Case Study Flashcards
Key elements of an NDA and impact on a project and when liaising with consultants / contractors
Key elements of the NDA:
- Description of the confidential information
- Requirements and obligations on the parties
- Exclusions
- Term
- Consequences of breach
Impact:
- Need to undertake due diligence before sharing documents
- Duty to monitor consultants / contractors to make sure they are fulfilling obligations (as agent of employer)
- Duty to notify the employer of any breaches
- Delay in information release
Who was responsible for checking that the contractor had completed a survey, and how did they justify it not being carried out?
- EA has a responsibility on behalf of the employer to monitor the works.
- The survey should have been requested at the time, or reviewed at handover as part of the O&M file.
- It was the contractor’s overall responsibility to ensure the survey was completed as they held overall design responsibility under D&B.
- The justification given was that they monitored the manhole and determined that it was redundant. The assumption was that they wanted to save money by omitting the survey.
Who prepared the PCI? Why was it assumed to be abandoned?
- PCI was co-ordinated by the Ridge PD, and the drawing in question was developed by a Ridge Civil Engineer.
- It was assumed to be abandoned due to information provided by the employer. It wasn’t possible to survey the drain pre-contract due to an obstruction.
How were you influenced by the Client’s perspective of the situation and their relationship with Contractor A?
As EA I had a duty to represent the client’s best interests, which included advising them of the contractual position regarding their stance towards Contractor A.
I was influenced by the client’s perspective because:
- the decision had financial implications for the client
- the client’s relationship with Contractor A had broken down
- the client had genuine concerns around the quality and performance of Contractor A’s work
Why was the amount of cost recoverable from Contractor A limited, given their acceptance of the error, and the impact on the work in progress by Contractor B?
1) The contractor’s liability is limited to the cost of repair and not any further economic costs.
2) If an employer elects not to allow the contractor back to rectify its own defects then the contractor’s liability for costs can be lessened, regardless of who caused the defect.
3) As an EA I sought to maximise the client’s interests. Therefore, the application to Contractor A was for the full costs.
How did you reach your recommendation on defect rectification and how did this get shared and agreed with the Client?
1) I outlined the two options and my assessment of the merits and risks of each
2) I sought client approval of my recommended option
3) I then communicated with Contractor A, informing of the situation
4) I issued Contractor A with a formal letter instructing them not to rectify the defect, providing a breakdown of costs and informed that the costs would be deducted from remaining retention
What was the impact of instructing Contractor B to rectify the defect from an ongoing design liability perspective?
1) Contractor A would no longer be liable for any further issues relating to this defect
2) Contractor B would assume design liability under the Phase 3 contract
How is float treated in EoT claims?
1) EOT clause in the contract specified that the EOT would only be granted if the employer delay delays completion beyond the contract completion date
2) The contractor will only be granted an EOT if there is no remaining float in the programme. Hence, the contractor cannot preserve his float in the face of employer delays.
“Accelerating works at own cost” – would this ever be expected and what does the contract say in relation to this?
1) The contract says the contractor has a duty to ‘constantly use his best endeavours to prevent delay’ but this doesn’t amount to a positive duty on the contractor to accelerate progress.
2) The Contractor might accelerate at own cost to mitigate their own delay, so don’t become liable for liquidated damages.
How was the EOT confirmed?
I issued a formal letter to the contractor on behalf of the employer, outlining the following:
- Date of claim
- Clauses against which claim was made
- Claim awarded
- Reasons for award
- Original completion date
- Revised completion date
How did the contractor react to your assessment?
- I ensured that I substantiated the assessment with programme justification and evidence
- I reviewed the evidence with the contractor and he admitted they were in delay on a critical item and was able to use the delay period to get back onto programme
How did your award of time impact the QS’s assessment of the Relevant Matter?
The QS was able to negotiate the prolongation costs based on a reduced time settlement.
- The claim must only be the actual additional costs incurred by the contractor
- The QS needed to consider the elements of costs for which can be directly attributed to the employer’s delay event
Did you adjust your thinking on the contractual facts to suit the required outcome?
I don’t believe so, I used the contract conditions as a constraining factor in my assessment of the available options and my recommendations, whilst also maintaining the best interests of my client.
How did you anticipate managing and controlling the accelerated programme, and what measures were in place to ensure it was achieved?
1) I assessed the contractor’s accelerated programme to understand whether it was achievable
and whether the sequencing was optimal for the client.
2) Put in place new reporting mechanisms and progress reviews to ensure the acceleration targets were being met.
What was contained in the Acceleration agreement and how was this formalised?
- Agreement for the contractor’s extended working hours, and the conditions attached
- The revised completion date which was to revert to the original completion date
- It was formalised by issue of a formal notification from the employer
What could you have done better?
1) Earlier identification of the defect through review of the contract drawings (PCI)
2) Closer review of the contractor’s progress pre-delay
3) Sectional completion in Acceleration Agreement
4) Contract amendments?
- Programme to be a contractual document, to be submitted for approval at regular intervals, as per NEC
5) Consideration of other delay analysis techniques such as time slice analysis
What client-side costs would the client have incurred for the delay?
- Professional fees
- Insurance costs
- Loss of productivity (from not being able to use the works)
- Reputational damage
- Financial penalty
What is the contractor’s obligation when claiming for a delay?
Issue a delay notice whenever it is reasonably apparent that the works is being or likely to be delayed.
The notice should include:
- the cause(s) of delay
- the Relevant Event
- expected effects of the delay upon completion date substantiated with evidence such as programme
If an extension of time is issued during the project, what must happen after completion?
A review of the time awarded, within 12 weeks of completion - cannot reduce time, only confirm or increase it
How would the extension of time have been dealt with if under an NEC contract?
- Early warning notice instead of a delay notice
- Contractor or Project Manager could instruct the other to attend a ‘risk reduction’ meeting
- Claim for both time and cost would be issued by the contractor as a Compensation Event within 8 weeks
- Project Manager has one week to confirm decision
- Failure of the PM to reply within this period allows the contractor to confirm the failure, following which the PM has a further 2 weeks, otherwise the CE is confirmed by default
- The latest ‘accepted programme’ would be used as the baseline for assessing any delay events and their impact on the completion date
- Must be dealt with at the time - not after completion as it is possible with JCT.
Can you name some methods of delay analysis?
- Impacted As-Planned Analysis
- Time impact analysis
- Time slice window analysis
- As-Planned vs As-Built
- Collapsed As-Built Analysis
What is the disadvantage of As Planned vs As Built?
Optimism bias: original planned start dates and durations might be too optimistic and/or that the contractor used more resources than planned, causing the works to be carried out at a different speed to that envisaged
What were the concurrent delays caused by?
- The contractor was in delay on a critical activity of 1st fix M&E by a week
- The delay to this activity would have impacted the critical path if the employer delay hadn’t happened
- The employer’s delay event prevented power being brought from the back to the front of the site, which had knock-on impacts to the front of the site being closed up
Did the contractor provide an acceleration quotation?
Yes it was agreed in advance that the quotation would only include the enhanced rates for the evening / weekend work as the delay had already been settled
What were the key risks associated with the acceleration? What suggested mitigation?
Risks:
- Labour / Plant / Supervision mix might be disrupted which might reduce productivity
- H&S issues with more trades on site
- Issues with damage from one trade to the other
- Rate of productivity not sustainable
- Inconsistency in the quality of work performed by different shifts
Mitigation:
- Split of site management responsibilities
- Good communication and information sharing
- Use of a DMS to ensure the right documents are being used
- Intelligent sequencing to allow space between trades
When you recommended option 2 which was for contractor B to rectify the defect, how did you deal with it from a contract administration perspective with contractor A?
- I informed Contractor A that they didn’t have an automatic right to attend site
- I outlined why option 2 was in their best interests
- I issued Contractor A with a formal letter stating the employer’s intention to withhold the rectification costs, alongside an estimate from the Ridge QS
- I obtained agreement in principle from the contractor
- I followed up with an instruction for Contractor A to not rectify the defect, and issued a breakdown of costs
Talk me through this negotiation, what did you do to convince contractor A to agree to the full value?
I informed Contractor A of the difficulties they were likely to fact in terms of:
- access / working on Contractor B’s site
- working in an operational environment
- ongoing design responsibility for the defect
Did Covid hit while the project was on site? Given that was the case, Covid hit, major issue, what advice did you give the client from a contract point of view?
- Encourage the client to maintain contract performance as far as possible
- Instruct the contractor to bring forward certain procurement activities, make space for storage of materials
- Encourage collaboration with the contractor
- Ensure contractor is adhering to CLC site operating procedures
- Awareness of Force Majeure clause in the contract; JCT is silent on conditions, likely that Covid is FM
- Ensure that the client is familiar with the clauses relating to suspension or termination of the works
What were the key contract particulars and amendments to the JCT D&B 2011 contract?
- Executed as a deed
- Date of possession 09/03/20 (6 week deferment)
- Date of completion 20/12/20
- LD’s £10K/pw
- Retention 5%
- Public, Employers and PI £10M (12 year period of liability)
- Insurance Option C
- Adjudication - RICS
- Arbitration - President or VP RICS
- Warranties - £5M
Amendments:
- Responsibility on the contractor to have examined the ERs and is satisfied to the feasibility and practicality for any design and will be completed for the agreed Contract Sum and completion date
- Clause added stating that materials must conform to British Standards and are known to be deleterious
- Early access right for furniture fit-out
- Programme clause - requiring contractor to provide a programme at the start of the works and whenever there is a change
- Employer right to comment on programme to be considered by the contractor
- Contractor accepts entire responsibility for the design, including all design prepared pre-contract
- Contractor shall design and construct the works in compliance with the requirements of the fire officer
- Any inaccuracy or discrepancy in the ERs or CPs shall be corrected by the contractor and does not entitle the contractor to EOT or loss/expense
- Changes: obligation for the contractor to provide a quotation within 10 business days / if no agreement the works are to continue and a GMP agreed for the works
Why didn’t Contractor A have a right to access site to rectify the defect?
Once the contractor has handed back the site to the employer, it is no longer within their control to return
What is the contractor’s obligation to mitigate its loss?
The Contractor’s duty to mitigate its loss has two aspects:
1) Contractor must take reasonable steps to minimise its loss
2) Contractor must not take unreasonable steps that increase its loss
How did you negotiate with the Planning Officer to extend construction working hours?
- Government guidance note regarding a relaxation of planning conditions regulations due to Covid
- Used this as the basis for the intention
- Let the officer know of the financial impact to the business if acceleration wasn’t possible
Why did you agree the EOT and then Accelerate, couldn’t you have just instructed the contractor to accelerate?
- I wanted to make sure the delay was dealt with first
- Made dealing with costs, etc, easier
- Reduced the risk of ongoing dispute
Why did you consider this to be a delay claim and not a disruption claim?
If Contractor A had been allowed back onto site to complete the works, I would consider this a disruption claim by Contractor B
A disruption claim is when the Contractor is prevented from carrying out the works and its resources will accomplish a lower productivity rate than planned.
A disruption claim would involve:
(a) activity delay; or
(b) the need for acceleration; or
(c) a combination of both – and therefore, in each case, loss and expense.
Hence, ‘disruption’ is concerned with an analysis of the productivity of work activities, irrespective of whether those activities are on the critical path to completion of
the works.
Did you review the EOT after completion and what was the outcome?
- The EoT was reviewed after practical completion
- It was difficult to analyse the impact of this single delay as there had been subsequent delays
- There was nothing substantive to suggest that the EOT award was insufficient
- Agreed with the contractor that no change was required to the outcome
Why did the Employer’s delay event cause a critical delay?
- The central position of the excavation on site was unfortunate as it delayed the completion of high-level works
- The high-level works were to be completed in order to deliver power from a switch room behind the site to the front of the site to the plant roof
- The plant was not able to be moved therefore this prevented the front elevation being closed up
How did you go about instructing the initial investigation works, and did the contractor provide a quotation?
1) Agreed with the client that investigation works should be undertaken by Contractor B
2) Issued instruction on basis of day works which was the prime cost plus OH&P
3) Worked with QS to monitor the works and costs
How did you determine whether the contractor’s assessment that it wasn’t economical to break out the manhole was right?
1) I consulted members of the design team (civil / structural engineers)
2) I sought the second opinion of another contractor
Why did you use the delay analysis techniques you chose?
1) A delay claim decision should be issued within 12 weeks of receipt of the claim
2) A wait and see approach is discouraged
3) It was in the client’s interests to settle the claim and agree an accelerated programme
4) It was better for working relationships to settle the claim
Why did you need to do an As-Planned vs As-Built analysis before you did the Time Impact Analysis?
1) I wanted to have an updated As Built programme to complete analysis
2) The last submitted programme was issued a few weeks prior to the delay event
3) I had concerns that the programme progress hadn’t been updated accurately
4) I was able to use records to reflect my understanding of the existing delay in the programme
What programming software was the contractor using and did you use to perform your analysis?
Asta PowerProject
I exported to MS Project to do delay analysis
Were there really two options for the EoT award?
- The significance rested on whether the contractor and employer delays were concurrent
- If there was true concurrency I understood that the contractor would be able to claim that their EOT award should not be reduced; based on case law such as Boot vs Malmaison
- I considered a full award of the EOT a viable option until the issue of concurrency had been resolved
How did you manage the risk of dispute with Option 2 in dealing with the EOT? Was it worth it for the sake of one week?
Stakeholder management: - Careful management of the contractor - Set client's expectation of the risk Was it worth it: - Principle of contractor accelerating to cover own delay was not acceptable to client
Why didn’t the contractor’s future delivery programme improve the timeline?
- Contractor’s programme re-sequenced activity but the overall duration didn’t change
- Some of the optimism bias was removed from the programme
