Information unless the failure is caused by the
Contractor not co-operating [CC 25.1].

The Contractor, when preparing the programme, shall include particulars related to the works to be carried out by Others. For example, the
Contractor shall include in the programme the dates when the Contractor plans to complete work neede to allow the Empoloyer and Others to do
their work. Also, the programe also need to show the dates when the Contractor will need access and other things to be provided to him by
specialists and also information from the specialists. [CC 31.2]

The Contractor shows on the Accepted Programme that one of these specialists is required to provide concrete plinth details by week 14 of the
contract which they fail to do so. This directly impacts upon their ability to meet a Condition stated for a Key Date.

b. What should the Contractor do as soon as becoming aware of this? Is there a time limit for the Contractor to respond?

[4 marks]

The Contractor shall give an early warning by notifying the Project Manager as soon as becoming aware of the delay by one of these specialists as it
will delay meeting a Key Date [CC 16.1]. The Project Manager will then input the early warning matters in the Risk Register [CC 16.1]. There is no
time frame for notifying the Early Warning but it is better to notify it as earliest as possible to resolve the problem at earliest stage.

This situation is possibly a Compensation Event as the specialist do not work within the times shown on the Accepted Programme [CC60.1(5)]. The
Contractor shall notify the Project Manager of an event which he expects to happen as a compensation event. He shall notify to the Project Manager
within eight weeks of becoming aware of the event [CC 61.3].

If the Project Manager believe that the notification is valid and agree this is a compensation event, the Project Manager can issue an Instruction to
the Contractor to resolve the problem due to the specialist delay. Then the Contractor will have to provide a Quotation with changes to the Prices
and any delay to the Completion Date and Key Dates assessed by the Contractor. The quotations shall be submitted by the Contractor within three
weeks of being instructed unless the Project Manager allows from extension [CC 62.5].

The Contractor, throughout the course of the project, has encountered a number of problems – SubContractor insolvency, bad weather and late
supply of materials. As a result, planned Completion is now forecast as four weeks after the Completion Date which is now 8 weeks away. This is a
disaster for the Employer who has organised a grand opening and engaged an event specialist to manage the opening.

c. Should the Project Manager accept the programme? When should delay damages be deducted? Can they be increased to account for the
potential additional costs of the events company?

[5 marks]

Even though the planned Completion is behind the Completion Date showed, the Project Manager should accept the programme as long as the
programme are practicable, show the information which the contract requires, represent the Contractor’s plan realistically and comply with the
Works Information [CC 31.3]. There are some other clause provisions in the contract to manage the delay such as Acceleration [CC 36] and Take over
[CC 35].

Delay damages are liquidated Delay damages can be deducted from the Contractor at the rate stated in the Contract Date from the Completion
Date for each day until the earlier of Completion and the date on which the Employer takes over the works [X7.1]. If any of the problems stated in
the question is / are not belonged to the Contractor risk / fault, they / it can become a compensation event and finally resulted to change in
Completion Date and the assessment of the Delay damages will be changed. [X7.2]
The entries for Delay damages made in the Contract Data comprise loss of rent, loss of profit, costs due to delayed start of another contract, or
simply interest on the capital invested. The Delay damages is not allowed to be increased to account for the potential additional costs of the events.
Damages greater than a genuine pre-estimate constitute a penalty and are not generally enforceable under English law. [X7.1]

To further compound the problem, the Project Manager instructs a change to the Works Information to include additional works – a ticketing booth
and enhanced reception area. The ticketing booth will not delay Completion, but the enhanced reception areas will.

d. How are these additional works assessed in terms of their impact on the programme?

[5 marks]

The Project Manager instructs a change to the Works Information will be a compensation event [CC 60.1]. Then the Contractor shall submit his
quotations within 3 weeks [CC 62.3] and comprise proposed changes to the Price and any delay to the Completion Date. [CC62.2]. If the programme
for the remaining work is altered by the compensation event, the Contractor includes the alterations to the Accepted Programme in his quotation.
Assessment are based upon the assumptions that the Conractor reacts competently and promptly to the compensation event [CC 63.7]. However, if
the Project Manager does not agree with the Contractor assessment on the compensation event, the Project Manager assesses a compensation
event [64.1]. Or if there is no Accepted Programme or no provision of programme in the quotation by the Contractor, the Project Manager can carry
out his own assessment of the programme for the remaining work [CC 64.2]. The Project Manager will notify the Contractor of his own assessment
of a compensation event and gives the Contractor details of it within the period allowed for the Contractor’s submission of his quotation for the
same event [CC64.3]. Finally, the Project Manager shall make a fair and reasonable assessment. Otherwise, the Contractor may refer to Adjudicator
if he thinks the assessment is not correct.

e. If the Employer had decided not to undertake these two additional items of work at the current time, what provisions are contained in the
contract to assess the programme impact prior to being committed? Could additional work be instruction after Completion – what are the
potential disadvantages of this?

[5 marks]

The Project Manager has the authority to instruct the Contractor to submit quotations as a first step for his proposed instruction or proposed
changed decision. This can allow the Project Manager know the extent of cost and time impact before formally issue an instruction to the
Contractor [CC 61.2]. The proposed instruction or proposed changed decision is not necessarily to be implemented even though the Contractor
submit the quotation.

If the Completion is earlier than the Completion Date, the Employer need not take over the works if it is stated in the Contract Data. Otherwise, the
Employer takes over the works not later than two weeks after completion [CC 35.1]. The Contract is not ended and therefore, instruction still can be
given to the Contractor for the additional works. However, there are drawbacks to the Employers that the Contractor will not be pushed to carry out
the works in a certain timescale, as they will no longer be threatened with delay damages if they have achieved Completion. Also the defect date
will be fixed following Completion, so there will be a reduced period for the extra works for which the Contractor is liable to correct defects. Also,
the cost of the additional work to be carried out after Completion may be comparatively higher than it was done before Completion as the
Contractor may need additional mobilization and demobilization, abortive works etc. Insurances may also need to be renewed and additional cost
will be incurred.

[END]