on Extention of Time (EoT) in Construction Project
Group Members Abishek Raja Shahi Thakuri Ayush Joshi Joseph Rana Sangpang Navneet Chaudhary Sarala Dahal INTRODUCTION
EOT is one of the provision clauses in the
standard contract form. The purpose is to preserve an employer’s right in liquidated damages. In the circumstances that the delays are caused by inevitable reason, EOT allows contractor to set an agreed completion date. [1] Factors causing Extension of Time [2] Improper Project Feasibility Study Delay in Instructions from Consultants Extreme Weather Conditions Unfavorable Site Conditions Poor Professional Management Delay in Interim Payment Certificates Factors causing Extension of Time [2]…. Land Acquisition Problems Delay in Issuance of Drawings Lack of Baseline Schedule Poor Design Mistakes with Soil Investigations Improper Investigation of Foundations at Site Factors causing Extension of Time [2]…. Late Deliveries of Materials Late Variation Orders Approval Difference between Building Code & Specification Delay by Sub-Contractors Slowness in Decision Making Shortage of Fuel, Materials and Equipment Lack of Capable Representative Poor Site Supervision LITERATURE REVIEW
General condition of contract clause no. 35
of standard bidding document for procurement of work prepared by Public Procurement monitoring office state that: [3] The Project Manager shall extend the Intended Completion Date if a Compensation Event occurs or a Variation is issued which makes it impossible for Completion to be achieved by the Intended Completion Date without the Contractor taking steps to accelerate the remaining work, which would cause the Contractor to incur additional cost. The Project Manager shall decide whether and by how much to extend the Intended Completion Date within 21 days of the Contractor asking the Project Manager for a decision upon the effect of a Compensation Event or Variation and submitting full supporting information at least 21 days prior to the intended completion date. If the Contractor has failed to give early warning of a delay or has failed to cooperate in dealing with a delay, the delay by this failure shall not be considered in assessing the new Intended Completion Date. Standard contract forms, especially that of the International Federation of Consulting Engineers (FIDIC) has included Extension of Time for completion on sub clause 8.4. This includes: [4] The Contractor can claims for an extension of the time for completion subject to sub clause 20.1 [ Contractor’s Claims] or due to delayed by any of the following causes: Variation due to change in quantity of an item of work Exceptionally adverse climatic conditions Unforeseeable shortages in the availability of personnel or goods caused by epidemic or governmental action. Any delay caused by the employer, the employer’s personnel or employer’s other contractors. If the Contractor considers himself to be entitled to any extension of the Time for Completion under any Clause of these Conditions, the Contractor shall give notice to the Engineer, describing the event or circumstance giving rise to the claim. The notice shall be given as soon as practicable, and not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance. Within 42 days after receiving a claim or any further particulars supporting a previous claim, the Engineer shall respond with approval, or with disapproval and detailed comments. He may also request any necessary further particulars, but shall nevertheless give his response on the principles of the claim within the above defined time period. If the Engineer does not respond within the timeframe defined in this Clause, either Party may consider that the claim is rejected by the Engineer and any of the Parties may refer to the Dispute Board in accordance with Sub-Clause 20.4 [ Obtaining Dispute Board’s Decision ]. Prevailing Legislations regarding Extension of Time in Nepal Eligibility Conditions/Requirements for EOT:- As per the section 56 of Public Procurement Act 2063, the conditional requirements for EOT are: [5] Provision of EOT must be incorpotated in Agreement Document. Force Majeure Failure of the Public Entity to make available the materials to be made available by it Miscellaneous genuine reasons. Procedure/Process for EOT:- [6] As per the Clause 120 of Public Procurement Regulation 2064, the following process must be followed and fulfilled before the approval of EOT. Application for EOT must be submitted to PE before 21 days of deadline by Contractor/Consultancy/Importer/Service Provider with reasons for the requirement of EOT. Investigation by Public Entity's responsible officer over the EOT application and respective documents on following terms: Whether the concerned contractor has endeavored his/her 100% to complete the work as per contract agreement in time or not Whether the concerned public entity has provided the construction entrepreneur, supplier, service provider or consultant with the matters required to be provided under the contract or not Whether the delay is due to PE's taking the required documents associated with contractor for the purpose of Investigation or not. Whether the delay is due to Force Majeure (Earthquake, Flood, Landslide, Soil Erosion, Pandemic/Epidemic or not. Approval of EOT:- On rigorous study or investigation, if the reasons provided on the application are found genuine, the approval of EOT can be done based on: For the EOT of up to 15% of initial Project Duration, approval can be done by the Officer who had approved the Procurement. For the EOT of above 15% up to 25% of initial Project Duration, approval can be done by the Departental Chief. For the EOT of above 25% up to 50% of initial Project Duration, approval can be done by the Secretariat of the Concerned Ministry/Entity. No EOT of above 50% of initial Project Duration can be done. For such requirements, the Contract should be terminated. Liquidated damages: The following provisions may be made in the procurement contract in regard to the liquidated damages: (a) If the work under the procurement contract could not be completed within the time specified in the contract due to the delay on the part of the supplier, consultant, service provider or construction entrepreneur, he or she shall pay to the public entity liquidated damages, generally of zero decimal zero five (0.05) percent of the contract price per day not exceeding ten percent of the contract price; however, he or she is not required to pay liquidated damages if the performance of work or delivery of goods is delayed due to the occurrence of a force majeure event or without any fault or negligence on his or her part, and (b) The concerned construction entrepreneur, supplier, service provider or consultant shall not be released from the obligation of performing the work under the procurement contract even upon payment of the liquidated damages referred to in clause (a). Reward may be given to those who complete work prior to time: 1. It may be provided that the public entity may reward the construction entrepreneur who completes the work prior to the period specified in the procurement contract. 2. The amount of reward referred to in sub-rule (1) shall be determined on the basis of sub-rule for such a number of days by which the work was completed before the period specified in the procurement contract. (3) While determining the rate referred to in sub-rule (2), the rate shall be so determined as equivalent to the same amount that the construction entrepreneur has to pay as liquidate damages to the public entity on daily basis for failure to complete the work within the period specified in the procurement contract. (4) Notwithstanding anything contained elsewhere in this Rule, the total amount of reward shall not exceed ten percent of the contract price. REFERENCES 1. Lian, Y. L., Hassim, S., Muniandy, R., & Ling, T. M. (2012). The Assessment of Applications for Extension of Time Claims in Malaysian Construction Industry. IACSIT International Journal of Engineering and Technology, 4, 446-450. 2. Hanif, H., Saleem, Y., Shahid, Z. A., Hanif, A., & Zeb, A. (2014). Assessment of Extension of Time Claims in Hydropower Projects of Pakistan. International Journal of Engineering and Advanced Technology (IJEAT), 4, 29-32. REFERENCES 3. GON, P. P. (2019). Standard Biddding Document Procurement of Works National Competitive Bidding (NCB). Nepal: www.ppmo.gov.np. 4. (FIDIC), I. F. (2010). Condition of Contract for CONSTRUCTION FOR BUILDING AND ENGINEERING WORKS DESIGNED BY THE EMPLOYER. Geneva: www.fidic.org. 5. The Public Procurement Act, 2063 (2007). (2019). Nepal: www.ppmo.gov.np. 6.The Public Procurement Regulation, 2064 (2007). (2019). Nepal: www.ppmo.gov.np.