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Employer instructed inclusion of TRA

0 votes
Where an Employer has instructed the Contractor to include TRA within programme activities (stated in CD Part 1), would the nutshell answer still apply?  If a critical TRA is not expended but converted to Terminal Float, the Employer may pay twice for the same period of time, if a Compensation Event later uses that Terminal Float.  In principle, this seems wrong but contractually not?
asked Aug 15, 2019 in Time by chris.everett (120 points)  

1 Answer

+1 vote
Firstly, I have no idea what you mean by "the nutshell answer" !

Assuming this is for original work,  as the Contractor owns both the TRA and terminal float, in terms of calculating delays due to compensation events, it does not matter where the TRA is put, although in terms of understanding the programme, transparency etc. it does !

If the Contractor does not use up the TRA in a critical activity, it will be reflected in greater terminal float in the next programme submission. Likewise the opposite if more time is needed than is allowed as TRA.

So if a compensation event occurs and puts back Completion by say a week, then according to the contract rules, the contractual Completion Date will be put back a week, regardless of whether the Contractor is ahead or behind on its original programme. And the Employer/Client would pay for this week delay only. So I do not see how the Employer is paying twice.
answered Aug 16, 2019 by Jon Broome Panel Member (61,270 points)