Option A - Secondary Option X7 Delayed Damages Included

The Contractor , throughout the course of the project, has encountered a number of problems – Sub Contractor 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 events specialist to manage the opening.

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?

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.

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

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?

Here goes:
If the submitted programme complies with the requirements of Clauses 31.2 and 32.1 the Project Manager should accept it. The fact that planned Completion is beyond the Completion Date is not a reason in itself to not accept and if the Contractor is late in achieving Completion then the contract has provision for dealing with it, X7.

The amount stated in the contract as damages in X7 is required to be a genuine pre-estimate of the costs the Employer/Client will incur and cannot be amended except by agreement.

The additional compensation events should be assessed in the same manner as any compensation event, the effect on Defined Cost + fee and the effect on planned Completion. To assess the effect on the planned Completion date, the accepted programme at the time of the event should be used and progressed to the date of the event. The additional work introduced into the programme and the change in planned Completion measured.

I’m not clear on your query regarding “what provisions …… to asses …… impact prior to being committed”. The Project Manager can instruct the Contractor to submit a revised programme at any time, so could have instructed one prior to the instruction. However the Project Manager should know where the project is against programme.

Additional works can be instructed after Completion, the main potential disadvantage to the Employer/Client is that they will not have their own defects date

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You could at least omit the bold type from the exam questions.

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