How To Ensure Engineer’s Responses And Instructions Do Not Result In Expensive Claims

A request was raised by one of our blog followers to examine the Engineer’s duty to provide instructions and responses within a reasonable time. In my experience, failure of the Engineer to comply with such obligations often gives rise to claims, so this is definitely worth a blog. I shall use the 1999 FIDIC Red Book as an example, although other forms of contract also contain similar provisions.

Sub-Clause 1.3 (Communications) states that ‘Approvals, certificates, consents and determinations shall not be unreasonably withheld or delayed’ which immediately begs the question what constitutes unreasonable delay. The contract itself provides guidance in many circumstances. For example, Sub-Clause 14.6 (Issue of Interim payment Certificates) provides that payment certificates shall be issued within 28 days of the Contractor’s Statement being received and 10.1 (Taking Over of the Works and Sections) obliges the Engineer to either issue the Taking Over Certificate or reject the Contractor’s application within 28 days.

Sub-Clause 1.9 (Delayed Drawings or Instructions) deals with less specific time frames and places an obligation on the Contractor to provide a notice ‘whenever the Works are likely to be delayed or disrupted if any necessary drawing or instruction is not issued to the Contractor within a particular time’. If the Engineer does not act within the required time and the Contractor suffers delay or incurs Cost, the Contractor is entitled to make a claim. Good contract administration will ensure that requests for information, submittals and the like contain a ‘response required by date’ so that the Engineer is made aware of matters which may cause delay.

A particular response procedure which is often ignored by Engineers are the obligations under Sub-Clause 20.1 (Contractor’s Claims) and 3.5 (Determinations) when responding to claims. Firstly, the Engineer is obliged to ‘respond with approval, or with disapproval and detailed comments’ within 42 days of receiving a claim. He is also required to ‘consult with each Party in an endeavour to reach agreement’ and ‘give notice to both Parties of each agreement or determination, with supporting particulars’.

It should be noted that any failure by the Engineer to act in accordance with the Contract and which causes delay or the incurrence of Cost, would entitle the Contractor to make a claim. It is therefore vitally important that the Engineer respects time frames.