INTRODUCTION

In any kind of construction industry it is impossible to prevent any delay or disruptions which can be caused
by employer, contractor or by various other activities. These delays mostly results in loss of time as well as
money and thus their claim from the either parties becomes inevitable which can lead to disputes. Thus in
order to deal with such disputes in orderly and coherent manner Delay Protocol is prepared by Society of
Construction Law for determining extensions of time and compensation for delay and disruptions. It was
published on October 16th 2002. It does need to be included in the contract but acts as a guidance to all
parties to the construction process when dealing with time delay matters. It recognizes that transparency of
information and methodology is central to both dispute prevention and dispute resolution.

Based on this it gives four guidelines to deal with delay compensations:

Guideline Section 1: It deals with core principles of delay.

Guideline Section 2: It deals with the preparation of records and programme.

Guideline Section 3: It deals with extension of time applications during the course of the project.

Guideline Section 4: Deals with causes and responsibility of delay of the project.

Guidance Section 1

 Purpose of extension of time-

 The benefit of EOT to the contractor is that he is relieved from the entitlement of damages caused due
to delay (usually the Liquidated Damages) during the period of extension.
 The benefit of EOT to the employer is that, the project completion time is prevented from becoming ‘at
large’.
 Entitlement to extension of time-
 Applications for EOT should be made and dealt with as close in time as possible to the delay event
that gives rise to the application.
 Entitlement of EOT does not automatically lead to entitlement to compensation for prolongation.
 The contractor is not liable for delay caused by Employer or due to natural events such as bad weather.
They are termed as non- compensable Employer Risk Events.
 The contractor should give notice to the CA as soon as an Employer Risk Event occurs, for which he
considers entitlement of EOT.
 Effect of delay-
 It is not necessary that the Employer Risk Event should have affected the progress of the work when the
EOT is being granted.
 It is a bad practice by some CA’s to wait and see the full effect of Employer Risk Event on the progress
of work and then granting the EOT.
 Incremental review of extension of time-
 If the full effect of Employer Risk Event can’t be predicted with certainty at the time of initial assessment
by CA, then EOT should be granted for the then predictable effect.
 The EOT should be considered by the CA at intervals as the genuine effect of the Employer Risk Event
develops and the EOT expanded (however not diminished, unless there are express contract terms
allowing this) if fitting.
 Float as it relates to extension of time-
 If there is remaining float in the programme at the time of Employer Delay Event,then EOT will not be
awarded to the contractor. An EOT should only be granted if the Total Float has been used up.
 Under contracts where the Employer Delay only has to affect the Contractor’s planned completion date,
the Contractor is potentially entitled to an EOT every time the Employer or CA delays any of its
activities, irrespective of their criticality to meeting the contract completion date.
 Float as it relates to compensation-
 If the Contractor’s planned completion date is delayed due to the Employer Delay, he is entitled to be
paid the costs directly caused by the Employer Delay. If there is no delay to project completion date
then there is no entitlement of EOT.
 It is not permissible for the Contractor, after the contract has been entered into, to state that it intends
to complete early, and claim additional costs for being prevented from doing so.
 Concurrent delay – its effect on entitlement to extension of time-
 Concurrent Delay is the occurring of two or more delays at the same time, one at Employer Risk Event,
the other a Contractor Risk Event.
 Where true concurrent delay occurs, the Contractor should nevertheless be entitled to an EOT for the
Employer Delay to Completion of the project. Separate analyses should be carried out for the concurrent
delay events. The Employer Risk Event should be analyzed first.
 Concurrent delay – its effect on entitlement to compensation for prolongation-
 If the Contractor incurs additional costs that are caused both by Employer Delay and Contractor Delay,
then the Contractor should only recover compensation if it is able to separate the additional costs caused
by the Employer Delay from those caused by the Contractor Delay.
 Where an Employer Risk Event and a Contractor Risk Event have concurrent effect, the Contractor
 may not recover compensation in respect of the Employer Risk Event unless it can separate the loss
and/or expense that flows from the Employer Risk Event from that which flows from the Contractor
Risk Event.
 Mitigation of Delay & mitigation of Loss-
The contractor has every right to reduce to loss of time which it has incurred due to the delay (Mitigation
of Delay) but to achieve that steps taken by contractor should be reasonable.
 Link between extension of time & compensation-
If the contractor is granted an EOT due to delay then it does not mean that he is entitled to compensation
also i.e EOT and compensation for losses suffered by contractor due to delay are not interconnected to
each other. The provisions of contract for claim of compensation and EOT to the contractor is different.
 Basics of Calculation of compensation for prolongation-
If prolongation is caused by other Employee risk events other than varaitions , then contractor will be
given compensation but only for additional cost which contractor suffered due to delay for that particular
work.
 Relevance of Tender Allowances-
The tender allowances is of little use for calculating compensation cost though it can serve as a rough
guide to understand the losses suffered by contractor due to delay. It can be used when it is difficult to use
contract prices for calculating the compensation due to delay caused by different types of variations.
 Period for evaluation of Compensation-
The contractor is to be compensated for the Employer Risk Delay from the time when its effect was first
felt by contractor due to its occurrence and not by the amount by which the contract period was extended
due to the delay caused by the employee.
 Global Claims-
 Contractor should avoid the “global claim’’ which identifies a number of causes of delay and/or disruption
and the total of the contractor’s cost.
 From this figure the employer’s net payment is deducted and a claim for the balance is made, without
attributing actual costs to individual events.
 The major issue with global claims is that, normally, for a contractor to succeed with a claim for loss and
expense he must show a causal link between the sums claimed and each individual event that has caused
this loss. In a global claim the contractor does not, or cannot, demonstrate a direct link between the loss
incurred and the individual events. Thus it is rarely accepted by courts.
 So contractor should try to maintain adequate and proper records so that he can show to losses incurred
due to delay in each particular cativity and not claim on “total cost”.
 Acceleration-
 Payment on acceleration should be done as written in the contract. However if not mentioned in the
contract and both parties agree for the acceleration its payment should be done on basis of mutual
agreement.
 The contractor can’t claim for the EOT due to the delay caused by disruptions but can claim for
compensation for the loss it has suffered, only if the disruptions was caused from the Employer and not
by the contractor.
 Disruption-
 Disruption analysis has to be done in order to calculate required compensation. Thus contractor should
maintain good site records so that data can be available for disruption analysis.
 The common method of disruption analysis is “Measured Mile’’ technique which compares the
productivity achieved on non-impacted part of the contract to the impacted part. The productivity due
to non-impacted part can be calculated as given in contract, otherwise data can be used from various
organizations.

Guidance Section 2

 Programme & Records-

 For any disputes relating to delay, the contractor prepares a programme which should be accepted by
the Employer’s agent usually referred as Contract Administrator (CA).
 The Programme shows in detail the manner & sequence in which the project work will be done.
 The Programme is prepared by using commercially available Critical Path Method Project Planning
Software.
 Good record keeping is done so that information regarding issues relating to when events occurred &
who caused what delay are available.
 By using agreed Project Planning software, the contractor should enter the actual progress as it proceeds
with the works, to create the Updated Programme Record.

Guidance Section 3
 Procedure for granting extension of time-
 The EOT ought to be allowed to the degree that the Employer Risk Event is sensibly anticipated to keep
the works being finished by the then prevailing contract completion date.
 Contractor should generally submit a sub-network to be inserted into the Updated Programme, which
should be close to the Delay period.
 The CA will check if the event is eligible to be considered as Employer Risk Event.
 Disagreements on the matters of EOT should be solved immediately and should not be left for the end.
The contractor should inform CA immediately if he disagrees with his decision.
 The sub- network should be prepared in the same manner with the same software by which the original
programme was made.

Guidance Section 4
 Delay Analysis-
If programme and record were not prepared in accordance with the protocols during the course of work
then delay analysis will be done on the basis of:
 The terms of the contract:
Collapse as built, As planned as built and time impact analysis are to be used when contract terms
denotes that contractor can claim liquidated damages or compensation only if Employer Risk Events
causes the delay in completion date of the project. Impacted as planned and time impact analysis can be
used if contractor is to be given compensation for any losses it incurs due to employer’s risk events.
 Records available of the contractor:
It means that analysis will be done on the basis of two records:
 Planned and updated network diagram.
 Records and data available of the works.
 Nature of events causing the delay:
It means that delay will be analyzed on the basis of cause of delay i.e. Whether it was contractor delay ,
employee delay , has delay caused the delay of project completion time , whether the activity was
completed or it was in still in planning etc.
 Cost of analysis and amount of Dispute:
As the above heading suggest, Delay analysis will be done on the basis of how much damage either parties
have faced due to delay. Thus it depends on the parties that how much detail analysis a party wants to
make and thus can pay the cost of analysis depending on the damages at stake.
 Construction Contract Management
CVL-774

Assignment 2
A Brief on the Society of Construction Law Delay
& Distribution Protocol
(October 2002, October 2004 Reprint)

Submitted By-
Anupam Verma - 2015CEC2727
Haris Azeez - 2015CEC2732
Rahul Chauhan - 2015CEC2738