Progress Updates – Fact or Fiction?

Contractors often shoot themselves in the foot when preparing progress updates for the employer’s team. Many times we see months worth of updates which present a rose-tinted view of project progress.

Whilst it is tempting to keep reporting good news month-on-month, be wary. A less than competent consultant may believe such reports because good news will not involve them in additional and troublesome work. However, you could be causing problems for yourself further down the line.

Problems frequently arise when the contractor needs to submit a claim for an extension of time. It becomes very difficult for him to subsequently tell the employer’s team: “I know we kept telling you that there was no delay to the completion date, but actually there is and it’s not our fault, so please can I have an extension of time.

A progress update, as-built programme or updated programme (all different names for the same thing) is created using the latest agreed programme. It uses planned start and finish dates plus the percentage of progress for any activity started but not finished. The logic contained in the programme and the programming software will then predict the completion date based on progress to date.

Before I specialised in contractual matters and claims I was a project manager for both contractors and consultants. When my planning team produced a progress update, I wanted only one thing from them and that was…

THE TRUTH.

If the update predicted early or on-time completion then I knew that we were doing okay. But if the update was predicting a delay, then I needed the planners to tell me the cause, or causes, of the delay so that we could to take action.

If the delay was caused by us or was due to something that we were responsible for under the contract, we had to find ways to recover the delay. This could mean working longer hours or mobilising additional resources.

But what if the delay was caused by the employer or by something which is at the employer’s risk under the contract? In this case, we needed to identify the cause, submit the necessary notices and make preparations to submit a claim.

So, what would I report to the employer’s team in our monthly progress reports under such circumstances? Again…

THE TRUTH.

Many contractors will not agree with this tactic and will be reluctant to tell the employer’s team that the project is in delay for any reason at all. The contractor should admit to his own delays but explains the steps that he is taking to mitigate. Generally, the employer’s team will accept that delays do happen and that the contractor is being proactive about dealing with them. Telling the employers team about predicted delay will only support subsequent claims. Particularly when the cause is something which will entitle the contractor to an extension of time.

This, of course, only works if the contractor is not going to just bury his head in the sand and hope that the delay will go away. Trust me, it probably won’t. The contractor must actually take mitigating action to recover their own delays. Make sure you send the necessary notices and submit a claim without undue delay.

So, what is the alternative to telling the Employer’s team THE TRUTH? Manipulate the programme so that it no longer predicts a delayed completion date? Unfortunately, this is what many contractors do to avoid giving the employer’s team any bad news.

The fact is that this knee-jerk reaction is not sustainable through many progress updates. It will not support any legitimate claims for extensions of time seems lost on such contractors.

Fact or fiction? I will leave you to decide the best way.

Understanding the importance of contract administration is vital to avoiding claims. Discover more with our Understanding Construction Claims Under FIDIC E-course.


Letters Abbreviations

When Should You Use Abbreviations and Acronyms?

I have one piece of simple advice about using abbreviations and acronyms. Whether in claims, responses, contractual letters, reports or any important communications on your project:

Do not use them….

at all…

ever!

Let’s look at a real-life example of why this is so important.

Our consultancy business, Hewitt Decipher Partnership, was recently appointed by a contractor. Our job was to prepare claims on behalf of the contractor for an extension of time and additional payment on a large project.

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Payment for Work Not in Accordance with the Contract

A former Claims Class student asked my advice on a matter which I thought would be an interesting case study to share. The Contract conditions are FIDIC and the question around non-payment of work which was not in accordance with the contract.

Background

Each month the Engineer makes deductions in the payment certificate for Non-Conformance Reports under Sub-Clause 14.6 (Issue of Interim Payment Certificates), sub-paragraphs (a) & (b).

The Contractor does not contest the Non-Conformance Reports. They state that the defects will be rectified. A problem being that this is likely to take some time to achieve.

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COVID-19

COVID-19: Options for Contractors, Engineers and Employers

In my last blog, I discussed the effects of COVID-19 under the FIDIC Red and Yellow Books. Particularly whether contractors are entitled to claim for an extension of time and/or costs.

My advice was just a few weeks ago. At that time, some contractors were anticipating delays. Firstly caused by supply chain problems associated with plant, goods or materials sourced from China. Secondly by the travel restrictions which were in place. My thoughts were that,  the Contractor will be entitled to an extension of time provided he can demonstrate delay to the Time for Completion and/or the incurrence of Cost. He may also be entitled to claim for additional payment for Cost incurred.

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Top 10 Tips for Effective Letter Writing

One of the things I notice when I review the records to prepare a claim, review claims on behalf of the respondent, or review particulars put forward in a dispute, is the poor standard of letter writing. This ranges from “could have been better” right through to “I have no idea what this letter means”. If your letters fall into these categories, you are not doing yourself or your company any favours. In fact, you could be doing considerable harm. This blog, therefore, contains my Top 10 Tips for effective letter writing.

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