Construction and contract Law

ADDIS ABABA UNIVERSITY

ADDIS ABABA INSTITUTE OF TECHNOLOGY SCHOOL OF

CIVIL AND ENVIRONMENTAL ENGINEERING

CONSTRUCTION TECHNOLOGY AND MANAGEMENT

Written Assignment of construction and contract law on title

Time & Program: its Regulation & Management under the MDB-FIDIC
(2010) & the PPA (2011) Conditions of Construction Contracts & the Applicable
Laws: with special emphasis to Delay & Disruption Claims Management

Name ID No

Abdella Hashim ……......GSR/8002/15

Behailu Gezhegn …….... GSR/6922/15

Submitted to: - Instructor: Zewdu Tefera Worke

(Engineering Contracts Lawyer)

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Acknowledgements

First all we would like to thank the almighty GOD for everything that he did for us and our next
deepest appreciation goes to our instructor Mr. Zewudu Tefera (Engineering Contracts Lawyer)
for his valuable and endless share of academic knowledge and advice to perform our project
study well.

Finally, we would like to thank all those who give data and information for us for successful
completion of this project thesis.

ABSTRACT

Construction projects play an important role in the economic development of every country.
These essential sectors in Ethiopia phases usually delay risks which consequently, have negative
impacts in terms of quality, budget, and scope of construction projects. Effective time and work
program management in Construction contract highly solves delay followed by disruption claim
which have its own the legal remedies as clearly described in conditions of contract.

The main objective of the study is to find out the role of stakeholder in time management, to
identify the effect of time on the project and consequence on failure on time in relation to both
national PPA (2011) and international FIDIC MDB (2010) condition of contracts.

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Table of Contents page

1. CHAPTER ONE INTRODUCTION………….……..….………………………………..…2

1.1 Project Background…………………………………………………….………..……………2

1.2 Objective study………………………………………………………………….……………2

1.2.1 General Objective the study………………………………………….……….………2

1.2.2 Specific Objective…………………………………………………………………..……2

1.3. Scope of the Study………………………………………………...…………………………2

1.4 Methodology Employed………………………..………………………………….………2

2 CHANTER TWO LITRATURE REVIEW……………………………………….…………3
2. Background……………………………………………………………………..…………3
2.1 Work Program in construction contract……………………………………..……………3
2.1.2 Importance of a works program………………………………………………..………4
2.1.3 Work program as method of project planning ……………………...…………………4
2.1.4 Work program integral part of contract document ………………………….…………5
2 . 2 Theory of Time and its Management in construction project………………………………5

2.2.1 Classification and definition of time in construction contract……………………………5

2.2.2 Consequence of Failure on time in construction project…………………………..……7

2.2.3 Liquidated damages in construction contract………………………………………...…7

2.2.4 Time at Large…………………………………………………………….………………7

2.2.5 Time and its Management in construction project……………………….……...……8
2.3 Delay in construction project …………………………………….…………………………9
2.3.1 Delay claim………………………………………………………………………………9
2.4 Disruption In construction project……………………………...……………………………9
2.4.1 Disruption Claim…………………………………………………………...…………10

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3. CHAPTER THTREE DELAY AND DELAY CLAIMS MANAGEMENT………………10

3.1 Delay Claims Management…………………………………………………………………11
3.1.2 Causes of Project Delay …………………………………………………………………11
3.1.3 Types of delay ……………………………………………………………………...……11
3.1.4 Consequences of Delaying Construction Projects ………………………………………12
3.1.5 Delay management…………………………………………………………………….…13
4. CHAPTER FOUR DISRUPTION & DISRUPTION CLAIMS MANAGEMENT…………14

4.1 Disruption …………………………………………...……………………………………14

4.2. Major causes of disruption…………………………………….……………………………14

4.3. Disruption Claims…………………………………………………………..……………14

4.4. Disruption Claims Management…………………………………………………………15

5. CHAPTER FIVE DELAY CLAIMS AND DISRUPTION CLAIMS MANAGEMENT…17

5.1 Delay Claims Management……………………………….…………………………………17
5.1.2 Delay Claims related with parties ……………………………………………..…………17
5.2 Disruption claim management………………………………………….…………………21

6. CHAPTER SIX ROLE OF ENGINEER……………………………………………………22

6.1 The role of engineer in construction overview…………………………………………22

6.2. Role of Engineer in Time Management………………………………………..

………24

6.3. Role of Engineer in Delay claim Management ………………………..

………………25

6.4. Role of Engineer in Program Management

……………………………………………26

6.5. Role of Engineer in Disruption Claim Management ……………………..

………….…26

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7. CHAPTER SEVEN CASE STUDY…………………………………………………………41

7.1 Background………………………………………………………………….……………41

7.2 case study data……………………………………………………………………………42

7.3 Analysis of case ………………………………………………………………….………42

7.4 Conclusion and recommendation for our case study …………………………….………44

8. CHAPTER EIGHT COMPARATIVE TABLE AND ANALYSIS………………..…………45

9. CHAPTER NINE CONCLUSION AND RECOMMENDATION………………………...…42

9.1 Conclusion……………………………………………………...…………………………42

9.2 Recommendation…………………………………………………….……………………43

REFERENCES…………………………..………………………………………………………44

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CHAPTER ONE

INTRODUCTION

1.1 Project Background

Construction industry plays important role in providing the required infrastructure to improve
the quality of life. Sustainable development of construction industry is so crucial. Construction
projects require on-schedule completion; however, unexpected conditions or planning errors
may lead to failures, which can dent the successful realization of the objectives of time, cost,
scope and quality. The distinctive nature of construction projects in developing countries, such
as Ethiopia most of the time leads to delay; consequently, it negatively impacts the quality,
budget, and safety of construction projects. Construction projects undergo large deviations in
terms of schedule delays, project scope, cost overruns, and quality issues, thus resulting to
unsuccessful project accomplishment. Time overrun as delay and some of them describe that
the time overrun is an effect from the construction delay, no matter what it was described, time
overrun become the most general problem in construction industry [10].
Time overrun occur when the actual progress of a construction project is slower than the
planned schedule. Delay or time overrun will affect all parties involved in the project. It will
affect the profits which would be obtained if the project can be completed on the schedule. But
due to the time overrun, contractors had to spend more money on labor, plant and may lose the
opportunity to get the next project.
Hence, effective time management is very important and crucial to achieve successful
completion of construction projects. On large projects, the employer may appoint a consultant
to prepare a detailed program for the project including an outline for construction if a
contractor has not been appointed. Once the contractor is appointed, they will take
responsibility for programming the construction works, but the consultant may continue to
develop an overall quality check for the client.

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1.2 Objective of the Study

1.2.1 General Objective

The objective of this study is to identify and understand the value of time, consequence of failure
on time, in construction contract with respect to both National (PPA 2011) and International
(MDB-FIDIC 2010) standards.

1.2.2 Specific Objective

To define time and program concept in construction project

To understand the concept of time & program in general
To identify the effect of time on the project
To identify the role of stakeholder(especially Engineer) on project time & program
management
To suggest better time management technique in construction project
To define the concept of Delay and Disruption
To identify concept of Delay claims and Disruption claims

1.2. Scope of the study

The scope of the study is limited to identifying time related issues in construction project as
per both National (PPA 2011) and International (MDB-FIDIC 2010) standard conditions of
contract in Ethiopia’s construction industry.

1.3 Methodology of the Study

The methodology of we used in this study are information gathering from web sites , journals,
different books and literature review on the concepts of time, program, its regulation &
management in the construction projects and also case study was conducted. After we have
collected all necessary document and information we have analyzed, compared and contrasted

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both conditions of contract (PPA 2011 & MDB-FIDIC 2010)

CHAPTER ONE

LITERATURE REVIEW

2. Background

A construction project is said to be efficiently executed if it is accomplished within the contract

budget, required quality and expected time [1]. The distinctive nature of construction projects in
developing countries, such as Ethiopia, causes a higher degree of schedule delay risk consequently
have a negatively impacts on the quality & budget of construction projects. Most Projects in Ethiopia
faces unnecessary costs and delays as a result of ineffective work program & time management.
Time is valuable things in construction, as employer to earn value for money depends on time and the
contractor depends on time to earn profit. Any construction contract is time dependent. Failure on
time leads to delay (when the project is not completed within the agreed deadline) and finally, damage
& disruption (loss of productivity) outcome occurred [1].
Generally, we have tried to addresses one by one work program and time related issues during
our literature reviews.
2.1 Work Program in construction contract

Work Program is an essential management tools, enabling forward planning to ensure project are
delivered on time, within budget and required quality. A program of work as a formal approved
document used to guide both project execution and project control. It is a road map of
construction document that shows the series of work items, their relationship, and the time
allocated for their execution. [2].

Work Program will often identify:

Work items with respect to its duration
Exact dates and durations allocated to tasks.
Tasks which can be carried out simultaneously.

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The sequence of critical task

Tasks inter dependent

A program of works will often identify dates and durations allocated to tasks, a critical path (the
sequence of critical tasks upon which the overall duration of the program is dependent), Tasks
which can only be carried out after other tasks have been completed and tasks which can be
carried out simultaneously. For a program of works to be effective, it must be used as a tool to
help plan activities, monitor progress and identify where additional resources may be required.

As per FIDIC MDB (2010) Clause 8.3 regarding work program, the Contractor shall submit a
detailed time program to the Engineer within 28 days after receiving the notice. The Contractor
shall also submit a revised program whenever the previous program is inconsistent with
actual progress or with the Contractor’s obligations, and as per PPA (2011) Clause 41
Completing the work program given as part of the Bid, the Contractor shall within the time stated
in the SCC provide the Engineer with a program of implementation of the tasks, broken down by
activity and by month. An update of the program shall be a program showing the actual progress
achieved on each activity and the effect of the progress achieved on the timing of the remaining
work, including any changes to the sequence of the activities.

2.1.2 Importance of a works program

A Works Program document describes the sequence in which tasks must be carried out so that a
project (or part of a project) can be completed on time. Work program is important in [6].
Improving planning of resources such as labor and equipment
Estimate cost and budget
It tracks activities and quality performance as the project proceeds
Assigns responsibility to team members
For Management
It is a cost control technique
Shows relationship between activities
In General, the program of works shows relationship between activities, it enables one to see
whether the duration the client has stipulated is achievable provide with feedback in work done,
tracks activities and quality performance as the project proceeds, cost control technique and
predicts the project target. A program of work is of importance to construction since it provides a
means to communicate the construction strategy.

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2.1.3 Work program as method of project planning

Project Designer/managers use different methods of project scheduling with effective work
program in order to estimate the time required for projects before starting. The period of
working on a project can be divided into three parts, which are before, during, and after
completion of construction. The first part, before planning, includes planning and estimation of
the project duration, cost, materials, number of workers, and sequence of activities.
Project work program in scheduling is vital because once everything is planned, everyone,
including engineers, workers, contractors, and the owner of the project will get an idea about
when they have to start and finish constructing, how much the project costs, what materials,
machines, equipment are needed, how many workers and engineers are required, what type of
skills from the workers and engineers are sought, and so on (planning) [5].
So during the construction period, most of the issues and operations would be clear and
understandable prior to happening. Another advantage of project planning is that in case of
needing a type of material, equipment, or any machine, which might be unavailable in the
country, we can order them earlier, so it will be ready to use when needed for a particular
activity of the project [7].

Otherwise, it may delay the project for months or more. In the case of the unavailability of
any type of machine or materials during the construction process, everyone has to wait and
delay their job, including workers and engineers. So before starting any project, the project
manager, engineers, and supervisors have to make sure of the material deliveries on time.

2.1.4 Work program integral part of contract document

The Work program is not usually included as a contract document and is therefore not
considered binding on the parties. In this case the Work program will be used as an indicative
tool for the parties, suppliers and consultants for administering the progress of the works.
Where the contract lists the program as a contract document, the program will be binding on
the parties. Any departure from it will constitute a breach of contract entitling the aggrieved
party to compensation if they can prove they have incurred additional costs or delay
Employers primarily concerned with completing stages of the works by precise dates may be
tempted to include the program in the list of contract documents. The advantage for the

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employer is that it will afford him greater control over the manner and order in which the
contractor will carry out the works. It will allow him to specify the works that are a priority
and oblige the contractor to priorities the same matter. The advantage for the contractor is that
he will be aware of what is expected of him from the outset. The same applies to third parties,
such as suppliers and consultants, who are often ignorant or left in limbo as to the timing of
their own contributions to the works. Where this approach is adopted, the contract should
clearly set out which part or parts of the program are binding. It could be that only the
key milestone dates are binding. Conversely, it could be that all dates, the order of the
works and the methods employed by the contractor are obligatory.

2 . 2 Theory of Time and its Management in construction project

2.2.1 Classification and definition of time in construction contract

Time is measurable period during which an action, process or condition exists or continues. Time
is all things (time is money, times are life, time is gold etc) we can relate with project
management. Time management in project management is about allocating resource to
completing tasks on time while staying within the approved budget.

Project time management refer to a component of aver all project management in which a
timeline is analyzed and developed for the completion of a project
Construction contract define time ‘‘the number of days or dates related to construction phases
that as stated in construction documents applies to achievement of substantial completion of the
work’
Time in construction contract can be classified as
Commencement time
Completion time
Sectional completion time
Extension time
Progress time
Commencement date: The date on which the contractor must begin work on the job site is
specified in the contract. (PPA 2011Sub-Clause 8.1 & FIDIC MDB 2010 clause 1.1.3.2)

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A contractor must start work based on a commencement date. The date of a contract's
commencement is frequently the source of argument in the construction industry, and it is
advised that a commencement date be agreed upon as soon as feasible by all parties involved.
Completion Date: the time for completing the work calculated from commencement date. (PPA
2011clause 8.2 & FIDIC MDB 2010 clause 1.1.3.3)
Most contracts specify a deadline by which the contract's work must be completed. This is not
the day by which all contract duties must be fulfilled, but rather the date by which substantial
practical completion must be certified. That is the date by which the work will be finished and
the client will be able to take possession of the property.

Sectional Completion Time: If the intention of the parties is that the contract work should be
completed and handed over in phases, it is essential that the contract documents make proper
provision for this, each with its own time for completion and own related contractual issues
(such as insurance, retention, defect liabilities and so on). (FIDIC MDB 2010 clause 10.2) and
PPA 2011 provision for partial acceptance: Clause 86 Partial Acceptance

Extension time: means an extension of the period allowed for completion of the Works. A

delay that could not have been reasonably anticipated at the time of contract signing is known as
an extension of time the contractor is released from responsibility for damages such as liquidated
damages from the initial date of contract completion for the duration of the claim upon the
granting of an extension of time. Time extensions are granted based on the contractor being able
to demonstrate that the delay was caused by events beyond their control. The contract guidelines
typically specify the provision of time extension requests [8]
Progress time: is the time from the commencement date to completion date. It is a time that
identifies the performance project by comparing the project’s progress with the planned
progress. Sometimes, it provides the forecasting analysis. The project progress time provides
critical information to stakeholders on project health regularly.

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2.2.2 Consequence of Failure on time in construction project

Time plays the key role in construction project. Owners, design professionals, and contractors
use time to calculate the impact of lost performance. Yet delay and disruption is commonplace
in construction projects. The reasons for the delay or disruption may vary, but delay or
disruption is a major concern in the construction industry, and has a major impact on any
project. Indeed, delay and disruption claims are some of the most expensive, difficult, and, time-
consuming disputes to litigate

2.2.3 Liquidated damages in construction contract

Liquidated Damages Clause is generally recognized and applied in the common law system.
This clause is applicable at law when the terms of the contract are breached. Liquidated
damages are not penalties, they are predetermined damages set at the time that a contract is
entered into, based on a calculation of the actual loss of the party’s is likely to incur. They are
generally set as a fixed percentage of from the total sum. It may be complicated where the works 
are phased, where may be partial possession and so on. In the case of sectional completion, it is
important that separate completion dates and liquidated damages are set out in the contract for
each section [8].
Liquidated damages can be beneficial for the client, as they remove their obligation to prove
actual losses in the event of delay occurring. They can also be beneficial to the contractor as
they limit their liability to a known amount in the event of delay. PPA(2011) clause 27 describe
liquidated damage, if the Contractor fails to carry out any or all of the Works within the period
specified in the Contract, the Public Body may without prejudice to all its other remedies under
the Contract, deduct from the Contract Price, as liquidated damages

Mechanisms allowing extensions of time are not simply for the contractor's benefit. If there was no

such mechanism and a delay occurred which was not the contractor’s fault, and then
the contractor could no longer be required to complete the works by the completion date and would

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only have to complete the works in a 'reasonable' time. With no enforceable completion date,

the client would lose any ability to claim liquidated damages for other delays that are
the contractor's fault [8].

2.2.4 Time at Large

Contracts typically specify a deadline for completing the work outlined in the contract. The term
'time at large' refers to circumstances in which there is no deadline for completion or where the
deadline has become invalid. The contractors are no longer obligated to execute the work by a
specified deadline.
The term "Time at Large" is not a legal term; it refers to a scenario in which no specific
completion date has been established, either due to a lack of contract conditions or as a result of
events and the operation of law. Because the time or date for completion is not specified before
the task is done, but is established after the work is done, time is said to be at large. When
liquidated damages are a concern, the term "Time at Large" is sometimes used in construction
contracts. When time is at large, it is asserted that liquidated damages cannot be imposed
because there is no fixed date from which they may be calculated. In some cases, the completion
date may be significant to termination and the question of whether or not the failure to complete
was a violation of the contract.

2.2.5 Time and its Management in construction project

Time management is important in any construction project. Each and every party in
construction process, the lender, owner, engineers, contractors, and subcontractors, bank and
insurance all should value for time in construction project. Without proper time management,
many problems will occur such as extension of time or time overrun [9].
Some of the researchers describe time overrun as delay and some of them describe that the
time overrun is an effect from the construction delay, no matter what it was described, time
overrun become the most general problem in construction industry.
Time overrun occur when the actual progress of a construction project is slower than the
planned schedule. Delay or time overrun will affect all parties involved in the project. It will
affect the profits which would be obtained if the project can be completed on the schedule. But
due to the time overrun, contractors had to spend more money on labor, plant and may lose the
opportunity to get the next project.

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Hence, effective time management is very important and crucial to achieve successful
completion of construction projects. On large projects, the client may appoint a consultant to
prepare a detailed program for the project including an outline for construction if a contractor
has not been appointed. Once the contractor is appointed, they will take responsibility for
programming the construction works, but the consultant may continue to develop an overall
quality check for the client [11].
During the planning stage, all work activities should be properly understood, and planned in
detail to optimize the allocation of resources and reduce the potential for ‘unknowns’.
Estimates can then be made of how long each activity will take. This is critical to the setting of
milestones and deadlines, for allocation of resources, and for determining the pricing of
contracts and cash flow requirements.
There are various time management techniques and software packages used for project
planning and scheduling worldwide. Each of the techniques has different functions and process
in providing a list of dates on which certain items are to be completed. Two main technique
used in time management in construction project is conventional time management method &
software package time management method.
Conventional time management method: the most common method for effective project
time management technique. There are several techniques or methods commonly used for
managing time in construction projects are; [5].
Critical path method
Gantt bar Chart method
Milestone date programming techniques
program evaluation and review technique
Line of balance method
Precedence network diagram
Simulation method

2.3 Delay in construction project

Construction delay is defined as time overrun beyond the completion date specified in the
binding contract agreed by both parties for the project delivery [14]. it as an event or act which
prolongs stipulated time to complete a project of the contract itself as additional days of work.
Delays in construction can also be defined as the execution of a project at a later date other
than the projected date. One of the most common problems associated with the Construction

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industry is the issue of delay in construction projects.

Delays in construction come at a costly price and achieving timely delivery of projects is
beneficial to the project and construction team. Along with cost and quality, project schedule is
often regarded as a significant aspect of the construction management life cycle, as well as one
of the drivers for project success. Despite its importance, most construction projects both in
developed and developing nations face project delays, which results a severe problem [14]

2.3.1 Delay claim

In almost every construction contract there will be a specified date by which the project must
be completed. If the contractor fails to complete the work in the completion date stated in the
contract, the employer would have a claim against the contractor for damages for breach of
contract. A contractor may insist the work was completed in a timely fashion in an effort to
resist a delay claim from the employer when no precise completion date is stated in the
contract or elsewhere in a written or verbal agreement between the parties [3].
However if time of completion is clearly stated in contract the party can claim for the delay of
project. Contractor may claim for
 extension of time,
 additional costs arising as a result of the delay
And also the employer clams for
 damage of time on the delivery project
 Quality issues related to delay.

2.4 Disruption In construction project

Disruption is defined as disturbance, hindrance or interruption to a Contractor’s normal working
methods, resulting in lower productivity or efficiency in the execution of particular work
activities [15]. Disruption requires the demonstration of entitlement, causation and damages. It’s
easier to prove delay – which is a matter of fact – than to demonstrate disruption. Demonstrating
disruption is more of an art than a science, however there are guidelines and procedures to follow
for an analysis to be acceptable and effective. Extensive and detailed records are a key
requirement for a successful claim for disruption. If there is only one activity and that activity is
delayed by the procuring party, then under most forms of contract the delay to the activity may
be claimable as an extension of time and any delay costs may be recoverable as well.

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However, there remains a cost in demobilizing and remobilizing the labor working on the activity
and this will be the disruption cost. Over this single activity the disruption is easy to identify,
however, where multiple activities are affected, the disruption costs become more difficult to
establish and measure. Where several events which affect the progress of the works are disrupted
the impact of any one event may not be discernible from the impact of another event. Disruption
is not a cause of action at law in its own right and the contractor must explain the legal basis of
entitlement. Most standard forms of contract do not address recovery for disruption but may give
entitlement to claim some of the events that could lead to it in the form of loss and expense or
damages. When it comes to explaining the cause of reimbursable disruption, contractors often
rely upon multiple and intermingled events to explain loss of productivity and entitlement. Once
those items that can be dealt with in isolation have been quantified, it may be acceptable to deal
with the remaining disruption globally. However, the bar for acceptance of a global claim is very
high and therefore carries significant risks.

2.4.1 Disruption Claim

Any construction contract is time dependent. Failure on time leads to delay (when the project
is not completed within the agreed deadline) and finally, damage & disruption (loss of
productivity) outcome occurred.
Claims for general disruption arise from the assumption that contractors arrange the activities
required to complete a project in an efficient sequence. On that assumption, any event that affects
the sequence of the works can lead to inefficient use of plants and manpower, which in turn
would increase the costs of completing the project. When the employer is responsible for such
events, a contractor is entitled to recover those costs.
Claims for disruption are generally difficult to prove. Contractors must show that the additional
costs are caused by events the employer is responsible for instead of the contractor’s inefficient
practices. The most commonly used method to prove disruption costs is the measured mile
method, where the contractor compares the efficiency in the disrupted section of the works with
the efficiency in an identical unaffected section. It will only work, however, when the contractor
is able to identify an identical unaffected section of the works.

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CHAPTER THREE

DELAY AND DELAY CLAIMS MANAGEMENT

3.1 Delay Claims Management

3.1.2 Causes of Project Delay

In Construction projects, various modifications occur at the construction stage. Design
failures, omissions, unforeseen conditions or new needs, and change requests from the owner
or other stakeholders are all examples of these changes, which are frequently tied to design
concerns [14].
According to a study on Ethiopian public construction project delays, the top ten influencing
factors are contractor financial difficulties, escalation of material prices, infective project
planning, and scheduling, delay in progress payments for completed works, lack of skilled
professionals in contractor organizations, fluctuating labor availability, late delivery of
materials, low labor productivity, unqualified/inadequate experienced labor, and insufficient
data.
Various scholars suggest and agree that the causes of project delay in most part of the world
are:
In adequate work program
poor site management
Improper planning
Improper labor supply
Inadequate finance of the client
Not timely paying for completed work
Problems related to subcontractors
Inadequate experience of the contractors
Material shortage
Availability and failure of construction equipment
lack of communication between parties
Errors during the construction stage.

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3.1.3 Types of delay

The deviation of project time from original schedules either starting and finishing dates of the
activities plan classified as critical or non critical delays, excusable or non excusable delays,
Compensable or non compensable delays & concurrent delays [4]
Critical or non-critical Delays a delay that is responsible for extending project duration is
a critical delay these delay includes extended of field overhead, unabsorbed home office
overhead cost, liquidated damage, idle labor & equipment cost, labor & material cost
escalation etc. However delay that is not the cause of extended project duration is a non-
critical delay; on the other hand, it will have an effect in terms of activities getting completed
late than scheduled completion.

Excusable & non-excusable Delay: a delay where the contractor is entitled for extension of
time or compensation or both, under the terms & conditions of contract is excusable delay. In
this case, contractor does not have any control on the activity getting delayed. The causes may
be; force measure clause, natural disaster, political/social unrest, terrorist attacks, delay from
client (approvals, decisions, etc.), etc all these delay are compensable delay.

However, a delay where the contractor is fully responsible for the activities getting delayed
and resulted in extending project duration (responsible for critical delays) are non excusable
delay. In this case, the contractor has to bear the risk of cost consequences including the
liability to pay damages for itself but possibly for the other parties as well. The causes may be
delayed mobilization, delayed Procurement, delayed submission of important documents
planning & scheduling, critical events that were not highlighted to client on right time, etc.

Compensable or non-compensable Delays Scenario where contractor is liable for Time

Extension & Cost compensation is compensable delays. All compensable delays fall under
excusable delays-Whereas, if the contractor is solely at fault for a delay event, it is termed
as non-compensable delay. However, non-compensable may fall under critical, non-critical,
excusable or non-excusable; depending upon the situation it has created and conditions of
contract.

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Concurrent Delays: a situation where more than one delay event occurs at the same time
affecting multiple activities simultaneously/independently affecting the completion is
a concurrent delay. However, not all those events enable the contractor to be entitled for
extension of time & cost claim. Importantly, it is the causes of delay rather the delay
themselves, that must overlap.
3.1.4 Consequences of Delaying Construction Projects
Delaying construction projects is a common problem in Ethiopia which results increase in the
project cost. Construction Projects are essential requirements and needed to be done to meet the
population demand and necessities. So when a project is delayed, a huge amount of money is
going to be spent and wasted, however, that amount could be invested for other projects or used
for buying new equipment. There are many Data showing that the delay in construction projects
causes
 Time overrun and
 Cost overrun.

3.1.5 Delay management

Delay claims management in construction is a main key to the success of any project in
today’s litigation world. Methods of delay analysis have been developed over the last two
decades to assist in the investigation about project delays and in the assessment of causation
and allocation of such liability [4].
One of the most prevalent ways of assessing and handling claims is to analyze time delays
suffered in the project. There are several methods through which this task can be performed.
Among several methods Mr. Anwar M. Omer (Gulf project management magazine) have
described four main methods applied in managing delay claims are:

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A) Planned vs. As-built method: this approach is probably the oldest and most straightforward
one. It compares activities from Contractor’s planned Baseline Schedule with the actual
Completion Dates of the delayed activities on the “As-Built” Schedule. The activity or
activities need to be clearly falling on the Baseline Critical Path
B) Impacted As-planned method: In this approach delayed event(s) by the client are
incorporated in the planned Baseline Schedule and then the re-run is done to determine the
resultant impact of the delayed event(s) to particular Milestones and overall project. In this
method, the contractor inserts the owner caused delays only.
C) Collapsed as-built (known as “but for” method): The beginning point of this approach is to
develop “As Built” schedule that reflects the actual dates and actual sequence of schedule
activities. In this method, the owner caused delay event(s) shall be removed from the As-
Built schedule to show what the completion date for particular milestones and/or overall
project completion would have been if the owner delay events had not occurred i.e.
recalculate the schedule to determine new completion date in the absence of owner caused
delays
D) Windows/slide method: Windows analysis (also known as contemporary method) is based
on the analysis of the effect of delayed events on the entire length of the project by looking
at the events which have impact within the Schedule at the reporting time period when the
events occurred.

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CHAPTER FOUR

DISRUPTION & DISRUPTION CLAIMS MANAGEMENT

4.1. Disruption

Disruption (as distinct from delay) is disturbance, hindrance or interruption to a Contractor’s

normal working methods, resulting in lower efficiency. If caused by the Employer, it may give
rise to a right to compensation either under the contractor as a breach of contract [15]

A distinction should be made between prolongation claims (involving costs and losses incurred
as a result of delays to the activity in question or the works as a whole which have led to critical
delay to the contract completion date) and disruption claims (which involve those additional
costs and losses incurred during extended or disrupted periods of activities usually without any
effect on the completion date for the works [18].

4.2. Major causes of disruption

Disruption can be caused by a variety of events, some of which are excusable, some are neutral,
and some are non-excusable. Common examples include, but are in no way limited to; change
orders, variations, instructions, late information, late approvals, adverse inclement weather, out
of sequence working, excessive overtime working, interface works with others, piecemeal
access, stacking of trades, abortive works, acceleration, mitigation, new and additional imposed
obligations, etc. These factors can occur, operate and compete at the same time, making it
practically impossible to separate out each of them to determine how much disruption was
caused by each factor. This makes it difficult to establish definitive causal linkages and may lead
to claims being more global in nature, i.e. all of these factors listed above affected the actual
performance of the labor, reducing their productivity, extending and prolonging the work
activities and, where critical, caused delay to the date for completion of the project. Therefore, it
is common that loss of productivity cases cannot be proven purely by reference to records,
schedules and other documentation, which will likely increase the reliance on witnesses of fact
and the opinion of expert witnesses [1].

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4.3. Disruption Claims

Contractor’s disruption claim arises when an owner changes the method and/or
sequence of construction from that upon which the contractor based its bid. When the
planned method of completing the project is disrupted, contractors incur increased labor costs
because it takes them more time to complete the task than originally contemplated. When this
occurs, contractors either allege a breach of an express contract provision that requires
cooperation between the owner and the contractor, or a breach of the implied duties of the owner
to cooperate with the contractor or to refrain from hindering the contractor.

To counter a contractor’s disruption claim, owners often argue that they had the right in the
contract to change the schedule and, therefore, the sequence of construction because of the terms
of the contract. Owners often urge that these express terms trump the implied duty to cooperate,
thereby undermine the legal basis for a contractor’s disruption claim.

Disruption damages are the result of the timing or sequence of the flow of work (e.g., lost
productivity) and not necessarily an extension beyond the originally anticipated project
completion. Loss of productivity claims are difficult, but vitally important, and almost always
require expert testimony. Productivity is a measurement of rate of output per unit of time or
effort, usually measured in labor hours or equipment hours. A loss of productivity, also
sometimes known as “disruption” or “loss of efficiency,” can have significant negative effects on
a contractor’s bottom line. There can be many causes of disruption on a project such as differing
site conditions, design deficiencies, or lack of access to the work. Quantifying that loss of
productivity is the difficult part. Knowledgeable construction counsel and knowledgeable experts
can guide you through this difficult process.

4.4. Disruption Claims Management

Importance of records

Whatever method is used to measure disruption, the most important requirement is to have
contemporaneous records that support the disruption calculations to the required level of proof.
The better the records, the greater chance of a successful outcome, Unlike prolongation,
disruption claims are quite often considered as an afterthought at the end of the project, using the
existing day to day records in the best manner possible. Unfortunately, at this stage the
opportunity to put systems in place to measure disruption and collect sufficient contemporaneous

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records may have been lost. As mentioned, some types of project (linear/repetitive work) are
more suited to identifying and measuring disruption. With these projects, especially those of
larger value, it may well be cost effective for contractors to employ resources (project
planning/quantity surveyors) solely for the purposes of putting systems in place to ensure
appropriate contemporaneous records are kept to support the disruption claim. [15, 17].

Valuing the disruption

Once it has been established that an event (or events) occurred that caused disruption, then the
next step will be to value the disruption. Disruption can be caused by a variety of events such as
late information/approvals, delayed access, variations, inclement weather, suspension of the
works etc. The starting point, as ever, will be to review the Conditions of Contract to determine
the remedy, if any, for the particular Disruptive event.

Typically, disruption will be assessed as loss and/or expense (damages) or valued as a variation,
where the valuation of variation rules will apply. Where a measured mile approach has been used
to measure the disruption caused by a variation, the valuation approach adopted will likely be a
re-rate with the planned allowances or measured mile production levels replaced by actual
production levels demonstrated by records. This will require the affected contract rate(s) to be
broken down into its constituent components (labor, plant, materials and overheads and profit
etc.). Care must be taken to ensure that only the affected elements of the rate are adjusted. For
instance, original plant mobilization and demobilization allowances should not be factored into
the calculation.

Where disruption is to be valued on a loss and/expense basis it will be necessary for the
contractor to provide documentation to prove the costs it has incurred. In such circumstances the
contractor will, where possible, be responsible for mitigating the ongoing losses caused by the
disruption, for example by relocating idling resources to other areas of the project unaffected by
the disruptive events. In circumstances where a contractor lacks sufficient records/documents to
link the costs being claimed to specific events then a disruption claim is sometimes advanced on
a ‘total cost’ basis. In Walter Lilly v Mackay & DMW Developments it was stated that there was
nothing in principle wrong with a ‘total’ or ‘global’ cost claim.

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However, there are added evidential difficulties in most cases. In order for a total cost claim to
succeed a contractor must generally demonstrate:

 The impracticability of directly proving the losses incurred;

 The reasonableness of its accepted tender;
 The reasonableness of its actual costs being claimed; and that
 The contractor is not responsible for any of the additional costs being claimed and has
adequately identified and removed any costs for which it could be considered responsible.
Given these added evidential requirements, reliance on the total cost approach should be seen
as a last resort when there is no other option available [15, 17].

Final thoughts

Disruption claims require thought, detailed investigation and most of all records in order support
the disruption analysis/calculations. Unfortunately, far too often disruption claims are considered
as an afterthought at the end of a project when the losses have been incurred and the opportunity
to collate adequate records and prove the claim to the required standard has gone. Taking the
time to put systems in place at project commencement and proactively collecting
contemporaneous records throughout the duration of the project will greatly improve the chances
of a successful outcome [15, 17]

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CHAPTER FIVE

DELAY CLAIMS AND DISRUPTION CLAIMS MANAGEMENT

5.1 Delay Claims Management

The nature of construction project sometimes faces unpredictable circumstances. The

circumstances which project face are usually delay followed by claims. Where the work is
delayed for reasons outside the contractor's control, the contractor may be able, in certain
conditions, to claim not only an extension of time, but also additional costs arising as a result of
the delay and also the employer clams for time for delivery project and quality issues [9].
Compensation may be recovered for disruption only to the extent that the contract
permits or there is an available cause of action at law. The objective of a disruption
analysis is to demonstrate the loss of productivity and hence additional loss and
expense over and above that which would have been incurred were it not for the
disruption events for which the Employer is responsible.

The construction industry often associates or conflates delay and disruption. While they are both
effects of events, the impacts on the works are different, the events may be governed by separate
provisions of the contract and governing law, they may require different types of substantiation
and they will lead to different remedies. Having said that, the monetary consequences of delay
and disruption may overlap and, further, delay can lead to disruption and, vice versa, disruption
can lead to delay.

Basically, claims in construction contract commenced by the construction parties are

Employers’ Claims
Contractors’ Claims,

5.1.2 Delay Claims related with Employers

The areas in which employers bring claims against contractors are:
the time for delivery of a project
the quality of what is being delivered
termination in case of failure in obligation
payment related issues
Claims concerning the time: In almost every construction contract there will be a specified date

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by which the project must be completed. If the contractor fails to complete the work in the
completion date stated in the contract, the employer would have a claim against the contractor
for damages for breach of contract. As stated in FIDIC MDB (2010) clause 8.7: If the
Contractor fails to comply with Sub-Clause 8.2 [Time for Completion], the Contractor shall
subject to notice under Sub-Clause 2.5 [Employer’s Claims] pay delay damages to the
Employer for this default. These delay damages shall be the sum stated in the Contract Data,
which shall be paid for every day which shall elapse between the relevant Time for
Completion and the date stated in the Taking-Over Certificate. However, the total
amount due under this Sub- Clause shall not exceed the maximum amount of delay damages (if
any) stated in the Contract Data. These delay damages shall be the only damages due from the
Contractor for such default, other than in the event of termination under Sub-Clause 15.2
[Termination by Employer] prior to completion of the Works. These damages shall not
relieve the Contractor from his obligation to complete the Works, or from any other duties,
obligations or responsibilities which he may have under the Contract. And also PPA(2011)
clause 27 as liquidated damages the following:

1) A penalty of 0.1% or 1/1000 of the value of undelivered Service for each day of delay until
actual delivery or performance,

2) The cumulative penalty to be paid by the Contractor shall not exceed 10% of the contract
price. If the delay in performing the contract affects its activities, the public Body may
terminate the contract by giving advance notice to the Contractor pursuant to GCC Clause 21
without any obligation to wait until the penalty reaches 10% of the value of the Contract.

3) If the Intended Completion d a t e i s extended after liquidated damages have been paid,
the Engineer shall correct any overpayment of liquidated damages by the Contractor by
adjusting the next payment certificate.

Generally, where there has been delay to a construction project, an employer will generally have
a claim against the contractor for liquidated damages.

Claims concerning the quality of the works: In almost every construction contract, the
contractor’s primary obligation is to deliver the project in accordance with the employer’s
specifications by a specified date. The contractor should complete the work as per specification
and correct the work if it have defect, in the defect liability period.

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If a contract does not provide for a defects liability period, or if defects remain un remedied or
other works remain incomplete within a reasonable time of them being identified during the
defects liability period or, in the worst case, at the end of the defects liability period, or if the
employer subsequently identifies further defects, the employer will have a claim against the
contractor for breach of contract. The measure of damages recoverable by the employer will be
the costs of rectifying the defects. as per FIDIC MDB(2010) clause11.1 in order that the Works
and Contractor’s Documents, and each Section, shall be in the condition required by the Contract
(fair wear and tear excepted) by the expiry date of the relevant Defects Notification Period or as
soon as practicable thereafter, the Contractor shall:

(a) complete any work which is outstanding on the date stated in a Taking-Over Certificate,
within such reasonable time as is instructed by the Engineer, and
(b) Execute all work required to remedy defects or damage, as may be notified by (or on behalf
of) the Employer on or before the expiry date of the Defects Notification Period for the Works or
Section (as the case may be). If a defect appears or damage occurs, the Contractor shall be
notified accordingly, by (or on behalf of) the Employer.
But FIDIC MDB (2010) clause11.4 states that, If the Contractor fails to remedy any defect or
damage within a reasonable time, a date may be fixed by (or on behalf of) the Employer, on or
by which the defect or damage is to be remedied. The Contractor shall be given reasonable notice
of this date. If the Contractor fails to remedy the defect or damage by this notified date and this
remedial work was to be executed at the cost of the Contractor under Sub-Clause 11.2 [Cost of
Remedying Defects], the Employer may (at his option): (a) carry out the work himself or by
others, in a reasonable manner and at the Contractor’s cost, but the Contractor shall have no
responsibility for this work; and the Contractor shall subject to Sub-Clause 2.5 [Employer’s
Claims] pay to the Employer the costs reasonably incurred by the Employer in remedying the
defect or damage; (b) require the Engineer to agree or determine a reasonable reduction in the
Contract Price in accordance with Sub-Clause 3.5 [Determinations]; or (c) if the defect or
damage deprives the Employer of substantially the whole benefit of the Works or any major part
of the Works, terminate the Contract as a whole, or in respect of such major part which cannot be
put to the intended use. Without prejudice to any other rights, under the Contract or otherwise,
the Employer shall then be entitled to recover all sums paid for the Works or for such part (as the
case may be), plus financing costs and the cost of dismantling the same, clearing the Site and
returning Plant and Materials to the Contractor.

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Claim concerning termination: sometime construction contract terminated if contractor unable to

perform. When the contractor is in default, the employer has the remedy to terminate the
contractor. However, the consequences of a wrongful termination of a contract can be serious
and can expose the employer to a substantial claim for damages from the contractor, extending to
the profit that it claims to have lost as a result of the wrongful termination. Example termination
of a partially completed project may cause disruption to the overall completion of the project.
Generally, an employer should have to do cost benefit ratio before terminating the contract.

5.1.3 Delay Claims related with Contractors

Contractors are required to complete projects on time, at the required quality and at the agreed
cost. However, due to a number of factors which hinders the contractor and leads to claim. The
areas in which contractors bring claims against employers are:
Extension of time
Force Majeure
Variation of works
Loss and expense
Payment related issues
Claim related to extensions of time: In most projects, contractors are required to complete the
project by a set date. However, a number of events can delay a project, some of which are
outside of a contractor’s control. Accordingly, contractors cannot always be held responsible for
delays and liable for the resulting losses. Events that can give rise to an extension of time
include Delay caused by the employer and events outside of both parties’ control and that are
the employer’s responsibility under the contract, such as force majeure events, material or goods
shortages or delays caused by the authorities; and variations to the scope of works. If the
contractor fulfills a requirement from his side and faces things beyond his control he can claim
for extension of time. PPA (2011) clause 73 states that The Contractor may request an extension
of the Intended Completion Date if he is or will be delayed in completing the contract by any of
the following causes:

a) Exceptional weather conditions in the Federal Democratic Republic of Ethiopia;

b) Artificial obstructions or physical conditions which could not reasonably have been foreseen
by an experienced Contractor;

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c) Compensation Event occurs or a change order for modification is issued which makes it
impossible for completion to be achieved by the Intended Completion Date;

d) Administrative orders affecting the date of completion other than those arising from the
Contractor's default;

e) Failure of the Public Body to fulfill his obligations under the Contract;

f) Any suspension of the works which is not due to the Contractor's default

g) Force majeure;

Claim related to Loss and expense: Claims for loss and expense happen when contractors
suffered loss because of an employer breach of contract and if contractor have additional money
under the contract. To successfully claim for loss and expense for breach of contract, a contractor
needs to prove that there was an obligation of employer, things have been breached by the
employer or its representatives, there must be tangible monetary loss [9].
The most common claim for loss and expense are
Prolongation cost
Disruption
Acceleration
When a project is delayed because of an event for which the employer is responsible, the
contractor is entitled to an extension of time, as well as any losses arising from the delay. These
losses are referred to as prolongation costs.
Prolongation costs can include site and office overheads, financing charges arising from money
borrowed to fund the project and loss of profit. To successfully claim for prolongation costs,
contractors need to provide detailed particulars and evidence that each of the claimed costs were
caused by employer delay.
Acceleration claims arise when the employer instructs the contractor to complete the works
within a shorter period than originally required under the contract or because of one or more
events for which the employer is responsible.
Claims for disruption occur from the assumption that contractors arrange the activities required
to complete a project in an efficient sequence. On that assumption, any event that affects the
sequence of the works can lead to inefficient use of plants and manpower, which in turn would
increase the costs of completing the project. When the employer is responsible for such events, a
contractor is entitled to recover those costs.

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Claim related to Force majeure: for events beyond parties’ control may arise during a project,
affecting the contractor’s ability to perform his or her contractual duties. Event which are
considered as force majeure are war, terrorism, civil unrest and severe adverse weather
conditions etc.
A force majeure claims act that:
 is beyond the reasonable control of the contractor
 was not reasonably foreseeable at the time of entering the contract;
 could not have been avoided;
 is not attributable to the employer; and
 prevents the contractor from performing its obligations under the contract
PPA (2011) clause 18 Define, “Force Majeure” shall mean an event or events which
are beyond the reasonable control of a Contractor, and which makes a Contractor’s
performance of its obligations hereunder impossible or so impractical as reasonably to be
considered impossible in the circumstances. And FIDIC MDB (2010) describes Force
Majeure on clause 19.1
5.2 Disruption claim management

Delay and disruption issues that ought to be managed within the contract all too often become
disputes that have to be decided by third parties (adjudicators, dispute review boards, arbitrators,
judges). The number of such cases could be substantially reduced by the introduction of a
transparent and unified approach to the understanding of programmed works, their expression in
records, and the allocation of responsibility for the consequences of delay and disruption event[7]

Delay and disruption are inherently interrelated. A loss of productivity (i.e. disruption) can lead
to delay and, if the impacted activities are on the critical path, that can be critical delay, Hence,
the Contractor may rely upon a disruption analysis to support a critical delay claim in addition to
its delay analysis. It is possible for work to be disrupted and yet for the works still to be
completed by the contract completion date. In this situation, the Contractor will not have a claim
for an EOT, but it may have a claim for the cost of the lost productivity.[7]

As regards a claim for disruption under the contract, most standard forms do not expressly
address recovery for disruption; although they do address some of the specific events that could
lead to disruption, such as unforeseen ground conditions and untimely approvals or instructions
from the CA. Disruption is SCL Delay and Disruption Protocol 2nd Edition: February 2017 44

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also not a cause of action at law in its own right. The Contractor must therefore explain in its
claim document the legal basis of its entitlement.

As regards a claim for disruption under the contract, most standard forms do not expressly
address recovery for disruption, although they do address some of the specific events that could
lead to disruption, such as unforeseen ground conditions and untimely approvals or instructions
from the CA. Disruption is SCL Delay and Disruption Protocol 2nd Edition: February 2017 44
also not a cause of action at law in its own right. The Contractor must therefore explain in its
claim document the legal basis of its entitlement.

Compensation may be recovered for disruption only to the extent that the contract
permits or there is an available cause of action at law. The objective of a disruption
analysis is to demonstrate the loss of productivity and hence additional loss and
expense over and above that which would have been incurred were it not for the
disruption events for which the Employee is responsible.

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CHAPTER SIX

ROLE OF ENGINEER

6.1 The role of engineer in construction overview

The Engineer can be natural or/and juridical person or organization (consultant) who can make
relationship (contract) to provide consultancy or intellectual service to the client.

According to civil code of Ethiopia, proclamation number 165 of 1960, Book V, Hiring of
intellectual work, from Article 2632 to 2638 consider an engineer as “intellectual” entity who has
contract or legal relation with employer.

In regards to PPA 2011, Section 7, General Condition of contract, Definition 1.2, “n” state,”
‘Engineer’ means a person named in the Special Conditions of Contract or appointed as such by
the Public Body and notified in writing to the Contractor to act as the representative of the Public
Body to supervise and inspect works and to test and examine the materials employed and the
quality of workmanship, including any authorized representative of such person;”

likewise, MDB FIDIC 2010, General condition of contract, General provision, definition 1.1.2.4
define Engineer as “’Engineer’ means the person appointed by the Employer to act as the
Engineer for the purposes of the Contract and named in the Contract Data, or other person
appointed from time to time by the Employer and notified to the Contractor under Sub-Clause
3.4 [Replacement of the Engineer].” .

Moreover, From FIDIC white book (client/consultant), fourth edition 2006, general condition of
contract, definition 1.1.8, define engineer in terms of consultant, “consultant means the
provisional firm or individual named in the agreement who is employed by the client to perform
the service and legal successors to the consultant and permitted assignees.”

The objectives of the construction project are to complete the project in the required Time,
quality and cost. To meet these objectives the role of engineer discussed in the MDB FIDIC 2010
and PPA 2011 perspective. In the project life cycle, the engineer participate starting from pre-
construction stage( the feasibility study including inception report, the engineering design and
specification, preparing work program, main role in the procurement process up to contractual
relationship), construction stage(supervision all activities, controlling and monitoring the works,

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etc.), final in the post constriction stage (Preparing & addressing the schedule of defects / punch
list, Preparation of project close-out report including learning, Collate and verify all As-built
drawings, Addressing any queries during defects liability period and Co-ordination with the
Contractors to rectify the defects during the defects liability period.). Due to these facts he has
good understanding of the project from starting to closing, therefore, he has a key role to the
project. His role can be observed as administrator(agent and professional assistance to the client)
of the project, these nature of his role will be discuss in relation to MDB FIDIC 2010 and PPA
2011.

 Professional Role

The engineer is the professional who use his knowledge and skill to design and administer the
project. According to Civil code, chapter four, Art. 2632, (2) cum art 2616, (1) and (2), the
engineer or the consultant independent to exercise his knowledge and skill to realize the work
based on his professional rules.

The engineer is the designer of the project (MDB FIDIC 2010 clause 17.3,g, PPA2011,clause
52.5), serve as the adviser of the client and the contractor for different issues regarding to the
project MDB FIDIC 2010 clause 3.5, 4.9 and PPA clause 15.4, 15.7, 18.8, 20.4, 69.2 and 73.3.

The engineer has the right for the modification of the work according to PPA clause 15.1. and he
provide approval for drawings, design calculation and other that are requested by the contractor
PPA,2011,clause 42.1, 42.3 designs, drawings, and related – Clause 3 MDB FIDIC 2010,

As Agent Role

Both MDB FIDIC 2010 and PPA 2011 are designed by the employer they have stated engineer
throughout the book. In MDB FIDIC 2010, clause 3.1, Engineer’s Duties and Authority stated as
“The Employer shall appoint the Engineer who shall carry out the duties assigned tohim in the
Contract. The Engineer’s staff shall include suitably qualified engineers and other professionals
who are competent to carry out these duties.(Power of agency-Agent Role derived from Art.
2179 of Civil Code)PPA 2011 state, “

Clause, 1.2 MDB FIDIC The Public Body appoints the Contractor to carry out the Works:

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(a) Promptly (and in any event within any time targets as may be set out in the Section 6,
Schedule of Requirements) and in a professional and courteous manner so as to
reflect and promote the image of the Public Body;

(b) Strictly in accordance with the Schedule of Requirements and all provisions of the
Contract; and

(c) In accordance with all applicable laws and regulations of the Federal Democratic
Republic of Ethiopia and Good Industry Practice; and

(d) In accordance with the policies, rules, and procedures of the appropriate Authority as
amended from time to time.

(e) In accordance with the quality standards set by the Ministry of Urban Development
and Construction, Quality and Standards Authority of Ethiopia (QSAE), and
applicable international standards;”

(a) In accordance with the terms and conditions of appointment as provided in this
Clauses in consideration of the Contract Price. Power: - Variation – Clause 13.1
MDB FIDIC 2010, Clause 8.8 MDB FIDIC 2010,
Clause 3.1-3.5 MDB FIDIC 2010, – Clause 3.1-3.5 MDB FIDIC 2010, Clause 3.1-3.5 MDB
FIDIC 2010, Clause 3.1-3.5 MDB FIDIC 2010, Clause 3.1-3.5 MDB FIDIC 2010
(Supervision ,Function, Advising Quantity Surveying ,Clause 3.1-3.5 MDB FIDIC 2010,
Testing, Inspection, respectively)

The Engineer has a very significant project management role under the MDB FIDIC 2010 and
PPA 2011 forms. Examples of the Engineer’s role (and tools for project management) include,
Notifying the Contractor of the Commencement Date not less than 14 days before that date,
Reviewing programs, Measuring the Works; Issuing payment certificates, Issuing instructions
(including for variations), Ensuring that the personnel of the contractor act professionally and
safely and removing them the site if they do not, Inspection and testing of the works, Issuing
notices to correct failures, Issuing Taking-Over Certificate(s), Issuing the Performance
Certificate, Assessing and making a neutral determination.

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6.6. Role of Engineer in Time Management

From MDB FIDIC 1.1.3.3 “’Time for Completion’ means the time for completing the Works or
a Section (as the case may be) under Sub-Clause 8.2 [Time for Completion], as stated in the
Contract Data (with any extension under Sub-Clause 8.4 [Extension of Time for Completion]),
calculated from the Commencement Date.”

PPA 2011 state "’Intended Completion Date’ is the date on which it is intended that the
Contractor shall complete the Works. The Intended Completion Date is specified in the Special
Conditions of Contract. The Intended Completion Date may be revised only by the Engineer by
issuing an extension of time or an acceleration order;”

Time management is important in any construction project. Without proper time management,
many problems will occur such as extension of time or time overrun. time overrun describe as
delay and an effect from the construction delay, time overrun become the most general problem
in construction industry. Time overrun occur when the actual progress of a construction project is
slower than the planned schedule. Delay or time overrun will affect all parties involved in the
project. It will affect the profits which would be obtained if the project can be completed on the
schedule. But due to the time overrun, contractors had to spend more money on labor, plant and
may lose the opportunity to get the next project. Hence, effective time management is very
important and crucial to achieve successful completion of construction projects.

In the pursuit of efficient project performance, time control is one of the most important
functions. Hence, there are numerous time management techniques and software packages used
for project planning and scheduling. Hence, time in construction projects need to be controlled
from the beginning of the construction process until the project is totally completed. Currently,
Gantt Bar and Critical Path Networks/Method Critical path method are the most commonly used
method of scheduling and controlling in construction industry, these tools use for planning and
scheduling projects. , allow assessment on how long a project should take. And determine the
resources needed. Moreover, the above issues are supported by the MDB FIDIC 2010, PPA
2011, etc. MDB FIDIC 2010, Clause 1.9,2. 19.4 a, 20.1 and appendix, 2 an PPA 2011, clause,
5.4 -6.5a, 28.d, 28.4 etc.

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6.7. Role of Engineer in Delay claim Management

Many events may increase the time of performance of the overall project or affect
any given activity. Common examples include contractor/subcontractor management and
performance problems, differing site conditions, changes in requirements or design,

unanticipated weather, unavailability of labor, material or equipment, defective plans or

specifications, and owner interference. Delay can either be excusable, thus justifying an
extension of the contract performance time, or non-excusable, where the delayed party
assumes the risk of the costs and consequences of delay. Determining whether a delay is
excusable or non-excusable is usually addressed in the contract. The contract will usually
enumerate various types of delay that will entitle the contractor to an extension of time
(i.e., an excusable delay). Typical extension provisions cover labor disputes,
unanticipated weather, unusual delay in deliveries, and a catchall for any unforeseen
causes beyond the control and without the fault or negligence of the contractor. The fight
for the contractor will usually be whether the delay was foreseeable (non-excusable) or
unforeseeable (possibly excusable).

Excusable delays may be further classified as compensable or non-compensable.

Again, the contract is usually controlling. Compensable claims are those where the
claiming party is entitled to additional compensation for the costs of the delay in addition
to the additional time for contract performance. These are usually delays that could have
been avoided by due care of the non-claiming party. The claiming party must not usually
contribute to the delay. Non-compensable delays are those that are not the fault of the
owner or contractor, but are due to events outside the control of the parties such as acts of
God or labor strikes.

MDB FIDIC 1.9 Delayed Drawings or Instructions

A party defending against a delay claim is not without recourse. And that recourse is usually
found in the form of a contract provision. For example:

 No Damages for Delay Clause: These are exculpatory clauses that preclude damages for delay.
Generally, a contract may provide that the contractor’s sole remedy is only a time extension.
These provisions are generally enforceable except in cases of fraud or owner interference or if a
statute prevents it from being enforced.

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 Liquidated Damages: An owner might be awarded damages based on contractor’s delay.

 Concurrent Delay: One party may argue that any delay was also caused in part by the other
party.
 Written Notice: Construction contracts typically require claims for delay and additional
compensation to be preceded and confirmed by specific written notice. Failure to follow the
contract may result in waiver of the claim, or at the very least, cause you to incur additional
attorneys’ fees attempting to circumvent the written notice requirement. In sum, it is important to
know your contract. Pay close attention to provisions relative to the schedule of work, provisions
regarding your ability to manage and modify your work plan, schedule and sequence, provisions
regarding your ability to seek relief from changes to and impacts upon your work plan and
schedule, notice and claims provisions, and “no damages for delay clauses.”

6.8. Role of Engineer in Program Management

(SCL) SCL2017, UK, clause 1, Contracting parties should reach a clear agreement on the type of
records to be kept and allocate the necessary resources to meet that agreement. Further, to assist
in managing progress of the works and to reduce the number of disputes relating to delay and
disruption, the Contractor should prepare and the Contract Administrator (CA) should accept a
properly prepared program showing the manner and sequence in which the Contractor plans to
carry out the works. The program should be updated to record actual progress, variations,
changes of logic, methods and sequences, mitigation or acceleration measures and any EOTs
granted. If this is done, then the program can be more easily used as a tool for managing change
and determining EOTs and periods of time for which compensation may be due.

Clause 8.3 requires the Engineer to “Review” the initial as-planned program as well as
subsequent iterations.24 They must do this against a detailed list of requirements, with
emphasis put on early detail to allow a highly effective project and risk management tool to be
created.25 The Engineer must provide notice of any comments on programs submitted by the
Contractor within 21 days after receiving the initial program, or 14 days after receiving a revised
program. If he does not do so, he is deemed to have given a Notice of No-Objection to the
program in question. Again, the Engineer has to be organized and ensure that he responds in the
correct time periods or an important opportunity to put the project on the right footing from the
beginning will be lost.

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6.9. Role of Engineer in Disruption Claim Management

A contractor’s disruption claim arises when an owner changes the method and/or
sequence of construction from that upon which the contractor based its bid. When the
planned method of completing the project is disrupted, contractors incur increased labor
costs because it takes them more time to complete the task than originally contemplated.
When this occurs, contractors either allege a breach of an express contract provision that
requires cooperation between the owner and the contractor, or a breach of the implied duties of
the owner to cooperate with the contractor or to refrain from hindering the
contractor.

To counter a contractor’s disruption claim, owners often argue that they had the
right in the contract to change the schedule and, therefore, the sequence of construction
because of the terms of the contract. Owners often urge that these express terms trump
the implied duty to cooperate, thereby undermine the legal basis for a contractor’s
disruption claim.

Disruption damages are the result of the timing or sequence of the flow of work
(e.g., lost productivity) and not necessarily an extension beyond the originally anticipated
project completion. Loss of productivity claims are difficult, but vitally important, and
almost always require expert testimony. Productivity is a measurement of rate of output
per unit of time or effort, usually measured in labor hours or equipment hours. A loss of
productivity, also sometimes known as “disruption” or “loss of efficiency,” can have
significant negative effects on a contractor’s bottom line. There can be many causes of
disruption on a project such as differing site conditions, design deficiencies, or lack of
access to the work. Quantifying that loss of productivity is the difficult part.
Knowledgeable construction counsel and knowledgeable experts can guide you through
this difficult process.PPA clause 4.2.

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UK(SCL), clause 18, Compensation may be recovered for disruption only to the extent that the
contract permits or there is an available cause of action at law. The objective of a disruption
analysis is to demonstrate the loss of productivity and hence additional loss and expense over and
above that which would have been incurred were it not for the disruption events for which the
Employer is responsible.

Over the years, the construction industry has developed various methods of
contractually allocating the risk of project delay and disruption. Some of these methods
include liquidated damages provisions, “no damages for delay” clauses, mutual waivers
of consequential damages, limitation of liability provisions; claims notice provisions, and
provisions addressing responsibility for the adequacy of the construction plans and
specifications. Parties frequently litigate the sufficiency and enforceability of these risk shifting
efforts in conjunction with the underlying merits of delay and disruption
disputes. Understanding these claims and the contractual provisions that relate to these
claims is critical. All parties should attempt to enter into contracts that clearly and
adequately address the risks imposed by project delays and disruptions.

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CHAPTER SEVEN

CASE STUDY

7.1 Background

Water supply project is one of the parts of construction project which is mostly susceptible to
delay because of sensitivity its nature. Water supply project may delayed for a single fitting if
it has not supplied and also, If the layout of the pipe line was not properly executed during
design phase the whole project can be delayed for a single pipe junction.

We have selected Kella Titto Water supply project which found in Oromia Regional state Arsi
zone to examine the project time overrun. The project is signed between Oromia Water and
Energy Bureau and Waika Engineering WWC in January 10/2020 to execute the project in 36
months. The contact type is DB form of contract.

7.2 case study data

Kella Titto water supply project activities and the total cost quoted by the contractor was
summarized in table below.

S/N Description of work Qty Total cost

1 Borehole Civil Works 2 11,120,000.00
Borehole Collector and Transmission 13,000,018.75
2 16.5km
Line DCI Pipes
3 Construction of reservoirs (3) 300m3 7,523,571.50
The
Construction of Distribution lines 20,800,315.60
4 35km tabulated
HDPE,uPVC,GS pipe
5 Construction of public fountain 16 2,400,000.00 project
6 Buildings     contract
6.1 Office Building 1 2,712,748.00 information
6.2 Generator House 2 1,678,915.00
6.3 Construction of pump Houses 2 1,878,789.50 are
6.4 Guard Houses (with EEPCO) 2 1,450,000.00 summarized
Operator Dowelling 1,579,457.50 as follows in
6.5 1
table
6.6 Guard Houses 3 1,897,417.10
6.7 Office Compound 1 760,000.00
Pump and Generator Supply and
6,000,000.00
7 Installation 4
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66,801,232.95
   Total  
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S/N Project data Description

1 Client Oromia water and Energy Bureau
2 Consultant Oromia Engineering Corporation
3 Contractor Waika Engineering WWC
4 Project cost 66,801,232.95
5 Project period 540 calendar of days
6 Project agreement signed January 10/ 2020
7 Commencement date February 5/ 2020
8 Completion date June 10/2021
9 Advance taken by contractor 20% of contract amount(13,360246.5)
10 Retention 5%
payment received by contractor to 49,432,912.38
11 date( up to four payment)
Advance payment returned 9,886,582.4
12 8
Advance left over by the contractor 3,473,664.1
13 1
14 Project progress Physical (82%) & Financial (78%)
15 Amount of performance bond 10% of contract price
16 Amount of liquidated damages 0.1% of the value of remaining per day
17 Limit of liquidated damage 10%of final contract price
18 Extension of time up to February 15/2023

7.3 Analysis of case

Delaying construction projects is a common problem in Ethiopia which results increase in the
project cost. Construction Projects are essential requirements and needed to be done to meet the
population demand and necessities. So when a project is delayed, a huge amount of money is
going to be spent and wasted, however, that amount could be invested for other projects or used
for buying new equipment. Usually, delay in construction projects causes Time overrun and Cost
overrun and if not managed profit loss and employer loss value for money can be occurred.
Specifically, the project we have taken to see the case( Kella Titto water supply project) have
been delayed since the project planned to completed on June 10/2021 still to today(January

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20/2023) the project was not completed. The project physical (civil work) progress was on only
around 82%

Depend on the information we have received from the employer representative (engineer) and
the contractor we have identified main cause of Kella Titto water supply delay was:

a. supply of Electro mechanical delayed

Most of the time, Electro mechanical equipments such as pumps and Generators were purchased
from abroad. In case of Kella Titto water supply project EM equipment was planned from
abroad. Due to the shortage of foreign currency (LC) this equipment was not purchased on time
the project was delayed for certain period of time as we have got information from the
stakeholder of the project.

b. Ineffective planning and scheduling by contractor

Kella Titto water supply was delayed due to Infective Planning and scheduling of the contractor.
Since, Infective Planning and scheduling have significant impact on the delay of the project. The
contractor have not actively planned and scheduled the project as day to day performances of the
contractor were very weak. Weak performance of the project activities by the contractor leads
the project to delay due to infective scheduling activities.

c. Escalation of construction material

Another cause for the delay of Kella Titto water supply is due to fluctuation of market after the
contract was made. The construction material during the contract formed and this time was
highly differentiated. Since most of the material which water supply serve were industrial
material such as pipe and fitting which share up to 50% of the project cost were escalated on the
market.

d. Contractor’s Financial difficulties

Riser pipe, pump and generator some pipes and fitting are purchased in a foreign country these
makes contractor difficulty due to foreign currency gap. And the employer was not also release
payment for contractor on time for executed work.

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e. Decision making and ineffective site supervision

Even though, the project have consultant on site for contract administration and over all site
supervision which the employer delegate was not actively engaged his responsibility.
Additionally, the decision made by the employer was somewhat weak.

7.4 Conclusion and recommendation for our case study

We have can conclude that, the project delay happens due to different reasons which both the
employer and contractor shares. The project we have observed were delay due to: material
import delay, ineffective planning & scheduling of project, slow decision making, inefficient site
management & supervision, financial difficulties of contractor and poor contract management
of owners are guide the project to time overrun and cost overrun.

Therefore, we recommend that

Effective planning and scheduling is very crucial every project to overcome time overrun.
So for this specific project the contacting parties should enforce and re plan for the
activities which was not still completed.
Timely decision making by the employer (consultant and the decision maker) for
Procurement of water supply goods, effect all progress payment as requested, effective
communication with delegated engineers etc and Review meeting with stakeholder and
deciding how to these projected completed is what we have recommend for these
specific project.
Effective contract management system with experienced & qualified personnel both at
site and office are also the most important and very critical to complete this specific
project.

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CHAPTER EIGHT

8.1 COMPARATIVE TABLE AND ANALYSIS

Programs
MDB- The Contractor shall submit a PPA Completing the work program given
FIDIC detailed time programme to the (2011) as part of the Bid, the Contractor
(2010) Engineer within 28 days after receiving shall within the time stated in the
the notice under Sub-Clause 8.1 Claus SCC provide the Engineer with a
Clause [Commencement of Works]. The e 41 program of implementation of the
8.3 Contractor shall also submit a tasks, broken down by activity and
revised programme whenever the by month and include the following
previous programme is inconsistent information:
with actual progress or with the (a) The order in which the
Contractor’s obligations. Each contractor proposes to carry out
programme shall include: the works;
(a) the order in which the Contractor (b) The time limits within which
intends to carry out the Works, submission and approved of the
including the anticipated timing of each drawings are required
stage of design (if any), Contractor’s (c) the order in which the
Documents, procurement, manufacture Contractor proposes to carry out the
of Plant, delivery to Site, construction, works;
erection and testing, (d)the time limits within which
(b) each of these stages for work by submission and approval of the
each nominated Subcontractor (as drawings are required;
defined in Clause 5 [Nominated (e) an organization chart containing
Subcontractors], the names, qualifications and
(c) the sequence and timing of curricula vitae of the staff responsible
inspections and tests specified in the for the Site,
Contract, and
(f)a general description of the method
(d) a supporting report which includes:
including the sequence, by month and
(i) a general description of the
by nature which the Contractor

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methods which the Contractor intends proposes to carry out the works;
to adopt, and of the major stages, in the
(g) a plan for the setting out and
execution of the Works, and
organization of the Site, and
(ii) Details showing the Contractor’s
(h) Such further details and
reasonable estimate ofthe number of
information as the Engineer may
each class of Contractor’s Personnel
reasonably require. The Engineer
and of each type of Contractor’s
shall return these documents to the
Equipment, required on the Site for each
Contractor with his approval or any
major stage. Unless the Engineer, within
relevant remarks within ten days of
21 days after receiving a programme,
receipt, except where the Engineer,
gives notice to the Contractor stating the
within those ten days, notifies the
extent to which it does not comply with
Contractor of his wish for a meeting.
the Contract, the Contractor shall
proceed in accordance with the An update of the program shall be a
programme, subject to his other program showing the actual progress
obligations under the Contract. The achieved on each activity and the
Employer’s Personnel shall be entitled effect of the progress achieved on
to rely upon the program when the timing of the remaining work,
planning their activities. including any changes to the
The Contractor shall promptly give sequence of the activities.
notice to the Engineer of specific The Contractor shall submit to the
probable future events or Engineer for approval an updated
circumstances which may adversely program at intervals no longer than
affect the work increase the Contract the period stated in the SCC. If the
Price or delay the execution of the Contractor does not submit an
Works. The Engineer may require the updated Program within this period,
Contractor to submit an estimate of the the Engineer may withhold the
anticipated effect of the future event or amount stated in the SCC from the
circumstances, and/or a proposal under next payment certificate and
Sub-Clause 13.3 [Variation Procedure]. continue to withhold this amount
If, at any time, the Engineer gives until the next payment after the date

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notice to the Contractor that a on which the overdue Program has

programme fails (to the extent stated) to been submitted.
comply with the Contract or to be The approval of the program by the
consistent with actual progress and the Engineer shall not relieve the
Contractor’s stated intentions, the Contractor from any of his obligations
Contractor shall submit a revised under the contract. The Contractor
programme to the Engineer in may revise the program and submit it
accordance with this Sub-Clause. to the Engineer again at any time. A
revised program shall show the effect
of modifications and Compensation
Events

Commencement of time
MDB- Except as otherwise specified in the Particular PPA a) The Public Body
FIDIC Conditions of (2011) shall fix the Start Date
(2010) Contract, the Commencement Date shall be the date at on which execution of
which the following precedent conditions have all Claus the Works is to
Clause been fulfilled and the Engineer’s notification e 71 commence in the SCC
8.1 recording the agreement of both Parties on such or by administrative
fulfillment and instructing to commence the Work is order issued by the
received by the Contractor: Engineer.
(a) signature of the Contract Agreement by both b) The Start Date for
Parties, and if required, approval of the Contract by commencing execution of
relevant authorities of the Country; the works shall be not
(b) delivery to the Contractor of reasonable evidence later than
of the Employer’s Financial arrangements (under Sub- 120 days following
Clause 2.4 [ Employer’s Financial Arrangements]); notification of award of
(c) except if otherwise specified in the Contract Data, Contract unless agreed
effective access to and possession of the Site given to otherwise by the parties.
the Contractor together with such permission(s)

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under(a)of Sub-Clause1.13 [ Compliance with Laws]

as required for the commencement of the Works;
(d) Receipt by the Contractor of the Advance
Payment under Sub-Clause 14.2 [Advance Payment]
provided that the corresponding bank guarantee has
been delivered by the Contractor.
If the said Engineer’s instruction is not received by
the Contractor within 180 days from his receipt of the
Letter of Acceptance, the Contractor shall be entitled
to terminate the Contract under Sub-Clause 16.2
[Termination by Contractor]. The Contractor shall
commence the execution of the Works as soon as is
reasonably practicable after the Commencement Date,
and shall then proceed with the Works with due
expedition and without delay.

Completion of time
MDB- The Contractor shall complete the PPA a. The period of execution of Works shall
FIDIC whole of the Works, and each (2011) commence on the Start Date fixed in
(2010) Section (if any), within the Time accordance with GCC Clause 71.1 and
for Completion for the Works or Claus shall be as laid down in the SCC, without
Clause Section (as the case may be), e prejudice to extensions of the period which
8.2 including: 72 may be granted under GCC Clause 73.
(a) achieving the passing of the b. The Contractor shall carry out the
Tests on Completion, an Works in accordance with the Program of
(b) Completing all work which is implementation of tasks submitted by the
stated in the Contract as being Contractor, as updated with the approval
required for the Works or Section to of the Engineer, and complete them by

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be considered to be completed for the Intended Completion Date.

the purposes of taking over under c. If provision is made for distinct periods
Sub- Clause 10.1 [Taking Over of the of implementation for separate lots, in cases
Works and Sections]. where one Contractor is awarded more than
one lot per contract, the periods of
implementation for the separate lots will not
be accumulated.
N.B Clause 72 was not exactly specify the
completion time rather period of
execution time

Extension of time
MDB- The Contractor shall be entitled PPA The Contractor may request an extension
FIDIC subject to Sub-Clause 20.1 (2011) of the Intended Completion Date if he is
(2010) [Contractor’s Claims] to an or will be delayed in completing the
extension of the Time for Claus contract by any of the following causes:
Claus Completion if and to the extent that e 73 a) Exceptional weather conditions in
e 8.4 completion for the purposes of Sub- the Federal Democratic Republic of
Clause 10.1 [Taking-Over of the Ethiopia;
Works and Sections] is or will be, b) Artificial obstructions or physical
delayed by any of the following conditions which could not reasonably
causes: have been foreseen by an experienced
(a) a Variation (unless an adjustment Contractor;
to the Time for Completion has been c) Compensation Event occurs or a
agreed under Sub-Clause 13.3 change order for modification is issued
[Variation Procedure]) or other which makes it impossible for
substantial change in completion to be achieved by the Intended
the quantity of an item of work Completion Date;
included in the Contract, d) Administrative orders affecting the
(b) a cause of delay giving an date of completion other than those arising

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entitlement to extension of time from the Contractor's default;

under a Sub-Clause of these e) Failure of the Public Body to fulfill
Conditions, his obligations under the Contract;
c)exceptionally f) Any suspension of the works which is
adverse climatic not due to the Contractor's default
conditions, g) Force majeure;
(d) Unforeseeable shortages in the h) Any other causes referred to in these
availability of personnel or Goods GCC which are not due to the Contractor's
caused by epidemic or governmental default.
actions, or The Contractor shall, within 15 days of
(e) Any delay, impediment or becoming aware that delay may occur,
prevention caused by or attributable notify the Engineer of his intention to
to the Employer, the Employer’s make a request for extension of the
Personnel, or the Employer’s other Intended Completion Date to which he
contractors. may consider himself entitled, and shall,
Completion If the Contractor unless otherwise agreed between the
considers himself to be entitled to an Contractor and the Engineer,
extension of the Time for Within 21 days from receipt of the
Completion, the Contractor shall Contractor's detailed particulars of the
give notice to the Engineer in request, the Engineer shall, by written
accordance with Sub- notice to the Contractor after due
Clause 20.1 [Contractor’s Claims]. consultation with the Public Body and,
When determining each extension of where appropriate, the Contractor, grant
time under Sub-Clause 20.1 such extension of the Intended
The Engineer shall review previous Completion Date as may be justified,
determinations and may increase, but either prospectively or retrospectively,
shall not decrease, the total extension or inform the Contractor that he is not
of time. entitled to an extension.
If the Contractor has failed to give
early notification of a delay or has failed
to cooperate in dealing with a delay,

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The delay by this failure shall not be

considered in assessing the new Intended
Completion Date.

Delayed Payment
DB- If the Contractor does not PPA 1) Once the time-limit referred to in GCC
FIDIC receive payment in accordance (2011) Clause 59.3 has expired, the
(2010) with Sub-Clause 14.7 [Payment], the Contractor – unless the Contractor
Contractor shall be entitled to Clause is a public body which is partly or
Claus receive financing charges 67 wholly financed by the Federal
e 14.8 compounded monthly on the amount Government Budget – shall upon
unpaid during the period of delay. demand, submitted within two months
This period shall be deemed to of receiving late payment, be entitled
commence on the date for payment to late-payment interest at the
specified in Sub-Clause 14.7 rediscount rate applied by the National
[Payment], irrespective (in the case bank of Ethiopia on the first day of the
of its sub-paragraph (b)) of the month in which the time-limit expired,
date on which any Interim Payment plus three and a half percentage
Certificate is issued. Unless points. The interest shall be payable
otherwise stated in the Particular for the time elapsed between the
Conditions, these financing charges expiry of the payment deadline and
shall be calculated at the annual rate the date on which the Public
of three percentage points above the Body’s account is debited. .
discount rate of the central bank in
the country of the currency of 2) Any default in payment of more than
payment, or if not available, the 120 days from the expiry of the period laid
interbank offered rate, and shall be down in GCC Clause 67.1 shall entitle the
paid in such currency. The Contractor Contractor either not to perform the
shall be entitled to this payment Contract or to terminate it.
without formal notice or certification,

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and without prejudice to any other

right or remedy.

Delay Damage
MDB- If the Contractor fails to comply with PPA Except as provided under GCC Clause
FIDIC Sub-Clause 8.2 [Time for (2011) 18, if the Contractor fails to carry out
(2010) Completion], the Contractor shall any or all of the Works within the
subject to notice under Sub-Clause 2.5 Clause period specified in the Contract, the
Claus [Employer’s Claims] pay delay 27 Public Body may without prejudice to
e 8.7 damages to the Employer for this all its other remedies under the
default. These delay damages shall be Contract, deduct from the Contract
the sum stated in the Contract Data, Price, as liquidated damages the
which shall be paid for following:
every day which shall elapse between 1) A penalty of 0.1% or 1/1000 of the
the relevant Time for value of undelivered Service for each
Completion and the date stated in day of delay until actual delivery or
the Taking-Over Certificate. However, performance,
the total amount due under this Sub- 2) The cumulative penalty to be paid
Clause shall not exceed the maximum by the Contractor shall not exceed 10%
amount of delay damages (if any) stated of the contract price. If the delay in
in the Contract Data. These delay performing the contract affects its
damages shall be the only damages due activities, the public Body may
from the Contractor for such default, terminate the contract by giving
other than in the event of termination advance notice to the Contractor
under Sub-Clause 15.2 [Termination by pursuant to GCC Clause 21 without any
Employer] prior to completion of the obligation to wait until the penalty
Works. These damages shall not reaches 10% of the value of the
relieve the Contractor from his Contract.
obligation to complete the Works, or 3) If the Intended Completion Date is
from any other duties, obligations or extended after liquidated damages

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responsibilities which he may have have been paid, the Engineer shall
under the Contract. correct any overpayment of liquidated
damages by the Contractor by adjusting
the next payment certificate.

Engineer’s Duties and Authority

MDB- The Employer shall appoint the Engineer PPA 1) Except where otherwise
FIDIC who shall carry out the duties assigned to (2011) specifically stated and subject to
(2010) him in the Contract. The Engineer’s staff Clause any restriction in the SCC, any
Claus shall include suitably qualified engineers 12 action required or permitted to be
e 3.1 and other professionals who are taken, and any document required
competent to carry out these duties. or permitted to be executed,
The Engineer shall have no authority to under this Contract by the Public
amend the Contract. The Engineer may Body or the Contractor may be
exercise the authority attributable to the taken or executed by the
Engineer as specified in or necessarily to Engineers named in the SCC.
be implied from the Contract. If the Except as expressly stated in the
Engineer is required to obtain the SCC, the Engineer shall not have
approval of the Employer before authority to relieve the Contractor
exercising a specified authority, the of any of his obligations under
requirements shall be as stated in the the Contract.
Particular Conditions. The Employer 2) Any notice, information or
shall promptly inform the Contractor of communication given to or made
any change to the authority attributed to by an Engineer shall be deemed
the Engineer. to have been given or made by
However, whenever the Engineer the Public Body.
exercises a specified authority for which
the Employer’s approval is required, 3) The Engineer may delegate any of
then (for the purposes of the Contract) his duties and responsibilities to
the Employer shall be deemed to have Engineer's representative after
notifying the Contractor, and may
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given approval. cancel any delegation

Except as otherwise stated 4) After notifying the Contractor.
in these Conditions: Instructions and/or orders issued by the
(a) whenever carrying out duties or Engineer shall be by way of
exercising authority, specified in or administrative orders. Such orders
implied by the Contract, the Engineer shall be dated, numbered and entered
shall be deemed to act for the Employer; by the Engineer in a register, and
(b) the Engineer has no authority to copies thereof delivered by hand,
relieve either Party of any duties, where appropriate, to the Contractor's
obligations or responsibilities under the representative
Contract; (c) any approval, check,
certificate, consent, examination,
inspection, instruction, notice, proposal,
request, test, or similar act by the
Engineer (including absence of
disapproval) shall not relieve the
Contractor from any responsibility he
has under the Contract, including
responsibility for errors, omissions,
discrepancy and non-compliances; and
(d) any act by the Engineer in response to
a Contractor’s request except as
otherwise expressly specified shall be
notified in writing to the Contractor
within 28 days of receipt.

Contractor’s Claims

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If the Contractor considers himself to be If under the Contract

MDB- entitled to any extension of the Time for PPA there are circumstances
FIDIC Completion and/or any additional payment, under (2011) which the Contractor
(2010) any Clause of these Conditions or otherwise in considers entitle him to
connection with the Contract, the Contractor shall Clause additional payment, the
Claus give notice to the Engineer, describing the event or 69 Contractor shall:
e 20.1 circumstance giving rise to the claim. The notice (a)if he intends to make
shall be given as soon as practicable, and not later any claim for additional
than 28 days after the Contractor became aware, or payment, give to the
should have become aware, of the event or Engineer notice of his
circumstance. intention or make such
If the Contractor fails to give notice of a claim claim within 15 days after
within such period of 28 days, the Time for the said circumstances
Completion shall not be extended, the Contractor become known to the
shall not be entitled to additional payment, and Contractor, stating the
the Employer shall be discharged from all reason for his claim; and
liability in connection with the claim. (b) Submit full and
Otherwise, the following provisions of this Sub- detailed particulars of his
Clause shall apply. claim as soon as it is
The Contractor shall also submit any other notices reasonably practicable, but
which are required by the Contract, and supporting no later than 60 days after
particulars for the claim, all as relevant to such the date of such notice,
event or circumstance. unless otherwise agreed
The Contractor shall keep such contemporary by the Engineer. In case
records as may be necessary to substantiate any the Engineer agrees to
claim, either on the Site or at another location another deadline than the
acceptable to the Engineer. Without admitting the said 60 days, the agreed
Employer’s liability, the Engineer may, after upon deadline will in any
receiving any notice under this Sub-Clause, event, require that such
monitor the record-keeping and/or instruct the particulars shall be
Contractor to keep further contemporary records. submitted no later than the

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The Contractor shall permit the Engineer to date of submission of the

inspect all these records, and shall (if instructed) draft final statement of
submit copies to the Engineer. account. The Contractor
Within 42 days after the Contractor became aware shall thereafter promptly
(or should have become aware) of the event or submit such further
circumstance giving rise particulars as the
to the claim, or within such other period as may Engineer may reasonably
be proposed require assessing the
by the Contractor and approved by the Engineer, validity of the claim.
the Contractor shall send to the Engineer a fully When the Engineer has
detailed claim which includes full supporting received the full and
particulars of the basis of the claim and of the detailed particulars of the
extension of time and/or additional payment Contractor's claim that he
claimed. requires, he shall, without
If the event or circumstance giving rise to the prejudice to GCC Clause
claim has a continuing effect: 44.4, after due
(a) this fully detailed claim shall be considered consultation with the
as interim; Public Body and, where
(b) the Contractor shall send further interim appropriate, the
claims at monthly intervals, giving the Contractor, determine
accumulated delay and/or amount claimed, and whether the Contractor is
such further particulars as the Engineer may entitled to additional
reasonably require; and payment and notify the
(c) the Contractor shall send a final claim parties accordingly.
within 28 days after the end of the effects
The Engineer may reject
resulting from the event or circumstance, or
any claim for additional
within such other period as may be
payment which does not
proposed by the Contractor and approved by the
comply with the
Engineer. Within 42 days after receiving a
requirements of this GCC
claim or any further particulars supporting a
Clause.
previous claim, or within such other period as

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may be proposed by the Engineer and approved N.B this clause of PPA
by the Contractor, the Engineer shall respond with (2011) is not exactly
approval, or with disapproval and detailed specifies the contractor’s
comments. He may also request any necessary all claim rather on
further particulars, but shall nevertheless give his payment only.
response on the principles of the claim within the
above defined time period.
Within the above defined period of 42 days, the
Engineer shall proceed in accordance with Sub-
Clause 3.5 [ Determinations ] to agree or determine
(i) the extension (if any) of the Time for
Completion (before or after its expiry) in
accordance with Sub-Clause 8.4 [ Extension of
Time for Completion ], and/or
(ii) The additional payment (if any) to which the
Contractor is entitled under the Contract.
Each Payment Certificate shall include such
additional payment for any claim as has been
reasonably substantiated as due under the relevant
provision of the Contract.
Unless and until the particulars supplied are
sufficient to substantiate the whole of the claim,
the Contractor shall only be entitled to payment
for such part of the claim as he has been able to
substantiate.
If the Engineer does not respond within the
timeframe defined in this Clause, either Party may
consider that the claim is rejected by the Engineer
and any of the Parties may refer to the Dispute
Board in accordance with Sub- Clause 20.4
[Obtaining Dispute Board’s Decision].

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The requirements of this Sub-Clause are in addition

to those of any other Sub-Clause which may apply
to a claim. If the Contractor fails to comply with
this or another Sub- Clause in relation to any claim,
any extension of time and/or additional payment
shall take account of the extent (if any) to which
the failure has prevented or prejudiced proper
investigation of the claim, unless the claim is
excluded under the second paragraph of this Sub-
Clause.

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CHAPTER NINE

CONCLUSION AND RECOMMENDATION

9.1 Conclusion

The study indicates that, completing construction projects within estimated time frame is the
main challenge faced in our country. It is very common to observe that, construction contract
especially public project are completed in an extremely delayed.

The most momentous root of project delay in Ethiopia’s construction industry, which are
improper planning, pitiable work program, poor site management, inadequate experience and
capacity of the contractor, inadequate finance of the client and payments for completed work,
problems related to subcontractors, material shortage, availability and failure of equipment,
lack of communication between parties, luck of LC, failure on contract administration and
mistakes during the construction stage. Such reasons for project delay are usual which need
more attention in minimizing and managing the effect as a whole.

Contract miss administration in public project provides an encouragement for contractors to

build up excessive confidence that they finally, will have a way to deal out of the contractual
complications since the implementation of the legal rules on contract administration is
undermined.

However, legally Construction project time overrun is a breach of a contract which can be lead
to dispute in case delay followed by disruption. Both PPA (2011) and MDB (2010) condition of
contract clearly states the legal remedies for delay and disruption claim for all parties in
contract.
The practical implementation of legal remedies against it is not very common instead,
implementation of termination as a remedy for non-performance obligations is common.

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9.2 Recommendation

Construction project behind schedule happens everywhere and it is difficult to totally eliminate
project delay in real life. As civil engineering project most of the time passes through hypothesis
of different phases. This uncertainty may or may not happen so the only option is to be optimal
in different stage of the project especially in design and planning phases. Failure on contractual
obligation leads delay and disruption claim, which include overhead cost, loss of productivity,
loss of profit and loss of value for money.

In general, to reduce extent of Delay and disruption claim in construction projects this study
would like to recommend that the construction stakeholders should be able to:
 Producing quality contractual document and managing all the process appropriately
within a time
 All the stakeholders should effectively manage contract period and take their
responsibility as per the contractual agreement.
 Knowing the scope and relationship of all the parties, good communication,
coordination and collaboration of all the parties are very essential.
 Appointing appropriate personnel which performers the contracts
 The Engineer should play his crucial role in contract process
 The contractor should schedule the work for each and every activity optimum and
perform within a time.

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REFERENCES

[1]. Sintayehu D. Kebede Enforcement of legal remedies against construction projects time
overrun in Ethiopia:
[2]. Mishra and Soota (2004)
[3]. The Guide to construction arbitration 3rd edition
[4]. Anwar M. Omar 2007, Delay Claims Management in Construction
[5]. Safw Kawa Abdulkareem 2020 Methods of Project Planning for Construction Projects
[6]. Bennatt(2003) The management of construction
[7]. Mubarek Shittu 2020 how to design program of work for building construction
1. [8]. Liquidated Damages and Extensions of Time: In Construction Contracts, Third Edition.
Brian Eggleston. ISBN: 978-1-405-11815-6
[9]. James J. Sienicki Jeffrey M. Singletary Delay and Disruption Claims: Big Impacts on Your
Bottom Line
[10]. M. Ibrahim, “Risk matrix for factors affecting time delay in road construction projects:
owners’ perspective,” Engineering, Construction and Architectural Management, Emerald
Group Publishing Limited, pp. 609-617, 2011.
[11]. Aftab Hameed Memon 2014, Time Management Practices in Large Construction Projects
[12].Chen, W.F. (2003)The Civil Engineering Hand Book 2ndEd
[13]. Koshe, Werku, Jha, K.N., 2016. Investigating causes of construction project delay in
Ethiopian construction industry. J. Civil Constr. Environ. Eng. 1 (1), 18–
[14]. Assaf, A;-Hejji 2006 causes of delay in large construction project, international journal of
project management
[15]. The Society of Construction Law (“SCL”) 2nd edition
[16]. FIDIC MDB(2010) Condition of contract
[18]. PPA(2011) Condition of contract
[[17] Keating on Construction Contracts 9th Edition, ‘Contractor’ claims,

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