A Contractor is including events on a revised programme issued for acceptance which are not yet implemented compensation events and in some instances have not been notified as compensation events. The events included on the revised programme will affect the works and therefore the Contractor believes it appropriate to include such events on his programme to ensure his programme is as realistic as possible.
The PM has difficulty with this approach because if EWN’s and non-implemented compensation events are driving the programme issued for acceptance, it is impossible to accurately assess future compensation events if that programme is accepted. What this means for the Contractor is that if non-implemented compensation events are included in a revised programme and it is accepted, then the Contractor has no way of assessing these events as the impact was already in the programme and impacting these events again will yield a zero impact.
What is the preferred approach in this situation? Does the Contractor exclude events which he knows will have a time impact on the programme? If he is to include such events, how does the compensation event get assessed if the accepted programme already contains the impact of the compensation event?
A common question to this platform so you can have a search on answers already given, but in summary:
Yes the Contractor shows effects of non-implemented compensation events - how can they not? If the PM has instructed them to do something that is a change to the Works Information and requested a quote under 61.1, they are proceeding with those works. These may already be affecting the planned works, yet will be several weeks before the quote is agreed and hence implemented. If a Contractor has been instructed not to work in an area for the next two weeks which is a CE - they have to show that. The key here is that they should only affect planned Completion, not Completion Date. If the effect is to delay planned Completion by three weeks, planned Completion moves three weeks beyond the Completion Date. When the quote is agreed, it includes the assessment of time. If the PM agrees three weeks then Completion Date can now move and catch up with planned. If the assessment is only two weeks, then planned Completion will be one week beyond the Completion Date and Contractor liable for Delay Damages if they can not recover the time (or they go adjudication to claim the extra week if they believe they are correct). This is why we have the separation of the two milestones. Planned Completion reflects REALITY, whilst Completion Date indicates LIABILITY.
Early Warnings are a bit different. The Contract used to say you show the effects of notified early warning matters on the programme, but this was taken out in 2006 as Contractors were showing potential effects of uncertain events on the programme. Therefore these should not be shown/driving the programme, but for the reasons above non-implemented compensation events absolutely should absolutely be shown (but only initially effect planned Completion).
n.b. to not show instructed works that is agreed is a CE but not yet implemented would be a reason to reject the programme under clause 31.3 as it would be unrealistic!
Like you said Glenn this is a common question but one that most Employers don’t seem to understand. We often put the effects of Instructions or CE’s on to Programmes which the Employer quickly accepts, they then often try to argue that the Planned Completion can’t move as its already been accepted therefore the delay cannot be demonstrated as the programme has been progressed. Very frustrating. (You may be able to tell that I work Contractor side)
In accordance with Sub-Clause 31.3, the Programme shall represent the Contractor’s plan realistically. The Programme then shall include additional works due to a CE even if it was not yet implemented so that the Programme reflects the Contractor’s plan realistically.
Further, I noticed that there are events that may constitute a CE but yet to be notified. Take note of the provision of Sub-Clause 61.3 which may cancel the Contractor’s entitlement for a CE if not notified within 8 weeks of being aware of the event.