4
Project progress
4.1 Most building contracts include provisions that require the contractor to complete by a specific date or set of dates as this is often a matter of great importance to the client. Late completion may well result in losses to the client, in particular the costs of alternative accommodation and additional consultants’ fees. However, the obligation to complete is normally subject to some exceptions; for example, the client will be required to allow the contractor additional time if the client itself causes delay. This chapter examines the contractor’s obligations regarding time, programming and completion under the RIBA Building Contracts, including the mechanisms for monitoring progress and the sanctions for non-completion.
The site: possession
4.2 An address for the site is to be given in item C of the Contract Details. However, far more information may be needed than simply the address. If the contractor is not to have full access to the whole plot at that address – for example, if only part of the plot can be used, or if there are restrictions on entry points – this should be made clear at the tender stage. Similarly, if the building is to be occupied, the details of this should be given, for example which parts and between which dates. Where the property shares common parts with other properties (e.g. stairs, parking), it may be sensible to explain exactly what the contractor may use of these. The contractor is required to liaise with the client regarding security (cl 1.4) – it would be sensible to set out as much information as possible on responsibility for security in the Contract Details.
4.3 The client has to allow ‘reasonable access’ to the contractor for carrying out the works (cl 2.1.2). Unlike some of the JCT contracts, the RIBA Building Contracts do not refer to the contractor having ‘possession’ of the site (which is normally held to be a licence to occupy the site up to the date of completion; H.W. Nevill (Sunblest) Ltd v William Press & Son Ltd and Impresa Castelli SpA v Cola Holdings Ltd). In the RIBA Building Contracts, ‘reasonable access’ will be interpreted in the light of all the information made available to the contractor at the time of tender. If little information is given, the courts will imply an obligation that the contractor should be given such possession, occupation or use as is necessary to enable it to perform the contract (London Borough of Hounslow v Twickenham Gardens Development). This may include access not just to the building where the work is to be carried out, but also to other areas in the control of the client (see The Queen in Rights of Canada v Walter Cabbott Construction Ltd).
The Queen in Rights of Canada v Walter Cabbott Construction Ltd (1975) 21 BLR 42
This Canadian case (Federal Court of Appeal) concerned work to construct a hatchery on a site (contract 1), where several other projects relating to ponds were also planned (contracts 3 and 4). The work to the ponds could not be undertaken without occupying part of the hatchery site. Work to the ponds was started in advance of contract 1, causing access problems to the contractor when contract 1 began. The court confirmed (at page 52) the trial judge’s view that ‘the “site for the work” must, in the case of a completely new structure comprise not only the ground actually to be occupied by the completed structure but so much area around it as is within the control of the owner and is reasonably necessary for carrying out the work efficiently’.
Starting the work
4.4 The contractor is required to start on the start date entered in the Contract Details (cl 1.1.1; note: there may be several start dates if optional clause A3 is adopted). The contractor must then carry out the works regularly and diligently (cl 1.1.2). Note that this is similar to the approach in the SBC and IC11 contracts, but different to that in the MW11 version; in the latter the contract simply gives a date when ‘work may be commenced’.
4.5 The requirement to start on a particular date is useful, as it is often crucial that work actually starts on the defined date. In cases where the site is empty, the client needs to be assured that from that date the contractor will be responsible for security, health and safety, and general compliance with local authority requirements. An empty site is exposed and hazardous, so the client will be at risk of claims if security is not being addressed. Even where a customer intends to remain in residence, it is disconcerting, and sometimes extremely inconvenient, if work does not commence on the planned date.
4.6 There are provisions to allow the client to defer access to the whole site, or to sections of the site, if needed (cl 2.4). This can be very helpful if, for example, the client has problems arranging alternative accommodation, or for removal of furniture or equipment to storage. The contract does not place any limits on the length of deferral allowed, nor does it require the client to give any advance warning notice. However, the contractor would be entitled to a revision of time, and to additional payment to cover costs arising as a result of the delay. As these could be considerable, especially if little or no warning is given, the client would be wise to exercise the right to defer only in emergency situations, or if the deferral and the contractual implications can be agreed with the contractor well in advance.
Completion in sections
4.7 The RIBA Building Contracts also include an optional clause (cl A3) providing for completion in sections. Although the provisions refer only to ‘Completion’, it is possible to arrange for the work to be started and/or finished in sections. This would be useful where the client cannot make all areas of the site available at the same time, or needs certain parts of the building before others. On large projects, phased working is quite often more economical for the contractor, as it can move its resources around the various sections in a phased programme. On smaller projects, however, it may actually be less convenient, so this may need to be negotiated following tender submissions. If this option is selected, separate start and completion dates and rates of liquidated damages are specified for each section in item V (CBC) or item S (DBC) of the Contract Details.
The contractor’s programme
4.8 Both versions of the contract contain an optional clause (cl A1), whereby the contractor is required to provide a programme. It is recommended that this should always be selected (optional Item T CBC and Q DBC), except on the very smallest of projects. The programme is of great help for:
- giving the client a general idea as to what to expect (especially important to the client if they are in residence);
- giving the contract administrator an indication as to when the contractor will require further information;
- alerting the contract administrator as to when it may be wise to inspect the site;
- acting as an early alert if the contractor is slipping behind programme or getting into financial difficulties.
4.9 The programme is not identified as being one of the contract documents under item F of the Contract Details. Nevertheless, it would be sensible to ask that the contractor provides a programme before the contract is entered into. This could be done either by requiring tenderers to provide a programme with their tenders, or, once the tenders have been received, by requesting the preferred bidder to submit a programme before their tender is accepted. Otherwise, the programme is to be provided 21 days before the start date (cl A1.1 CBC and DBC).
4.10 There are alternative sanctions available for non-production of a programme (a selection is made in the Contract Details, item T CBC or item Q DBC). The contractor can either be subject to a financial penalty or prevented from starting work until the programme is produced. The contractor would be still be bound to finish by the completion date, despite the delayed start. The financial penalty involves withholding 10 per cent of the value of the first payment certificate until the programme is produced (cl A1.4 and A1.5 CBC, A1.2 and A1.3 DBC). The money is, of course, paid when the programme is produced (presumably immediately, although the contracts do not say). This will have a significant impact on the contractor’s cash flow, but ultimately the financial penalty will only be the interest on the withheld amount. The interest on 10 per cent for a few weeks will not be a large sum, whereas the losses that could arise due to being unable to start are likely to be much higher (i.e. the liquidated damages for that number of weeks, plus possible cancellation and start-up costs), therefore this is likely to be a more effective sanction. It is notable that NEC3 has a higher deduction: 25 per cent of any amount due (cl 50.3).
Content of programme
4.11 The parties are required to set out in the Contract Details, under item T in CBC or item Q in DBC, what the programme should contain (this should be done at tender stage). Two options are listed:
4.12 It is possible to select both options, and to add further requirements. The first will, among other things, give a clear idea of the sequence of work operations throughout the project. Including ‘the relationship of each activity to the others’ will show whether an item needs to be finished before another can start, i.e. which items are time critical. The shortest route through all time critical activities is usually referred to as the ‘critical path’. Knowing the critical path is extremely useful when it comes to assessing revisions of time. It should be noted that the critical path is not fixed and may change throughout the project, therefore having regular programme updates is essential.
4.13 The number of people and other resources is also very useful to know. It will give an immediate indicator of whether the contractor is not resourcing the project as planned, and therefore may be evidence that the contractor is responsible for a delay. In extreme cases it may signal that the contractor is getting into financial difficulty.
4.14 It is difficult to see why both options would not always be required. These days most contractors use software packages to work out their programmes, and the packages would always show both sets of information (in fact, an input of resources is required in order for the package to calculate the durations of activities).
Drawings/information required/provided
4.15 One of the further requirements for the programme might be to show the dates when the contractor will require additional information or drawings. There is no requirement in the contracts for further information to be provided, but it is likely that such a duty would be implied (see para. 5.10). It would therefore be useful for the contract administrator to be aware of when the contractor anticipates it will need information. Nevertheless, as the programme is not a contract document, any dates shown would not be binding.
Progress
4.16 The contractor is required to proceed regularly and diligently and to complete by the date for completion (cl 1.1.2). The meaning of this phrase is discussed in detail in Chapter 8, but essentially it means maintaining steady progress using adequate resources. The contractor does not have to stick precisely to its own programme, so long as it completes by the date for completion; if the client requires any parts to be completed before others, or to use any parts during the course of the works, it will need to make use of the sectional completion provisions, or those for early use and partial possession before practical completion (see paras. 5.40–5.44).
4.17 The contract administrator will not normally intervene in matters concerning the day-to-day programming. As the contract administrator is given wide powers to issue instructions on any matter (cl 5.4.8) and the specific power to issue ‘instructions on postponing the Works or Sections of the Works’ (cl 5.4.4) it would be entitled to alter the working sequence, but should generally only use these powers where no other option is open. Examples might be if the local authority requires work to cease for a period of time, if an unanticipated health and safety hazard is encountered, or if the client has second thoughts about the design of a part of the project and work has to be put on hold while discussions are held. There will almost always be significant effects on the completion date and the costs of the project.
Updated programmes
4.18 CBC, but not DBC, requires the contractor to submit updated versions of the programme (the requirement is linked to progress meetings; there are no such meetings in DBC). In CBC, the contractor is required to submit an updated programme to the contract administrator no later than five days before each progress meeting, and a revised version shortly after if amendments are agreed (cl A1.2 and A1.3). This is the system that is used in the Government General Conditions of Contract for Building and Civil Engineering (GC Works) contracts, and which has proved to be very effective in practice (it is also used in NEC3). For clarity, the ‘update’ should be provided even if there are no changes to the programme. It is very unlikely that this will be the case, however. Even without any delays being experienced, the contractor will in practice regularly review and make adjustments to the resourcing and sequencing, and it is very useful for the contract administrator to be made aware of these. It may be sensible to add a similar requirement to DBC, possibly for a monthly update to be provided, as a programme can quickly become out of date.
4.19 There is a financial penalty for late provision of updates, in addition to that for late initial production of the programme; for late updates, five per cent is withheld from certified amounts (cl A1.4 CBC). In practice, it is suggested that if no programme is produced for the first three months, this would mean withholding 10 per cent of the first certificate amount, and then five per cent of the second and the third. A financial penalty for late updates is also included in DBC (A1.2), even though there is no requirement to provide updates, i.e. there is no equivalent to CBC clauses A1.2 and A1.3. The parties could, of course, agree to add such a provision if they wish.
Finishing the work
4.20 The Contract Details require the insertion of a ‘Date for Completion’ (and if completion in sections is selected, a date for completion for each section), and the contractor is required to complete by this date (cl 1.1.2). However, this is rarely the date the works are actually completed. If delays occur that were not the fault of the contractor, the contractor will be entitled to a ‘Revision of Time’; this will mean that the date for completion of the works or a section will be postponed, and the contractor’s obligation will be to meet the revised date. If the contractor simply fails to finish by the original or revised date for completion, liquidated damages will be claimable by the client (note: the damages may need to be repaid if the date for completion is subsequently revised).
4.21 Once the works are complete, the contract administrator will certify ‘Practical Completion’, which is then followed by a ‘Defects Fixing Period’. When all defects have been corrected, the contract administrator will issue a final payment certificate. The rest of this chapter considers delays to the programme. Practical completion and the remedying of defects is dealt with in Chapter 5.
Delay
4.22 Delays to a project will obviously cause problems for all involved, including the client, the contractor and the contract administrator, and so should be prevented or minimised if at all possible. The ‘Collaborative Working’ section that appears in both of the RIBA Building Contracts includes provisions that are aimed at preventing or managing delay and its consequences, under the heading ‘Advance Warning and Joint Resolution of Delay’. The relevant clauses state:
- 3.2 If an event affects or will affect progress of the Works and/or the Contract Price, the Parties shall:
- 3.2.1 provide each other and the Architect/Contract Administrator with an advance warning notice of the event as soon as they become aware of it
- 3.2.2 work together to resolve the event. If necessary the Architect/Contract Administrator shall hold a meeting with the Parties and other related stakeholders to resolve the event.
4.23 The obligation applies to both parties; so, for example, the client might notify of a possible restriction to access, and the contractor might notify of a problem with obtaining a material. A notification by the contractor must be given whether or not the event might entitle it to a revision of time. There is no obligation on the contract administrator to issue a notification of events of which only it is aware, but of course it would be sensible for it to do so. Also, although the clause states ‘affects or will affect’, it would be sensible for a party to alert the other to events that might occur as well as ones that will occur (if there is a reasonable probability). The aim of the warning is to allow a strategy to resolve or minimise the effect of the event to be agreed in advance of the event occurring, and some events might be entirely averted if a warning is issued sufficiently early. Whether or not a warning is given, the contractor is required to take reasonable steps to minimise the effect of any delaying event (cl 3.3.1).
Revisions to the contract completion date
4.24 All construction contracts include provisions for making revisions to the contract period (usually referred to as ‘extensions of time’, but in the RIBA Building Contracts they are referred to as ‘Revisions of Time’). In many cases, construction contracts will list the reasons that would justify a revision, which will comprise ‘neutral’ events – i.e. things that could occur through neither party’s fault, such as bad weather – and events caused by actions of the client or the contract administrator. Such a list of events acts as a means of distributing risk between the parties; the more events are included, the more risk is borne by the client. The main reason for including events caused by the client and the contract administrator is to preserve the client’s right to liquidated damages. If no such provisions were included and a delay occurred that was caused by the client, this would in effect be a breach of contract by the client and the contractor would no longer be bound to complete by the completion date (see Peak Construction v McKinney Foundations). The client would therefore lose the right to liquidated damages, even if some of the blame for the delay rests with the contractor. The phrase ‘time at large’ is often used to describe this situation. However, this is, strictly speaking, a misuse of the phrase as in most cases the contractor would remain under an obligation to complete within a reasonable time.
Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111 (CA)
Peak Construction was the main contractor on a project to construct a multi-storey block of flats for Liverpool Corporation. The main contract was not on any of the standard forms, but was drawn up by the Corporation. McKinney Foundations Ltd was the subcontractor nominated to design and construct the piling. After the piling was complete and the subcontractor had left the site, serious defects were discovered in one of the piles and, following further investigation, minor defects were found in several other piles. Work was halted while the best strategy for remedial work was debated between the parties. The city surveyor did not accept the initial remedial proposals, and it was agreed that an independent engineer would prepare a proposal. The Corporation refused to agree to accept his decision in advance, and delayed making the appointment. Altogether it was 58 weeks before work resumed (although the remedial work took only six weeks) and the main contractor brought a claim against the subcontractor for damages. The Official Referee at first instance found that the entire 58 weeks constituted delay caused by the nominated subcontractor and awarded £40,000 damages for breach of contract, based in part on liquidated damages which the Corporation had claimed from the contractors. McKinney appealed, and the Court of Appeal found that the 58-week delay could not possibly be entirely due to the subcontractor’s breach, but was in part caused by the tardiness of the Corporation. This being the case, and as there were no provisions in the contract for extending time for delay on the part of the Corporation, it lost its right to claim liquidated damages, and this component of the damages awarded against the subcontractor was disallowed. Even if the contract had contained such a provision, the failure of the architect to exercise it would have prevented the Corporation from claiming liquidated damages. The only remedy would have been for the Corporation to prove what damages it had suffered as a result of the breach.
4.25 In both CBC and DBC, the provisions are set out in clause 9.9, which states:
- 9.9 The Contractor may apply (with supporting documentation) for a Revision of Time if the Works are delayed due to any of the following:
- 9.9.1 the Architect/Contract Administrator issues a Change to Works Instruction
- 9.9.2 the Employer [CBC; Customer, DBC] defers access to the Site
- 9.9.3 the Employer [Customer] or its agents cause delay or disruption
- 9.9.4 the Architect/Contract Administrator postpones the Works or part of the Works
- 9.9.5 the Architect/Contract Administrator issues an instruction for any work or products to be inspected and/or opened up and no defective work or products are found
- 9.9.6 the Architect/Contract Administrator issues an instruction resolving an inconsistency, unless the inconsistency is due to a document prepared by the Contractor
- 9.9.7 the Architect/Contract Administrator issues instructions on Items of Interest
- 9.9.8 the Contractor suspends some or all of its duties
- 9.9.9 the action or omission of a utility company or statutory body
- 9.9.10 weather conditions are exceptionally adverse
- 9.9.11 the Employer’s [Customer’s] risks and/or Force Majeure.
4.26 Many of these events are dealt with at other points in this Guide: for change to works instructions, see paragraphs 5.21–5.30; for deferring access and postponing work, see paragraphs 4.6 and 4.17 above; for inspections and items of interest, see paragraphs 5.18–5.20; and for inconsistencies, see paragraphs 2.42–2.43. In regard to other events, the following points should be noted:
- The client or its agents causing delay or disruption (cl 9.9.3) acts as a useful ‘catch-all’, to pick up any actions not covered elsewhere in the list. ‘Agents’ would include the contract administrator if acting on behalf of the client, and may include other third parties whose actions have been authorised by the client.
- The contractor suspending some or all of its duties (cl 9.9.8) must be taken to be referring to a valid suspension, i.e. one allowed for under clause 8 (and not simply the contractor suspending an aspect of the work for other reasons, such as a disagreement with the client).
- Weather has to be exceptionally adverse (cl 9.9.10), i.e. not that which would be expected at the time of year in question. Any ambiguity here can usually be resolved by consulting the contractor’s site records and/or Meteorological Office records.
- Client’s risks are defined in clause 9.1 and force majeure in clauses 9.5 and 9.6 (both contracts), and are essentially matters for which the client has agreed to accept the risks of any delay (cl 9.2 and 9.8; the contractor accepts the risk of all other matters, cl 9.3 and 9.4). The list of risks does not specifically exclude matters that are caused by the contractor’s negligence, for example delays caused by a fire, flood, etc., where the contractor has caused the fire etc. itself. This is similar to the position under the SBC11, where the employer accepts such risks. However, the RIBA has confirmed that in these contracts the clause 9.1 risks were not intended to include anything resulting from the contractor’s negligence. As this intention is not apparent in the clause, it may be sensible for the client to consider clarifying it by an amendment (which should be set out in the tender documents).
Applying for a revision of time
4.27 If the contractor is delayed by a clause 9.9 event and wishes to apply for a revision of time, it must do so, with supporting information, within ten days of the ‘single’ event ending (cl 9.10.1). If the event is a continuing one, clause 9.10.2 states that ‘the Contractor shall inform the Architect/Contract Administrator of the event within 10 days of it commencing and shall apply for a Revision of Time (with supporting documentation) within 10 days of the last element of the event’. An example of a ‘single’ event would be a pipe bursting overnight and causing damage; a ‘continuing’ event would be something that is ongoing, such as exceptionally adverse weather. The aim of clause 9.10.2 is to ensure that the contract administrator is made aware of the event at a reasonably early stage, even through the contractor might at that point not have enough information to make a full application. In the case of change to works instructions, an assessment is required within 10 days of receiving the instruction, not from when it first impacts on the programme, or when a possible impact is identified (cl 5.12 CBC and 5.9 DBC, see para 5.31), or the right to a revision will be lost.
4.28 The time limits are critical – and an important feature of the RIBA Building Contracts – as they limit the contractor’s rights: clause 9.10.3 states: ‘If the Contractor fails to apply within these periods, it will lose the right to a Revision of Time’. It not clear whether the contractor’s application is a condition precedent to the award of a revision of time, i.e. not only would it lose the right, but the contract administrator would have no power to issue a revision unless the contractor has made an application. It is unlikely that the contractor would object to a revision made by the contract administrator on its own initiative, and given the ‘discretion’ afforded by clause 9.11.2 (see para. 4.31), it is unlikely that any such revision would cause problems. Nevertheless, it would be wise for the contract administrator to seek the agreement of both parties before making the revision.
4.29 The contract administrator and contractor are required to ‘aim to agree the Revision of Time promptly’ (cl 9.11.1, also 5.13.1 CBC and 5.10.1 DBC). If no agreement can be reached, the contract administrator is required to make a decision on the correct revision of time (cl 9.11.2, also 5.13.2 CBC and 5.10.2 DBC). If a revision of time is granted, the contract administrator is required to amend the date for completion, and to inform both parties (cl 9.12). This process seems reasonably straightforward; however, it is complicated by the fact that clause 9.11.2 in full states:
4.30 At first sight there appears to be some contradiction between clauses 9.10.3 and 9.11.2: if the contractor has not met the time limits set, there should be no need for the contract administrator to go through the process of reaching a decision, the right to a revision has been simply lost.
4.31 One way of reading clause 9.11.2 is therefore that if the application is late, the only ‘reasonable’ decision would be that the revision of time is zero (and the purpose of issuing a ‘decision’ is simply to record the position). The RIBA has, however, suggested that clause 9.11.2 is intended to give the contract administrator discretion to consider the merits of the claim, even when the application is submitted late.
4.32 Clauses such as the above are often referred to as time-bar clauses, and tend to be interpreted strictly by the courts, especially when the matter that is the subject of the claim is a default of the client, or of those for whom the client is responsible, such as its consultants; the principle being that it is inherently unlikely that a party would relinquish its right to claim for losses suffered by the other party’s breach. However, in this case the statement in clause 9.10.3 is clear and unequivocal.
4.33 It is suggested that if a claim is late, the contract administrator should normally apply the time bar, and resist the inevitable arguments that to do so is being ‘unreasonable’. If there is any discretion, it is suggested that it is exercised with caution, and only in exceptional circumstances (e.g. where the delay has been raised earlier under an advance warning notice and discussed with the contractor, who has provided full details of its expected effects, but the actual application for a revision arrived slightly late). To treat it otherwise, i.e. to consider all applications, would deprive clause 9.10.3 of any meaning.
Assessment of an application
4.34 Assessment of revisions of time is a complex process that often causes difficulty in practice. What follows is a brief outline only. If faced with difficult claims the contract administrator should consult one of the published texts on the subject (e.g. Birkby et al., 2008; Eggleston, 2009) or take expert advice.
4.35 All assessments must be made in a fair and reasonable manner. If the parties have agreed rules under optional clause A11 (CBC), A9 (DBC), then obviously these should be used for the assessment where appropriate. The objective is always to assess what effect the event will have on the final completion date, and the contract administrator should take into account the fact that the contractor should use reasonable endeavours to minimise the effects of any delaying event. This would include giving an early warning of any event of which it ought to be aware, and taking reasonable steps to re-organise the works and adjust the programme (cl 3.3.2).
4.36 It should be remembered that the standard of proof is ‘on the balance of probability’ (the civil standard), i.e. the contractor has to convince the contract administrator that it is more likely than not that it suffered delay due to the event. The contract administrator should not expect the application to prove the contractor’s case ‘beyond all reasonable doubt’ (the criminal standard). The contractor must demonstrate not only that an event listed in clause 9.9 has occurred, but also that the event has delayed the work, and that the particular work delayed is on the critical path, i.e. its delay will ultimately delay the completion of the project; put simply, it must show a causal link between the event and delay to completion.
4.37 If there is a programme, the contract administrator is required to take it into account when making adjustments to the time (cl 5.13.2 in CBC, or cl 5.10.2 in DBC, and cl 9.11.2 in both versions). The contract administrator is also required to take into account ‘any advance warning notices’ (cl 9.11.2). There are probably two ways in which the notices may be relevant: first, the fact that they were given is evidence that the contractor has been vigilant and used reasonable endeavours to avoid the delay (conversely if no warning is given this must be taken into account, cl 3.3.2); and second, the notices should contain useful contemporaneous evidence of the nature and anticipated effects of the event. The contract administrator could also consult any other available records as to the history of events on site, and use its own knowledge and experience when making the decision.
4.38 Two issues in particular can cause problems when assessing revisions of time: ‘concurrent delay’ and ‘contractor’s float’. The following sections present very brief explanations of these issues.
Concurrent delay
4.39 Where two separate events contribute to the same period of delay, but only one of these is an event listed in clause 9.9, the normal approach is that the contractor is given a revision of time for the full effect of the clause 9.9 event (i.e. the contractor gets the benefit of the contributing but approximately equal cause, unless another competing cause can be identified as the dominant cause). The courts have normally adopted this approach (see Walter Lilly & Co Ltd v Giles Mackay & DMW Ltd; note, however, that the same does not apply to claims for loss/expense).
4.40 The instinctive reaction of many assessors might be to ‘split the difference’, given that both parties have contributed to the delay. However, it is more logical that the contractor should be given a revision of time for the full length of delay caused by the relevant event, irrespective of the fact that, during the overlap, the contractor was also causing delay.
Walter Lilly & Co Ltd v Giles Mackay & DMW Ltd [2012] EWHC 649 (TCC)
This case concerned a contract to build Mr and Mrs Mackay’s, and two other families’, luxury new homes in South Kensington, London. The contract was entered into in 2004 on the JCT Standard Form of Building Contract 1998 Edition with a Contractor’s Designed Portion Supplement. The total contract sum was £15.3 million, the date for completion was 23 January 2006, and liquidated damages were set at £6,400 per day. Practical completion was certified on 7 July 2008. The contractor (Walter Lilly) issued 234 notices of delay and requests for extensions of time, of which fewer than a quarter were answered. The contractor brought a claim for, among other things, an additional extension of time. The court awarded a full extension up to the date of practical completion. It took the opportunity to review approaches to dealing with concurrent delay, including that in the case of Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (where the contractor is entitled to a full extension of time for delay caused by two or more events, provided one is an event which entitles it to an extension under the contract), and the alternative approach in the Scottish case of City Inn Ltd v Shepherd Construction Ltd (where the delay is apportioned between the events). The court decided that the former was the correct approach in this case. As part of its reasoning the court noted that there was nothing in the relevant clauses to suggest that the extension of time should be reduced if the contractor was partly to blame for the delay.
Taking any other approach – for example, splitting the overlap period and awarding only half of the extension to the contractor – could result in the contractor being subject to liquidated damages for a delay partly caused by the client.
Float
4.41 Another area that sometimes causes problems is the question of float. Float is essentially planned early completion, i.e. a period shown on a programme between the contractor’s planned completion date and the contractual date for completion. If a revision of time is applied for at a relatively early stage in the project, it may be that the delay suffered will not push the planned date beyond the contractual date for completion. Therefore, strictly speaking, no revision should be given. However, if the contractor is later delayed through its own errors, it may wish it had had the benefit of the earlier revision, as it now appears unlikely that it will complete on time. In such cases it is generally considered that the contractor should be given the benefit of the ‘float’, therefore the contract administrator may need to review earlier decisions and account for the float period.
Final assessment of revisions of time
4.42 The RIBA Building Contracts do not require the contract administrator to review any revisions of time after practical completion. However, the RIBA has confirmed that it would be possible to do this, provided that it extended, not reduced, the contract period (the RIBA proposes that the power arises under clause 5.4.8, but the author suggests that 9.11.2 is a better basis, see para. 4.28). After practical completion, the contract administrator will be able to review all the earlier revisions of time and to adjust the date for completion as necessary with the benefit of full information, including the final programme. Such an adjustment would only be to extend the date further; the contract administrator would not be entitled to shorten the programme at that stage.