In this blog post, Steering Committee member, Lee Sporle, answers questions related to delays arising from COVID-19 and clears up float confusion. These questions were answered in our sixth Construction Clinic session, which took place in May, 2020. The entire webinar may be viewed on-demand on YouTube.

Question 1

Question: I’m acting as the Engineer under a FIDIC Yellow contract. It has two stages clearly identified. According to the contractual programme, they should have finished and handed over the first stage before COVID-19 impacted our area, but they didn’t. No reasons and/or previous claims. Now under the new scenario, they are working at one-third of the pace and they’ve started to submit Notices pleading, among others, force majeure. Beyond the specific FIDIC clauses that the contract may or may not have regarding these issues, my question is whether the Contractor does or does not have the right to issue any claim when all the problems have arisen solely due to his own delay?

Answer: Right. So the first part is the Contractor hasn’t submitted any claims. He was forecasting delays on the project before COVID-19 impacted; that’s my understanding of what you’re saying. So the programme’s already late, then COVID comes along and now he starts issuing Notices. Well, it could be that he’s implying that the previous delays before COVID-19, because he didn’t issue any Notices, are actually his delays, because now he knows how to issue a Notice. That is one good point that he’s following the contract.

Is he entitled to make a claim for COVID?

Yes. If he can prove COVID has delayed his work, depending on what your contract said, he is entitled to make that claim. He was going to be late, now he’s going to be even later because COVID-19 has come. He can’t be penalized for an event that’s not his. It’s definitely unforeseen. Say there was a public holiday, then it would be his issue, because that public holiday was always coming. But for an event like COVID-19, he is entitled to make a claim if he believes he has a delay event, which is an excusable event. So yes, he can.

As much as that may annoy you as the Engineer, because he is late and he should have finished before. I understand the frustration, but under the contract, he should be entitled to make a claim, he’s issued a Notice. You need to review that Notice and see whether it’s valid. So, yes, he is entitled to make that claim.

Question 2

Question: Is it worth tracking float? If it’s proved that one party has used the float, that party cannot then argue that the float would be the other party’s responsibility, because the party that used the float subsequently took responsibility for the float.

Answer: I’m not sure I understand exactly what this question is asking, but I will try. The person who submitted the question may email me for further clarification.

I’ll split this question in two. First, is it worth tracking float? If you have the manpower and you have the monitoring systems to track who uses the float and when, there’s no bad record. However, it’s extremely onerous to monitor that float.

If you bear in mind that the Contractor may have started an activity and the Engineer comes along and says, “Look, can you just come around and start this other area,” how are you picking that up on the float issue? Because that activity then gets delayed and it eats the float.

So, unless you’ve got those specific records, that on that day, the Engineer verbally requested onsite for you to start something else and the supervisor on site went along with it and was willing to help and delayed that activity, on your record, it just shows that your guys have taken longer, so the floats been eaten. It’s really difficult to track the float if that’s how you mean to track it. Float being used up is just a comparison of the variances on every month.

For the next part, if it’s proved that one party has used the float, that party cannot then argue that the float would be the other party’s responsibility, because the party that used the float subsequently took responsibility for the float. Now this is where I’m slightly confused.

So if it’s proved that one party used the float, let’s say the Contractor used the float, and it becomes a critical activity. That party, the Contractor, cannot then argue that that float would be the other party’s responsibility, which would be the Engineer’s responsibility. Why would the Contractor use the float and then say it’s the other party’s responsibility?

I don’t see how that scenario would work and that’s why I’m not too sure on the question, because this is the same the other way around. If the Engineer used the float, he wouldn’t say that float is the Contractor’s responsibility.

Question 3

Question: An Employer’s delay event happened and the Contractor has submitted his detailed claim for this event, defending his entitlement for an extension of time and additional costs associated. Awaiting the determination on this claim, so after the employers’ delay occurred, some Contractor’s delays occurred also impacting the original date of completion, but far less than the impact of the Employer’s delay on the date of completion. Will the Contractor lose part of the additional time claimed, prolongation costs claimed, due to his own delay?

Answer: My quick answer to that would be, no. My reasoning is, let’s say the Employee’s delay occurred on the 1st of January to the 20th of January, so there’s a 20-day delay. The job was due to finish 1st of June. So now we’re looking at 20th of June and that’s the EOT claim that we put together: a 20-day delay. We submitted that on the 1st of February.

So one month after the claim, after the first event occurred, on the 1st of March, a month later, we’re still waiting for the response, which is said in the question that while we’re waiting for the response. So one month after we submitted, we’re waiting for the response and between the 20th and the 25th of Feb, there’s a five-day delay due to our own reason.

So that would impact the original completion, if the employee delay had not occurred, we would have impacted the date from the 1st of June to the 5th of June. However, the critical path at the point of our event, is the Employer event, which delays the project to the 20th of June. Our event is after and doesn’t affect the project completion. It is still not on the critical path.

Therefore, you are entitled to the time and any of the prolongation costs that you’ve worked up. I’m not going to deal with costs, but you are entitled to that EOT that you’ve claimed for, based on the first event with the 20 days, and that would have revised the completion date. And any works that finished before that date are not critical. Now, one’s in January and one’s in February– they’re different periods of time, so we won’t even get into the concurrency argument.

The questions covered in this blog were answered by Lee Sporle

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