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Time extension in circumstances of concurrent delay

In the last chapter, it was discussed that the judiciary had not recognised one standard method that can be used toanalyse extension of time in circumstances of concurrent delay. This has worsened the existing confusion in the

industry on dealing with concurrent delay. A practice guide produced by the JCT is there but it only promotes the useof their contracts instead of clearing the air on prolonged issues. However, in the United States of America (USA), theUSAs Association for the Advancement of Cost Engineering International (AACE) produced a directive in the form of a protocol to ease the confusion of the practitioners in the USA construction industry. Similar to the protocol producedby their counterpart across the region, the Society of Construction Law (UK) produced the Delay and DisruptionProtocol .

In this chapter we will be analyzing and interpreting the approach and recommended practices in the Society of Construction Law (UK) protocol in dealing with concurrent delay in the context of extension of time. Based on thestudy done on the approaches in the SCL Protocol in managing concurrent delay, a suitable recommended practicewill be suggested to be applied for the use of projects under the supervision of the Public Works Department of Malaysia.

4.2. The Society of Construction Law & the Delay and Disruption Protocol

The Society of Construction Law (SCL) (UK) is an independent organization formed to promote for the public benefit,education study and research (and publication of the useful of the useful results of such research) in the field of construction law and related both in the United Kingdom and overseas . Concerned with the rising numbers of disputes and constant confusion on claim matters i.e. entitlement of extension of time and financial claims, SCL (UK)published the Delay and Disruption Protocol in 2002 (reprinted 2004) to assist practitioners in the constructionindustry identifying and resolving thorny issues. Some of the core principles covered in the SCL protocols are

extension of time, concurrent delay, variations, loss and expense, ownership of floats and others.

The SCL protocol was drafted by a subcommittee in the SCL (UK). Before the latter edition of the Delay andDisruption Protocol was published, there was the consultation edition which had gone through a few workshopsbefore it made the final cut. There were some changes made to the consultation edition taking into considerationfeedback and comments received. It has been much discussed since its debut . Blackler suggested that the SCLprotocol is a tool to ensure the contract runs smoothly without disputes . Disagreeing with the term protocol used,Bingham believed that it is only a guide which still did not give the builders the answer to their questions onmanaging change in delay and disruption. Knowles also played down the hype of the protocol by stating that thesuggested approach is not something new, instead the SCL Protocol is only supporting some of the existingapproaches i n the construction industry . SCL (UK) recommended that SCL protocol is the ans wer to the missing link

in a standard form of contract. Most of the core principles covered in the protocol was clearly defined and step bystep guidance on how to deal with delay and disruption issues is provided. It was also produced to fit any contract for management of delay and disruption .

The SCL protocol is not a compulsory document to be used with the contract document or either a statement of law.The SCL Protocol is only a mere guideline to provide a clearer picture on managing delay and disruption issueswhere the SCL (UK) hopes to reduce the number of disputes in the construction industry. Nonetheless, the Society of Construction Law (UK) aims for the SCL protocol to be applied by contracting parties with any of the availablestandard forms of contract to avoid disputes regarding the common problems covered in the SCL protocol. Partieswho intend to incorporate a part of or the whole of the SCL protocol as part of the contract document should ensurethat it does not contradict with the terms of designated standard forms of contract or a customized drafted contract. A

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reformation on the protocol shall be made to the SCL protocol if they intend to change the status quo of the documentas just another useful guideline to a contract document material .

In a bold attempt to make the SCL protocol contract compliant universally with the standard forms of contract,prominent names in the industry, Pickavance Consulting and Fenwick Elliot (PFE) joint forces to produce the PFEsupplement. PFE supplement is a change management supplement which contains lists of amendments to the JCT98. The purpose of the whole idea is to make the JCT form and the SCL protocol compliant with each other .

While SCL claimed that the idea to integrate the SCL Protocol with standard form of contract is the move long awaitedby the people in the industry, JCT however opposed the idea to be compliant with SCL Protocol. Lal in his articlesuggested that JCT declined on the basis that (1) it is not suitable to translate the particulars in the SCL Protocol as acontractual document (2) the PFE supplement is not in line with JCT conditions of contract and (3) if combinedtogether, SCL Protocol will make JCT contract complicated and will lead to more disputes . With everybodyacknowledging JCTs stand on this matter, Lal wonders on the other bodies reaction to this protocol compliant withthe standard form issue .

4.3 Concurrent Delay in the Protocol

SCL Protocol has an interesting positive framework on dealing with concurrent delay and extension of time. SCL

Protocol only defines concurrent delay as a true concurrency situation where

occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor RiskEvent and the effects of which are felt at the same time. The term concurrent delay is often used to describe thesituation where two or more delay events arise at different times, but the effects of them are felt (in whole or in part) athe same time.

SCL protocol acknowledges that the situation of true concurrency can take place anytime although rarely found. Theapproach of true concurrency by the SCL protocol was supported by the judiciary in two Technology and ConstructionCourt (TCC) cases, namely in the case of (1) Henry Boot v Malmaison Hotel and (2) The Royal Brompton HospitalNHS Trust v Frederick Alexander Hammond & Others . However, instead of independent causes of delay as true

concurrent delay is defined, there are other concurrent situations where overlapped delays were linked anddepended on each other .

The approach in the SCL protocol recommends that if in the occurrence of overlapped delay caused by the employer and the contractor, the contractor shall be entitled to the entire days of extension of time without any reduction. In theview of the sub-committee who drafted the SCL protocol, they believed it is wrong for the employer to deductliquidated damages from the contractor in an event which is contributed by the employer themselves . Approachessuggested in the SCL protocol in dealing with concurrent delay were also in line with the Prevention Principle in theEnglish law. An employer should not be allowed to prevent the contractor to complete his obligation to complete thework on time. By awarding extension of time for the total period of the employers caused delay the employer willavoid the contract completion date to be at large. The approach by the SCL protocol literally illustrates that the SCL

protocol is not supporting the idea of apportioning the liability between overlapped delay caused by the employer andthe contractor.

To avoid the development of an impact of delay to a project, the SCL recommends proactive action in pursuing delayevents. The contractor should not delay in making claim for extension of time and the same thing goes for theContract Administrator in assessing entitlement for extension of time. Instead of the conventional approach by theContract Administrator to analyse the effect of the employers delay event after the event occurs, the Contract

Administrator is urged to award an extension of time as soon as possible for the period of delay or predicted period of delay caused by an employers caused delay. It is a common dilemma in the construction industry where anextension of time claim is only finalised until the final hour of the contract which can be considered too late. It will betricky to track previous causes of delays and its effects. In the occurrence of concurrent delay, it is advised to do a

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separate assessment on the contractors entitlement for an extension of time and entitlement for cost related due tothe delay.

However to determine and granting extension of time as suggested by the SCL Protocol is difficult unless thecontractor is ready to come clean and plead guilty for every delay caused by them .

4.4 Public Works Department of Malaysia & Concurrent Delay

Public Works Department Malaysia (PWD) plays an important role in developing Malaysia. For more than a centurythey have been vastly involved in building the nation. PWD has been executing various construction projects fromother ministries and government agencies such as building construction and maintenance, civil engineeringconstruction and maintenance such as highways and bridges. As the leading agency to manage a large portion of thegovernment construction projects, PWD has to ensure that the publics money is managed efficiently and well spentby keeping the projects run smoothly as planned and completed within time.

PWD and other government agencies practice is governed by the Treasury Instruction produced by the Ministry of Finance Malaysia. In line with the Treasury Instruction, PWD produce its own Directors Generals Instruction since1980 as a guideline for PWD officers, individuals, consultants and contractors who are involved with the Malaysiangovernment managed by the PWD. The Director General Instruction contains PWD policies and guidelines on

contract administration, project management, project planning and others.

The first Director General Instruction regarding extension of time was created in 1985 . However, there was noguideline or method on assessing extension or time. To ensure that the projects under the Ninth Malaysia Plan arecompleted on time, PWD in line with the Treasurys Circular came out with a guideline on methods of assessment for extension of time in 2008 . The Malaysia Plan is an economic development plan applied by the Government of Malaysia. Every Malaysia Plan consists of a five years period with the construction sector as the main priority. TheFirst Malaysia Plan started in 1966-1970 and Malaysia is currently in the final phase of the Ninth Malaysia Plan(2006-2010)

In the latter Director General Instruction, concurrent delay issues were also briefly addressed. (1) Superintending

Officer named in the contract is reminded to take into consideration concurrent delay in assessing extension of time.The SO shall deem delay affecting the actual progress of the work at the point the work is actually carried out insteadof when the work is planned to have been carried out . (2) For delay caused by variation instruction from theemployer, the employer should only consider the delay effect directly flows from the variation instruction. (3) Criticalityof the effect of the delay to the progress of work should be analysed based on the critical path method. The delayevent occurred should have affected the critical activities of the project in order to grant extension of time. Theapproach in the guideline is consistent with Mr. Judge Seymour QC view in the case of The Royal Brompton HospitalNHS Trust v Frederick Alexander Hammond & Others .

Even though a guideline on extension of time and concurrent delay was just recently issued in 2008, as discussed inchapter three, there are only a single number of concurrent delay cases that was referred to the litigation for

settlement. The case discussed however was not even a government project which used another prominent standardform of contract produced by the Malaysia Institute of Architect.

The guideline produced is a very simple yet very straightforward approach on dealing with concurrent delay. However the author is of the opinion that more initiatives has to be undertaken by the PWD to provide awareness, up to dateknowledge and information regarding concurrent delay to the individuals directly involved in managing projects for thegovernment. As discussed in the previous chapter, concurrent delay is considered to be a major issue in the UnitedKingdom construction industry. It is also a problem in the other parts of the world. PWD should equip their workforceon the concurrent delay issue before it becomes a major problem in the Malaysia construction industry. Prevention isalways said to be better than cure.

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4.5 Summary Chapter

In the fourth chapter, the proposed approach of SCL Delay and Disruption Protocol on concurrent delay wasanalyzed. While there are people in the construction industry pleased to see the implementation of the guideline inthe SCL Protocol to manage delay and disruption, there are also others in the construction industry anxious with theinitiative to incorporate the SCL Protocol as a contract material because?. It is best to let the contracting partiesdecide on the terms and conditions of their agreement including inclusion of the SCL Protocols. The Public WorksDepartment of Malaysia has just recently come out with a very brief guideline on concurrent delay. It may be seen as

a little bit too late compared to the demanding scenario on the matter in the United Kingdom. Fortunately for thePublic Works Department and the Government of Malaysia, there is no lawsuit being taken all this while as there arestill lacks of awareness of the contractor on their rights in concurrent delay issue. This is however only an assumptionof the author on the issue until a proper study is carried out on the matter.

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