Fidic Programme Requirements

[Skyy Mansour]

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Contractors in the Middle East tend not to take their programming obligations seriously. They frequently appear to be caught off-guard by winning a contract leaving them unprepared to make a timely start. There are a variety of matters which must be addressed immediately upon award and failure to do so can leave the contractor at risk of failing to complete the works on time and liable to pay delay damages for that failure.

One of these matters is the preparation of the contract programme which should usually be submitted within 28 days of contract award. It has often seen that contractors do not have any programmer available to prepare the contract programme at commencement and, instead, take time to recruit from outside. This lack of preparation results in the programme submission and acceptance being significantly delayed and is solely the responsibility of the contractor.

But, just because a set of conditions of contract is based on this template does not mean that the terms will be close to those set down in the original as it is not uncommon to see greatly amended versions in use in the UAE often of significantly poorer quality than the original. For the purpose of this article, it will be assumed that the unadulterated version of the FIDIC GCC is used.

When the contract programme has been submitted to the Engineer, the Engineer has 21 days to review the programme. If the programme is found to be acceptable, the Engineer does not need to, and should not, issue approval of the programme, it is deliberately not required by Clause 8.3. If and when the 21-day period expires without any notice from the Engineer, then the contractor is required to commence the works in accordance with the programme. He should not wait for the Engineer to issue an approval or any other notice as none is required by the contract, any delay in proceeding after the expiry of the 21-day period would be a contractor delay.

This is a long and non-exhaustive list of matters which have their own timeline. For example, the Clause 4.2 Performance Security must be delivered within 28 days of the date of receipt of the Letter of Acceptance, it is not tied to the programme submission or to the commencement of the works.

It is not unusual to find that the Specifications state that the submitted programmes shall be approved by the Engineer and/or the Employer. This is not valid, the Specifications do not take precedence or prevail over the Conditions of Contract. FIDIC Clause 1.5 states that the priority of documents shall place the Conditions of Contract at a higher level than the Specifications. Therefore, the provisions of Clause 8.3 shall apply and not those of the Specifications.

This and similar formats are satisfactory for the submission of materials, shop drawings, method statements and etc. where the conditions of contract are silent on how such submissions are to be managed. But this format is not satisfactory when dealing with the submission of programmes as the format conflicts with the express terms of FIDIC GCC Clause 8.3. Under Clause 8.3, no programme shall be approved; if a Clause 8.3 notice with comments is issued then the contractor is not permitted to commence the works until the programme has been revised, resubmitted and no subsequent Clause 8.3 notice is issued in response to the revised submission. No other options are provided for by Clause 8.3.

If an Employer wants to ensure that the programmes are formally approved then he will have to amend Clause 8.3 either by editing the General Conditions or, preferably, by expressly substituting the Clause in the Particular Conditions which is the method expressly recommended by FIDIC.

FIDIC GCC Clause 4.21 requires the contractor to prepare monthly progress reports, the first of which shall cover the period up to the end of the first calendar month and, like all succeeding monthly progress reports, should be submitted within 7 days of the last day of the period covered.

Until the contract programme comes into existence, some of these requirements cannot be addressed, however, once the contract programme has been put in place all these requirements shall be included and progress data incorporated into the contract programme whereupon the progressed programme shall be scheduled to determine the effects of the progress made on future activities and the completion date and included in the relevant progress report.

The progressed programmes are needed to enable the contractor, the Engineer and the Employer to monitor the actual progress of the works and forecast completion dates and so that the parties can discuss any lack of progress, delay events and other related issues at the time that the issues occur and attempt to devise and agree solutions to mitigate delays or to extend the time for completion contemporaneously rather than after the completion date has passed.

The records of actual progress, actual start dates, actual finish dates, actual percentage completion of activities, delay events and their ongoing effects constitute important records to be used in the analysis of delays and assignment of liability. It cannot be stressed enough how important this information is to the evaluation of delay claims as is confirmed by FIDIC GCC Clause 20.1 which obliges the contractor to keep contemporary records of claim events and to submit a fully detailed claim with full supporting particulars of the basis of the claim and the extent of extension of time and/or additional payment claimed. The laws of the UAE confirm that this is both a contractual and a legal obligation.

Once a revised programme has been submitted and accepted pursuant to Clause 8.3 it becomes the baseline from that date forward and subsequent progress reports will then be based upon this revised baseline.

The contract programme, progressed programmes and revised programmes are the only programmes that the contract expressly requires the contractor to produce and submit to the Engineer. However, at times a contractor will need to carry out other programming-type operations, for example when:

In these scenarios the contractor is put at risk and must notify his intention to claim and then follow this up with a fully detailed claim complete with full supporting documents to prove the principle and the extent of his entitlement to claim an extension of time and/or additional payment.

Some events may have no effect on the completion date. A commonly used example is an instruction given to change the specification for bathroom taps from chromed steel to gold-plated. If it is given in good time it will give rise to a change in the price of the taps but will not cause delay to their installation. There will be a need to claim the additional payment but no need to claim an extension of time.

But, if the instruction is given late, say after procurement of the chromed steel taps had already commenced, or if procurement, delivery and/or installation of the gold-plated taps requires more time than it would for the chromed steel taps, then a delay will occur. This delay must be proved by way of a detailed set of documents demonstrating the date of the instruction, the extent of procurement already progressed, and the revised durations and any additional steps required for procurement, delivery and installation. The revised and/or additional activities must be added into the programme at the correct point of time, in this case the date of the instruction, by way of a fragment of a programme network, aka a fragnet.

If the event is the only matter that caused delay, that is, there were no other Employer or contractor delays, then the above steps describe the basis for the extension of time and the cost. The claim submission must include the contractual proof that the instruction constitutes a variation from the requirements of the contract, plus the above programme delay analysis and cost calculations and the collation of all the records supporting the claim in an annex.

These other delays should have been addressed as and when they occurred so that resolution could have been achieved contemporaneously as is highly recommended by experts in the field. However, it is recognised that this rarely occurs and extensions of time and additional payments are frequently left until the end of the contract to sort out the issues. This approach does not comply with the terms of Clause 20.1 and any contravention of the timing of claim submissions and claim responses will put the offending party in breach of contract.

The contractor is encouraged to submit his detailed claim as soon as possible by the terms of Clause 20.1 which provide for him to include any reasonably substantiated additional payments arising out of the claim into interim Payment Certificates thereby improving his cash flow.

The importance of programming throughout the lifespan of a contract cannot be stressed enough. The programme is an indispensable tool to schedule the activities required to execute the works, to monitor progress against the current programme and to evaluate the effects of changes to the extent or nature of the works on the programme.

As soon as the contract programme has been accepted, the contractor will commence making monthly progress reports which must be accurate and fully detailed depictions of the actual progress made on all activities contained in the programme. These must continue to be prepared until all works have been completed, including all outstanding work to be carried out during the defects liability period.

In addition, if an event occurs which the contractor considers to be outside the scope of his obligations under the contract, then he will need to give notice of and submit a claim to demonstrate his entitlement. Frequently such a claim will involve the evaluation of the delaying event and how that delay will set back completion of the works. This is done making use of the programme current at the date that the event occurred combined with the extent of progress achieved and recorded as of that or the nearest date.

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