Programmes, Contracts, Extensions of Time

At Chronos, our appointment is often after the occurrence of a project delay, and often after certification of practical completion. This is often where two parties are either in dispute already or heading in that direction. A large proportion of our work is in the compilation or assessment of delay claims.

To undertake our remit we are generally provided with a project’s contemporaneous records (including programmes) to forensically review. This is to allow us to form a view and advise clients accordingly.

In an ideal world, a project’s contemporaneous records would be provided to us in a databank of sorts, and comprise the following:

With the above information, we have sufficient detail to assess critical delays at any stage of a project.

However, we often find that the level of information kept by Contractors, Subcontractors, and Employers alike is less than the level we would anticipate. Such deficiencies in the required information can make it difficult for us to confidently assert how much critical delay has occurred. This leaves one or both parties with a high level of residual commercial risk should negotiations falter, and a formal dispute arise.

With regard to project programming requirements what we (and others) have observed over the years is that there is a general misunderstanding of the contract requirements. This is both in terms of what is actually required of parties at the start of a project, and subsequently throughout. In the UK the two most common forms of contract used in construction projects are the NEC and JCT forms. These have very different programme requirements, and are discussed/compared below:

There is just one reference to the word ‘programme’ in the entire contract form. This appears in Schedule 5 relating to costs savings and value improvements. There is no definition of the word ‘programme’. This form relies upon either the Employer’s Requirements listing out its requirements for programmes and their submissions/updates, or the Contractor’s diligence in sharing his programmes and associated updates.

This form is more prescriptive, with clause 2.9 requiring the Contractor to provide a Master Programme and occasional updates.

There is no specific clause for dealing with the contract programme. The Contractor is responsible for the design and construction, and therefore the programme. This form also relies upon either the Employer’s Requirements listing out details of required programmes and their submissions/updates, or the Contractor’s diligence in sharing his programmes and associated updates. There is no definition of the word ‘programme’, and there is just one reference to the word ‘programme’, within Schedule 2 in relation to cost savings and value improvements.

Chronos believes that Employers in particular should consider including the programme submission requirements and update frequency (every 1 or 2 months) within the Employer’s Requirements or the contract schedule of amendments. In this way, an accurate extension of time can be assessed in the event of a delay occurring.

Once a programme ‘clause’ is incorporated into the contract the Employer should ensure that it is adhered to. All too often, those drafting and agreeing contracts do not become involved in the contract administration.

The NEC ‘mantra’ is very different to that of the JCT, where:

Whilst there is a significant section in NEC relating to the programme, there is no definition of ‘programme’. Clauses 31 and 32 deal with the submission and updating of the programme. The Contractor is responsible for compiling, issuing, and updating the programme on a monthly basis.
The Project Manager is responsible for accepting or not accepting the programme. Note that the word ‘rejecting’ is not used here. Nevertheless, many Project Managers incorrectly ‘reject’ programmes, and often for reasons not permitted under the contract.

The NEC is prescriptive in its requirement for the parties to regularly review and update the programme as detailed below.

N.B. The NEC4 update introduces some minor changes:

31.1 Discusses the requirements for submitting the ‘first programme’

31.2 Lists the details to be shown on every programme submitted for acceptance, including:

31.3 Details of how the Project Manager ‘accepts’ or gives reasons why not – within 2 weeks. Reasons for not accepting the programme:

N.B. In NEC4, if the Project Manager does not issue acceptance or non-acceptance within 3 weeks (2 weeks plus a Contractor notified period of 1 week) then the programme is treated as accepted.

32.1 Details to be shown on every revised programme:

32.2 Frequency of submitting revised programme – ideally every 4 weeks/month. This may appear onerous. However, it will greatly assist in any retrospective time claim situation.

Contrary to popular belief the term ‘extension of time’ does not appear in the NEC forms of contract. In NEC, ‘time award’ or a ‘delay to the completion date’ are more appropriate.

The NEC prescriptive approach to programming allows for a significant increase in usable information to forensically analyse periods of delay. We often find within Employer’s Requirements for JCT contracts a section that resembles the NEC requirements for programming. This suggests a desire to use the JCT contract, however, there is a recognition that the NEC requirements for the programme are robust/preferable.

It is often the case, following the completion of our instructed work, that we end up discussing with, or advising, our clients on how to improve programming requirements and record-keeping. The aim is to reduce commercial risk in the event of delay events occurring.

This is a service that Chronos is happy to continue to provide. However, the inclusion of more prescriptive requirements in the Employer’s Requirements, or even within a schedule of contract amendments, would greatly benefit all parties to enable more accurate assessments of delay events.

The emphasis is on the old mantra of, “records, records, records”. In particular, all parties should ensure the required level and quality of contemporaneous records are kept, and agreed.

Should any of the issues in this article be of interest, or you require further information, please do not hesitate to get in touch.