The granting of an Extension of Time relieves the contractor from liability of damages such as Liquidated Damages up to the extended contract completion date. For the employer, the early establishment of an extended contract completion date prevents the contract period becoming ‘Time at Large‘.
Entitlement and Notifications
The conditions and events that the contractor is entitled to a claim for extension of time will be documented in the contract and these events will have been acknowledged by the employer as matters affecting regular progress. The contract will also require notification of delaying events to be given as close a time as possible to the event, a failure to provide timely notification can affect the contractors claim for an extension of time.
Float time is often a subject of dispute regarding its effect in determining entitlement of an extension of time claim. With reference to the SCL Delay Protocol, unless the contract stipulates to the contrary, Extension of Time should be granted if the Employer Delay is predicted to reduce float on the relevant activity paths to below zero. i.e. Float belongs to the employer in regards to time.
The protocol also states regarding concurrent delay that where the contractors delays runs concurrent with the employer’s delays, the contractors delays should not reduce any EoT due. Concurrent Delays effect to prolongation costs are more complicated but in general, the contractor should not be able to recover any costs if it would have suffered those costs as a result of the contractors own delay regardless of the concurrent delay.
Granting of EoT
In theory, EoT should be granted as the delaying event occurs and even before to maintain a feasible contract programme for coordination of the project. In practice, the responsible parties for assessing and granting of the Extension of Time is seldom given the authority to grant extensions at an early stage and many contracts extend well beyond their contract completion date without even the beginning of an EoT process. This reluctance to accept responsibility for delays and grant EoT is often disastrous to the project and the employer.
A common misunderstanding by contractors is that the granting of EoT automatically means that they are entitled to prolongation reimbursement. However, it is crucial that we understand that an Extension of Time is precisely as described and only extends the contract period. An example would be if a project was extended by 2 months and the contractor is granted the appropriate extension of time but the contract may have specified that the particular cause of delay is not required to be compensated. A common situation would be delays caused by adverse weather conditions.
