All too often, construction projects are finished late. Usually, the contractor is blamed. Contractors inevitably lose money because they are on the project longer than they planned to be. In addition, they are often penalized by the client for finishing late. But, is it always the contractor’s fault?
Many of the delays experienced on a construction project are due to circumstances beyond the contractor’s control, which means that the contractor could have claimed an extension of time, usually including the additional costs that they incurred as a result of the delay. So why don’t contractors claim for these delays?
Why do contractors fail to submit delay claims?
- They are so focused on doing the work that they don’t recognize when they have been delayed by circumstances which they could not have reasonably allowed for.
- They don’t understand their contractual rights in terms of the contract.
- They don’t understand the construction schedule and the impact that the delay will have on the project completion.
- They believe that the delay won’t be a problem and that they’ll catch up on the lost time.
- They don’t want to upset the client by submitting a delay claim. Many of these delays occur early in the project, sometimes even before work on the project has begun and contractors are often embarrassed to be submitting a delay claim so early in the project.
It is vital to notify the client immediately when a delay occurs. Not only can the client sometimes take steps to minimize the delay by rectifying the situation, but they also have the option of requesting the contractor to accelerate the work to catch up with the lost time, or they can implement steps to avoid delay on their following activities.
Contractors must learn to be more focused on the contractual issues as well as the construction work. Those who don’t understand their contractual rights will run into trouble, costing them money which could ultimately sink their company. The contract document is there to protect the client’s rights as well as the contractor’s rights, and no client can object to a contractor’s legitimate delay claim. Indeed, in the course of my career, I’ve been involved in over 120 projects for a multitude of different clients and many of these projects have involved variation and delay claims. Almost every one of these claims was settled amicably, even though some involved substantial increases to both the value and the time of the project. In nearly every case we went on to do further projects with the client.
Of course, it is important that every delay claim is backed up by sound logic and information.
Regrettably, some contractors only focus on submitting claims, often claims which are only desperate attempts to claw back time and money that has been lost due to their own mistakes. Many of these claims have no sound basis and are a waste of the contractor’s and the client’s time. In my next article, I’ll discuss some reasons the contractor can’t claim a delay for.
When Can Contractors Claim for Additional Time?
Contractors can claim for additional time when:
- The client increases the scope of work on the project.
- The client issues instructions to the contractor to stop work for reasons unrelated to the contractor. Or, when the contractor can prove that the client wrongfully stopped them working because the client claimed the contractor had not fulfilled certain responsibilities.
- The client’s team provided construction information late to the contractor.
- The contractor received access to a work area late.
- The work area given to the contractor was not in accordance with the contract or the drawings. For instance, the area may not have met the correct specifications, dimensions or levels.
- The client changes specifications to an item so that the item has to be reordered which causes a delay, or that the item with the newer specification takes longer to manufacture.
- The client’s activities delay the contractor. This could be that the client’s contractors have not completed tasks required by the contractor to proceed, or the client’s operations impede the contractor’s work.
- The client unnecessarily withholds approvals of the contractor’s designs, drawings or completed items.
- The client demanded additional tests and inspections which weren’t in the contract document and which aren’t the norm in the construction industry.
- The client demanded additional safety measures which weren’t stipulated in the contract document and which are above the normal requirements for the industry.
- The client’s team issues drawings which have errors or omissions which results in the contractor being unable to carry out their work, or which caused the contractor to construct an item incorrectly which then has to be redone.
- There were unforeseen site conditions which delay the contractor. These conditions could include:
- Existing unknown services and utilities, such as; gas lines, electrical cables, water pipes, data cables, etc. which have to be moved or protected.
- Different soil conditions such as rock and clay.
- Encountering hazardous materials.
- Discovering of archaeological artefacts.
- Uncovering buried building rubble.
- There are extreme weather events in excess of what could be expected for that location at that time of the year.
- Items that were specifically excluded in the contract, possibly such as, normal expected weather or hurricanes and tornadoes, occur.
- Changes in legislation.
- National strikes, work stoppages or disruptions which stops the contractor’s work, or impacts their suppliers or subcontractors.
- Disruptions caused to the contractor’s work by the client’s workers embarking on industrial actions such as work stoppages.
- Client supplied materials or equipment arriving late, or where these aren’t fit for purpose.
- Drawing coordination problems where the drawings supplied by the client’s team don’t agree. For instance, the engineer’s drawing doesn’t allow for the requirements of the mechanical or the architect’s drawings.
- The client failing to obtain the statutory permits and authorizations that they are responsible to obtain.
- The client’s team doesn’t immediately respond to the contractor’s queries, where these queries directly impede the contractor’s progress on the project.
- The client doesn’t supply facilities or utilities in the quantity, or time, that they were required.
- The client revises drawings which cause the contractor to redo work already completed.
- The client changes the sequence on the construction schedule which impacts progress on the critical path.
- The client failed to relocate a service or utility line which they were supposed to move and this prevents the contractor from working.
- The client (or the client’s contractors) damages the works which have to be repaired by the contractor.
Of course, sometimes you can’t claim for some of these events. For instance, if they don’t impact progress on the construction schedules critical path
It is important that contractors understand the construction schedule and the contract document. Contractors should immediately notify the client when a delay event occurs so that the delay can be minimized. In fact, whenever possible, remind the client ahead of time when information and access are required, or when you foresee a potential problem. Review construction drawings early to ensure that they have all the required information for construction. Be proactive to limit delay claims.
Don’t get beaten up for completing a project late when the delay wasn’t your fault, or it was caused by something you could not have reasonably expected or avoided.
If you are not sure about a contractual issue ask for expert advice. Wise up to your contractual rights. My book: ‘Construction Claims: A Short Guide for Contractors’ provides some useful guidance, as do many other similar books.
Is your project being delayed by circumstances outside your control?
What are some of the delays that you have experienced on your projects?