Extension of time under the Fidic Silver Book, Const. L.J.

2020, 36(1), 18-22

For educational use only

Extension of time under the Fidic Silver Book
Simon Longley

Table of Contents

[there is no table of contents for this document]

Journal Article

Construction Law Journal

Const. L.J. 2020, 36(1), 18-22

Subject
Construction law

Other related subjects

Contracts

Keywords
Construction contracts; Delay; Extensions of time; FIDIC forms of contract; International Federation of Consulting Engineers

*Const. L.J. 18 All contracts are capable of suffering delay, whether as a consequence of employer variations, unexpected
circumstances, force majeure events, contractor delay, or otherwise. For these reasons, construction contracts contain detailed
provisions for dealing with delay. This article takes a look at how the FIDIC Silver Book deals with delay in terms of rights and
remedies and the procedural processes that have to be followed if disputes are to be avoided.

The FIDIC Silver Book is intended to be used where the employer requires the contractor to take total responsibility for the design
and execution of a project, with little involvement of the employer other than compliance oversight. As such, the contractor
accepts a substantially higher level of risk than under other more traditional forms of contract. The employer is, theoretically at
least, prepared to pay a premium price for this greater level of risk transfer to the contractor in order to have greater certainty
over final price and time.

Even so, the FIDIC Silver Book still provides the contractor with the right of relief to an extension of time in certain
circumstances. These are set out in sub-clause 8.4 of the Conditions:

1. For a variation.
2. For a cause of delay giving an entitlement to an extension of time under a sub-clause of the Conditions.
3. For any delay, impediment or prevention caused by or attributable to the employer, the employer’s personnel or the
employer’s other contractors on the site.

A variation is defined in the contract as "any change to the Employer’s Requirements or the Works, which is instructed or
approved as a variation under Clause 13 [Variations and Adjustments]". This includes the appointment of a nominated sub-
contractor (SC 4.5), changes in technical standards (SC 5.4), omission of work as a consequence of prolonged suspension (SC

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Extension of time under the Fidic Silver Book, Const. L.J. 2020, 36(1), 18-22

8.11), the cost of remedying defects not the liability of the Contractor (SC 11.2), approval to expend a provisional sum (SC
13.5) or to execute dayworks (SC 13.6).

There are several sub-clauses in the Conditions that provide the express right of relief to an extension of time: *Const. L.J. 19

SC 2.1 –
Right of Access to the Site
SC 4.24 –
Fossils
SC 7.4 –
Testing
SC 8.4 –
Extension of Time for Completion
SC 8.5 –
Delays Caused by Authorities
SC 8.9 –
Consequences of Suspension
SC 10.3 –
Interference with Tests on Completion
SC 13.7 –
Adjustments for Changes in Legislation
SC 16.1 –
Contractor’s Entitlement to Suspend Work
SC 17.4 –
Consequences of Employer’s Risks
SC 19.4 –
Consequences of Force Majeure

Notably absent from this list and reflecting the higher level of risk transfer to the contractor under the FIDIC Silver Book,
is any right of relief for "unforeseeable difficulties", such as adverse ground or weather conditions. SC 4.12 [Unforeseeable
Difficulties] of the Conditions makes absolutely clear that the contractor, except as otherwise stated in the contract, "is deemed
to have obtained all necessary information as to risks, contingencies and other circumstances which may influence or affect the
Works" and "in signing the Contract, the Contractor accepts total responsibility for having foreseen all difficulties and costs of
successfully completing the Works". This transfer of risk liability is clearly manifest in SC 5.1 [General Design Obligations]
wherein the contractor is expressly made responsible for the accuracy of the employer’s requirements, and the employer is
indemnified against any "error, inaccuracy or omission of any kind" in the employer’s requirements, other than in a limited
number of tightly prescribed exceptions. *Const. L.J. 20

The third right of entitlement to an extension of time, for any delay, impediment or prevention caused or attributable to
the employer, the employer’s personnel or other employer contractors on site, is designed to cover other potential causes of
delay which are either the direct or vicarious responsibility of the employer. Therefore, circumstances such as the employer’s
representative not acting in accordance with the contract (e.g. by not reviewing and approving the contractor’s documents within
stated time periods), or the employer’s other contractors not completing their works within stated timescales thereby causing
delay to the contractor’s works, would be captured under this provision. It also extends to acts of prevention, for example the
employer not obtaining any necessary licences or permissions in time to permit the works to proceed in accordance with the
contractor’s programme.

In each of the cases 1, 2 and 3, above, if the relevant circumstances arise and the necessary qualifying criteria are satisfied, the
gateway to the recovery of extension of time is by the giving of notice of claim, within due time, under SC 20.1 [Contractor’s
Claims] and the submission of a fully detailed claim to the employer including full supporting particulars (i.e. the contractor’s

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delay analysis), the basis of the claim (i.e. the contractual and/or legal ground(s) upon which entitlement to extension of time
is asserted) and the extension of time period claimed.

The FIDIC Silver Book does not prescribe or indicate how the contractor is to demonstrate the claimed entitlement to extension
of time, or how the employer is to assess and determine that entitlement under SC 3.5 [Employer’s Determinations]. Therefore,
unless otherwise provided in any particular conditions of contract and/or the employer’s requirements, the contractor has
complete discretion as to the method of delay analysis to be adopted. Having said that, it would be unwise for the contractor not
to adopt a methodology consistent with modern forensic delay analysis practice, such as "windows" or "time-impact analysis",
to demonstrate the impact of the delay on the critical path to completion, taking account of actual progress, and thereby quantify
the period of extension of time to be claimed as a result of the delay event.

However, the adoption of such delay analysis methodologies does not sit comfortably with the SC 20.1 [Contractor’s Claims]
time-requirement for a fully detailed claim to be prepared and submitted within 42 days after the contractor first becoming aware
of the event or circumstance giving rise to the entitlement; a forensic delay analysis can often takes many weeks to complete
to capture all relevant data and delays to determine what has critically delayed the Works. This is even more so in the case of
the large, complex and sophisticated projects that the FIDIC Silver Book is principally designed to serve. The undertaking of a
forensic delay analysis is often an immense task requiring detailed research, consideration and analysis of potentially thousands
of programme activities to establish impacts, effects and liabilities.

In such cases, it is suggested the contractor and the employer should, at the outset of the claim process, meet to agree some basic
parameters for the contractor’s making of the claim, and the employer’s review, assessment and determination of entitlement.
Such parameters could include the delay analysis methodology to be adopted, the number, dates and durations of the "windows"
to be used (if any), *Const. L.J. 21 the level of detail, evidence and substantiation required to support the delay analysis,
what is the appropriate programme to use as the foundation for the analysis (baseline programme), how any errors, omissions,
missing logic links etc in the baseline programme might be addressed (and explained) and, importantly, the realistic time period
required to prepare and submit the fully detailed claim to the employer. It is in neither party’s interest for the contractor to
expend substantial time, effort and expense in preparing an extension of time claim with associated forensic delay analysis if
the employer, upon its receipt, rejects the methodology or approach adopted and requires the contractor to represent the claim
in another format.

Not to be overlooked is the issue of procedural compliance to obtain the right of entitlement to make a claim. Of particular
importance is the issue of giving notice of claim within a specified time, often a condition precedent to the right to bring a claim
at the outset. All too frequently claim submissions overlook this key procedural gateway, giving the employer an easy reason
to reject the claim. Therefore, the issue of notice should be explicitly addressed in the claim either to demonstrate compliance
with prescribed requirements or, if there is any risk of challenge, arguments as to how or why notice should be deemed to have
been given (possibly by reference to correspondence, meeting minutes etc) or why it should be taken to have been waived by
the employer or otherwise rendered ineffective (there are certain legal arguments and principles that may be open to use in such
circumstance). It plainly makes no sense for a contractor to invest substantial time and expense in the undertaking of the delay
analysis only for the subsequent claim to be found to be "time-barred".

Once the claim has been submitted by the contractor, the employer is obliged to respond with "approval or disapproval with
detailed comments" within 42 days of receipt, or such other period as may be agreed between the parties (SC 20.1). The intention
of this obligation is to provide the contractor with early feedback as to whether the claim is approved in principle or not and
whether clarification and/or further information is required to allow the employer to fully assess the claimed entitlement. The
parties can then seek to resolve the matter contemporaneously with the occurrence of the delay.

However, even though SC 1.3 [Communications] of the conditions expressly provides that employer "approvals, certificates,
consents and determinations shall not be unreasonably withheld or delayed", it is extraordinary just how often employer
evaluations of extension of time claims can take many months to be made. Although this may frequently (and sometimes
legitimately) be due to perceived inadequacies in a contractor’s claim submission, it also has to be recognised that sometimes
employer "requests for further necessary particulars" under SC 20.1 [Contractor’s Claims] are made with the sole intent and
purpose of delaying the required evaluation of extension of time entitlement, possibly to "see what happens" in the future, but
sometimes with the more nefarious intent of seeking to gain leverage at a later date against the contractor.

There is no guidance provided as to how the employer is to evaluate and determine the contractor’s entitlement to extension
of time, other than that the employer should consult with the contractor to endeavour to reach agreement, failing which the

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Extension of time under the Fidic Silver Book, Const. L.J. 2020, 36(1), 18-22

employer shall make a "fair determination in accordance with *Const. L.J. 22 the Contract, taking due regard of all relevant
circumstances" (SC 3.5). However, the employer cannot decrease any extensions of time previously awarded (SC 8.4).

Given the above, and perhaps inevitably, the lack of express guidance on how the contractor should go about presenting an
extension of time claim, and how the employer should assess it, provides plenty of scope for disagreement and dispute between
the parties.

For the contractor, therefore, the route to mitigating the risk of delayed evaluation and for instead obtaining a prompt and
realistic award of extension of time entitlement is to focus on presenting a well-written, factual and evidence-based claim that
clearly explains and demonstrates entitlement to time extension by the adoption and use of a recognised forensic delay analysis
methodology and which considers all events and circumstances of delay that have impacted the contract, whether caused by
the employer or the contractor. The better prepared and more complete the claim submission, the less opportunity the employer
has to reject or delay its evaluation.

Simon Longley

Partner

Dubai, HKA

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