REQUEST FOR DISPUTE REVIEW EXPERT'S (DRE) RECOMMENDATION FOR REIMBURSEMENT OF ADDITOINAL COSTS ARISING OUT OF AND IN CONNECTION WITH DISRUPTIONS TO THE PROGRESS OF THE WORKS AND EXTENTION TO THE TIME FOR COMPLETION OF THE WORKS GRANTED FOR Dabat - Keraker — Ketema Nigus Design and Build Road Project, Contract 1: Dabat - Ajire OCTOBER, 2021Table of Contents ). Consequences of Abandoning the Variation Works... . Extension of Time and Recovery of Additional Cost Claims Afresh Executive Summary ... Contract Deseription. Payment Schedule . Progress of the Works Contractor's First Extension of Time Claim (EOT No. 01). Proposal for Changing the Pavement Structure from DBST to AC...010 Expiry of the Time for Completion of the Works and “Interim Extension of Times”. 14 Other Disruptions and Contractor's Claim 18 Employer's Representative Responses to the Contractor's Claims " 20 Employer's Representative Determination of the Extension of Time and Recovery of1. Executive Summary In connection with the execution of the works Dabat ~ Ajire - Keraker ~ Ketema Nigus Design and Build Road Project, the Contractor had experienced delays and disruptions which were neither his own making nor were the risks associated thereof to pass on to him. As a result, a total extension of time of 750.0 calendar days had been granted against a claim of 934.0 (excluding recent claim of 272.0 calendar days) calendar days thereby revising the time for completion of the works from the Original 09" October, 2019 to the 29* of October, 2021. Though disagreements over the determination of the extension of time due to the Contractor is not yet resolved, the additional costs claimed by the Contractor are nearly disregarded despite numerous exchange of correspondences and discussions that had been held with the Employer's Representative and additional documentations provided. After the elapse of several months since the Contractor's claim had been made, the Employer's Representative opted to forward an assessment of the Contractor's claim carried out by the Employer in clear violation of the Contract. Considering the Employer's and the Employer's Representative final responses to the Contractor's objections and following the notice served to the Employer on the August 13, 2021 with Ref. No. PY/DA/01/0013/13, the Contractor refers its dispute to the Dispute Review Expert's recommendation pursuant to the stipulation of Sub Clause 20 of the Special Conditions of Contract. The dispute arises because of an assessment (not determination) of the Contractor's additional cost claim carried out by the Employer which lately becomes the Employer's Representative determination as well is unjustified, has not contractual basis and totally revokes the rights the Contractor have to recover the additional costs associated with extending the time for completion of the works arising out of default of the Employer. Comparison of the additional costs claimed by the Contractor versus assessed by the Employer/determined by the Employer’ Representative is presented in table 1.1 below. Table 1.1 Comparisons of the Additional Costs Claimed versus Assessed/Determined S.No. Claimed Cost Category | Amount Claimed Amount | (ETB) 1 Additional cost of idle resources ie | 1.1__| Idle machinery [14,685,813.3__ [0.0 1.2 __ |Idle man power [1.219.146.5 (0.0 Sub Total (1) [15.904.959.8 | 0.0 2 Payment for the provision, maintenance and | services of the Employer's Representative facilities | 21 | Continued provi ermanent | 31.07.2145 | 0.0 facilities 2.2 | Continued servigés®9f arfeXs of the | 7,665,706.0 4,744,248.7Employer's Representative facilities = Sub Total (2) 38,742,920.5 | 4,744,248.7 [3 ‘Additional cost due to extending the time for completion of the works ce 3.1__| Site overhead costs = 139,716.528.9 | 0.0 3.2 _ | Head office overhead costs 36,321.578.31__| 0.0 3.3 _| Other costs 4,570,688,76 | 0.0 Sub Total (3) 180,608,795.97 [0.0 Total (1+2+3) _ 235,256,677.19 | 4,744,248.7 VAT 35,288,501.44 | 711,637.3 Grand Total 270,545,178.77 | 5.455,886.01 Both the Employer's assessment and the Employer's Representative determination are objected. The Contractor's objection is not merely because of nullifying of his claim but also: 1. The Employer's Representative first addressed an assessment (not determination) carried out by the Employer not by himself in clear violation of the stipulation of Sub Clause 3.5 of the GCC. It is bizarre both the assessment and determination are exactly the same shading doubt about the Employer's Representative exercise of fairness, reasonability and compliance to the Contract. 2. The Employer's assessment of the Contractor's additional cost claim is tantamount to obliterating the presence of an independent, fair, and reasonable and Contract compliant body stated under Sub Clause 3.5 of the General Conditions of Contract. 3. The Employer's assessment gives no reason, explanation or argument for nearly nullifying the Contractor's claim despite the bundles of documentations provided ‘over the course of months. 4. Neither the Employer's assessment nor the Employer's Representative determination is reliant on to any specific reference to or inference from any provisions of the Contract. 5. Both the Employer's assessment and the Employer's Representative determination disregard the specific sub clause(s) of the Conditions of Contract on which extension of time and recovery of additional cost claims were based, 6. The assessment/determination gave no regard to the various communications exchanged/clarifications offered at various times and made no reference to these or the Employer's Representative earlier comments. 7. Overlooked the extension of times granted which were the direct consequences of the Contractor's claim, ve 2 #([P QV 0 | Addis Abab. j *In essence, the Employer empowered itself to assess the Contractor's claim without regard to the very manner the Contract is conceived, drafted and concluded. While, the Employer's Representative is tasked to carry determination ensuring compliance with Sub Clause 3.2 and Sub Clause 3.5 of the General Conditions of Contract, an assessment was first any assessment carried out by the Employer is a violation of the Contract. Hence, it is disputed. Furthermore, the Employer's Representative determination sent under a cover letter with Ref. No. BCE/D-HO/020/21 dated 02 August. 2021 is equally disputed for reasons including but not limited to the following. 1, It is not fair, reasonable and fails to comply with the Contract as stipulated under Sub Clause 3.5 of the GCC. The unfairness and unreasonableness extends to nullifying a whole of portion of a claim on alleged grounds of “absence of certain document” which have never been asked or could have been requested and subsequently provided either through formal communications or during discussions held. 2. It is an assessment (not a determination) as required under Sub Clause 3.5 of the GCC which may be different from the one addressed to the Employer under a cover letter with Ref. No. BCE/D-A/HO/0O1/2idated 02% February, 2021. Moreover, the assessment contains significant inconsistent and/or self contradicting arguments as it shall be pointed out in subsequent sections. 3. It fails to recognize the various methods of determining additional cost claims which are academically established and internationally recognized. It rather opted to nullify significantly undisputed portion of the additional costs claimed on unrelated grounds. This typically refers to audit reports. payrolls which were supported with external auditors’ reports and payroll tax receipts respectively. 4. It overlooked the specific clauses based on which extension of times had been granted. These clauses entitled the Contractor recovery of additional costs as well. 5. The assessment is also partly hinged on a self definition given to “cost” as an actual cost expensed by the Contractor overlooking the definition given for Cost under Sub Clause 1.1.5.6 of the GCC which reads “all expenditure properly incurred or to be incurred...” 6. The assessment while admitting more than 550 pages of documentations provided in support of the Contractor's claim nullifies every claim of the Contractor for no good reason and without citing any reference justification under the terms of the Contract. Whereas, all clarification and additional documents required had been provided: further documentation required could have been asked if exercising fairness and reasonableness was sought. Moreover, the various discussions held and clarifications offered should have had served some purpose and helped to come to a certain7. It is also partly based on references to its own and the Employer's views about progress of the works, which were not relevant to the subject issue. The issue of progress had already been dealt with while determining extension of times due to the Contractor 8, The assessment goes on to the extent of alleging “concurrency” of events and risk without any justification, dissection, records, substantiation and ultimately absolve the Employer from the risks it shoulders under the terms of the Contract. 9. Reference to both the Employer's and the Employer's Representative views regarding progress of the works also jeopardized assessment/determination of the additional cost claim. The significance of these views, if right, have had been considered while determining the extension of time granted and it is unclear how they may even referred to nullify the Contractor's entitlements. The Employer's Representative, when required to determine value, Cost or extension of time, it is required to consult with the Contractor in an endeavor to reach an agreement as stated under Sub Clause 3.5 of the GCC. No such endeavor to reach an agreement about the value of the additional cost recoverable had been exercised other than meetings convened during which either adcitional documentations were requested or general presentation approaches are advised. The Employer's Representative should have had made an endeavor to reach an agreement by consulting the Contractor first. His own determination follows if agreement could not have been reached after due endeavoring. However, it carried out its own assessment/determination and communicated to the Employer under a cover letter with Ref. No. BCE/D-A/HO/OO1/2Idated 02" February, 2021 but defaulted to disclose it to the Contractor. Cognizant of the Employer's Representative concluding remark “...the assessment is final and cannot be reversed...” in reply to the Contractor's objection about the determination made, the Contractor equally concluded that fairness, reasonableness and compliance to the Contract has not been exercised by both the Employer and his representative. Therefore, the Contractor opts to purse the next course available to have the addition costs associated with extending the time for completion of the works beyond stipulated under Sub Clause 8.2 of the Appendix and additional costs arising out of the Employer's risk events recovered pursuant to the stipulation of Sub Clause 20 of the Special Conditions of Contract. Before pursuing this course, however, a notice was served to the Employer with an intention of settling the dispute amicably on 13" August, 2021, to which the Employer's response received on the 27 of August, 2021 necessitated filing this dispute to the Dispute Review Expert (DRE) pursuant to the stipulation of Sub Clause 20 of the Conditions of Contract. Therefore, the Contractor by this dispute referral requests the DRE’s Recommendation for recovering the additional costs arisi connection with the 750.0 calendar days extension of time already grar of 934.0 calendar days made(excluding recent claim of 272.0 calendar days) and the additional costs arising out of Employer's risk events as summarized in the table below. Table 1.2: Recovery of Additional Cost Claim of the Contractor S.No | Claimed Cost Category Amount Claimed (ETB) 1 ‘Additional cost of idle resources [1.1 Tidle machinery 14.685,813.3 1.2 ___| Idle man power 1,219,146.5 Sub Total (1) 15,904,960.0 2 Payment for the provision, maintenance and services of the Employer's Representative facilities | 2.1__| Continued provision of the permanent facilities 31,077,214.5 2.2 | Continued services and maintenances of the Employer's | 6,159,200.0 Representative facilities Sub Total (2) 38,742,920.5 3 | Additional cost due to extending the time for completion of the works 3.1__ | Site overhead costs 89,591,670.0 3.2 _| Head office overhead costs 17,459,747.0 3.3_| Other costs _ 0.0 Sub Total (3) 107,051,417.0 Total (1+2+3) 161.699.297.0 VAT : 24,254,894.5 Grand Total 185,954,191.5 Unlike in the earlier of the Contractor's claim, in this Request, the Contractor seeks reimbursement of costs associated with the granted extension of times only in the light of yet to be agreed or determined extension of time in pursuit but without jeopardizing its right to request similar DRE's Recommendation pursuant to the stipulation of Sub Clause 20 of the Special Conditions of Contract. Records would justify that the additional costs claimed under item 1 above is related to an isolated disruption to the progress of the works that happened in the months of February - May 2020 the extension of time claim of which is already submitted; therefore, has insignificant relevance to the yet to be agreed to or determined an extension of time the Contractor is pursing. Therefore, the Contractor requests the DRE’s recommendation for reimbursement of the amounts claimed on lump sum basis pursuant to the stipulation of Sub Clause 20 of the Special Conditions of Contract. Similarly, the additional costs claimed under items 2.1 has insignificant relation with the final determination of the extension of time because it concerns additional payment for the provision of the Employer's ive permanent facilities which are continuously provided beyond the completion of the works of 1095.0calendar days. However, the monthly payments for the continued services and maintenance of the Employer's Representative permanent facilities is duly agreed by the Employer for portion of the extension of time granted, nonetheless, such payment must be ensured for the whole duration of extensions of time granted and recommendation is also requested to ensure payment on similar basis for further extension of times to be determined. The additional costs the Contractor claimed in connection with the extension of time granted and Employer's risks eventuated, the Contractor seeks the DRE’s recommendation of the costs that are expended or would be expended over the granted extension of time period be reimbursed on lump sum basis pursuant to the stipulation of Sub Clause 20 of the Special Conditions of Contractor including for the continued application of recovery of the additional costs for further extension of times to be determined. Details of the Contractor's justification and substantiations are discussed in subsequent sections with records that would enable the DRE make a recommendation being appropriately referred at various locations within this document or attached separately as annexes. 2. Contract Description The Ethiopian Roads Authority (named as the Employer in the Contract Agreement) and Powercon Private Limited Company (named the Contractor in the same Contract Agreement) concluded an agreement on the 19% day of May. 2016. By this agreement, the Contractor undertakes to design and construct a road having an estimated length of 43.14 km linking Dabat town and Ajire located entirely in the North Gondar Administrative zone of the Amhara National Regional State. Peculiar features of the said contract agreement is that the Contractor undertakes the responsibility and risks of both designing and construction of the road as per the terms, conditions and governing parameters described therein. Accordingly, the Contractor is responsible to design and construct (assuming the risk and responsibilities associated thereof) a road of Double Surface Treatment Surfacing (DBST) in accordance with the Ethiopian Roads Authority Manual 2013. Furthermore, the Contractor undertakes to provide, maintain and service facilities including vehicles, offices, laboratory, accommodations, surveying instruments with furniture, fixtures and other amenities for the use of the Employer's Representative all in accordance with the terms of the Contract. In consideration of the design, execution, completion of the works and remedying defects the Employer covenants to pay the Contractor a lump sum Contract Price of ETB 931,304,149.56 (Nine Hundred Thirty One Million Three Hundred Four Thousands One Hundred Forty Nine and 56 Cents) includjag-5REMAT payable fully in ETB. As per Sub Dae Ncompletion of the works is 1095, +( DOWER" Aadis Abab. f *) poy A.Important issues excerpted from the Contract/records are summarized in table 2.1 below. Table 2.1 Important contract data excerpts Contract For Dabat — Ajire — Ketema Nigus Design and Build Road Project, Contract 1: Dabat - Ajire Estimated Length 43.20 km Contract Signed Date 20" May. 2016 Type of Contract Design and Build Contract Price ETB 931,304.149.56 Payment Schedule Lump Sum Time for Completion of the works 1095 calendar days Road Standard DC-4 Pavernent Surfacin Dest ‘Commencement date 10" October, 2016 Original Completion date 9% October, 2019 Extension of time claimed 1205.0 calendar days Revised completion date (as claimed) 27° January, 2023 Extension of time granted 750.0 calendar days Revised completion date (as granted) 29% October, 2021 3, Payment Schedule According to the Payment Schedule “Measurement and Payment provisions of the construction specification shall be Lump Sum basis and shall be paid upon completion of each of the work items indicated below as per the percentage proportion provided herein.” Following the above quoted stipulation, the Payment Schedule proportions the lump sum Contract Amount as summarized in the table below. Table 3.1 Payments Schedule S.No [Description ‘Weight (%)_| Amount (ETB) 1 Survey. investigation and design 15 13,969,562.24 2 | Employer's Representative facilities 5.0 46.565.207.48 B Site clearance and earthworks 29.0 270,078,203.37 4 | Sub base 4.0 37,252,165.98 5 | Road base 4.0 37,252.165.98 6 __| Bituminous surfacing 9.0 83.817.373.46 7 | Bridge, culvert, drainage and protection works | 46.0 482,399,908.79 8 Road furniture and environmental works [1.50 13,969,562.24 100.0 931,304,149.56 The Payment Schedule further explains how measurement and payment are done in the light of design and build nature of the x ease of measurement, progress vePSevaluation and certification of payment the above listed weights are further divided in agreement with the Employer. 4, Progress of the Works After commencement of the works, the Contractor started to exercise due diligence to progress the works with expedition. However, the Contractor's progress has been delayed by events which neither are his own making nor he could have averted the consequences associated thereof. Chronology of events clearly indicates the fact that the Contractor would have completed the works within the time stated under Sub Clause 8.2 of the Conditions of Contract had it not been delayed by events the consequences of which are to be shouldered by the Employer pursuant to the various stipulations of the Contract. More than one reason delayed the progress of the works the effects of which left a tangible delay on the completion date of the works. The delays are caused by delayed payment of certified amounts, delayed possession of the site, disruption to progress of the works and adverse weather conditions experienced during execution of the works. Therefore, the Contractor have been unable to progress the works as planned because of the Employer's belated payment of certified amounts, delayed possession of the site free of obstructions, various disruptions frequently experienced. The cumulative effects of the Employer's belated honoring of his obligations under the Contract and other events the risks associated with them are assumed by the Employer made it impossible to complete the works within the time prescribed under the Contract. Comparison of the monthly and cumulative progress of the works as shown in the table 4.1 below is indicative of the delays suffered against which an extension of time and recovery of additional costs are claimed. Table 4.1 Contractor's Plan versus Accomplishment Monthly (%) ‘Cumulative (%) Cumulative Slippage (%) oa Plan Actual Plan Actual Oct-16 1.50 0.00 1.50 0.0 “1.50 Nov-l6 | 0.34 1.06 1.84 1.06 +0.78 Decié_| 0.35 1.27 2.20 2.33 +0.11 Jant7_| 2.79 3.20 | 4.97 5.53 +0.56 Feb-17 | 3.66 1.08 | 8.64 6.41 2.23 Mar-17 | 3.67 2.77 12.31 9.18 “3.13 Aprl7_| 3.72 1.26 16.03 10.44 “5.59 May-17 | 4.02 3.00 20.05 13.44 ~6.61 Junt7_| 1.53 1.23 6.91 Jul-7_| 0.99 0.96 6.94 Aug-l7_| 0.18 2.03 “5.09Sep-17_| 0.23 0.60 22.98 18.26 472 Oct-17 | 2.83 4.94 25.82_| 23.20 2.62 Nov-l7 | 3.37 3.30 29.19 | 26.50 2.69 Dec17 | 4.99 2.36 34.18 | 28.86 5.53 Jan-18 5.05 425 39.23 | 33.1 “6.12 | Feb-18 5.61 5.31 44.85 | 38.42 6.43 Mar-Ig | 5.01 497 49.86 | 43.39 “6.47 | Apr-18 5.38 3.35 55.24 46.74 8.54 | ~ May-18 5.30 4.31 60.54 51.05 9.49 Jun-18 1.61 3.33 62.14 | 54.35 “7.79 Jul18 1.01 0.62 63.16 54.97 “8.19 Aug-i8 | 0.21 0.17 63.36 55.14 “8.22 Sep-18 | 0.25 0.33 | 63.61 55.47 “8.14 Oats | 3.32 “17 | (66.93 57.18 9.75 Nov-18 | 3.93 6.26 70.85 | 63.44 741 Deci8 | 7.17 3.76 78.03 | 67.20 10.83 Jan19 | 7.06 2.58 85.08 | 69.78 “15.30 Feb-19 44l 214 89.50 71.92 17.58 | The slippages suffered emanated from various delays which were neither the Contractor's own making nor does the Contractor assume the risks associated thereof as per the various stipulations of the Contract. Hence, the Contractor pursued a claim for extension of time in recognition of its rights to recover the time and additional cost suffered. 5. Contractor's First Extension of Time Claim (EOT No. 01) From table 4.1 it is apparent that the slippage against the plan accrued gradually which significantly increased to 17.58% as of the end of February. 2019. The slippages accrued to the progress of the works was the consequences of various delaying events which are nether the Contractor's own making nor do the Contractor shoulder the consequences/risks associated thereof. As recognized by the Employer through various extension of times granted, belated Payment of certified amounts, late possession of site, disruptions to the progress of the works, rampant insecurity (disorder) in and around the project area have had a combined effect on delayed progress of the works. Therefore, with due regard to the delays and disruptions that had been experi and the contractual remedy available to the Contractor to pursue to recov; nd additional costs suffered; theContractor applied for extending the time for completion of the works first without jeopardizing its right to claim for recovering the additional costs. In recognition of the various rights and remedies the Contractor is entitled under the terms of the Contract associated with the delays and disruptions, the Contractor on 18" April, 2019 requested the formalization of the revised completion date of the works to the 12" August, 2020 effectively claiming 327.0 calendar days extension of time to the original completion date which was 9" of October, 2019. The Contractor's claim of 327.0 calendar days extension of time is the sum of: 1. 106.00 calendar days extension of time for delayed payment of certified amounts, 2. 125.0 calendar days extension of time for delayed granting of possession of site free of obstructions, 3. 41.0 calendar days extension of time for various disruptions experienced by the Contractor and 4. 55.0 calendar days extension of time for adverse weather condition experienced during execution of the works, This extension of time claim was made in compliance with the requirement of the Contract and justifies and substantiates the Contractor's request for extension of time pursuant to the provision of Sub Clause 2.2, Sub Clause 8.3 (a), Sub Clause 8.3 (c), Sub Clause 8.3 (e) and Sub Clause 14.3 of the General Conditions of Contract. Moreover, the Contractor underscored that that events arising out of the default of the Employer are compensable events as per the stipulation of Sub Clause 2.2, 16.1 of the General Conditions of Contract. In addition, the Employer assumes the risk associated with the events mentioned under Sub Clause 17.3 of the General Conditions of Contract thereby guaranteeing the Contractor for recovery of time and costs suffered. The Contractor's claim stated above, however, is confined to extension of time claim only but specifically underscoring that the claim is made without prejudice to its right to pursue a claim for recovery of the additional costs that would be incurred over prolonged completion of the works. 6. Proposal for Changing the Pavement Structure from DBST to AC Before the first extension of time claim was submitted on the 18 April, 2019, a suggestion had been offered to have the pavement structure changed from DBST to AC. The Employer's Representative response on the 16" of May, 2019 requested the Contractor's proposal including contractual implications. Hence a proposal including the contractual implications of changing the pavement structure from DBST to AC was made on the 22™ May, 2019. The Contractor, changing the pavement structureunder a cover letter with Ref. No. PY/02/0011/1 dated 1%" April, 2019 which shall be treated separately.” The pavement structure proposal and its subsequent clarifications have contained the following major contents. An extension of time for executing the varied works, Amount of the varied works, Additional cost of extending the time for completion of the works, Additional payment for extra design obligations initiated, Additional payment for the provision of additional laboratory equipments required, Additional payment for the extended services and maintenance of the Employer's Representative facilities. The Employer's Representative while reviewing the first extension of time claim and the extension of time requested for executing the proposed varied works opted to have merger of these two claims and advised the Contractor to the same effect on the 06" of August, 2019. Therefore, the Contractor is now bound to resubmit the extension of time arising out of various delays in consideration of any optimization/concurrency that may be due with the time it may take to execute the proposed varied works. Till the Employer's Representative suggestion of the 06" August, 2019 is received but since the first extension of time claim submission, back and forth correspondences exchanged with their main contents are summarized in the following table, Table 6.1 Contents of Exchange of Correspondences S.No | Date | Content 1 [18-Apr-19 _| Extension of Time Claim No. 01 first submitted 2 [15-May-19 _| Pavement Structure Change from DBST to AC reminder issued 3__| 16-May-19 | Instructed to Submit a Proposal 4 | 22-May-19 | Pavement Structure Change Proposal made 5__| 31-May-19 _| Clarification on the Proposed Change requested 6 | 28-Jun-19 | Clarification on the Proposed Change issued 7 | 1Jul-19 | Further Clarification on the Proposed Change requested 8 [17-Jul-19 | Proposed Employer's Requirements amendments are informed 9 | 23-JuH19 | Resubmission of a Proposal made 10___| 06-Aug-19 | Comments on the Extension of Time Claim No. OI received M__[04-Sep-19 | Combined Time and Cost implications submitted In response to the Employer's Representative suggestion of the 06" August, 2019 the Contractor had to merge the first extension of time claim with proposal for changing the pavement structure from DBST and submitted it on the 04" of September, 2019, The Contractor's extension of time claim as 2019 is as shown hereunder.Table 6.2 Merged Extension of Time Claim S.No | Claim Head _____TEOT Claimed 1 Delayed Payment of Certified Amounts 106 [2 Delayed Possession of Site 125 3 Disruption to Progress of the Works 41+61= 102 4 ‘Adverse Weather Condition 55 5 Change of the pavement structure from DBST to AC_| 463 In summary, the Contractor requested/proposed that the pavement structure change entails an extension of time of 463.0 calendar days starting from the original time for completion of the works thereby revising the time for completion of the works to the 15* of January, 2021. As a result, of the extension of time that may be due for executing the varied works which includes time for procurement of resources, mobilization etc the Contractor considered that the slippages accrued against which an extension of time of time claimed shall be recovered as a result of the concurrent execution of preparatory works of the varied works. however, its rights as claimed are not abandoned by the proposal of the 04" September, 2019 as underscored in its earlier proposal made which reads “No consideration to earlier extension of time submitted under a cover letter with Ref. No. PY/02/0011/11 dated 18° April, 2019 which shall be treated separately.” In addition the Contractor requested the additional costs that would arise from extending the original time for completion of the works by 463.0 calendar days based on the following proportioning of the Contract Price it had presumed during tendering. Table 6.3 Proportion of the Contract Price [Item | Description %___| Amount [1 [lump sum Contract Amount including VAT 100.0 | 931.304.149.54 Lump Sum Contract Amount excluding VAT. 809,829,695.25 2 [VAT 15.0 | 121,474,454.28 3__ | Overhead, Risk, Profit and Maintenance Obligations total | 48.0 | 388,718,253.72 EX] Overhead — total 15.0 _| 121,474,454.29 3.2_| Profit 20.0 | 161.965.939.05 3.3_| Risk [7.0 | 56.688,078.67 3.4_| Maintenance obligations 6.0 | 48,589.781.71 Based on the above proportioning of the Contract price the total overhead is 15.0% which is not uncommon. As it is known and based on the Contractor's prior experiences; out of the total 15.0% overhead costs, substantial portion accounts to time related overheads which include site overheads, head office overhead, and other time related overhead costs including costs for guarantees/insurances etc. Based on the Contractor's considerations, the time related overhead cost is an average of 75.0% of the total ‘overhead which is ETB 91,105,840.71 th be disbursed over the duration of the ).Therefore, the Contractor's proposal for extending the time for completion of the works is considerate of an average time related overhead cost of ETB 2,530,717.78 per month without regard for increased cost of labor and inflation over longer periods of the Contract. However, in the light of the additional varied works to be executed over the extended period, the Contractor claimed for the unrecovered time related overhead costs only as shown in the table below. Table 6.4 Determination of the additional cost of extending the time for completion of the works Item_] Description % | Amount 1 Lump Sum Variation Amount 100.0 | 90,410,760.86 2 Overhead, Risk, Profit and Maintenance Obligations —| 48.0 | 43,397,165.21 total 2.1 | Overhead ~ recovered 15.0 _| 13,561.614.13 2.2 _| Total time related overhead over the extended period 39,057,997.37 2.3__| Unrecovered overhead (2.2 -2.1) 25,496,383.24 Therefore, the Contractor claimed a total of ETB 25,496,383.24 as an additional time related overhead cost for the extended period (469.0 calendar days or 15.4 months) payable ETB 1,547,274.6 per month subject to agreement of the amount of the varied works and duration, Moreover, the Contractor's proposal contained other costs/payments in connection with executing the varied works and extending the time for completion of the woks as summarily presented including the proposed amount of the varied works as shown in the table 6.5 below. Table 6.5 Contractor's Proposal/Claim for Varied Works Proposed S.No | Description ‘Amount (ETB) _| Remark 1 | Additional Costs Associated with Extension | 25,496,383.24 | Payable on of Time monthly basis. 2___ | Additional Laboratory Equipments Required | 1,406,000.00 __| Payable lump sum: 3 [Maintenances and Services for the | 3,897.305.40 | Payable on Employer's Representative Facilities monthly basis. 4 | Amount Variation because of Change of | 90,410,760.86 Pavement Structure eee 5 | Reduced Quantity of Crushed Base Course | (2,305,800.0) Sub Total : a 118,908,875.00__| VAT 17,836,331.25 Total Amount of Variation 136,745,206.3 The above proposal for executing the varied works is made pursuant to the stipulation of Conditions of Contract and other Sub Clause 14.1, Sub Clause 14.3 of the Geng, provisions of the Contract. 37. Expiry of the Time for Completion of the Works and “Interim Extension of Times” Following the Contractor's submittal on the 04" of September, 2019 no response, comment or remark has been received from either the Employer's or the Employer's Representative before expiry of the time for completion of the works on the 09" October, 2019 and for months to come. During this period, the Employer's Representative had been granting series of “interim extension of time” every two months without regard to the absence of such piecemeal extension of the time for completion of the works and without regard to fairness, reasonability and compliance to the Contract that it must have adhered to pursuant to the stipulation of Sub Clause 3.5 of the General Conditions of Contract @ Two months calendar days under a cover letter with Ref. No. BCE/D-A/023/20 dated August 06, 2020, © Two months calendar days under a cover letter with Ref. No. BCE/D-A/014/20 dated 05" June, 2020, @ Two months calendar days under a cover letter with Ref. No. BCE/D-A/008/20 dated 02" April, 2020, © Two months calendar days under a cover letter with Ref. No. BCE/D-A/004/20 dated 05" February, 2020, @ Two months calendar days under a cover letter with Ref. No. BCE/D-A/029/19 dated 04" December, 2019 and @ =Two months calendar days under a cover letter with Ref. No. BCE/D-A/021/19 dated 02" October, 2019 As a consequence the varied works of changing the pavement structure from DBST to AC initiated, the Contractor must have to put on hold the construction of pavement works till the Employer makes a decision. Attempts to progress the pavement works as per the Contract had been objected by the local administration and the resources are stranded before they are sent away with a warning never to return to the project. Therefore, the Contractor had to endure a long period of awaiting decision making by the Employer either to let proceed in accordance with the Contract pavement design or as per the proposal made. However, the Employer opted to grant series of interim extension of times in piece meal fashion without regard to the repercussions such as inefficiencies, denial of the Contractor's liberty of scheduling, resourcing and execution and without the slightest con n to pay part of the additional cost claim.Moreover, the Employer's Representative has continued to use the permanent facilities including vehicles, laboratory, office, accommodation and surveying equipments together with their services and maintenances without paying a dime. The practice of extending the time for completion of the works on interim basis: © |s unjustified under the terms of the Contract, @ Shades uncertainties about the full amount of extension of time that shall have been granted. © Deny the Contractor the liberty to plan, schedule, resource and execute the works, © It may benefit only the Employer by indemnifying it from the consequences of time being at large after expiry of the time for completion of the works. Hence, the Contractor's letter with Ref. No. PY/DA/02/0011/12 dated February 14, 2020 warned that “the Employer's Representative shall recognize this fact and make appropriate adjustment for time and costs we suffer during the period the time for completion of the works is extended in piece meal fashion when the full amount of extension of time and recovery of additional costs are determined.” Over more than 09 months period of extending the time for completion of the works, the Employer's Representative could not reason out why agreement to the Contractor's claim or determination is not concluded but go on and on with an excuse “..the Contractor's EOT assessment and determination by the Engineer and subsequent approval by the Employer may take some time.” and had always pledged “... two months during which the determination and subsequent approval of your revised submission will be finalized.” but to no avail. During this period the Contractor has never bothered to object the interim extension of times granted, requested to be informed about the outcome of the pavement structure change proposal and demanded payment of certain portion of the additional cost claim, but all again in vain. According to the Contract, agreement to the Contractor's claim or determination by the Employer's Representative should have been made expeditiously in the spirit of the stipulation of Sub Clause 1.8 of the General Conditions of Contract. Accordingly, it would have been correct to agree to or determine the Contractor's first extension of time claim discretely. However, before agreement to or determination was made an advice to merge the first claim with the contractual implication of the pavement structure proposal was made. After submission of complete documentation of the Contractor's proposal including theSeptember, 2019 and 10% June, 2020 the Contractor had to go through a state of limbo and had been unable to plan, schedule, resource and execute the works. During this long period the Employer indetermination either to let proceed the works according to the contract or as per the proposed changes is tantamount to suspending the progress of part of the works or prevention of the progress of the works. The Employer's letter with Ref. No. mm3/345/11-3505 dated 02-10-2012 E.C itself is a clear testament to the suspension of the pavement works until settlement was ensured between the Employer and the local administration on certain matters. Hence, the Employer effectively exercised prevention of progress of part of the works which qualifies suspension of the progress of part of the works as per the stipulation of Sub Clause 8.8 of the General Conditions of Contract. The Employer's Representative letter with Ref. No. BCE/D-A/997/20 dated 05 February, 2020 acknowledges the suspension of the progress of part of the works stating “the suspension on the construction of OBST/Asphalt pavement works could affect only the placing of the base course and the installation of roadside furniture.” Hence, it is not also unreasonable to say that suspension qualifying the stipulation of Sub Clause 8.8 of the General Conditions of Contract has been exercised by the Employer's Representative. During the 09 months of period between September, 2019 and June 2020 the Contractor had been obliged to maintain completed sub base works, remained unable to demobilize crusher, incurred significant additional overhead costs, continued to provide, service and maintain facilities without payment and etc. Moreover, the progress of the below listed works representing 14.5 % of the Contract price works had been suspended till the Employer's decision to proceed in accordance with the Contract pavement structure was disclosed on the 10% of June, 2020. Table 7.1: Amount of works suspended 5 Road base 4.0 37.252,165.98 6 _| Bituminous surfacing 9.0 83,817,373.46 8 Road furniture and environmental works [iso | 13,969,562.24 During the months of inability to proceed either according to the contract stipulation or the proposed change, the Contractor served many reminders including prior notice which reads “The Recognizing the protracted exchange of correspondences made and detailed clarifications offered, agreeing to the Contractor's submission or determination of the Contractor's entitlement should not consume considerable time. In addition, regard must be given to the original time for completion of works which shall expire on the 09 of October, 2019." and other reminders and notices had been served in consideration of the stipulation of Sub Clause 8.3 and other relevant provisions of the Contract as summarized in the table below. 16 }Table 7.2: Reminders/notices served Subject Ref. No. Date Crushed Base Course Produce and Payment Thereof PY/DA/O2/0010/__| Apr.15. 2019 Extension of Time and Recovery of Additional Cost Cl PY/DA/02/0023/1_| Sep. 17, 2019 Extension of Time and Recovery of Adcitional Cost Claim PY/DA/02/003/12 _| Nov.07. 2019 Extension of Time and Recovery of Additional Cost Claim PY/DA/02/006/12__ | Dec. 20, 2019 Notice to Claim in Connection with Delayed Determination of | PY/DA/02/009/12 | Jan. 30, 2020 the Extension of Time and Recovery of Additional Cost due to the Contractor Third Interim Extension of Time PY/DA/02/0011/12 _| Feb. 14. 2020 Disruption Progress of the Works PY/DA/02/0012/12 _| Feb. 15. 2020 Progress of the Works PY/DA/02/0013/12 _| Feb. 26. 2020 Disruption Progress of the Works PY/DA/02/0015/12 __| Mar. 12, 2020 Maintenance of Sub Base Works PY/DA/02/0016/12 __| Mar. 19. 2020 Recovery of Additional Cost PY/DA/02/0017/12__| Mar. 19, 2020 Recovery of Additional Cost PY/DA/02/0020/12_| Apr. 06. 2020 Crushed Base Course Produce and Payment Thereo! PY/DA/02/0021/12 __| May.08. 2020 Payment for the maintenance and services of facilities for the | PY/DA/02/0024/12 | May 19. 2020 Employer's Representative use Provision, maintenance and services of facilities for the | PY/DA/02/0025/12 | May 25. 2020 Employer's Representative use Road Surfacing PY/DA/02/0029/12_| Jun. 22. 2020 Notice to claim Py/DA/02/0030/12_| Jul. 04, 2020 Recovery of Additional Cost Py/DA/02/0034/12 | Sep. 10, 2020 Finally, vide a letter of the Employer's Representative with Ref. No. BCE/D-A/016/20 dated 10" June, 2020 the Contractor is informed the decision made by the Employer to hold on to the Contract surfacing type. It is well recorded that this decision is made belatedly after more than 18 months since the Contractor's proposal was first made and more than 8 months after the expiry of the original time for completion of the works. Sadly, the letter referred above failed to address critical issues long overdue including but not limited to the revised time for completion of the works, the additional cost that should have been paid months ago etc. The six interim extension of times granted extended the time for completion of the works by one year revising the time for completion of the works to the 09" of October. 2020. During the 365 days period, the Employer: 1. Suspended the progress of part of the works representing 14.5 of the Contract Price, 2. Failed to uphold the Contract stipulation and went on to extend the time for completion of the works in a manner that may serve only the Employer,4, Failed to pay amounts due to the Contractor for the continued provision, maintenance and services for the Employer's Representative facilities, 5. Failed to reimburse the additional costs expended over the prolonged time for completion of the works, Therefore, the Contractor had to go through a state of limbo about the extension of time due to making it absolutely impractical to properly plan, schedule, resource and then execute the works. 8. Other Disruptions and Contractor's Claim It has never been uncommon to experience various degree of disruption by various actors in and around the project area. The Contractor suffered delay and incurred additional cost due to wide spared insecurity in the project area resulting from the abduction and killing of civilians, the Contractor's staff and security personnel by armed men. The first incident happened on the 12" of February, 2020 with kidnapping of two local police and two of the Contractors’ staff. Without improvement in the security situation, but while the Contractor is attempting to progress the works, another unfortunate shootout between unidentified gunmen and local security personnel occurred on the 19" of March, 2020 causing the death of six persons and injury of more than 13. Between the 12" February, 2020 and 19" February, 2020 (6.0 calendar days), construction activities have been ceased but relative calm resulted resumption of the works at significantly lower pace due to the shear fear the Contractor's personnel felt and the psychological impact the incident had cognizant of similar incidents in the past. Unfortunately, however, without improvement in the security situation, another unfortunate shootout between unidentified gunmen and local security personnel occurred on the 19 of March, 2020 causing the death of six persons and injury of more than 13. Since the 19% March, 2020 to the 12" May, 2020 (55.0 calendar days) all activities remained ceased. The security situation remained unimproved and the Contractor continue to suffer the consequences thereof. Local administrations, despite their efforts, continue to suffer similarly because of their inability to restore secure environment therefore, cessation of the construction works ensued for inability to establish logistical arrangements, road closures, and dislocation of both the Contractor's and the Employer's Representative staffs. Local security personnel’s' activities were curtailed and it was noted that the insecurity was well above the local administrations capacity to control it. Disruptions to the Contractor's progress have always been frequent emanating from various alleged grounds including farmers’ complaint related to compensation payments, and road blockages.The Contractor served various notices in relation to the incident. The following are the relevant notices served pursuant to the stipulation of Sub Clause 8.3 of the General Conditions of Contract. Table 8.1 Notices to claim served in relation to disruption to progress of the works [S.No Subject Ref. No. Date 1| Disruption to the Progress of the Works _| PY/DA/02/0022/12 _| MAY 19, 2020 2 | Cessation of Construction Activities PY/DA/02/0019/12 _| Mar. 23. 2020 Disruption to the Progress of the Works 3 | due to severe security Concern PY/DA/02/0018/12_| Mar. 20, 2020 4 | Disruption to the Progress of the Works _| PY/DA/02/0012/12 _| Feb. 15, 2020 Taking in to account the Employer's risks stated under Sub Clause 17.3 of the General Conditions of Contract and associated consequences stated under Sub Clause 17.4 of the General Conditions of Contract, the Contractor claimed 61.0 calendar days extension of time vide a letter with Ref. No. PY/DA/02/0027/12 dated 08" June, 2020. Moreover, pursuant to the above stated sub clauses of the General Conditions of Contract, the Contractor pursued a claim for recovery of additional costs namely additional costs incurred/reasonably to be incurred associated with extending the Time for Completion of the works, additional costs arising out of idleness of workmen, additional costs arising out of idleness of machineries/equipment and payment for the continued maintenance and services over the extended period, The total additional costs the Contractor claimed amounts ETB 21,558,470.24 (excluding VAT) resulting from the following list of claim heads. © ETB 14,685,813.3 (excluding VAT) arising out of idleness of equipment/machineries computed considering 8.0 working hours per day and 6.0 working days per week (excluding VAT) payable on lump sum basis at once, © ETB 1,219,146.5 (excluding VAT) arising out of idleness of human resources (labor) based on actual payroll sheets (excluding VAT) payable on lump sum basis at once, © ETB 507,717.62 (ETB 249,697.29 (excluding VAT) per month) for the extended services and maintenances of the Employer's Representative facilities as per the breakdown of the Schedule of Payments pre-agreed payable on monthly basis and © ETB 5,145,792.82 (ETB 2,530,717.78 (excluding VAT) per month) as the additional cost arising out of extending the time for completion of the works payable on monthly basis Following submission of this claim, like that of the others no attempt has been made to reach to an agreement about the value or extension of time as per the stipulation of Sub Clause 3.5. Neither was any determination, jim before another round ofresubmission was made in response to the verbal instruction made by the Employer's Representative after the Employer absconded executing the varied works. 9. Employer's Representative Responses to the Contractor’s Claims a) First Extension of Time Claim The only response received from the Employer's Representative on the 06" August, 2019 partly reads “However, your claim for the entitlement of extension of time under claim heads of delay in possession of site and disruption to progress of the works is not properly substantiated, an you have failed to prove beyond any reasonable doubt (underlined) that the completion date of the Contract has been affected as a result of events under scrutiny, in which case the Employer's Representative has been unable to make any determination whatsoever.” Moreover, it ended with a conclusion reading “Please be advised to consider and include the time implication of changing the surfacing type of the road during resubmission of £OT 1 by clearly indicating the critical and concurrent activities for our review and assessment.” By the only response of the 06" of August, 2019 the Employer's Representative failed: 1. To uphold consulting the Contractor to reach an agreement about the extension of time that may be due to in connection with the claim as stated under Sub Clause 3.5 of the GCC, 2. To make his own determination of the extension of time similarly as stated under Sub Clause 3.5 of the GCC, 3. To make prompt announcement of agreement to the Contractor's claim or determination of his own as required under Sub Clause 1.8 of the GCC and 4. To recognize the needlessness of “prove beyond any reasonable doubt” in a civil contract In addition, the above referred letter other than casual remarks has never gone in depth to comment, object, disagree about the extension of time claimed arising out of late payment of certified amounts or the basis of the claim, the specific clauses they are based or the method of quantifying the extension of times.b) Extension of Time for Executing Varied Works From the date the Contractor's first extension of time submitted on the 18% April, 2019 to the last version of the pavement structure change proposal was made on the 04" September, 2019 the following list of correspondences have been exchanged between the Contractor and the Employer Representative. Table 9.1 List of Correspondences Exchanged [Subject - Date Ref. No. Claim for Extension of Time and recovery of additional [18-Apr-19 | PY/02/OO1I/11 cost Pavement Structure Change Proposal 15-May-19] PY/02/0013/11 Request for further submission of contractual implication | 16-May-19___| BCE/D-A/819/19 ‘on the Contractor's pavement structure change proposal ‘Contractual implication in connection with change of the | 22-May-19 | PY/02/0014/11 pavement structure from DBST to asphalt concrete Request for Clarification on Your Proposal for the Change | 31-May-19 | BCE/D-A/838/19 of DBST to AC Clarification regarding contractual implication in | 26-Jun-19___| PY/DA/O2/0015/11 connection with change of the pavement structure from DBST to asphalt concrete Request for Further Clarification on Your Proposal for the | 11-Jul-19 BCE/D-A/882/19 ‘Change of DBST to AC ‘Amendment of the Employer's Requirements 17-Jul-19 BCE/D-A/885/19 Clarification Regarding Contractual Implication in | 23-Jul-19 PY/DA/02/0018/11 Connection with Proposed Change of the Pavement Structure from DBST to AC Request for Original BOQ and Cost Breakdown O1-Aug-19 BCE/D-A/O14/19. ‘Comments on the Contractor's EOT Claim No.1 06-Aug-19___| BCE/D-A/O15/19 Claim for Extension of Time and Recovery of Additional | 04-Sep-19 PY/DA/02/0022/11 Cost During the period the above correspondences are exchanged no attempt hes been made to come to an agreement regarding the value of the varied works. the extension of time or other related costs. In addition, none of the reference correspondences have objected or refuted the Contractor's submissions but rather demanded clarification, additional documentation or seek reconsideration of some items. However, after the final version of the Contractor's proposal was made on the 4" of September, 2019 no comment had ever been received till the Employer's decision of maintaining the Contract pavement structure was disclosed on the 10" of June, 2020.10. Consequences of Abandoning the Variation Works After submission of complete documentation of the Contractor's proposal for executing the varied works including the contractual implications, the Contractor had to suspend pavement construction works until the Employer's response was received on the 10" of June, 2020. Moreover, the Contractor had been in a state of limbo blindfolded to plan, schedule, resource and execute the works. As of the Employer's abandonment of the variation works on the 10 of June, 2020, critical issues long overdue including but not limited to the revised time for completion of the works, the additional cost that should have been paid months ago etc have never been addressed. The Contractor recognizes the Employer's sole discretion to maintain the Contract surfacing type but without jeopardizing the Contractor's right for an extension of time and recovery of additional costs the belated decision broughi Despite the Contractor's plights to have his claims agreed to or determined, partial payment be considered as an “interim” payment against the additional costs claimed or certification of payment for the services and maintenance offered to the Employer's Representative facilities none have been materialized. Rather the Contractor had to go Pursue another round of extension of time and recovery of additional cost claim as of the 21* July, 2020 under a cover letter with Ref. No. PY/DA/02/0031/12. Therefore, as of the Employer's decision to maintain the Contract surfacing type made on the 10" of June, 2020: 1. The Contractor's extension of time claim submitted on the 18° of April, 2019 has neither been agreed to nor determined pursuant to the stipulation of Sub Clause 3.5 of the GCC and though due expedition is required under the stipulation of Sub Clause 1.8 of the GCC, 2. The Contractor's extension of time and recovery of additional cost claim arising out of disruption to progress of the works experienced in February-May 2020 submitted ‘on the PY/DA/02/0027/12 dated 08" June, 2020 has neither been agreed to nor determined. Therefore, the Employer's Representative failed to uphold the stipulation of Sub Clause 3.5 and Sub Clause 1.8 of the GCC, 3. Neither partial payment for the additional cost claim nor payment for the continued services and maintenance of the Employer's Representative facilities has ever been made, 4. The market and economic situation has completely changed over the years, 5. No attempt has ever been made to alleviate the Contractor's financial difficulties, of certain of the works, the the time for completion 6. Further to delaying and suspending the progres Employer continuously breached the Contra of the works in a piecemeal fashion, +( COMED" lol Addis bai. f = a A.