THE LEGAL STATUS OF CONSTRUCTION WORK PROGRAMME IN THE
CONSTRUCTION INDUSTRY
SITI FAIRUS BINTI OTHMAN
A project report submitted in partial fulfillment of the
requirement for the award of the
Master of Sciences in Construction Contract Management
Faculty of Built Environment
University Technology Malaysia
NOVEMBER 2009
iii
For my beloved Mother,
Husband, Sisters, Brothers
And Farya Nafeesa
Thank you for your support, guidance and everything.
iv
ACKNOWLEDGEMENTS
In the name of Allah most gracious most merciful
A research of this nature may not be undertaken without help and support of others.
They have contributed useful ideas towards my understanding and thoughts. In
particular, I wish to express my sincere appreciation to my supervisor, Dr Nur Emma
Mustaffa, for encouragement, guidance, critics, and friendship. Also not forgotten to the
other lecturers PM Dr Maizon Hashim, PM Dr. Rosli Abdul Rashid, En. Jamaludin
Yaacob and En. Norazam for being so helpful and understanding.
My fellow postgraduate students should also be recognized for their support, guidance
and care. My sincere appreciations also extend to all my colleagues and others who have
provided assistance at various occasions. Their views and tips are useful indeed.
Most of all, I wish to express my deep sense of gratitude to my family, especially to my
mother, sisters for their never-ending support and encouragement. I am so very thankful
to my beloved husband, Alhadi Bujang for always being there to light up my spirit and
give motivation, also to my kindred spirit beautiful baby Farya Nafeesa, having both of
you makes me feel complete. Without their continued support and interest, this thesis
would not have been the same as presented here.
Last but not least, thank you to all who have made this dissertation possible.
Thank you and God bless.
v
ABSTRACT
In construction contracts, a programme is usually produced to record the
sequence of work. Most standard forms of contract neither state it to be part of the
contract document nor give guidelines of how to prepare a work programme and the
form it should take. The form does not clearly defined the programme’s role and it does
not state that there is a clear obligation to proceed in accordance with the programme.
The aim of this research is to identify the legal status of a work programme and whether
it is contractually binding or not and whether it can be used as an evidence in
establishing variations, assessing extension of time and in determining a contractor’s
employment. The research is based on literature information about construction work
programme, its provisions for international and local standard forms of contract and the
legal implications in court cases where work programme was considered an important
document in the judgment. From the research, it is found that a contractor has to have at
least an updated documents about its project’s progress, minimally in the form of critical
path analysis and logical link for a causative event of delay to be proven. If the
programme includes a method statement then that stated method may become the
specified method of working. This entitles the contractor to a variation if the specified
method is required to be changed. It is also found that the subcontract programme had
no contractual effect as to original main programme. But non-performance under its
obligations may be treated as a repudiatory breach and claims for damages is liable due
to parties determination. Lastly the research found that his entitlement to recover losses
due to the delay or awardment of an extension of time can be considered the
compensation under the contract. All the existence and extent of these obligations are
determined by the terms of the contract.
vi
ABSTRAK
Dalam kontrak pembinaan, perancangan kerja biasanya dikemukakan untuk
menunjukkan aliran kerja projek tersebut. Tetapi kebanyakan Borang Kontrak Setara
menyatakan perancangan kerja bukannya sebahagian dokumen kontrak. Cara-cara dan
bentuk program yang harus ada, peranannya dari segi kontrak, obligasi pelaksanaan
kerja mengikut aliran dalam perancangan kerja juga tidak spesifik dinyatakan. Oleh itu,
penyelidikan ini adalah bertujuan untuk mengkaji status penggunaan perancangan kerja
dari segi perundangan berdasarkan ikatan kontrak serta kesahihan dokumen tersebut
dalam membuktikan perubahan kerja, lanjutan masa mahupun menjadi asas untuk
penamatan kontrak. Kajian ini dibuat berdasarkan maklumat penulisan mengenai
perancangan kerja, peruntukan klausa berkenaan yang ada dalam Borang Kontrak Setara
di Malaysia dan Antarabangsa dan beberapa kes mahkamah yang menggunakan rekod
perancangan kerja ini sebagai sandaran perbicaraan. Kajian mendapati seseorang
Kontraktor harus mempunyai dokumen yang sentiasa dikemaskini mengenai pencapaian
pelaksanaan sekurang-kurangnya melalui analisa laluan genting dan analisa secara
pautan logik untuk membuktikan peristiwa penyebab kelewatan projek itu. Perancangan
kerja berserta penyata kaedah merupakan dokumen rasmi aturan kerja ketika pembinaan.
Jika adanya perubahan kepada aturan kerja yang diluluskan, ia boleh diberi hak
berdasarkan klausa perubahan. Perancangan kerja subkontraktor tidak mempunyai
sebarang implikasi kontrak kepada perancangan kerja kontraktor utama, namun prestasi
yang tidak memuaskan boleh dianggap sebagai perlanggaran perjanjian dan boleh
mendapatkan tuntutan gantirugi jika penamatan kontrak berlaku. Kajian juga
menunjukkan pemberian ganti rugi atas sebab kelewatan mahupun lanjutan masa
merupakan alternatif pampasan dalam kontrak. Namun obligasi pengurusan kontrak
adalah termaktub terhadap syarat-syarat kontrak itu sendiri.
vii
TABLE OF CONTENTS
CHAPTER
1
2
TITLE
PAGE
DECLARATION
ii
DEDICATION
iii
ACKNOWLEDGEMENT
iv
ABSTRACT
v
ABSTRAK
vi
TABLE OF CONTENTS
vii
LIST OF ABBREVIATIONS
xi
TABLE OF CASES
xii
INTRODUCTION
1
1.0
Introduction
1
1.1
Background of the study
1
1.2
Statement of issues
3
1.3
Objective of Study
5
1.4
Scope of Study
6
1.5
Importance of Research
6
1.6
Research Method
7
1.7
Organisation of the report
8
WORK PROGRAMME IN CONSTRUCTION INDUSTRY
11
2.0
11
Introduction
viii
CHAPTER
TITLE
PAGE
2.1
Construction Planning
11
2.2
Project Time
12
2.2.1
Defining Project Time
12
2.2.2
Estimating the Project Time
13
2.2.3
Project Time Management
13
2.3
Construction Work Programme
14
2.4
Purpose of Construction Work Programme
16
2.4.1
Project Completion Time
17
2.4.2
Task Time
17
2.4.3
Conflict in Work Sequence
17
2.4.4
Requirement for Financing
18
2.4.5
Effect of Proposed Changes
18
2.4.6
Delay in Work
19
2.4.7
To serve as a Record of Actual Vs Schedule
19
Completion
2.5
2.4.8
Historical Cost Data
20
2.4.9
To satisfy a Contractual Requirement
20
Types of Work Programme
20
2.5.1
Bar Chart
21
2.5.2
Network Programme
23
2.5.2.1
Activity-on-Arrow
26
2.5.2.2
Activity-on-Node
26
2.5.3
Logic Links
27
2.5.4
Linked Bar Chart
27
2.5.5
Line of Balance Method
29
2.6
Advantages of Work Programme
29
2.7
Conclusion
33
ix
CHAPTER
TITLE
PAGE
3
PROVISION OF WORK PROGRAMME AND RELATION
34
TO OTHER PROVISIONS IN STANDARD FORMS OF
CONSTRUCTION CONTRACT
3.0
Introduction
34
3.1
Background
34
3.2
Work Programme Provision and In Relation to Others in
35
Standard Forms
3.2.1
Fidic Forms 1999
36
3.2.2
ICE 7th Edition
39
3.2.3
ECC 2nd Eition
41
3.2.4
MF/1 Rev 4 2000
45
th
3.2.5
IChemE Red Book 4 Edition 2001
47
3.2.6
JCT 1998 Forms
49
3.2.7
PAM 1998 and 2006
50
3.2.8
CIDB 2000
50
3.3
Programme and Contractual Entitlement
51
3.4
How Construction Work Programme Can Contribute
55
Analysing Causative Event
3.4.1
Obligation to Complete
56
3.4.2
Obligation to Progress the Works
57
3.4.3
Establishing Compensation
57
3.5
Methodology of Delay Analysis
59
3.6
Conclusion
61
x
CHAPTER
4
TITLE
PAGE
LEGAL IMPLICATIONS AND CASES
63
4.0
Introduction
63
4.1.
Research Focus
64
4.2
The Obligation to Provide a Programme by Contractor
64
4.3
Obligation if the Programme is included in the
70
Contract Document
4.4
Obligation of SubContractors Towards Main Contract
73
Programme
4.5
5
Rights of Entitlement
78
4.5.1
78
Requirement to Reduce Delay
4.5.1.1
Mitigation of Loss
79
4.5.1.2
Mitigation of Delay
80
4.6
Obligation to Mitigate Delay or To Progress the Works
82
4.7
Conclusion
84
CONCLUSION AND RECOMMENDATIONS
86
5.0
Introduction
86
5.1
Background
86
5.2
Research`s Overview
87
5.3
Research Findings
88
5.4
Recommendation of Enhancement to Current Practice
89
in the Construction Industry for Malaysia’s Contracting
Parties
5.5
Research Constraints
REFERENCES
95
96
xi
LIST OF ABBREVIATIONS
AC
-
Law Report Appeal Cases
Adj.LR
-
Adjudicator Law Report
BLR
-
Building Law Reports
CA
-
Contract Administrator
CIDB
-
Construction Industry Development Board
Con LR
-
Construction Law Report
ECC
-
Engineering and Construction Contract
EWHC
-
High Court of England and Wales Decision
FIDIC
-
Federation Internationale de Inginieurs Conseils
ICE
-
The Institution of Civil Engineers, UK
I ChemE
Institution of Chemical Engineers
JCT
-
Joint Contract Tribunal
LT
-
Law Times Report
MF
-
Model Forms
MLJ
-
Malayan Law Journal
PAM
-
Persatuan Arkitek Malaysia
PWD
-
Public Work Department
TCC
-
Technology and Construction Court
SLR
-
Singapore Law Report
SO
-
Superintending Officer
xii
TABLE OF CASES
CASES
Ascon Contracting Limited v Alfred McAlpine Construction Isle of
PAGE
73, 81
Man Ltd (1999) 16 Const LJ 316, 66 ConLR 119, 19 October 1999
Balfour Beatty Construction Ltd v. The London Borough of Lambeth
32, 59, 93
(2002)
British Westinghouse-v-Underground Electric Railway (1912)
79
CFW Architects (a firm) v Cowlin Construction Ltd
69
DSND Subsea Ltd v Petroleum Geo-Services ASA and PGS Offshore
66, 67, 68, 83
Technology AS [2000] BLR 530
English Industrial Estates Corporation -v- Kier Construction Ltd
70
[1991] 56BLR93
Garmac Grain Co -v- Faire and Fairclough (1968)
80
GLC v Cleveland Bridge and Eng Co Ltd [1984] 34BLR50
65
Havant Borough Council -v- South Coast Shipping Company Ltd
71
(1996)CILL1146
xiii
CASES
Henry Boot Construction (UK) Ltd v. Malmaison Hotel (Manchester)
PAGE
30
Ltd. (1999)
Hiap Tian Soon Construction Pte Ltd and Another v Hola
77
Development Pte Ltd and Another
John Barker Construction Ltd. v. London Portman Hotel Ltd (1996).
6
John Doyle v. Laing Management
82
Jurong Engineering Ltd v Paccan Building Technology Pte Ltd
75, 77
[1999] 3 SLR 667
J.F Finnegan Ltd -v- Sheffield City Council (1988) 43 BLR 130
68
Kitson Sheet Metal Ltd -v- Matthew Hall Mechanical and Electrical
74
Engineers Ltd (1989)
Leighton Contractors (Asia) v Stelux Holdings Ltd (2004) HCCT
32
29/2004
Martin Grant and Co Ltd -v- Sir Lindsay Parkinson and Co Ltd
74
(1984)
Midland Land Reclamation Ltd -v- Warren Energy Ltd (1997)
84
Mirant Asia-Pacific Construction (Hong Kong) Limited v Ove Arup
74
and Partners International Limited v Ove Arup International Limited
and Ove Arup Partners Hong Kong Limited [2007] EWHC 918
xiv
CASES
PAGE
Motherwell Bridge Construction Limited v Micafil Vakuumtecchnik
31, 81
(2002) TCC 81 CONLR44
Multiplex Constructions (UK) Ltd v Honeywell Control Systems
71
Ltd[2007] EWHC 447 (TCC); 111 ConLR 78; [2007] Build LR 195
Pigott Foundations Ltd -v- Shepherd Construction Ltd (1993)
73
67BLR48
Royal Brompton Hospital NHS Trust v Frederick
29
Alexander Hammond and others (2002) 76 ConLR 131
Scottish Power plc v Kvaerner Ltd (1998)
75
Skanska Construction UK Limited v Egger (Barony) Limited (2004)
Sweatfield Ltd -v- Hathaway Roofing Ltd
Terrell -v- Mabie Todd and Co (1952)
7
76
84
Wells v. Army & Navy Co-operative Society
65
White and Carter (Councils) Ltd -v- Mc Gregor (1962)
80
Yorkshire Water Authority -v- Sir Alfred McAlpine and Son
70
(Northern) Ltd (1985) 32 BLR 114
CHAPTER 1
INTRODUCTION
1.0
Introduction
This chapter will discuss briefly the background of the study, objective of
the study, scope of the study as well as the methodology of the study.
1.1
Background of the study
A contractor is someone who contracts to build things or someone who contracts
for and supervises construction, as of a building (Ashley, 1985). According to Chan
(2002), a contractor‟s obligation in a traditional contract to carry out and complete the
works would require him to provide the workmanship and materials as required by the
specifications given by the architect and engineers.
Ficken (2006) similarly
acknowledges that the contractor is required to perform construction fully in accordance
with the contract documents, usually consisting of at least plans, specifications and the
2
building code within required time.
Thus, if the contractors fail to construct in
accordance with applicable contract documents, he is responsible for resulting damages.
Contract period is a binding period within which the contractor not only must do
the work but it is also a license for the contractor to spend that time carrying out the
works. In addition, he may plan and do the work in whatever order he pleases. It is
usually an express obligation for the contractor to proceed regularly and diligently with
the work, and where he must make sufficient progress to achieve the completion date
(Eggleston, 1992).
Any contract will have a time requirement even if it is simply to complete in a
reasonable time. In construction contracts, it is usual for a programme to be produced to
record the sequence of work. It is intended to assist the parties to plan and manage the
Contract and the various interfaces between the Employer and the Contractor as well as
other contractors. The programme of work is normally submitted by the Contractor after
entering into the Contract. The programme has two possible roles in the management of
the contract, either a Monitor Role or a Dynamic Role. The Monitor Role allows the
extent of compliance with the parties' obligations as to time to be assessed at particular
stages. The Dynamic Role allows an analysis of progress to determine the corrective
actions to be taken to comply with the particular obligation or to ascertain the right to
compensation1.
In the Malaysian standard form of contract, the employer usually requires the
contractor to provide a programme (construction work programme) at the
commencement of the work to show the sequences and timing of the activities involved
in the construction of the project. In most standard forms, the programme which the
1
Retrieved from http://www.atkinson-law.com
3
contractor is required to submit is not stated to be a contract document as in PWD 75
(rev.2006) Clause 14.2, PAM 2006 3.6. In PWD 203A (Rev.2007), the express
obligation of work programme requirement is silent. But for other international standard
forms the provision of the programme entitles to become a compensation programme in
determining delay and damages allowable. This again depend on what is the content of
the work programme required and the comprehensiveness of its usage in context of the
standard forms.
1.2
Statement of issues
The effect of making the programme an express requirement without it being a
contract document is that while the contractor may in breach for failure to submit a
master programme, he may not be in breach if the series of events are not followed as
scheduled (Rajoo,1999). But if the contract requires the contractor to submit a
programme in accordance with the requirements of the contract then his failure to do so
will be a breach of contract. The contractor will then be liable for substantial damages if
the Employer can establish a loss.
For Malaysian standard forms, it makes provision for the submission of
programme and their revision to S.O. for approval or endorsement. But there are no
guideline of how to prepare a work programme, the role of the programme is not clearly
defined, and the uniformity of form it should take is not described. It also does not state
a clear obligation to proceed in accordance with the programme, the exceptions being
FIDIC Forms and ICE. Even though Rajoo (1999) in The Malaysian Standard Form of
Building Contract (The PAM 1998 Form) had stated the elements of work programme, it
is not defined in any clause in any standard form of contract. He stated that,
4
…….the elements of Work programme is not defined in clause 3.4. As such, it may take
the form of a bar chart, critical path, precedence diagram, schedule, network analysis or
otherwise. A good work programme should show interfaces with sub-contractors, dated,
time frames, activities, stages and more.
For example in Malaysia, the programme of works as prepared by the contractor
is usually not detailed, not realistic or do not have the activities properly linked to show
the critical path. It is usually used for „show‟ only more than anything else which is the
cause of many incidents where EOT was not granted even when the contractor rightly
has its entitlement to EOT if a proper programme of works was presented and all the
information related to delays was provided (Entrusty Group, 2006). It is essential to
appreciate in EOT computations that the period of extension to be granted is the effect
(actual or estimated) that the delaying event had (or will have) on the date for
completion. The recording of immediate or direct consequence of the event on the
carrying out of the work is of no concern, for its effect on the final outcome may be very
different, not least because it is the contractor's duty to mitigate the effect of a delaying
event as far as he reasonably can with his intended level of resources2.
Engineer or architect appointed as Superintendent Officer (SO) or C.A (Contract
Administrator) generally acts as an agent of the employer, and the certifier in
administering the contract on the employer‟s behalf. The responsibilities of the CA and
SO include deciding whether an event is one that gives rise to an entitlement on the part
of the contractor under the contract and whether that event has caused delay and or is
likely to affect the date for completion of the work3. In practice generally, the measure
of actual progress against the programme will be cogent evidence of a failure to proceed
with due expedition. The failure of the Contractor to proceed in accordance with the
programme will be sufficient, without more, to terminate the Contract, providing that
2
3
Construction Law in Singapore & Malaysia (2nd Ed) at p 312
Sundra Rajoo (1999).The Malaysian Standard Form of Building Contract (The PAM1998 Form). MLJ
5
this is "without reasonable excuse". The meaning of that term is not further defined, but
an entitlement to an extension of time will clearly qualify. The statement of "failure to
proceed regularly and diligently" must be significant in terms of the overall contract or
a particularly critical activity for the project, and not simply a failure to follow the
timing of isolated activities on the programme4. Only an updated and verified `quality`
work programme, will be able to show the status or progress of any in contractor‟s plan
of proceeding the works. It will also be a strong evidence in any dispute which may arise
on issues of responsibilities arising from delay to completion from changes of
programme sequences and duration of activities5.
The main aim of this research is to identify the legal status of a work programme
whether contractually binding or not and whether the obligations in programming can be
used as evidences in establishing variations, assessing extension of time and in
determining a Contractors employment.
1.3
Objective of Study
The objective of this research is
i). To identify the legal status of work programme in the current construction
industry in binding contractual obligations of parties involved and as supporting
evidences in assessing validity of delays, variations, and in determination of
employment
4
5
Vincent Powell-Smith and John Sims (1989). Building Contract Claims.
Edward M. Willis (1997), Scheduling Construction Projects.
6
1.4
Scope of Study
The main thrust of this dissertation is on determining the legality of work
programme incorporated as part of contract document and its attribute to notifying delay
in managing ongoing construction phase. The scope of this study will be confined to the
following areas:
1.5
a.
The available construction work programme
b.
Available standard forms emphasizing usage of work programme
c.
Cases related to works programme and mitigation to the delay and loss
Importance of research
This study is intended to give an in-depth insight of how a programme is (or should
be) formulated and give indications of the legal aspect as to who should make the
decisions, and the factors that should be taken into account when making these decisions
due to the effect of methods, sequencing and programme on works and finally the
outcome of it. A better understanding of the process of compiling and monitoring a
programme, and indeed the limitations of a programme, and that they will also have a
better understanding of the factors that need to be reviewed when adjudicating a
dispute6. Some of the issues to be taken into account when analysing for example
determination of contract due to delay of works, an entitlement to EOT which were
inherent in the analysis in the John Barker 7case, are:
6
7
Edward M. Willis (1997), Scheduling Construction Projects.
John Barker Construction Ltd. v. London Portman Hotel Ltd (1996).
7

The need for a programme.

The need to take into account the actual progress and update the
programme.

The need to consider the critical path (including changes in the critical
path).
The courts, in tune with practice, regularly make their decisions taking into
account assessments based on as-planned programme. That is, of course, provided that
the programme are realistic and applicable in the first place. See for example the English
case of Skanska Construction UK Limited v Egger (Barony) Limited
8
where the judge
held that the programming expert had based his analysis on a programme which had
become “virtually redundant, almost at the outset”.
1.6
Research Method
In pursuance of the aim or objective as stipulated above, the primarily methods
that have used to complete this project are research by literature review.
Sources for literature review are from books, journals, newspaper article, lecturer
notes and magazines. These sources provide lots of data that can help to determine the
8
[2004] EWHC 1748 (TCC)
8
background of the research, work programme roles, and nature of contractor‟s
obligations in enforcing his schedule of works.
All these reading sources can be obtained at the internet sites that are related to
this dissertation and library; Perpustakaan Sulatanah Zanariah, UTM . Analysis of cases
collected from Malayan Law Journal (MLJ) and UK Cases and Combined Courts.
1.7
Organisation of the Report
The dissertation consists of five chapters. The brief descriptions of each chapter
are as follows:
Chapter 1:
Introduction
This chapter presents the overall content of the whole project writing. It introduces the
subject matter, the problems that are purported to solve. The objective is specified with
an appropriate research method to achieve them.
Chapter 2:
Work Programme in Construction Industry
This chapter with the overview and analysis of work programme promising valuable
information for identifying and modeling delays and their effect on progress and the use
of computerized work programme techniques for proving delay is become a practical
requirement nowadays. Nevertheless techniques are being considered by the courts and
9
it is now almost inevitable in litigation involving disputes over the extent of project
delays that a programming expert will be appointed. Therefore, it is good for the parties
involved in a construction project, especially contractor to have a proper documented
record such as work programme as a step to help in reducing disputes in the future,
although it is still not a legal requirement in standard form of contract in Malaysia.
Chapter 3:
Provision of Work Programme and Relation to Other Provisions In
Standard Forms of Construction Contract
This chapter reviews the various definitions of International and Malaysia Standard
Forms in used, the relation to the provision of work programme and the different of
approaches under contract.
Chapter 4:
Legal Implications and Cases
This chapter analyses the results from the judicial decisions as reported in law reports
and further explore related cases regarding the contractor‟s liability to third party for not
following through its work programme during construction works and what
circumstances that the contractor liable or not liable. Attempts were made to analyse the
reported judicial decisions and to state the law there from. This would allow not only
the law to be stated, but equally important, it allows the law to be assessed in relation to
the facts as found by the court.
10
Chapter 5: Conclusion and Recommendations
This chapter presents the conclusions for the overall dissertation.
It includes the
summary of the findings of this study, conclusions, recommendations for future
management of contracts as well as enhancements of the current practice.
11
CHAPTER 2
WORK PROGRAMME IN CONSTRUCTION INDUSTRY
2.0
Introduction
The focus of this chapter is on construction planning, project time and its
derivation from construction work programme. The overview of common type of work
programme used in construction industry and its function is explained. Discussions on
the aspect of the construction time, its attributes, and issues with relation to Contract
management.
2.1
Construction Planning
Construction planning is a fundamental and challenging activity in the
management and execution of construction projects. It involves the choice of
technology, the definition of work tasks, the estimation of the required resources and
durations for individual tasks, and the identification of any interactions among the
12
different work tasks. A good construction plan is the basis for developing the budget and
the schedule for work. Developing the construction plan is a critical task in the
management of construction, even if the plan is not written or otherwise formally
recorded. In addition to these technical aspects of construction planning, it may also be
necessary to make organizational decisions about the relationships between project
participants and even which organizations to include in a project9.
2.2
Project Time
2.2.1
Defining Project Time
Project time has been defined as the completion of the project on the date stated
in the contract, or interim completion dates required for phases of the work (Clough et.
al., 2000). It is also defined as the duration that is needed to complete the work starting
from site processions until finished. “Duration” is the time, usually in days, taken to
complete the entire project, from starting the first task to finishing the last one (Sunny
and Kim Baker, 2003). Estimating the duration of tasks is the most important.
Unfortunately, this is like trying to predict the future. It is only a guess, but there are
better ways to guess than others. It can be concluded that project time is the duration or
time schedule that needed to complete all the project work10.
9
Retrieved from http://pmbook.ce.cmu.edu/09_Construction_Planning
Edward M. Willis (1997), Scheduling Construction Projects
10
13
2.2.2
Estimating the Project Time
To estimate the project time, there are several options that can use to make the
estimates (the guesses) as good as possible11. They are as follows:

Based on records of previous project files that are detailed. It is enough to
aid in developing time estimates12.

Find a similar task in a completed project plan to see how long it took to
get done. This is called an analogous estimate13.

Get an objectives expert‟s opinion. Expert‟s opinion guided by historical
information should be used whenever possible14.
2.2.3
Project Time Management
PMBOK‟s (1996) defines project time management as the effective and efficient
use of time to facilitate the execution of project, which starts from planning, scheduling
and controlling the project to achieve the time objectives. Degoff and Friedman, (1999)
defines project time management as the development of a project time schedule, to
manage that schedule, and to ensure the project completes within the approved time
schedule. Therefore, schedule is important to manage time, which involves defining
project activities, sequencing the activities, developing the schedule, executing the
schedule and controlling the plans during project execution.
11
http://books.mcgraw-hill.com - Chapter 6: Introducing Project Time Management
Ibid
13
Ibid
14
Ibid
12
14
Project time management includes the processes required to ensure timely
completion of the project (Duncan, 1990). Overviews of the major processes in project
time management are as follows:

Activity definition – identifying the specific activities that must be
performed to produce the various project deliverables.

Activity sequencing – identifying and documenting interactivity
dependencies.

Activity duration estimating – estimating the number of works periods
which will be needed to complete individual activities

Schedule development – analyzing activity sequences, activity durations,
and resources requirements to create the project schedule.

2.3
Schedule control – controlling changes to the project schedule.
Construction Work Programme
In the construction industry, programme of works usually shows the sequence of
activities. The extent of the list of activities will depend upon the contract description of
the programme15.
15
Retrieved from http://pmbook.ce.cmu.edu/09_Construction_Planning
15
A comprehensive programme marked up on a regular basis to show actual start
dates, durations and completion dates of significant activities16. It is at least a credible
record of progress even if it says nothing on the actual causes of any delays. By adding
to the programme indicators on when variations, revisions and the like were ordered,
instruction were given, and other events were encountered, the programme can provide a
detailed picture which should satisfy the test of good evidence17. The main advantage is
to foreseen the contractor‟s planning of work and to determine the critical path or critical
activities in a project. This information is useful in knowing which party had contributed
to the delays and due to that, make an easier assessment for S.O or C.A (Contract
Administrator) in granting time extension to contractor18.
„Programme‟ takes its meaning from the contract and it is not a legal term. In a
construction contract, there are extensive provisions for both the submission of
programme for acceptance and for their revision whereby the role of the programme is
for the administration of the contract and the obligations and rights as to programme.
Under the Engineering Construction Contract 2nd Edition the programme is an
important tool in the management and administration of the contract19.
Professor Wallace in Hudson‟s Building and Engineering Contracts (1980)
explained the usefulness for the architect of the requirement of work programme :
The purpose of contractual requirement for a programme to be supplied by the
contractor is often misunderstood, and is primary to enable its owner, or his Architect
or engineer, to plan their own arrangements for giving possession, supplying
information and working drawings, and co-ordinating the work of other contractors or
nominated sub- contractors, and only secondarily for use in connection with the
16
Edward M. Willis (1997), Scheduling Construction Projects
Keith Pickavance (2000). Delay and Disruption in Construction Contract
18
Sundra Rajoo (1999).The Malaysian Standard Form of Building Contract (The PAM 1998 Form): MLJ
17
19
Retrieved from http://www.atkinson-law.com
16
contractor‟s extension of time applications or monetary claims, or to impose additional
time obligations on it.
2.4
Purpose of Construction Work Programme
The owner and his representatives will use the construction work programme to
monitor progress on the construction project. The contractor‟s project manager, project
superintendents, engineers and subcontractors will also use the construction work
programme for them to supervise and manage their work on site. Therefore, the usage of
construction work programme and the schedules of the users make, are as diverse as is
the construction industries itself. From here, the main purpose of construction work
programme is to predict the progress of following character20 :
20
i.
Project Completion Time
ii.
Task Time
iii.
Conflict in work sequence
iv.
Requirement of financing
v.
Effect of proposed changes
vi.
Delay in work
vii.
To serve as a record of actual versus schedule completion
viii.
Historical cost data
ix.
To satisfy a contractual requirement
Retrieved from eprints.utm.my/2359
17
2.4.1
Project Completion Time
The project completion time is the date when a project will be completed. If the
project is being performed under the terms of a contract that specifies a contract
completion date, there may be financial penalties for late completion. If the schedule
indicates that the plan will result in late completion, then the construction manager has
been put on notice that he must revise that plan. Perhaps he can employ more craftsmen,
mobilize more equipment, work overtime, or perform tasks in a different sequence21.
2.4.2
Task Time
Task times are the times that specific tasks or activities will commence or end.
With this information, the manager can make arrangements to have material, craftsmen,
and equipment on hand when they will be needed. Procurement of material is often a
critical task. The manager can schedule the preparation of procurement specifications
and shop drawings, the architect's approval of these documents and the fabrication and
delivery of the material. If the schedule does indicate that initiation of critical tasks will
be delayed by the lack of some resource, then the manager is alerted to the need to take
extraordinary action to obtain that resource in a timely manner22.
2.4.3
Conflict in Work Sequence
Examination of the task times may reveal conflicts that will occur between
different trades or subcontractors because of limited work space. It may also reveal that
21
22
Retrieved from eprints.utm.my/2359
Ibid
18
one trade is scheduled to start a task before another trade has done work that must be
completed before that task can be started23.
2.4.4
Requirement for Financing
The rate of progress on the project determines the rate at which labor, equipment,
and material resources will be consumed and costs will be incurred. It also affects the
rate at which the contractor will receive progress payments. The difference between
costs incurred and paid and payments received represents the contractor's cash flow on a
project. During the early stages of a project, the cash flow is negative, meaning that
more cash has been paid out than has been taken in. The contractor may need to borrow
additional working capital if he doesn't have enough liquid assets to cope with the
problem24.
2.4.5
Effect of Proposed Changes
Changes in the project scope, in the type of materials to be used or of any kind
may affect the starting and finishing dates of uncompleted tasks. These changes may
either increase or decrease the overall project cost. If these changes are initiated by the
owner and if they result in increased costs to the contractor, then the contractor should
request additional compensation. One of the commonest causes for increased project
cost is the extension of the project duration. The cost component project overhead, or is
nearly proportional to project duration25.
23
Retrieved from eprints.utm.my/2359
24
Ibid
25
Ibid
19
2.4.6
Delay in work
The schedule should be periodically updated to show both scheduled and actual
task times. It should show when work was delayed, whether by the contractor's acts or
omissions, or by changes in the project scope or design initiated by the owner. If a task:
actually starts later than its scheduled time, that delay may affect costs incurred on other
tasks. If the delay was caused by the owner, the contractor is entitled to a time extension
and additional compensation. If the delay was caused by neither the owner nor the
contractor, then the contractor may be entitled to a time extension. The project
superintendent should maintain a project diary and should make frequent job
photographs. These records, together with the updated schedule, will indicate to the
contractor the amount and reasons for delay and increased costs, and will aid him in
negotiating fair compensation from the owner. Such records may be valuable if the
contractor wishes to defend himself against penalties that the owner intends to assess for
late completion. They may also assist the contractor in justifying increased
compensation, which is warranted because of changes initiated by the owner26.
2.4.7
To serve as a Record of Actual Versus Schedule Completion
It is customary in contract construction for the contractor to submit a periodic
invoice or request for partial payment as the work progresses. He will receive progress
payments that are based on the percentage completion of the project at the time the
invoice was submitted. Often the owner will withhold some percentage of the
contractor's earnings until the project is completed. The retention maybe 10% of
cumulative earnings until the project is 50% completed. There after, if the project is on
schedule, the retainage may bee reduced to 5%. A detailed schedule, one that has been
26
Retrieved from eprints.utm.my/2359
20
properly posted with current project status, is one of the most acceptable forms of
evidence that the percentage completion claimed by the contractor is accurate27.
2.4.8
Historical Cost Data
A properly updated schedule may be a valuable source of cost and scheduling
data that estimators and schedulers can use for future projects28.
2.4.9
To satisfy a contractual requirement
Often, in contract construction, the owner of the future facilities has a contractual
right to be provided with a copy of the contractor's schedule. He may also have a
contractual right to direct the contractor to accelerate progress, perhaps by working
extended hours, if the schedule reveals that the job will not be finished by the contract
completion date, some owners may specify the form of the schedule that they are to be
provided29.
2. 5
Types of Work Programme
The construction industry uses a number of different types and techniques of
work programme to manage construction. It is necessary to identify the intended role of
the programme in the contract, in order to decide the type of programme required by the
27
Retrieved from eprints.utm.my/2359
28
Ibid
29
Ibid
21
contract. The terms of the contract will determine which type of programme is
contractually necessary but the extent of management control required to ensure
compliance with the time obligation will determine the type of programme which should
be used. The main time obligations are to complete by a specified date, to progress the
works to a specified standard (due diligence or due expedition) and to manage progress
by taking steps to mitigate delays. The existence and extent of these obligations is
determined by the terms of the contract30.
There are three possible uses for the Programme of Works. First it can be used to
monitor progress by comparing actual duration against planned durations which is the
progress Programme. Second it can be used as a management tool, to decide the priority
to be given to activities to ensure that the particular time obligation is achieved known as
the Prediction programme. Third it can be used to establish the contractor‟s entitlement
to extension of time where the Management Programme allows an assessment of the
effect on future progress of different corrective actions.
2.5.1
Bar Chart
The Bar Chart is also commonly referred to as a Gantt Chart, in deference to its
originator Henry Gantt. The Bar Chart is easily prepared and can be used to show
estimated timing and duration of activities, or to record actual progress. It does not
require computers or special software and can be drawn easily by hand. Experience
shows that it is the most natural representation of activities used by engineers and
30
Richard H. Clough, Glenn A. Sears, S. Keoki Sears (2000), Construction Project Management, 4th
Edition
22
project managers. The Bar Chart Plan is commonly used form of Progress Programme
to monitor compliance with the obligation to complete by the specified date31.
The features of a Bar Chart is that it shows a list of those activities required for
the project placed in a vertical column on the left side of the schedule. A calendar,
either represented in weeks or months is placed horizontally along the top of the chart.
The planned start and planned finish of each activity are shown in a time grid and are
connected as a bar. The bar therefore represents the duration of the activity. The
assumption usually made is that the bar represents a continuing uninterrupted activity,
but this may not be intended. Common to all programme, contributes to the inherent
ambiguity of the terms "start" and "finish" of an activity. Unless the activity description
clearly states discrete verifiable tasks to mark the start and finish, the programme will
lack precision32.
The Bar Chart does not model the inter-relationship between activities, and does
not model the consequences on expected completion, if the actual timing or duration of
an activity is not met. The Bar Chart simply shows that an activity started later than
planned. Similarly if an activity requires a longer duration than shown on the Bar Chart,
this only shows that an activity took longer than estimated. The absence of logic links
between activities means that the use of the Bar Charts is limited to monitoring progress
rather than forward planning of the project. It is used in the initial stages of delay
analysis to compare planned and actual progress so as to identify problem activities33.
31
Michael Mawdesley, William Askew, Michael O‟Reilly (1996). Planning and Controlling
Construction Projects-The Best Laid Plans and Retrieved from http://www.atkinson-law.com
32
Ibid
33
Ibid
23
2.5.2
Network Programme
Network Programme are a model not only of the activities and their durations,
but of their interdependence. They represent the time characteristics of the Project, not
just each individual activity. The additional project dimension means that it is necessary
to consider the introduction of additional activities which do not represent tasks, but
contingencies in time for risk events or "time risk allowances"34.
The most commonly used Network Programme is the Critical Path Method
which models the construction logic links between the activities. As a Management
Programme, it provides a model for analysis and implementation of corrective action. It
allows the activities that are critical to completion to be identified. Those activities that
are not critical will be identified by the extent of “float”. In practice, float is an essential
requirement of a Management Programme35.
The critical path is 'the sequence of activities through a project network from
start to finish, the sum of whose durations determine the overall Project duration'. Those
activities which affect the least delay without affecting the Date for Completion are said
to be on the critical path. The line through those activities is the critical path to
completion and is usually generated by modern software. If the logic is actually
followed, and the start or finish dates for any of these activities are different to
programmed, then the completion date will be affected (unless the changes cancel out).
If the planned date is to be maintained then priority will need to be given to the critical
activities. Critical path analysis as a tool which requires detailed and sophisticated
analysis where it may be conducted on a 'Windows' or 'Watershed' basis;
34
Michael Mawdesley, William Askew, Michael O‟Reilly (1996). Planning and Controlling
Construction Projects-The Best Laid Plans and Retrieved from http://www.atkinson-law.com
35
Planning and Scheduling using Microsoft Office Project 2007 by Paul E. Harris Chapter 2
24

Windows analysis is an excellent and the most accepted method of
critical path analysis - it involves regular reviews and updates on the
progress of a project for set intervals of time, usually a month. A
programmer, using sophisticated software, plots activities that are on or
close to the critical path for the duration of each 'window' of time to
discover the effect between events within a particular window and on the
total contract period. This enables the employer and contractor quickly to
identify and deal with delays36.

Watersheds analysis is a less reliable form of analysis - critical path
analysis is only undertaken at critical benchmarks in a project, usually
months apart. It provides only a 'snapshot' of the time at which it is
undertaken and does not take account of the events between the
watersheds. The 'longer the interval between windows, the more likely it
is that the review will be inaccurate (particularly if the records are poor)'.
If something goes wrong on a project there is more likely be a dispute
over apportionment of blame under a watershed analysis37.
The Critical Path Analysis (CPA) consists of basic features as follows :

Sets out all the individual activities that make up a larger project.

Shows the order in which activities have to be undertaken.

Shows which activities can only taken place once other activities have
been completed.
36
37
Barry B. Bramble, Michael T. Callahan (1992). Construction Delay Claims, 2nd Edition
Ibid
25

Shows which activities can be undertaken simultaneously, thereby
reducing the overall time taken to complete the whole project.

Shows when certain resources will be needed – for example, a crane to be
hired for a building site.
The construction logical links is drawn up based on dependencies of construction
sequence in the project, which represent factors such as :

the method of working, showing how the project is to be carried out and
the sequence of activities;

the construction constraints, which may be access dates for parts of the
site or release dates for information or delivery dates for work by others;

the resource restraints, which recognise the limited availability of plant,
equipment, labour and supply of materials. The resource restraint is
usually modeled by the sequential linking of activities which use the
same resource. Experience shows that the resource restraint is often not
appreciated when delay analysis is carried out.
There are two types of Critical Path Programme; Activity-on-Arrow Programme
and Activity-on-Node Programme.
26
2.5.2.1 Activity-on-Arrow
The Activity-on-Arrow Programme produces an Arrow Network in which each
node represents either the beginning or end of a discrete activity and the arrow linking
the nodes is the activity. The nodes are numbered and the activity is identified by the
numbers of the nodes at the start and the finish. The Activity-on-Arrow Network is
useful in representing the flow of work38.
2.5.2.2 Activity-on-Node
In the Arrow-on-Node Programme, each node is an activity with a duration and
the arrows represent the logic link between the activities. The Programme uses finish to
start relationships or links which are the same as used in Activity-on-Arrow
Programme. The Precedence Network Method is now the most common form of
Activity-on-Node Programme and uses the possibility of defining the links between
activities by relationships other than finish-to-start. This method permits not only startfinish links, but start-start and finish-finish, as well as allowing a time dimension to be
added to the link in the form of a lag or lead. The choice of logic link depends on which
link accurately models the particular restraint39.
38
Construction Delays: extensions of Time and Prolongation Claim by Roger Gibson
39
Ibid
27
2.5.3
Logic Links
Logic links other than finish-to-start are used because the assumption in Activityon-Node programmes that activities are indivisible is not usually correct. In order to
reduce the complexity of programme activities are defined which are made up of a
considerable number of separate tasks. In many situations it is not necessary for all the
tasks to be completed before the follow-on activity commences40.
The facility to define the relationship of activities both in terms of the type of
logic as well as with a time dimension, makes the Precedence Network Method a most
powerful and flexible method of programming. The assumptions made must be
carefully examined when carrying out any delay analysis or management through
programming analysis. If for instance the initial design of the equipment in the above
example is delayed, then the lag in the above start-to-start link will need to be adjusted
to take account of the delay. In any analysis, the time dimension of links which are not
based on real time factors need to be examined carefully to establish that they still
accurately model the relationship between activities41.
2.5.4
Linked Bar Chart
The Linked Bar Chart is the most common Prediction Programme. The
Prediction Programme provides a means of up-dating the prediction of future progress
by providing a model of the time dimension of the project. It does this by linking
individual activities by Logic Links. The effect on the obligation to complete by a
40
Construction Delays: extensions of Time and Prolongation Claim by Roger Gibson
41
Retrieved from http://www.atkinson-law.com
28
specified date of delay or acceleration of one activity can now be estimated. If the
method of working changes then this can be taking into account by changing the model
of logic links. The obligation to progress the work can also be effectively monitored42.
The introduction of logic links to create the Linked Bar Chart allows the time
dimension of the project to be defined by the relationship of activities one to the other.
The Chart has become the main management tool for deciding for example which
activities have priority to achieve the project completion date and for example how to
allocate resources for optimum efficiency43.
Projects are not static. When progress does not follow the programme, the
Linked Bar Chart allows the analysis of the consequences of events that have occurred.
More dynamically the Chart allows prediction of the effect of events yet to occur. This
is possible with modern software which allows precedence networks to be constructed
by linking directly on screen the bars representing activities. The Linked Bar Chart
produced by such software is a full precedence network creating a mathematical model
of the project. As with any model, the assumptions made of the duration of activities
and the links between activities, need to be checked to ensure they remain valid for the
analysis44.
42
Retrieved from http://www.atkinson-law.com
43
Michael Mawdesley, William Askew, Michael O‟Reilly (1996). Planning and Controlling Construction ProjectsThe Best Laid Plans
44
Ibid
29
2.5.6
Line of Balance Method
Other types of programme which are used to manage projects include the Linear
Scheduling Method or Line-of Balance Programme. This type of programme allows the
different rates of productivity of parts of an activity to be modeled, depending on its
location on site or the period of year when the activity is carried out. It also allows the
inter-relation between different trades in an area to be modeled such as the effect of
events on productivity and the movement of resources in the site45.
2.6
Advantages of Work Programme
Standard Forms of contract currently do not adopt a common approach to the
description of programme. But, it has been proved by several court cases of the
advantages to have a work programme as a guide to parties involved and to understand
the contractor‟s plan of proceeding for the work. The importance of having work
programme in construction progress which can determine the critical events were stated
in The Royal Brompton Hospital NHS Trust v Frederick Alexander Hammond and
others (2002)46, which incorporate the JCT Standard Form of Contract, HHJ Richard
Seymour QC said that :
..“It was plain from the evidence called at the sub-trial on behalf of the Claimant, in
particular that of Mr. Gibson, who of course is a programming expert, that there are a
number of established ways in which a person who wishes to assess whether a particular
event has or has not affected the progress of construction work can seek to do that.
45
Michael Mawdesley, William Askew, Michael O‟Reilly (1996). Planning and Controlling
Construction Projects-The Best Laid Plans
46
76 ConLR 131
30
Because the construction of a modern building, other than one of the most basic type,
involved the carrying out of a series of operations, some of which possibly can be
undertaken at the same times as some of the others, but many of which can only be
carried out in a sequence, it may well not be immediately obvious which operations
impact upon which other operations. In order to make an assessment of whether a
particular occurrence has effected the ultimate completion of the work, rather than just
a particular operations, it is desirable to consider what operations, at the time the event
with one is concerned happens, are critical to the forward progress of the work as a
whole. On the evidence of Mr.Gibson and Mr. Luder (for the Claimant) the
establishment of the critical path of a particular construction project can itself be a
difficult task if one does know how the contractor planned the job..”
From the judge statement, it is clear that a critical path analysis is always
required or merited. In the case of certain types of delay it may be so plainly obvious
that a delaying event has affected the critical path that provided such an event is properly
evidenced and based in fact and is a relevant event then the contractor will be entitled to
the time.
The earlier case of Henry Boot Construction (UK) Ltd v. Malmaison Hotel
(Manchester) Ltd. (1999)47 which incorporate the JCT Standard Form of Contract had
also stated the importance of having critical path analysis in a construction project and
include further confirmation of the requirement to establish the critical path. It was held
by Dyson J. that ,
“ the respondent was entitled to respond to the claim both by arguing that the
variations, late information and so on relied on by the claimant did not cause any delay
because they were not on the critical path and positively by arguing that the true cause
of delay was other matters”
47
70 Con LR 32
31
This confirms the view that, in order to establish that an event has affected the
completion date, it must be shown that it falls on the critical path.
The later case on critical path terms found in Motherwell Bridge Construction
Ltd v. Micafil Vakuumtechnik (2002)48, Micafil was engaged as the main contractor for
the construction of an autoclave under modified FIDIC 1998, a large steel vessel with an
internal volume of 650m3. The vessel was to be used in the manufacture of high quality
power cables. Micafil undertook responsibility for the design of the vessel and
subcontracted its construction to Motherwell Bridge. The project did not run smoothly.
During construction Motherwell Bridge raised many technical queries and there were a
number of significant design changes issued by Micafil. There were two major formal
amendments to the contract. Delays occurred and Micafil deducted liquidated damages.
Motherwell Bridge in turn claimed extension of time to extinguish the claim for
liquidated damages.
Judge Toulmin provided:
“ Crucial questions are (a) is the delay in the critical path, and if so, (b) is it caused by
Motherwell? If the answer to the first to the question is „Yes‟ and the second question is
„No‟ then I must assess how many additional working days should be include”
The judgment of the case can be defined as if the delay touch on the programmed
critical path and it was not caused by the contractor, the contractor is entitle to get
reasonable time extension. The passage from Henry Boot49 referred to above also points
to some of the principle defenses to a delay claim. In order to show that an event was not
48
49
81 Con L.R. 44
70 Con LR 32
32
on the critical path, the defendant has to argue that the claimant‟s version of the critical
path is incorrect and must prove on the balance of probabilities that the critical path in
fact went elsewhere.
Besides critical path, it is important to have logic links shown in the works
programme that can be used as a causal link in an argument. Without links, it is almost
impossible to prove the connection between events and the effect whether it has
possibility to contribute in delaying the project. The case which had touch on the absent
of link is Balfour Beatty Construction Ltd v. The London Borough of Lambeth (2002)50.
The main issue in this case was not on causal link directly, but Judge Lloyd in his
judgment had quoted on importance of having the causal link. It was found that Balfour
Beatty was unable to identify the critical path on its programme as there were not a
critical path analysis but were a simpler bar chart without any links. In this case, it was
clear that Balfour Beatty did nothing to present its case in a logical or methodical way.
There then was no attempt to provide a critical path analysis.
Where the work programme had successfully proved the causal link, the
application for the time to be extended would be considered. This condition can be
referred to a very recent case in Hong Kong, Leighton Contractors (Asia) v Stelux
Holdings Ltd (2004) 51. Stelux was the employer and Leighton the main contractor on a
large building project in Hong Kong using the JCT Standard Form of Contract. One of
the Leighton‟s argument was that Stelux had caused delay by releasing tender
information for the heating, air conditioning and electrical subcontract works late and it
was found that by the time the information has been provided and the relevant
subcontractors awarded, Leighton was still only commencing construction of the
basement slab.
50
Adj.L.R. 04/12
51
HCCT 29/2004
33
On this basis, it was concluded that the late information could not have caused
actual delay. The judge concluded that there had to be some finding of a causal link
between the late submission of information and the potential delay to the completion of
the works. It was not enough for the contractor simply to show that the information was
late. Whichever delay analysis method was used it was therefore necessary to take
account of the progress of the works at the point that the claimed delay event occurred.
2.7
Conclusion
One of the advantages of using method of programming is that people can see
the sequences of works and the links involved. It is significant in work programme to
clearly state the links of cause and effect. It would show that if delay happened, what are
the causes of it and how it can be affected. If the effect has the potential to delay the
completion date, it can be defined as a critical path. Critical path analysis is a significant
element in preparing work programme. In order to determine whether an event affected
the completion date, it is necessary to determine whether the event affected the critical
path. If delays occurred in the construction progress and it does not affect the critical
path, therefore it would not affect the completion date. If the work programme had
successfully proved the causal link, the application for the time to be extended would be
considered. The next chapter discusses on the relation of provisions between work
programme that is required to be submitted in common standard forms and the relevant
provisions involving delay, variations and determination.
34
CHAPTER 3
PROVISION OF WORK PROGRAMME
AND RELATION TO OTHER PROVISIONS
IN STANDARD FORMS OF CONSTRUCTION CONTRACT
3.0
Introduction
This chapter examines the detailed provision of work programme requirement in
relation to the relevant clauses in determining delay, extension of time, variations, and
even the determination clause of the commonly used standard forms, i.e. FIDIC, ECC
etc.
3.1
Background
The evidential value of the programme depends upon the accuracy of the
information on which the programme is based and whether the assumptions inherent in
the programme and method used are correct. Frequently programme presented as factual
analysis are based on the opinion of the author of the programme rather than accurate
35
information or logic. The compensation will depend not on that analysis but on legal
analysis of the incidence of liability52.
The contractor who fails to produce an effective and realistic programme puts
himself at a disadvantage on proving his entitlement to extension of time. The burden of
proof of delay rests on the contractor whether the application is made before or after
completion and whether the delaying events, is the employer‟s fault or neutral and not
his own deficiency and difficulties. He must show that he has suffered delay and that
this delay has affected completion of the works. He then must show that the delay is
caused by a relevant event. If the contractor intends to challenge liquidated damages on
the grounds of delay or aims to avoid liquidated damages, by obtaining an extension
from the C.A (Contract Administrator) or an arbitrator, the contractor will have to
produce evidence that delay occurred and that the cause of the delay gave an entitlement
to an extension. Consequently it is up to the contractor to keep records as evidence of
both delay and cause. The strength of the contractor‟s case will depend on the quality of
the records53.
3.2
Work Programme Provision and In Relation to Others in Standard Forms
The standard forms make provision for the submission of programme and their
revision. Generally the role of the programme is not clearly defined, the form it should
take is not described. Forms do not state a clear obligation to proceed in accordance
with the programme.
52
53
James J. Adrian (1988). Construction Claims – A Quantitative Approach
Ibid
36
3.2.1
Fidic Forms 1999
As expected with a modern contract the Contractor‟s obligation under FIDIC
Forms is tied into a programme and progress reports. The first role of the programme
under the FIDIC Forms is to monitor the progress of the works by comparison of actual
progress with the programme. Importantly the programme is required to include a
supporting report which gives a general description of the methods which the Contractor
intends to adopt, and the major stages, in the execution of the Works.
Clause 8.3 (Red and Yellow Forms) requires the Contractor to submit a "detailed
time programme" to the Engineer within 28 days of the notice of commencement. The
term "detailed time programme" is not defined, but Clause 8.3 lists details which are to
be included with any programme submitted.
The Silver Form uses the term
"programme" and requires the programme to be submitted within 28 days after the
Commencement Date. All the Forms require the programme to include the order in
which the Contractor intends to carry out the Works, anticipated timing of various stages
of work and the sequence and timing of inspections and tests specified in the Contract.
The report must also give details of resources. Clause 8.3 also provides that at any time
the Engineer may give notice that the programme fails to comply with the Contract and
the Contractor is required to issue a revised programme. Clause 8.3 provides that unless
the Engineer (Employer under the Silver Form) gives notice that a submitted programme
does not comply with the contract, the Contractor is required to proceed in accordance
with the programme, subject to his other obligations under the contract. The Employer is
expressly entitled to rely on the programme when planning his activities. The
Contractor therefore has an express obligation to follow the programme, although this is
stated to be subject to his other obligations.
37
The monitor role is expressly stated in Clause 4.21. Clause 4.21(a) provides that
monthly progress reports are required to include charts and detailed descriptions of
progress. Clause 4.21(h) provides that monthly progress reports are required to compare
actual and planned progress. A Network Programme is usually be used on many
projects to demonstrate the measures to be taken to overcome delays, but it is not a
necessary requirement of Clause 4.21(h).
Clause 1.9 (Red) requires the Contractor to give notice to the Engineer whenever
the Works are likely to be delayed or disrupted, if any necessary drawing or instruction
is not issued to the Contractor within a particular time, which shall be reasonable.
Clause 1.9 (Red) provides compensation to the Contractor if the Engineer fails to issue
the notified drawing or instruction within a time that is reasonable, and the Contractor
suffers delay and/or incurs Cost as a result.
A further example of the programme defining rights and obligations, is Clause
2.1(Red and Yellow) which deals with the primary obligation of the Employer to
provide access. Clause 2.1 (Red and Yellow) requires the Employer to give the
Contractor right of access to, and possession of, all parts of the Site within the times
stated in the Appendix to Tender. If no time is stated then access and possession must
be given to the contractor at such times as will enable him to proceed in accordance with
the programme submitted under Clause 8.3. In that case a failure to comply with the
access requirements in the Programme will be breach of contract by the Employer under
the Red and Yellow Forms.
The further role of the programme is to provide a means of predicting the effect
of identified events, and this role is shown in the requirements of Clauses 8.3, 4.21(h)
and 8.6. In order to provide the estimate, a logical analysis will be required whereby the
Contractor is to state reasons why he cannot comply, or make a submission which
38
includes a programme for the proposed work and the necessary modifications to the
programme. Any proposals for modification to the programme must be based on a
logical analysis of the effects of the proposed work on the progress of the other work
based on an up-to-date programme showing actual and predicted progress. This again
will require a Prediction Programme.
Clause 8.6 gives the Engineer (Employer under the Silver Form) power to
instruct the Contractor to submit a revised programme with revised methods to expedite
progress and complete within the Time for Completion. The power arises if the actual
progress is too slow to complete within the Time for Completion, or if the progress has
fallen or will fall behind the programme. The Contractor is required to adopt the
revised methods which are stated to include increases in the working hours and/or
increase in resources and/or goods. The measure of progress against the Clause 8.3
programme can therefore define the right of the Employer to order acceleration and the
obligation of the Contractor to do so. Since each programme is required to include
resources, the increase in resources can be monitored. The revised methods are at the
contractor‟s cost and risk and he is liable for the Employer‟s additional costs incurred in
addition to any delay damages. There is no such power if the cause is one of the matters
which entitles the contractor to an extension of time.
Under Clause 15.2(c), the Employer is entitled to terminate the Contract and expel
the Contractor from the Site, after notice, if the Contractor without reasonable excuse
fails to proceed with the Works in accordance with Clause 8. The obligations under
Clause 8 include the following:

the obligation to proceed with due expedition and without delay (Clause
8.1),

the obligation to proceed in accordance with the programme (Clause 8.3),
39

the obligation to submit revisions to the programme on certain events
(Clause 8.3),

the obligation to give notice of probable future events which may delay
execution of the Works (Clause 8.3),

the obligation to accelerate if properly instructed (Clause 8.6).
Clause 20.1 requires the Contractor to give notice of a claim for extension of
time and to provide particulars of the claim, including the extension of time claimed.
Any failure by the Contractor to comply with the contract requirements in relation to the
claim, can be taken into account to the extent that it has prevented or prejudiced proper
investigation of the claim. The Engineer (Employer under the Silver Form) is required
to reach a "fair determination" under Clause 3.5 following consultation and failure to
reach agreement54.
3.2.2
ICE 7th Edition
Clause 14 requires the Contractor to submit both a programme and a method
statement. These are two separate obligations which are not inter-related under ICE 7th
Edition. Clause 14(1)(a) requires the Contractor to submit a programme for acceptance
showing the order in which he proposes to carry out the Works, within 21 days of award
of the Contract taking into account possession releases, access and specified order of
construction prescribed in the Contract. At the same time under Clause 14(1)(b) the
54
In the context of FIDIC Forms 1999
40
Contractor is required to submit a general description of the method of construction.
The programme and the method statement are administered separately.
Clauses 14((2), (3) and (4) relate to the programme. Clause 14(2) allows the
Engineer to request further information to satisfy the Engineer as to the programme`s
reasonableness having regard to the Contractor's obligations under the Contract. It is
intended therefore that one role of the programme is to be a measure of reasonable
progress of the Works. It is suggested that the comparison of actual progress to the
programme will be evidence of the Contractor's obligation to proceed with due
expedition and without delay under Clause 41(2). The programme is intended only to
fulfill the role of a Progress Programme, not as a Prediction Programme. Clause 14(4)
requires the Contractor to submit a revised programme showing such modifications to
the original programme as may be necessary to ensure completion of the Works within
the time for completion, if it appears to the Engineer at any time that actual progress
does not conform with the accepted programme.
The obligations as to the method statement are set out in Clause 13(2), 14(1)(b)
and 14(6). Clause 13(2) provides that the mode manner and speed of construction of the
Works are to be of a kind and conducted in a manner acceptable to the Engineer. Clause
14(1)(b) requires the Contractor to submit a general description of the arrangements and
methods of construction. Clause 14(7) prohibits the Contractor from changing the
methods which have received the Engineer's consent, except with further consent of the
Engineer which cannot be unreasonably withheld. Although required to be submitted at
the same time as the programme, there is no express requirement that the programme
should represent the method of working by showing Logic Links between activities
showing the construction logic. Strictly, revision of the programme is not required if the
future method of working has been changed under Clause 14(7).
41
The programme is not intended to be a Compensation Programme. The
Contractor's entitlement to extension of time under Clauses such as Clause 42(3)
(possession), Clause 7(4) (information), Clause 13(3) (instructions) or Clause 44(2)(a),
(3) or (5) is based on actual delay. Clause 44(2)(a) requires the Engineer to consider all
the circumstances known to him at the time of making his assessment of the delay
suffered by the Contractor. Clause 44(3) requires the Engineer to consider if the delay
suffered fairly entitles the contractors to an extension of the time for substantial
completion of the Works. The entitlement does not depend upon an analysis of the
Clause 14 programme, nor do the Employer's obligations of possession and access
(Clause 42(2)) or supply of information (Clause 7(1)) refer to the programme. Any
entitlement is based on actual delay.
The Employer's entitlement to terminate and to expel the Contractor from Site
under Clause 65(1)(j) is, subject to notice, for failure of the Contractor to proceed with
the Works with due diligence. Whilst the programme may be evidence of reasonable
progress, failure to proceed in accordance with the programme of itself is not sufficient
under Clause 65(1)(j)55.
3.2.3
ECC 2nd Edition
The Accepted Programme is an important tool in the management and
administration of the contract under the ECC Form and there are extensive provisions
for both the submission of programme for acceptance and their revision.
55
In the context of ICE 7th Edition
42
If the Contractor is not to submit a programme with his tender then it is for the
Employer to state in Contract Data Part One the period in weeks from the Contract Date
when the Contractor is to submit the "first programme". Clause 11.2(14) defines the
Accepted Programme as either the programme identified in the Contract Data or as the
latest programme accepted by the Project Manager. Clause 11.2(14) expressly states that
the latest programme accepted by the Project Manager supersedes previous Accepted
Programme.
Contract Data Part Two allows the Contractor to identify the Accepted
Programme with his tender and this becomes the Accepted Programme, by the definition
in Clause 11.2(14). The identified programme is the Accepted Programme simply by
acceptance of the Contractor's tender. Clause 31.2 provides that any submitted
programme is required to show key specified dates as well as a method statement for
each operation which includes resources, and the order and timing of operations the
Contractor plans to do and planned completion. The term "programme" in the ECC
Form means more than simply a bar chart, but also includes a method statement as
identified at Clause 31.2. If the identified method statement is changed or cannot be
followed then this is a situation which has given rise to considerable case law under the
ICE Form in which it has been decided that the contractor was entitled to compensation
on the basis of the change being a variation. Clause 31.2 lists the information that any
submitted programme must include on each programme provision for:

float

time risk allowances

health and safety requirements and

the procedures set out in the contract
43
Clause 31.3 lists reasons why a Project Manager may decide not to accept a
programme. They include the Project Manager`s subjective judgment that the
programme:

shows that the Contractor`s plans are not practicable

does not represent the Contractor`s plans realistically
Clause 32.1 requires the revised programme to show

actual progress achieved and the effect on the timing of remaining work,

the effects of implemented compensation events and of notified early
warning matters,

how the Contractor plans to deal with any delays.
Clause 19 which deals with illegal or impossible requirements refers to the
Works Information and not to the Accepted Programme. The Contractor will be entitled
to compensation for a change to his method statement, only to the extent that the method
statement is defined by the Works Information. In this context the only relevant
compensation event is Clause 60.1(1) which is an instruction changing the Works
Information from Project Manager. If the Contractor's method statement cannot be
followed it is not a breach of contract by the Employer, unless and to the extent that the
Employer may have warranted the accuracy of information on which the statement was
based. The definition of compensation events at Clauses 60.1(3) and (5) is in terms of
the Accepted Programme, and if the Employer accepts the tender it is suggested that he
will be taken to have accepted to carry out those obligations under the terms of the
programme.
44
The importance of the Accepted Programme is shown by the sanction at Clause
50.3 which applies when no programme is identified in the Contract Data. The sanction
under Clause 50.3 is that one quarter of the Price for Work Done to Date is retained in
assessments of the amount due until the Contractor has submitted a "first programme" to
the Project Manager for acceptance showing the information which the Contract
requires. It is possible that for a programme not to be accepted as that there is no
Accepted Programme, but the Clause 50.3 sanction will not apply.
The Accepted Programme is also used to establish the delay to the Completion
Date. Under Clause 62.2 the Contractor is required to submit a quotation for a
Compensation Event which includes an assessment of any delay to the Completion
Date. Crucially if the "programme for remaining work" is affected by the Compensation
Event, then the Contractor is required to include a revised programme in his quotation
showing the effect. Clause 63.5 states that the assessment of the effect of a
Compensation Event includes time risk allowances for matters which have a significant
chance of occurring and are at the Contractor's risk under the Contract. Clause 63.3
provides that a delay to the Completion Data is assessed as the length of time that, due to
the compensation event based on the assessment in the revised programme.
The revised programme may need to be modified to take into account Clause
63.4 when used as Compensation Programme. Clause 63.4 is the early warning
sanction. If the Project Manager has notified that the contractor did not give an early
warning which an experienced Contractor could have given, then the event is assessed as
if the Contractor had given an early warning.
The grounds for termination for default, do not include failure to follow the
Accepted Programme, but does provide for the Contractor's hindrance of the Employer.
Clause 95.3 provides that the Employer may terminate if the Project Manager has
45
notified that the Contractor has substantially hindered the Employer and not stopped
defaulting within four weeks of notification56.
3.2.4
MF/1 Rev 4 2000
The term "Programme" is defined at Clause 1.1p as the programme referred to in
Clause 14. Clause 14.1 requires the Contractor to submit a programme within the time
stated in the Contract, or if no time is stated within 30 days after the letter of
Acceptance. The Programme is required to show the sequence and timing of the
activities by which the Contractor proposes to carry out Works, anticipated resources,
the respective times for submission by the Contractor of drawings and operating and
maintenance instructions, and the times by which the Contractor requires the Purchaser
to provide information and access, to have completed any necessary work, obtained
permits etc and provided site utilities. Clause 14.2 provides that the Programme shall be
in such form as specified in the Special Conditions, or if not specified, as may be
reasonably required by the Engineer.
The Contractor's obligation to progress the work is stated in Clause 13.1 and 32.1
in terms of due diligence and completion within the Time for Completion and not in
terms of progressing in accordance with the Programme.
The Programme is required to be an accurate measure of actual progress since
under Clause 14.5 the Engineer has the power to order the Contractor to revise the
Programme if he decides that progress does not match the Programme. The Contractor is
then required to revise the Programme to show the modifications necessary to ensure
56
In the context of ECC 2nd Edition
46
completion of the Works within the Time for Completion. If the modifications are
required for reasons for which the Contractor is not responsible, the Cost of producing
the revised Programme is added to the Contract Price. In addition Clause 14.4 requires
that the Contractor shall not make any material alteration to the approved programme
without the Engineer‟s consent. The power under Clause 14.5 is limited and can only be
exercised if actual progress does not match the programme, not if for instance the future
method of working has changed.
Clause 14.6 appears to give the Engineer some power to manage progress. If he
decides that the rate of progress of the Works is too slow to meet the Time for
Completion, and not due to circumstances which entitle the Contractor to an extension
of time, then he can give notice to that effect. Clause 14.6 requires the Contractor
following receipt of notice to take such steps as may be necessary and as the Engineer
may approve to remedy or mitigate the likely delay, including revision of the
Programme. The Contractor is not entitled to any additional payment for taking such
steps. The comparison of actual progress to the Programme will be evidence of the
Contractor's fulfilment (or otherwise) of his obligation to proceed with diligence and the
likelihood that he will complete by the Time for Completion. The weight to be given to
the Programme will depend upon the accuracy of the Programme in predicting future
progress. Failure to follow the Programme will not be sufficient for the Engineer to
exercise the power under Clause 14.6.
The Programme is not intended to be a Compensation Programme, since under
Clause 33.1 the entitlement is based on actual delay. Under Clause 33.1 the extension of
time granted is such as may be reasonable and under Clause 33.3 the Contractor is
required to determine what steps can be taken to overcome or minimise the actual or
anticipated delay in consultation with the Engineer. There is no mention of the
Programme in Clause 33.
47
The Purchaser's right to terminate and expel the Contractor from Site under
Clause 49.1 is, subject to notice, for failure of the Contractor to proceed with due
diligence. Whilst the Programme may be evidence of reasonable progress, failure to
proceed in accordance with the Programme of itself is not sufficient under Clause 49.157.
3.2.5
IChemE Red Book 4th Edition 2001
The term "Approved Programme" is defined in Clause 1 as the programme
approved in accordance with Clause 13.
Clause 13.3 requires the Contractor within the time stated in Schedule 11 to
prepare and submit to the Project Manager for approval a programme of work setting out
in such manner as the Project Manager shall reasonably require the sequence in which
and dates by which the Contractor proposes to perform his obligations under the
Contract. The programme is also required to show the dates by which the Contractor
reasonably requires that the Purchaser should provide any further Documentation or
information or take any action to permit the Contractor to perform his obligations.
Clause 13.4 requires the Contractor to submit details of the personnel and other
resources which he proposes to use, if required by the Project Manager and in a form as
the Project Manager reasonably requires. The Project Manager is required to approve
the programme if it complies with the specified dates and is "otherwise reasonable".
The Approved Programme is therefore intended to demonstrate the progress that the
Project Manager considers could reasonably be made by the Contractor.
57
In the context of MF/1 Rev 4 2000
48
The Contractor's obligations are stated in terms of the Approved Programme in
addition to his obligations to complete by the specified dates or periods (Clause 13.1)
and to proceed regularly and diligently. Clause 13.3 requires the Contractor to use his
reasonable endeavours to perform his obligations in accordance with the Approved
Programme. Clause 13.5 gives the Project Manager power to require the Contractor
either to take steps as may be practicable in order to achieve the Approved Programme
or to revise the Approved Programme, if the Contractor falls behind the Approved
Programme or it becomes clear he will fall behind. The Approved Programme is
therefore required to be an accurate prediction of likely progress. The power of the
Project Manager can only be used if the Contractor falls behind the Approved
Programme and not if for instance the progress is faster then programmed for some
activities. Since the Contractor is required to use reasonable endeavours to perform his
obligations in accordance with the Approved Programme, this does not prevent him
adopting a different method of working if that is reasonable in the circumstances.
Clause 13.7 deals with the Contractor‟s failure to revise the Programme within a
reasonable time or when the Project Manager does not approve the revised Programme.
There appears to be no power for the Project Manager to require the Approved
Programme to be revised but Project Manager may instruct reasonable revisions to the
Programme which the Contractor is required to implement.
Under Clause 13.6 the Project Manager may give notice that he decides that the
rate of progress is likely to prejudice the Contractor's ability to complete in accordance
with Clause 13.1 which is the primary obligation of completion on time, if due to a
cause for which the Contractor is responsible. The Contractor is required to use his best
endeavours to remedy the potential delay at his own cost.
Under Clause 14.1 the entitlement is based on actual delay and indeed the
resultant Variation Order is only given once the the extent and consequence of any delay
are known.
49
Clause 43.2 allows the Purchaser to determine the employment of the Contractor
on notice and continuing default for any material breach of the Contract as well as
failing to proceed regularly and diligently. Since the submission and revision of the
Programme takes such prominence in the Form, it could be argued that the Contractor‟s
failure would constitute a material breach58.
3.2.6
JCT 1998 Forms
Clause 5.3.1.2 requires the Contractor to provide the Architect with two copies of
his Master Programme for the execution of the Works. Within 14 days of the Architect‟s
decision to grant an extension of time by fixing a later Completion Date the contractor is
required to issue two copies of any amendments and revisions to take into account the
decision. The provision is optional and may be deleted. Clause 5.3.2 makes clear that
nothing contained in the Master Programme or its revision shall impose any obligation
beyond those imposed by the Contract Documents.
Clause 5.4.1 refers to an Information Release Schedule and requires the Architect
to issue information stated in the Schedule at the times stated in the Schedule. Under
Clause 5.4.2 the Architect is required to issue other information, drawings and
instructions to allow the Contractor to carry out and complete the Works in accordance
with the Conditions. The failure of the Architect to comply with Clause 5.4.1 or 5.4.2 is
a Relevant Event under Clause 25.4.6 and may entitle the Contractor to an extension of
time and loss and expense under Clause 26.2.1.
58
In the context of IChemE Red Book 4th Edition 2001
50
For the other JCT 1998 forms, none of the provision makes no reference to a
Master Programme or any programme nor to an Information Release Schedule59.
3.2.7
PAM 1998 and 2006
Requirement in preparing work programme in contract document is stated in
PAM 98 and 2006 under clause 3.4, and 3.6 respectively. In PAM 98, the contractor
under the clause is required to provide two copies of work programme to the architect
within 14 days after receiving the Letter of Acceptance (L.A). PAM 98 describes work
programme as represents the contractor‟s plan of proceeding for the work, nevertheless
the expected element in work programme are not defined in the clause, but Rajoo (1999)
stated that it may take the form of a bar chart, critical path, precedence diagram,
schedule, network analysis or otherwise. He also described a good work should show
interfaces with sub-contractors, dates, time frame, activities, stages and more.
However under clause 3.5 and 3.6, there are stated that the work programme is
not consider as a part of contract documents and do not relieved the contractor from his
obligations and responsibilities60.
3.2.8
CIDB 2000
The provision of work programme is stated under clause 5.1 in CIDB 2000 form
of contract and it seems to be more detailed describe in clause 5.1 (a) which defined the
expected work programme should clearly identifying the sequence, logic and critical
59
60
In the context of JCT 1998 Forms
In the context of PAM 1998 and 2006
51
path in which he propose to carry out the Works including the various work activities
and milestones to be achieved61.
3.3
Programme and Contractual Entitlement
The use of programme, beside to monitor progress and to manage projects is to
establish the time related entitlement and its measure, or to establish the circumstances
necessary for the exercise of certain rights. The particular entitlement or right must be
identified in order to ascertain the exact role of the programme62.
The main compensation usually sought by Contractors are entitlements to
additional time for completion (extension of time), to additional payment for delay
and/or disruption or to additional payment for instructed acceleration. The main
compensation sought by Purchasers or Employers is the exercise of rights to deduct
liquidated damages for Contractor's failure to comply with the obligation to complete on
time, to instruct the Contractor to accelerate due to the Contractor's failure to comply
with the obligation to progress the works or to terminate the Contractor's employment
for the Contractor's failure to comply with the obligation to progress the works63.
These rights to compensation depend upon the extent to which the contractor is
required to fulfil, has performed or is excused from performing his two main time
obligations. These are first the obligation to complete the works on time and secondly
the obligation to progress the works. The role of the programme needs to be determined
61
In the context of CIDB 2000
Barry B. Bramble, Michael T. Callahan (1992). Construction Delay Claims, 2nd Edition
63
Construction Law Handbook by Vivian Ramsay, Thomas Telford Limited
62
52
by examination of these two main obligations. Before examining these obligations, it is
necessary to add a word of caution against the reliance on the ability of programme to
accurately analyse compensation64.
In FIDIC Form of Clause 8.3 programme, the Contractor has the primary
obligation to proceed in accordance with the programme and to update the programme
and the Employer has the right to terminate for failure to follow the programme. The
reference to "float" and "time risk allowances" indicated that the programme is intended
to be a Network Programme. The provisions for revision to the Accepted Programme
indicated the role of a Management Programme, allowing analysis of the effects of
events on future progress. But the entitlement to extension of time is not determined by
analysis of the Clause 8.3 programme. As such, it is not a "fair determination" to ignore
the results of analysis of the entitlement to extension of time based on or using the
Clause 8.3 programme because the programme does not accurately predict future
progress.
ICE 7th Edition Clause 14 requires the contractor to submit a programme and a
method statement. One role of the programme is to measure progress: comparison
against the programme will be evidence of the contractor having fulfilled its obligation
to proceed as reasonably expected. The contractor's report on its method of working is
distinct from the submission of a programme and the contractor's obligation for progress
is not directly related to the programme. A bar chart will be sufficient to fulfil the
function identified in ICE 7th Edition, as it will show the order of carrying out the works
and allow progress to be monitored. This programme is not a compensation programme
since the entitlement to extension of time is based on actual delay and not on an analysis
of the clause 14 programme.
64
Construction Law Handbook by Vivian Ramsay, Thomas Telford Limited
53
The Accepted Programme in the ECC 2nd Edition is used to establish the delay
to the Completion Date as a Compensation Programme. It is updated at monthly
intervals and includes among other things, float time, construction methods, and
resource levels for each operation. In addition, the schedule gives the Employer
milestone dates such as inspections, access, and possession. If the "programme for
remaining work" is affected by the Compensation Event, then the Contractor is required
to include a revised programme in his quotation showing the effect. Analysis of delay is
to be based on the revised Accepted Programme as it does not only took account of the
delay but also time risk allowances for the consequences of the Compensation Event.
This is provided for under Clause 63.3 that a delay to the Completion Data is assessed as
the length of time due to the compensation event, whereby planned Completion is later
than planned Completion in the Accepted Programme.
The role of the MF/1 Rev 4 2000 programme is to allow the monitoring of
progress and not fulfil the role of a Prediction Programme. A bar chart is used to fulfill
the functions required under the MF/1 Rev 4 2000, subject to provisions in the special
conditions. Under the detailed document of MF/1 Rev 4 2000, the programme is only
required to show:

The sequence and timing of the activities by which the contractor
proposes to carry out the works;

Anticipated resources;
The engineer can also order revision of the programme, but there is no express
obligation to follow it. Since there is no mention of the Programme in Clause 33, the
Programme in MF/1 Rev 4 2000 is not intended to be a Compensation Programme and
the entitlement is based on actual delay. The extension of time granted is may be
reasonable and Contractor is required to determine what steps can be taken to overcome
or minimise the actual or anticipated delay in consultation with the Engineer.
54
The IChemE Form approach of using the programme as to monitor progress
only. A bar chart is sufficient to fulfil the required role. Clause 13.3 requires the
contractor to use reasonable endeavours to perform its obligations in accordance with
the programme. The Programme in IChemE Red Book 4th Edition 2001 is not intended
to be a Compensation Programme, since under Clause 14.1 the entitlement is based on
actual delay and the resultant Variation Order is only given once the extent and
consequence of any delay are known.
Of all the standard forms, the JCT 1998 is the least innovative in recognising the
rise in the use of programme in contracts and particularly in reducing the incidence of
disputes. The form refers to a 'Master Programme' in clause 5.4.1, which is optional.
There is no requirement for the Contractor to proceed in accordance with the Master
Programme nor in its revision, imposes any obligation beyond those imposed by the
contract documents. The form also refers to an 'Information Release Schedule'. This is
the simplest form of programme: a list of required information together with dates on
which the architect is to issue the information. The failure of the architect to comply
with clause 5.4.1 is a 'relevant event' which may entitle the contractor to an extension of
time. There is no indication in the Form what is required of a “Master Programme”.
There is no provision for the Architect to approve or reject the Master Programme and it
is not referred to in terms of monitoring progress nor in the assessment of extension of
time.
Both standard forms of contract PAM 1998, PAM 2006 and CIDB 2000 stated in
clause 3.4, 3.6 and clause 5.2(a) respectively that work programme is not a part of
contract document and shall not treated as one. There are also no direct link in clause of
extension of time and requirement of work programme.
55
3.4
How Construction Work Programme Can Contribute in Analysing
Causative Event
The said clauses dilute the significant of the work programme and its contractual
effect arising from any aberrations to the programme. The effect of making the
programme an express requirement without it being a contract document is that while
the contractor may be in breach for the failure to provide the programme, he may not be
in breach if the series of events are not followed as scheduled. A distinction needs to be
made between programme required by the contract and the related obligations, and
programme required to manage the project and establish entitlement (the Compensation
Programme)65.
The planned programme and the revisions will be evidence of the steps taken, or
the failure to take sufficient steps, by the Contractor to fulfill his obligations as to
programme. The evidence provided by the programme of works is not sufficient in itself
to justify compensation. It is necessary to establish The Causative Event: There must be
a liability to compensate for the event, either in contract or at law.

Causation: There must be a causal connection between the compensation
and the Causative Event of the type prescribed by the contract and/or at
law66.

Measure of Compensation: The compensation must follow the rules and
principles of valuation prescribed by the contract and/or at law67.
65
Retrieved from http://www.atkinson-law.com
66
James J. Adrian (1988). Construction Claims – A Quantitative Approach
Ibid
67
56
The Compensation Programme acting as a Dynamic Role, introduces the legal
dimension in determining the incidence of liability, causation and measurement of
compensation. The assessment is made together with Logic Links based on the provided
network analysis programme which allows the criticality of activities and float trends to
be assessed to allow management decisions to be made68.
3.4.1
Obligation to Complete
In the case of the first obligation to complete by a specified date, it only requires
the date of actual completion to be compared with the specified date, to establish
whether the obligation has been discharged. If the date for completion is not specified in
the contract, then evidence will be required to determine the reasonable time for
completion, which will depend upon all the circumstances. Of course the required date
for completion will depend on any rights the contractor may have to extension of the
date for completion. The Causative Events that entitle the contractor to an extension of
time will be stated in the contract and will usually include the all-encompassing event of
“breach of contract”69. If the contractor does complete in time, but it can be shown that
in breach of contract he has not proceeded regularly and diligently, then the Employer
will have a remedy of substantial damages if he can establish a loss.
68
Retrieved from http://www.atkinson-law.com
69
Keith Pickavance (2000). Delay and Disruption in Construction Contract
57
3.4.2
Obligation to Progress the Works
In the case of the obligation to progress the works, standard forms of contract
usually include an express obligation for the contractor to proceed regularly and
diligently with the works. The term "regularly and diligently" means to proceed
continuously, industriously and efficiently with appropriate physical resources so as to
progress the works steadily towards completion substantially in accordance with the
contractual requirements as to time, sequence and quality of work This obligation is
most difficult to monitor and analyse. This requires the actual progress measured in
terms of both time and resources to be compared to the standard of progress specified in
the contract. If the contractor is well ahead with the works, he is not allowed to slow
down if he is under an obligation to proceed regularly and diligently, so that the work is
completed on time. In the absence of this implied term, the contractor has the right to
plan, execute and progress the works as he considers, provided he completes in
accordance with the contract. Due to this, the Employer will be faced with severe
evidential difficulties if he considers progress is too slow to ensure completion on time
or wishes to take remedial action under the contract. As such, a programme can provide
evidence of necessary facts, either as evidence of fact or opinion, of both the reasonable
standard of progress and the actual progress achieved for comparison.
3.4.3
Establishing Compensation
The evidence provided by the programme of works will not be sufficient in itself
to justify compensation. It is necessary to establish a causal connection between the
compensation and the Causative Event of the type prescribed by the contract. The
measure of compensation must follow the rules and principles of valuation prescribed by
the contract and/or at law.
58
Whether or not the Causative Event has caused the type of loss which is required
to be compensated is a matter of analysis of cause and effect - a mixed question of fact
and law. In the case of the right to deduct liquidated damages for the contractor's breach
of the obligation to complete by a specified date, usually no complicated analysis of
cause and effect is required. The right to liquidated damages may not arise unless the
pre-conditions to that right are fulfilled and this will usually be notice provisions if at all.
In the case of compensation in the form of the right to an extension of time, the
contract will usually prescribe causation, either in terms of the actual delay to the date
for completion and/or the estimated future delay and/or the probable future delay. It is
usual in all but the most simple of cases to carry out the analysis using a Network
Analysis Programme. The method of network analysis, whether impact analysis on the
planned programme, window or snapshot analysis or collapse method using the as-built
programme will depend upon the prescription for causation in the extension of time
clause. The accuracy of any analysis will depend upon the accuracy of the information
on which it is based.
In the case of compensation in the form of payment for delay and/or disruption
and/or acceleration, the role of the programme is usually to demonstrate the period in
which the delay or disruption or acceleration occurred so that a separate analysis can be
carried out of the change in resources in the period and hence the compensation.
Frequently, available evidence is not sufficient to establish the precise measure
of compensation even in the case of extension of time, but more so in the case of
disruption and acceleration compensation. The contract itself may state the standard to
be adopted by terms such as "he ... estimates is fair and reasonable" or "... the delay
suffered fairly entitles the Contractor to an extension of time .." or "... such extension of
the Time for Completion as may be reasonable".
59
3.5
Methodology of Delay Analysis
Under the Society of Construction Law Protocol which sets out a reasonable
hierarchy for the methodologies available for the delay analysis. In order of preference,
these are70:
I.
Time Impact Analysis
II.
Windows Analysis
III.
Collapsed As-built Analysis
IV.
Impacted Plan Analysis
The use of a particular method is determined by the information available, with
least information allowing the least preferred method and giving rise to the lease
accurate answer. That does not mean that if all information is available, the answer
determined by a less accurate method is not valid or that, if little information is
available, an assessment is not valid. Rather the answer is less likely to be accurate.
Given the nature of the project and the construction programme, any evaluation of
extension of time in a disputed case must necessarily be relatively coarse. It means that
any inaccuracy in determination to an evaluation of the extension of time will cut both
ways.
70
Society of Construction Law Protocol For Determining Extension of Time And Compensation For
Delay and Disruption, Consultation Version, November 2001
60
In relation to the provision of work programme, in the case of law Balfour Beatty
Construction Ltd v. The London Borough of Lambeth (2002)71 whereby Lambeth would
make passing reference to the delay analysis methods most widely recognised and used:
(I)
Time Impact Analysis (or 'time slice' of 'snapshot' analysis).
This method is used to map out the impacts of particular delays at the
point in time at which they occur permitting the discrete effects of
individual events to be determined.
(II)
Window analysis.
For this method the programme is divided into consecutive time
'windows' where the delay occurring in each window is analysed and
attributed to the events occurring in that window.
(III)
Collapsed as-built.
This method is used so as to permit the effect of events to be 'subtracted'
from the as-built programme to determine what would have occurred but
for those events.
71
Adj.L.R. 04/12
61
(IV)
Impacted plan
The original programme is taken as the basis of the delay calculation, and
delay defaults are added into the programme to determine when the work
should have finished as a result of those delays.
(V)
Global assessment.
This is not a proper or acceptable method to analyse delay.
It is in the Lambeth's case that the programme of BB do not conform or comply
with any of the recognised and accepted delays analysis methods. Further all that it has
provided by BB is a claim in the most global of natures. It is observed that BB has
provided no explanation whatsoever as to why it has not used any of the above
mentioned delay analysis techniques, nor even why it has pleaded its case on a global
basis. Lambeth suggest that this is because none of the above methods would not
substantiate the delays claimed by BB.
3.6
Conclusion
The standard forms of contract do not set any limit on the permissible types of work
programme. The programme is required to be an accurate prediction of progress. It is
visible from the various standard forms of its minimal impact and relation to delay or
damages provision that the primary obligations are to complete on time and to proceed
regularly and diligently. The obligation to follow the approved programme is a
secondary requirement to achieving the primary obligations. The standard of obligations
required to be determined by interpretation of the contract. The specific obligations
62
might vary with the contract, but may include the requirement to revise and update
programme, to record actual progress and projected future progress and to show the
steps to be taken to overcome the delay caused by events. From there, the liability to
compensate for the event, either in contract or at law can be establish indirectly.
Due to the above scenario, it is essential to examine the decided court cases in
order to determine what is the legal status of work programme in construction as
evidences in assessing causative event.
63
CHAPTER 4
LEGAL IMPLICATIONS AND CASES
4.0
Introduction
Many modern construction contracts require the contractor to produce a
programme. The programme of work is normally submitted by the Contractor after
entering into the Contract. It is intended to assist the parties to plan and manage the
Contract and the various interfaces between the Employer and the Contractor as well as
other contractors. Modern construction, which may involve specialist subcontractors
and/or international suppliers, requires the managed interaction and coordination of the
works. The increased complexity on site requires a rapid and reliable means of analysing
different events and effects, so that the process of construction can be managed
efficiently. This is usually achieved also through a programme of works.
In modern forms of contract, the key question in determining the role of the
programme is whether the programme such as a Compensation Programme that can be
64
established by analysing the compensation due, or instead whether it is simply evidence
for determining compensation.
4.1
Research Focus
This chapter analyses legal status of „a work programme` in construction whether
the programme role as to fulfill contractual obligations is substantial as evidence to
establish causative events and compensation, establish the entitlement or right sought.
The various court cases chosen in order to achieve the objective of this project study. It
is done mainly through documentary analysis of law journals and law reports, e.g.
Malayan Law Journal, Singapore Law Report, All England Report, Canada Law Report,
Building Law Report, Construction Law Report, etc.
4.2.
The Obligation to provide a Programme by Contractor
If the contract requires the contractor to submit a programme in accordance with
the requirements of the contract then his failure to do so will be a breach of contract. The
contractor will then be liable for substantial damages if the Employer can establish a
loss.
It is suggested that the Employer will need to demonstrate

that the contractor was under an obligation to progress the works in
accordance with the programme, and
65

that the absence of the programme prevented the Employer managing
either the contract or other related work so

that as a result he suffered delay and/or loss which could have been
avoided if the programme had been submitted.
In practice establishing the necessary evidence is likely to be difficult. This is
particularly so if the contractor has submitted a programme, but the extent of the breach
is that the programme is not in accordance with the specified requirements. There is no
related mechanism for the failure to comply with the obligation to revise the programme,
which is equally important as the initial submission. Some construction contracts require
the contractor to carry out the works in accordance with the accepted programme.
Extending the principle in GLC v Cleveland Bridge and Eng Co Ltd72, it was
required under the construction contract for the contractor to carry out the works in
accordance with the accepted programme. Even if the standard forms require a
programme to be submitted, it should have anticipated that the contractor has a
discretion to modify his method of working or sequence of working and therefore not to
follow the programme.
In Wells v. Army & Navy Co-operative Society
73
, the Contractors at the
commencement of or early in the course of a contract prepare and submit to the
Architect a programme of works showing completion at a date materially before the
contract date. The Architect approves or accepts without comment such programme. It is
72
[1984] 34BLR50
73
[1902] 86 LT 764
66
then argued that the contractor has a claim for damages for failure by the Architects to
issue instructions at times necessary to comply with the programme.
Wright J had stated :
`The plaintiffs must within reasonable limits be allowed to decide for themselves
at what time they are to be supplied with detail`
The above obligations apart, in Glenlion Construction Ltd -v- The Guiness Trust
74
the Employer is not bound to comply with the accepted programme. The contractor
submitted a shortened programme. It was held that the contractor was entitled to
complete earlier than the completion date since his obligation was to complete “on or
before” the Date of Completion. There was however no implied term requiring the
Employer to perform his obligations to allow the contractor to complete at the earlier
date.
From these cases it indicated that when the contractor is required to work to the
programme, then the Employer will be required to comply with it also to the extent
necessary to allow the contractor to comply with that obligation. When the programme
is an accurate indication of the progress that the contractor needs to make to fulfill his
further obligation to progress the works, then the Employer is required to comply with
the programme to the extent necessary.
74
[1987] 39 BLR 94
67
In DSND Subsea Ltd v Petroleum Geo-Services ASA and PGS Offshore
Technology AS75, DSND Subsea Ltd ("DSND") entered into a contract ("the Contract")
with PGS Offshore Technology AS ("PGS") for the subsea work on 3 June 1997. The
contract was subsequently varied by Heads of Agreement ("HOA") made between the
parties on 2 April 1998. Further relevant agreements were concluded between them on
25 September and 9 October 1998. These were the Memorandum of Understanding
("MOU") and Memorandum of Agreement ("MOA") respectively. It is PGS' case that it
was induced to enter into the MOU by a misrepresentation made by DSND, and that it
entered into this agreement under economic duress. .On 19 November 1998, PGS
purported to terminate the Contract on the grounds of DSND's failure to remedy a
"serious breach of contract".
Article 9.0 dealt with "Progress of the Work", and included the following: 9.1
Contractor shall commence performance of the work, continue and complete the work in
an expeditious and timely manner and in accordance with the programme cited in echibit
C together with the specified Key Dates and Milestones. Contractor acknowledges that
the timely performance of its obligations here under are vital, fundamental and essential
for the exploitation of the field. Consequently time is of the essence of this Contract, as
delays in the performance of the work would cause most substantial prejudice to Owner.
Contractor shall be entitled to schedule the performance of the Work so as to maximise
efficiency, providing always that the key dates and milestones are not delayed."
Article 16.1 provided that in the event of certain specified defaults on the part of
DSND: . . . then in any such event Owner having given Contractor reasonable
opportunity to remedy the situation shall have the right to terminate this contract by
giving written notice thereof to Contractor. . . ."
75
[2000] 37BLISS 8
68
Article 16.3 provided for termination of the contract by PGS "at its sole
discretion and without cause".
Derived from the case, the previous programme of works had been overtaken by
events and a revised programme was prepared. The parties executed a Memorandum of
Understanding agreeing to the revised programme. The revised programme showed the
dates and durations as being “indicative”. It was held that the fact that the dates and
durations were indicative did not mean that they were not intended to have contractual
effect. It meant that the parties agreed that they would work in accordance with the
revised programme to the best of their ability, but that the contractor would not be in
breach of contract merely because it failed to achieve the dates and durations. It was
held that the revised programme was evidence of what the parties considered at the time
of the Memorandum of Agreement to be expeditious and timely performance as required
by the Contract. The revised programme gave indicative dates and durations because the
parties recognised that the situation was fraught with uncertainty due to weather
affecting the sub-sea work and the uncertain availability of deep sea vessels. Therefore,
PGS did not enter into the MOU under duress or in reliance on any misrepresentation by
DSND. PGS was not entitled to terminate the Contract under Clause 16.1 and did not
terminate under Clause 16.3
In J.F Finnegan Ltd -v- Sheffield City Council76 it was held that the reference to
a shorter contract period in the Special Conditions in the Contract Bills did not contain
an obligation to complete by an earlier completion date, applying the decision in
Glenlion. It was held that the provisions applied to programming rather than timerelated obligations. Accordingly the prolongation costs were to be calculated from the
end of the contract period.
76
[1988] 43 BLR 130
69
In CFW Architects (a firm) v Cowlin Construction Ltd77, issue raised what were
the relevant contract terms and obligations relating to the timing and programming of the
production of design drawings. Cowlin's proposed construction programme was in barchart form and showed the period during which the phased construction of each pair of
dwellings would take place. Finally agreed programme had been submitted as part of
Cowlin's tender and, under the terms of the design and build contract, became the
contract programme under that contract. All five bar-charts, being the two design
programme and the three construction programme, were sent to CFW together on 6 June
2000 and were intended to be complementary to each other. CFW produced a payment
schedule on 20 June 2000 which was linked to the construction programme. Held CFW
had agreed to carry out its design obligation so as not only to deliver the drawing by, at
the latest, the dates provided for in the milestone schedule, but also to deliver them in a
way and in accordance with a delivery timetable that would enable Cowlin to comply
with its contractual obligations.
In conclusion, the contract may refer to programme requirements either in clear
terms or in conflict with the primary obligation to complete by a specified date. The
exact obligations of the contractor and Employer are then a matter of interpretation and
whether to identify respective entitlement for compensation. One consequence of the
contractor not submitting or revising the programme is that his ability to prove an
entitlement to extension of time may be reduced due to the absence of contemporary
programming evidence. The accepted programme will be one of the main tools available
to the Architect/Engineer in understanding the construction logic and assessing delay.
His assessment will be less accurate without the programme. Since in many standard
forms the Architect/Engineer can take into account all circumstances and is required to
make a fair assessment, the fact that no programme or revisions have been provided can
properly be taken into account.
77
[2006] EWHC 06 (TCC); 105 ConstLR 116
70
4.3.
Obligation if the Programme is included in the Contract Document
In some standard forms the programme is a contract document, but its use in
defining the work is limited. Depending on the precedence of documents the contract
programme may define the obligations and responsibilities of the parties. Alternatively
the programme may only indicate the anticipated sequence of events which are
considered acceptable progress of the works to achieve completion by the specified date.
In Yorkshire Water Authority -v- Sir Alfred McAlpine and Son (Northern) Ltd78
under the ICE 5th Edition the contractor was required to submit a programme with his
tender, expressly stated to be in addition to the requirement of clause 14 of the
Conditions of Contract. The contractor duly submitted the programme and his method
statement. The method statement followed the tender documents in providing for the
construction of the works upstream. It was held that the method statement was not the
programme submitted under clause 14 and that the incorporation of the method
statement into the contract imposed on the contractors an obligation to follow it in so far
as it was legally or physically possible to do so. The method statement therefore became
the specified method of construction. If the change in method of construction was
necessary for completion of the works because of impossibility within clause 13(1) then
the contractor was entitled to a variation order under clause 51 and payment under
clause 51(2) and 52.
In English Industrial Estates Corporation -v- Kier Construction Ltd79 using the
ICE 5th Edition standard form of contract, the contractor was required to submit with his
tender a full and detailed programme indicating his proposed work sequence together
78
[1985] 32 BLR 114
79
[1991] 56 BLR 93
71
with a brief description of the arrangements and methods of demolition and construction
which he proposed to adopt. The method statement provided for suitable demolition
materials to be crushed on site and unsuitable arisings to be removed from site. The
Engineer instructed all hard arisings to be crushed and the surplus stockpiled. It was held
that this was a variation to contract where it had removed any economic option from the
Contractor, Kier to decide whether the materials were uneconomic to crush as it required
all arisings to be crushed.
In Havant Borough Council -v- South Coast Shipping Company Ltd80 the
contractor was unable to follow the method statement due to a court injunction which
restricted the hours of working. To overcome the problem which involved excessive
noise the contractor worked a different system to that provided for in the method
statement. The method statement was a contract document. The court held that the
change in method constituted a variation.
In Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd81, it is a
contract made on 26 September 2002 made between Wembley National Stadium Ltd
(WNSL), Multiplex Constructions (UK) Ltd (Multiplex) and Multiplex's Australian parent
company as guarantor. Multiplex agreed to design and construct the new national stadium at
Wembley. On 21 May 2004 Multiplex entered into a contract with Honeywell Control
Systems Ltd (Honeywell) for Honeywell to design, supply and install various electronic
systems for communication and control of the building. The contract provided for
completion within 60 weeks and contained provisions for variation and for extension of
time.
80
[1996] CILL 1146
81
[2007] EWHC 447 (TCC); 111 ConLR 78; [2007] Build LR 195
72
Delays to the construction of the stadium and to the installation of the electronic
systems continued to occur after Honeywell had commenced work. Honeywell is
strongly critical of Multiplex's organisation and programming of the works since the
summer of 2004. Honeywell maintains that Multiplex and those for whom Multiplex is
responsible have caused the delay during this period. Multiplex, on the other hand, is
strongly critical of Honeywell's performance and blames Honeywell for much of the
delay since the summer of 2004.
During 2005 Multiplex issued three revised programme to Honeywell. On 10
February 2005 Multiplex issued programme CB7E, which showed a completion date of
31 December 2005. On 18 July 2005 Multiplex issued programme FO15, which showed
a completion date of 31 March 2006. On 24 November 2005 Multiplex issued
programme DC10, which also showed a completion date of 31 March 2006. Multiplex
issued each of these programme in the form of a direction under cl 4.2 of the subcontract conditions.
The proposed completion date of 31 March 2006 passed without completion
being achieved either of the electronic systems or of a number of other trades.
Honeywell maintained that by reason of the issue of programme CB7E, FO15 and DC10
it was entitled to recover prolongation costs and other financial relief. Honeywell
commenced two adjudications concerning the effect and financial consequences of those
three programme. In that decision Mr Mouzer held that programme CB7E, FO15 and
DC10 were issued as directions pursuant to cl 4.2 of the sub-contract conditions; that
Honeywell was obliged to comply with those programme; and that each of those
programme constituted a variation under the terms of the sub-contract. Mr Mouzer gave
his decision in the second adjudication on 28 April 2006. In that decision Mr Mouzer
awarded to Honeywell certain prolongation costs in respect of the period 1 October 2005
73
to 31 March 2006. Neither party has challenged Mr Mouzer's decisions by litigation.
Therefore, at least for the time being, those two decisions are binding on the parties
pursuant to cl 38A.7 of the sub-contract conditions.
From the cases discussed, if the programme includes a method statement then
that stated method may become the specified method of working. It has implication
entitling the contractor to a variation if the specified method is required to be changed.
The effect depends upon the standard form. In other forms, the programme is not a
contract document but is used to establish the entitlement to extension of time.
4.4
Obligation of SubContractors Towards Main Contract Programme
Main contractors normally require flexibility from subcontractors so that they
can manage subcontracts in the light of actual progress. It is therefore unusual for
subcontractors to be entitled to follow the main contract programme.
In Pigott Foundations Ltd -v- Shepherd Construction Ltd82 it was held that
where DOM/1 conditions apply a subcontractor is not required to comply with the main
contractor‟s programme.
In Ascon Contracting Limited v Alfred McAlpine Construction Isle of Man Ltd
(1999) Clause 11.1 required the Sub-Contractor to carry out and complete the SubContract Works reasonably in accordance with the progress of the Main Contract Works.
It was held relying on Pigott Foundations Ltd v Shepherd Construction Ltd
82
[1993] 67BLR48
82
that the
74
Sub-Contractor was not required to comply with the detail of the main contractor‟s
programme, either generally or in relation to the work of other specific sub-contractors.
In Kitson Sheet Metal Ltd -v- Matthew Hall Mechanical and Electrical Engineers
Ltd83 it was held that the parties must have recognised the likelihood of delays and of
trades getting in each other‟s way and that the prospects of working to programme were
small. Provided Matthew Hall did their best to make areas available for work they were
not in breach of contract even if Kitsons were brought to a complete stop. Kitsons were
therefore unable to recover the additional cost due to a substantial overrun on the
contractor‟s programme.
A similar situation occurred in the case of Martin Grant and Co Ltd -v- Sir
Lindsay Parkinson and Co Ltd (1984). Again the court held that there was no
entitlement for the subcontractor to claim extra due to delays to the main contract
programme.
Mirant Asia-Pacific Construction (Hong Kong) Limited v Ove Arup and Partners
International Limited v Ove Arup International Limited and Ove Arup Partners Hong
Kong Limited84 illustrates the difficulties that are often encountered when it becomes
necessary for parties to complex building or engineering projects to establish the real
cause of delay to the project. Mirant's claim for damages for delay hinged upon whether
remedial works required to Boiler Unit 1's foundations were on the critical path. In
Mirant v Ove Arup both parties' programming experts used a watershed analysis to recreate the critical path on the project. As agreed by both parties, none of the programme
used during construction of the power station were reliable. The absence of regular
83
[1989] 47 BLR 82
84
[2007] EWHC 918
75
programming reviews regularly carried out over the duration of the project had put
Mirant in difficult position to analyse project delay and to manage it. After hearing the
parties' evidence, and in particular that of the parties' respective programming experts,
his honour Judge Toulmin CMG, QC, found that the critical path of the civil works
under the contract went through other parts of the civil works. Accordingly the
'consequences of the boiler foundation failure were not the proximate or dominate cause
and not therefore the operative cause (or one of the operative causes) of the delay' to the
project and damages for delay were not recoverable.
In Scottish Power plc v Kvaerner Ltd (1998), it was held that the reference to the
dates for completion of the work were a provisional indication of when the subcontracts
might be carried out. In particular Clause F of subcontract stated that the contractor did
not give any guarantee of continuous working. Clause F was important in determining
when the subcontract fixed the dates for commencement and completion of the
subcontract works. Prima facie clause F contemplated that the subcontractor would start
on site not on a contractually predetermined commencement date but when instructed by
the main contractor. Clause F was clearly intended to give Kvaerner flexibility.
In Jurong Engineering Ltd v Paccan Building Technology Pte Ltd85, it was
raised whether subcontract programme could be used to determine if subcontractors
were proceeding with reasonable diligence. It was held that the only way to determine
whether the respondents had proceeded with reasonable diligence under cl 35(1)(ii) was
to pace the progress of their work against the subcontract programme. This was the
contractually promised programme which the appellants used to formulate their own
master programme. If the progress of the subcontract works consistently lagged behind
and did not keep pace with the subcontract programme, then the respondents could not
be said to be progressing with reasonable diligence. As the delays as measured against
85
[1999] 3 SLR 667
76
the subcontract programme were extensive, the respondents were in breach of cl
35(1)(ii) for failing to proceed with their works with reasonable diligence. The
appellants were therefore entitled to determine the subcontract under this clause.
In the case of Sweatfield Ltd -v- Hathaway Roofing Ltd, heard in January 1997,
the court took a rather harsh view of circumstances which it considered amounted to
repudiation. The sub-contractor Hathaway was engaged to install roofing and cladding
work and had fallen severely behind its programme, partly because of bad weather and
partly because of earlier disputes. Delays to the sub-contract works continued and in
January 1995 the main contractor complained to the sub-contractor that its operatives
were not working a full day. They sought the sub-contractor's assurance that it would
use its best endeavours to avoid further slippage on the programme and that they would
at least work normal site hours. The sub-contractor said that this would not be practical
but that if they were given an instruction to accelerate they would respond by setting out
the additional costs involved. The main contractor, no doubt extremely frustrated by this
exchange, indicated that if agreement could not be reached they would bring additional
men on site themselves. The sub-contractor immediately left site and claimed that the
main contract was in repudiatory breach. Similarly the main contractor claimed that the
sub-contractor was in repudiatory breach by leaving the site.
The whole matter came before the courts. Only one party could be judged to be
in repudiatory breach and thus only one party would be entitled to recover all the
damages which flowed from this event. Would the sub-contractor's failure to progress
the works and failure to take appropriate measures to mitigate further deterioration of the
programme amount to a repudiation, or would the main contractor's act of bringing six
further operatives on site to undertake part of the sub-contractor's work be treated as the
fatal move? It was decided that the main contractor was in repudiation by instructing
other workers to carry out work within the sub-contract. Whilst it might be accepted that
this was clearly a breach of the sub-contract, it seems surprising that a main contractor,
77
desperate to see the project brought back on to programme, should be found to be so
fundamentally at fault. Nevertheless, the sub-contractor was held entitled to recover all
its costs and losses arising from the premature bringing to an end of their sub-contract
works. Perhaps the lesson for main contractors is to include a clause in their subcontracts giving them the express right to introduce other labour or resources or to take
over parts of the sub-contractor's work in the event of the sub-contractor falling
substantially behind programme.
In the Singaporean case of Hiap Tian Soon Construction Pte Ltd and Another v
Hola Development Pte Ltd and Another
86
, the High Court followed the Court of
Appeal's decision in Jurong Engineering Ltd v Paccan Building Technology Pte Ltd
85
where 'reasonable diligence' could only be determined by pacing the progress of the
subcontractors work against the sub-contract programme. The High Court treated the
term 'reasonable diligence' as the same as 'regularly and diligently' and therefore found
that the contractor's progress of work had consistently lagged behind the construction
programme thus falling below what was regularly and diligently. Moreover, the
contractor persisted in its delay despite reminders from the employer to expedite the
work. Although the contract only gave the employer a right to terminate the contractor's
employment for the failure to proceed regularly and diligently, the High Court in
following the Court of Appeal's decision in Jurong Engineering's case, held that the
contractor's breach of the obligation to proceed regularly and diligently would give rise
to damages as well as to a right to terminate the contractor's employment.
In conclusion, where there are no express provisions within a subcontract
requiring a subcontractor to work to a main contractor's programme and where such a
programme is not a subcontract document, then neither the subcontractor nor the main
contractor is likely to be able to rely on a main contractor's programme for establishing a
86
[2003] 1 SLR 667
78
claim against the other. It is a management document intended as a working guide
subject to variations due to several foreseen and unforeseen factors. But if a party to a
contract shows an intention not to perform its obligations under the contract this may be
treated as a repudiatory breach. The innocent party may either affirm the contract, if that
is possible, or accept the repudiation and so bring the contract to an end. Each party may
rely upon rights accrued before the termination, and in addition the innocent party may
claim damages for breach of contract.
4.5
Rights of Entitlement
If the Contractor is delayed by an event which entitles him to an extension of
time, then he is under no obligation to reduce the delay except possibly by re-sequencing
his work. The express terms may provide otherwise particularly to progress the works or
mitigate delays.
4.5.1
Requirement to Reduce Delay
The issue of the contractor‟s right or obligation to reduce the effect of qualifying
delays may arise in three ways:
1.
the contractor may be considered to have a right to choose how to deal
with a qualifying delay and whether for instance to accelerate or not and
to recovery on the basis of this right;
2.
the contractor may be considered to be entitled to extension of time and
any associated loss only to the extent that he has mitigated the effect of
the delays;
79
3.
the contractor may be under an obligation to progress the works including
an express obligation to mitigate delays and the failure to do so prevents
remedies of extension of time and associated losses and may make him
liable in damages.
As such three possibilities are examined below. Since the issue of the
contractor‟s right to choose is a positive aspect of mitigation it has been examined below
with mitigation.
4.5.1.1 Mitigation of Loss
The main remedy for breach of contract is damages. The measure of damages
does not include losses caused by the injured party‟s failure to take reasonable steps to
mitigate the loss. There are three rules relating to mitigation for breach of contract. First
an injured party cannot recover damages for a loss which could have been avoided by
reasonable steps. The injured party is not required to do anything other than in the
ordinary course of business. Second, if the injured party takes steps which he could not
reasonably have been required to do, and avoids the potential loss he cannot recover the
potential loss as damages. Thirdly, the injured party may recover his loss or expense in
taking reasonable steps to mitigate the loss due to breach of contract. This is so even if
the mitigation is unsuccessful and even increases the loss. British Westinghouse-vUnderground Electric Railway (1912).
80
In White and Carter (Councils) Ltd -v- Mc Gregor 87 it was held that the rules of
mitigation do not apply in the situation where the injured party has a legitimate interest
in performing the contract rather than stopping and claiming damages. He is not required
in that case to discontinue performance even though the Employer may no longer require
him to continue.
Although commonly referred to as a "duty to mitigate" the loss, it is not a duty
but a principle adopted in the measure of loss The Soholt (1983). The onus of proving
the failure to mitigate rests on the party alleging the failure Garmac Grain Co -v- Faire
and Fairclough (1968).
4.5.1.2 Mitigation of Delay
The remedy of extension of time is a contractual remedy for acts of prevention
and breach of contract by the Employer and for events at the risk of the Employer. If the
remedy of extension of time is based on causation, that the principles referred to as the
"duty to mitigate" should apply. There are two situations to consider, first when the
contractor responds positively and the second when the contractor takes no positive
action.
In the first situation the contractor may react to the qualifying delay by making
changes to his methods of working, or sequence of working or even accelerate the work.
The issue then is whether he is entitled to recover the loss incurred by this reaction and
that depends on whether or not he has a right to react as he did. Subjected to the express
terms of the contract, the contractor has no right to accelerate and is not entitled to
87
[1962] AC 413
81
recover additional costs incurred in acceleration measures to mitigate the effect of
qualifying delays without an instruction from the Employer. Since many contracts
contain provisions for the grant of extensions of time and express terms for agreement of
acceleration measures, the unilateral action by the contractor in giving priority to the
fixed date for completion over the cost of working efficiently cannot bind the Employer
in those contracts. It is not reasonable when there are sufficient contractual remedies for
the contractor to decide to accelerate the works. This interpretation must be examined in
the context of express obligations to progress the works.
In the second situation the contractor may not react to the qualifying delay and
the issue then is what minimum measures he is required to take in order to mitigate the
effects of the qualifying delay and if he fails to take those measures whether this affects
the extent of his entitlement to extension of time. The rules of mitigation do not
generally apply to construction contracts in relation to time where there are extension of
time provisions.
In Ascon Contracting Limited -v- Alfred McAlpine Construction Isle of Man
Limited (1999) His Honour Judge Hicks QC held that it was difficult to see how there
could be any room for the doctrine of mitigation in relation to damage suffered by
reason of the Employer‟s culpable delay in the face of express contractual machinery for
dealing with the situation of extension of time and reimbursement of loss and expense.
This decision was made in relation a submission that the contractor should have incurred
additional expenditure in accelerating the works to overcome the delay.
In Motherwell Bridge Construction Limited v Micafil Vakuumtecchnik (2002),
the claim for acceleration costs of site works failed. There was a term of the contract that
if unexpected delays and difficulties occurred, Motherwell was required to provide
82
additional personnel at no extra cost at the request of Micafil in order to meet the
required completion date.
This approach was followed in the Inner House Court of Session case of John
Doyle v. Laing Management. Burr and Palles-Clark set out that, in paragraph‟s 14 to 17
of the judgement, Lord Drummond Young dealt with two scenarios in situations of
concurrent delay, one of which fell within Furst et al‟s current understanding of the
position in English law and a second which, according to Furst et al, is currently not
permissible in English law. Firstly, paragraph 14 of the judgement identifies that, in
some cases, it maybe possible to identify a causal link between Employer culpable
events in determining what is a significant cause, therefore, the dominant cause
approach is of relevance. Secondly, “…if it cannot be said that events for which the
Employer is responsible are the dominant cause of the loss, it may be possible to
apportion the loss between the causes for which the Employer is responsible and other
causes…in an appropriate case…” Burr and Palless-Clark welcome this judgement‟s
indication, firstly of a preference to apply a common sense approach in applying the
dominant cause approach, so that then, in the absence of a dominant cause being
established, an apportionment of the loss may take place.
4.6
Obligation to Mitigate Delay or To Progress the Works
Although the rules of mitigation do not generally apply to construction contracts
with extension of time provisions and provision for recovery of time related losses, it is
suggested that the contractor will have some obligation to progress the works which will
involve an aspect of management of resources and planning of activities in the
circumstances of actual events. In a matter of interpretation of the terms of the contract,
it is suggested that such an obligation will usually be intended by the parties to apply
equally to events causing qualifying delays. The obligation to progress the works may
83
however require the contractor to take some positive action, and a failure to do so may
sound in damages measured by the liquidated damages for additional period of over-run
which could have been avoided but for the breach. Since the obligation to proceed
"regularly and diligently" means to proceed continuously, industriously and efficiently
with appropriate physical resources so as to progress the works steadily towards
completion, this will include managing the effects of the delay.
Facing with delay, the contractor will not be able to claim extension of time for
delays which could have been avoided by changing the planned sequences of working,
unless the sequence is a specified sequence, so that he could carry on with other work as
best he could. It cannot be considered reasonable that a contractor should maintain his
sequence of working, doing no further work and incurring delay when by changing the
sequence he would be able to open up other areas of work and progress some of the
works. The contractor is not required to take steps which would reduce productivity such
as acceleration measures, and increase his direct costs by procuring additional plant or
materials. He will usually be required to properly manage the progress of the works,
including terms as to proceeding regularly and diligently. The obligation will apply to
the consequences of the delay.
In DSND Subsea Ltd v Petroleum Geo-Services ASA and PGS Offshore
Technology AS 75 , the contractor was under an obligation to carry out and complete the
work involving deep sea diving in an expeditious and timely manner. The sequence of
the phases of work was specified in a programme incorporated in a Memorandum of
Agreement agreed by the parties as the way to deal with delays that had occurred. There
were further delays. It was held that the obligation to progress the works in an
expeditious and timely manner did not impose an obligation on the contractor to carry
out the work in a different sequence and particularly to carry out deep sea diving work
before all other work specified to be carried out (the riser installations), had been
completed. The contractor had carried out a significant amount of diving before the
84
installation of the risers, but that was not something he was obliged to do. Since plant
was on site it made sense for it to do some diving work as and when it was able to do so,
but there was no obligation to do so.
The most onerous obligation is that the contractor must use his best endeavours
to reduce the delay. It is suggested that the obligation does not require the contractor to
expend substantial sums to reduce the delay. In Midland Land Reclamation Ltd -vWarren Energy Ltd (1997) it was held that the best endeavours obligation was not the
next best thing to an absolute obligation or guarantee. In Terrell -v- Mabie Todd and Co
(1952) it was held that a best endeavours obligation only required a party to do what was
commercially practicable and what it could reasonably do in the circumstances.
From the cases mentioned if the entitlement to extension of time is on the basis
of what is fair and reasonable, that this must include consideration of the positive steps
taken by the contractor to reduce the consequences of the delay, and the steps which
could have been taken, without the expenditure of substantial sums. It is because of
these difficulties that many standard forms require the contractor to take steps to reduce
the effects of delays, to mitigate the delay, but the extent of the obligation differs.
Failure to comply with the obligation may reduce or even extinguish the contractor‟s
entitlement to extension of time.
4.7
Conclusion
In conclusion, an express obligation to proceed regularly and diligently will
include applying resources in such a way as to reduce the consequences of a qualifying
delay, so that work is carried out efficiently. The use of programme, beside to monitor
progress and to manage projects is to establish the time related entitlement and its
85
measure, or to establish the circumstances necessary for the exercise of certain rights.
Subcontract programme, main contract programmes are the management document as a
working guide subject to measure entitlements or right sought as such variations due to
several foreseen and unforeseen factors. But if a party to a contract shows an intention
not to perform its obligations under the contract this may be treated as a repudiatory
breach. The reasonable steps to be taken by the contractor when faced with a qualifying
delay is to provide the appropriate notices required by the contract together with the
details required or requested by the Engineer/Architect. A contractor should takes
reasonable steps to mitigate the effects of the delay and succeeds in reducing the effect
of the delay, then his entitlement to extension of time is reduced accordingly. If the
entitlement is based on actual delay evaluated retrospectively and if he is entitled to
recover losses due to the delay, then loss incurred in taking reasonable steps are part of
the recoverable loss. If on the other hand the Contractor is awarded an extension of time
prospectively, there is then no reason to mitigate the delay, since he has been granted the
compensation under the contract. Whether or not he would be entitled in that case
recover his loss due to the delay depends upon the terms of the contract.
86
CHAPTER 5
CONCLUSION AND RECOMMENDATIONS
5.0
Introduction
This chapter briefly consists the summary of the findings of this study,
conclusions, recommendations for future management of contracts as well as
enhancements of the current practice.
5.1
Background
If the programme is to be effective as a management tool it must be revised to
show actual progress of activities, and revised to show changes in the construction logic
and the incidence of actual events. Unfortunately the management of information to
provide accurate revisions to the programme requires considerable effort.
87
5.2
Research’s Overview
Work programme especially using the critical path analysis of Network
Programme is the most tangible methods in resolving disputes in construction. The
definition and the expected contents of a work programme had been discussed in detail
in chapter 2. There must be an agreement and acceptance of the baseline programme.
There should be in place a procedure for formal acceptance of the final as-planned
schedule. This schedule will serve as that all-important baseline, a record of the
contractor‟s intent in carrying out the works. Subsequent evaluation or assessment of
EOT and delay will be facilitated with the baseline as-planned programme finalized and
accepted (Lawrence, 2001)88.
In Chapter 3, there were few clauses in International and local Standard Forms of
contract which embraced work programme as part of document contract or a basic
requirement for contractual requirement under compensation to accurately predict on
progress. The primary obligations are to complete on time and to proceed regularly and
diligently. The obligation to follow the approved programme is a secondary requirement
to achieving the primary obligations. It is still not binding where there are clauses
debarred the earlier clauses which stated that work programme cannot be treated as a
contract. Therefore a contractor may not in breach if the series of events or activities are
not followed as scheduled but may be in breach for the failure to provide the
programme.
88
Lawrence, T. (2001). Effective Measures For Minimising Disagreements Concerning Extension of Time.
Conference On Avoiding & Resolving Disputes In Construction Contracts
88
5.3
Research Findings
The main conclusion ascertained in this research
a)
The programme under the identified Standard Forms is not only intended
to define some of the time obligations of the parties, but it allows
progress to be monitored and also records the actual progress of the
Works.
b)
A programme can provide evidence of fact or opinion, of both the
reasonable standard of progress and the actual progress achieved for
comparison.
c)
Employers should consider specifying a Network Analysis Programme
and the form required as well as the software to be adopted, since this
will allow easier reporting and monitoring of progress as well as analysis
of compensation, particularly as each programme is required to be
resourced. Minimal Progress Programme in the form of a critical path
analysis can be adopted.
d)
The use of programme is to establish the time related entitlement and its
measure, or to establish the circumstances necessary for the exercise of
certain rights. Entitlements to additional time for completion (extension
of time), to additional payment for delay and/or disruption or to
additional payment for instructed acceleration are sought by Contractors.
Purchasers or Employers main compensation is the exercise of rights to
deduct liquidated damages for Contractor's failure to comply with the
obligation to complete on time, to instruct the Contractor to accelerate
due to the Contractor's failure to comply with the obligation to progress
89
the works or to terminate the Contractor's employment for the
Contractor's failure to comply with the obligation to progress the works.
e)
It also identified that the subcontract programme had no contractual
effect as to original main programme. But if a party to a contract shows
an intention not to perform its obligations under the contract this may be
treated as a repudiatory breach and the innocent party may claim damages
for breach of contract due to its determination.
f)
Any consequences due to non progress, it is still up to Contractor to
mitigate the potential losses or delay based on the actual entitlement.
5.4
Recommendation of Enhancement to Current Practice in the Construction
Industry for Malaysia’s Contracting Parties
What has been observed in the industry lately is the further tightening of
conditions in Standard Forms of Contract as in the various standard forms. Some say
the contractors brought about the changes by their increasing readiness to make claims.
This emergence of claims has prompted the various institutions and professional bodies
to further tightened the contract conditions. There are a multitude of different types of
records kept on construction projects, which are documented with varying degrees of
rigour depending on who is responsible for their completion, as well as being dependant
on project management effectiveness from one project to the next.
Progress records are commonly kept by the contractor and the architect/ S.O.
independently. If at all possible, these records should either be jointly taken or agreed at
the time of compilation. The following list of records should be considered a minimum
90
to be kept by the contractor that can be used as the main source of information in
quantifying delays (Michael, 200189; David, 198490).
1.
A master programme together with subsequent updates
A programme should be updated on a regular basis to provide good
contemporaneous evidence of what happened in the project, in case of
dispute.
2.
A comparison of master programme with actual records
The contractor‟s programme could be of relevance in considering rates of
progress and if there was a question of determination of the contractor‟s
employment for lack of progress, under express terms or at common law,
it could be some interest as evidence.
3.
Site diaries in a standard format
A daily diary should be maintained by each member of the field staff.
The book is a quasi-legal document and should be neatly and accurately
recorded. An entry should be made everyday, whether or not work was
performed.
4.
A drawing register kept up to date as new drawings are issued and
incorporating issue dates
Drawings of clarification or change, or drawings that contain
supplemental information should be filed at the field office, in addition to
89
Michael, C. (2001). Formulation, Preparation & Presentation of Claims. Conference On Avoiding & Resolving
Disputes In Construction Contracts
90
David, M.C. (1984). Contractor‟s Claims: An Architect‟s Guide. London: The Architectural Press
91
a complete set of all contract drawings as bid. The evidence of a drawing
is often crucial. If revisions have taken place, the date and nature of the
revision should be noted on drawing. The drawings provide clear
evidence of architect‟s instructions to the contractor.
5.
A weekly log of activities commenced and completed
6.
A weekly log of those areas which were considered problematic
7.
Progress meetings
Minutes meetings may provide a vast resource of information for claims
preparation. In order to have credibility the minutes must be approved by
the other various parties involved in the meeting who probably had no
hand in the preparation of the minutes contractor.
Other documents which are not listed from the previous list such as project daily
reports and tests of materials can also be used as information in quantifying delays
(David, 1984)91.
1.
Project daily reports
A daily construction report containing a description of the work
commenced, new work started, status of work in progress, manpower and
equipment at the site, weather, and visitors to the site. If no work was
performed at all, a daily report should still be filed, stating „no work‟. On
91
David, M.C. (1984). Contractor‟s Claims: An Architect‟s Guide. London: The Architectural Press
92
projects where several inspectors are involved, this report is compiled
from each inspector‟s daily record of work progress.
2.
Tests of materials
A record should be kept of all material samples sent out to laboratory for
testing as well as those tests performed at site. The report should include
space for later inclusion of the test results as well as the location of the
structure where the particular material was to be installed.
3.
Correspondence
Correspondence, written by one person for the eyes of another, is
potentially the best sort of evidence save only for documents (such as the
contract) agreed and signed by both parties. Copies of all correspondence
concerning the project that have been sent to the resident project
representative should be maintained and filed by date. Letters are an
extremely valuable source of evidence because they indicate intentions
and attitudes at the time of writing. Letters must be read with care and
always in the context of other letters and documents. Written evidence is
always useful provided that it is clear. A letter from the contractor
asserting that a particular situation exists (for example, lack of drawings)
is persuasive in the absence of a letter from the architect / S.O. refuting
the assertion.
Records should be kept as to when particular works activities have been carried
out and what resources were used to carry the works. In situations where the employer
or his agents have breached the contract or instructed variations or taken other actions
that could entitle a contractor to additional time, the „marked up‟ copy of the
contractor‟s program maintained by the architect/S.O must clearly show when such
93
events occur, what work activity is affected, what effect the events may have on the
critical path, and whether the terms of the contract, the contractor has an entitlement to
an EOT.
The contractor need to updated their work programme by using such software
because such software speed up the calculations and are versatile tools in comparing as
planned and as-built schedule (Lawrence, 2001)92. The contractor is required to regularly
update work programme to reflect project progress and changes. Then, the contractor
should keep reliable and accurate progress and programme records to assist
contemporaneous assessment of the cause and effect of project changes (Stuart, 2006)93.
In addition, the contractor can refer to previous common law cases which are related to
entitlement to EOT to get an idea about the effective preparation of EOT claim to
eliminate their mistake. The judge in the English case of Balfour Beatty Construction
Ltd v The Mayor and Burgess of the London Borough of Lambeth (2002), gave a good
summary of the information a contractor should provide to establish its entitlement to
EOT:
a)
A reliable original programme
b)
The establishment of valid critical paths initially and at every later
material point in time
c)
Sound revisions on the occurrence of every event to demonstrate cause
and effect
d)
92
93
A means of demonstrating the effect of concurrent or parallel delays
Lawrence, T. (2001). Effective Measures For Minimising Disagreements Concerning Extension of Time.
Conference On Avoiding & Resolving Disputes In Construction Contracts
Stuart, M. (2006). Record Keeping For Contemporaneous Delay Analysis: A Model For Effective Event
Management. Construction Management and Economics
94
The contractor also needs to implement a proper claim administration system. An
effective administration of the contract is of utmost importance in minimizing
EOT
disputes. The voluminous backload of data required to substantiate a point claims clearly
to the need for an established and efficient contract administration system (Lawrence,
2001)94.
A systematic approach to recording and reporting is required which may involve
some or all of the following:

Measurement of Work: - a comparison of actual to estimated measure of
work may provide an indication of the rate of progress as well as
identifying changes. This method of monitoring is the minimum required
to accurately record progress. In some contracts the method of payment
will require an estimate of percentage completion of activities or stages,
or a measure of bill items. This information can then usefully be used to
measure progress.

Valuation of Resource Cost: - a comparison of the actual rate of
expenditure of resource to the estimate may indicate that a change to the
planned programme is required;

Productivity Measurement: - a comparison of actual productivity to
estimated will identify the validity or otherwise of the assumptions made
for the planned duration of activities. This information is usually readily
available to those involved on a day by day basis, but very difficult to
analyse later due usually to lack of records. A systematic approach to
94
Lawrence, T. (2001). Effective Measures For Minimising Disagreements Concerning Extension of Time.
Conference On Avoiding & Resolving Disputes In Construction Contracts
95
records such as labour allocation sheets and/or on-going histrograms is
needed. Work sampling may be sufficient in many cases, particularly
when warned by those involved on a day-to-day basis.

Management Briefings: - Regular team briefings in which progress in
terms of start and finish dates, durations, productivities, method of
working and inter-relationship of activities is examined will allow a
"project-wide" view to be developed. This type of review brings together
the team knowledge of recent events, increases awareness and increases
the accuracy of reporting. It is vital that the result of such analytical
briefings are recorded and if necessary incorporated in revised
programme.
5.5
Research’s Constraints
The central theme of the research is on work programme role, determining the
legal implications in the Standard Forms and the possibility of implementing it as part of
the contract requirement in the construction industry for Malaysia. Assessment based on
work programme and as a compensation programme is virtually non existence in
Malaysia. Hence, the lack of knowledge on making and using work programme amongst
project managers and contractors may not be sufficient in managing project time. It is
beyond the capacity of this research to look into every aspects of the international cases
or Malaysian cases to the legal status of the work programme in as a document and
determining delay and loss given only two months to execute this study and to prepare
this report.
96
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