Contactor's programme

How to Administer the Contractor’s Programme

One of our followers asked for some advice on the administration of the contractor’s programme. The questions raised relate to fairly frequently occurring situations, so this subject is definitely worthy of a blog post. I have reproduced the queries below and I will refer to the FIDIC forms of contract and terminology when providing my advice.

Requested Advice. A summary of general principles which would avoid the contractor submitting erroneous programme updates. For example, don’t be bullied by the Engineer into submitting a programme based on the original completion dates and which therefore absorbs the impacts of delay events (thus losing entitlement).

So, let’s be clear what a programme update actually is. Firstly, we must establish the contractor’s programme, which is often referred to as the baseline programme. This programme should be the contractor’s best estimate of the sequence and timing of how he intends to carry out the works and should be based on the contract at the time it was entered into. An update is where the contractor records actual progress onto the baseline (or any subsequent revision to the baseline) to forecast the Time for Completion, at the time of the update.

I have witnessed many occasions whereby the Contractor is late submitting his programme and by the time he gets around to doing so, employer delays have occurred. The Engineer then wants the Contractor to incorporate the delays into the programme and maintain the Contract Time for Completion. The message to Contractors here is, “do not delay in submitting your baseline programme”.

FIDIC Sub-Clause 8.3 (Programme) only allows the Engineer to give ‘notice to the Contractor stating the extent to which it does not comply with the Contract’. Consequently, the Engineer has no right to pressure the Contractor into including post-contract events.

Once the baseline programme has been established and delay events have occurred or particularly if extensions of time have been awarded, the Contractor should submit a revised programme which will then be the programme against which future progress updates are carried out.

Requested Advice. Examples of when the Contractor could reasonably refuse to submit a programme update, ie, if the Engineer / Employer has failed to review a previously submitted EOT claim.

Maybe the terminology had become confused here, but if ‘updated programme’ is meant FIDIC Sub-Clause 4.21 (Progress Reports) obliges the Contractor to submit a ‘comparison of actual and planned progress’ as part of the progress report, then an update is the usual way of doing this.

If the query relates to a ‘revised programme’ both FIDIC Sub-Clause 8.3 (Programme) and 8.6 (Rete of Progress) obliges the Contractor to revise the programme if progress is not consistent with the prevailing programme. He cannot therefore simply refuse to do so.

If the Contractor has submitted an extension of time claim that has not been responded to, then it would be reasonable to include the claimed extension of time within the revised programme on the basis that entitlement exists until the claim is either rejected or reduced. The message to Contractor’s here is that you must submit your extension of timely claims in a timely manner, or you will be obliged to meet the prevailing time for completion, or suffer the consequences.

Requested Advice. Advice on how the Contractor can avoid being coerced into accelerating the progress of the Works – or – the conditions which the Contractor must ensure are in place before he agrees to accelerate (if delay is non-culpable), i.e., ensuring that a prior acceleration agreement with conditions is in place before actually accelerating.

I am assuming that this is a situation whereby the Contractor is entitled to an extension of time, but the Employer wishes the Contractor to meet an earlier date. In order to achieve the earlier date, the Contractor must accelerate.

I have three pieces of advice here. Firstly acceleration costs are usually difficult to prove and to agree; secondly, this is especially so after the acceleration has taken place because at this time, the Employer or Engineer may lack incentive to pay the Contractor for the acceleration measures and thirdly, never accelerate without a specific instruction to do so.

The Contractor only has the upper hand before he has instigated the acceleration, so this is the time to either agree a cost of acceleration, or to at least agree the principles of how the costs will be calculated at a later date. The agreement should be recorded before the contractor takes any action.

I hope this rather long blog provides some useful advice. If you are looking for more detail on working with FIDIC contracts, the practical use of FIDIC e-course might be right for you. Have a look at what the course covers here.