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EXTENSION OF TIME: WHAT IS NEXT?

posted May 8, 2022, 6:02 PM by jeffery jim
Extension of Time (EOT) in construction industry is an added time which was granted by the Client after scrutinizing incidents which have contributed directly and require extended time for the contractor to complete a project with or without variation to the contract price. There are several prerequisite criteria which a contractor must conform in order to be grated EOT and in certain projects, EOT can be granted multiple of time. In my past project, Client (Oil & Gas MNC) have to award me one and a half year EOT, however granted me only six months due to other constraints which I will not name here.

2. Planning is divided into two criteria; technical project planning and tactical project planning. Both of these use similar software such as Microsoft Project and Primavera but the approach used in dictating a project is different. Technical planning usually revolves around compliance in updating and reporting about the current progress with the assistance of other diagnostic tools and the use of Monte Carlo simulation. Tactical project planning is another level of technical planning where it embodies the contract and risk as precedence before other elements in technical planning. Moreover, a lot of other analyses involving contract and risk will take place. Contract interpretation involves the contract document and other legal elements, while risk mitigation involves more than just Monte Carlo simulation. This includes statistics such as Pearson or Spearman correlation, time-related binomial distribution and utilizing Latin Hypercube Sampling in order to provide level of significance for event(s).

3. Once EOT is granted, a project planner will have to do the followings;

3A. To update all activities with appropriate progress percentage before making current progress at site as a basis or baseline. All existing baseline dates. durations and costs can be transferred to Baseline 1. Subsequently, a new baseline dates, durations and costs shall be established in accordance to awarded new completion time and cost. In certain cases where omission is required, cost adjustment or realization will take place to reflect the new instruction and notice(s).

3B. To recalculate remaining works using productivity schedule for affected activities and group these dates as optimistic duration, mean duration (from your planning software) and pessimistic duration. In this particular calculation, additional considerations should be included in case possible delay(s) may be prolonged. SWOT analysis can be handy but a planner must ensure that quality and cost should not be hindrances to achieve targeted duration.

3C. If there are additional works to the EOT as in variation to contract price, additional works should be included in the new work program with approved cost. This should be introduced with new task relationship(s) that may see existing tasks to shift forward into a newer completion date. One of the biggest failures many did previously is the failure to leverage the resources. Introduction of newer activities and extended time do not mean a project is able to employ and discharge workers based on the man-month. One have to review their resources histogram and their financial momentum. In no way, a project should be allowing sudden dip or spike to their monthly expenses. I reckon the S-curve to be as linear as possible to avoid disastrous outcome for additional project funding and additional cost contributed for financial interest when cashflow is running below optimized level.

3D. After completing the new proposed baseline, a sequential analyses can be performed to see if the new work program is robust enough to tackle all contractual issues if one wants to established dominance in tactical planning and robust final account. The additional works or delayed work may render as critical path but in certain cases where multiple elements was considered, this may not be the case. For this purpose, always try to gauge and foresee possibilities of delay that maybe triggered by contract sub-clauses (in Malaysia case PWD203 and its variants - Extension of Time, and Loss and Expenses).

3E. The outcome of analyses would indicate how robust the work program can be and is bulletproof from contractual elements. When satisfied, this shall be submitted as a new work program and use for scheduling purposes. Else, it is back to the planning board for continuous rework.

4. In this particular write up, the complimentary information on tactical planning is the ability of a planner to exploit contract clauses but one have to be very articulate when it comes to causal and sequential route to the utilization of such exploit(s). I hope project planners are aware of their responsibilities and articulate their depth of knowledge in contractual and legal matters into the work program. Planning requires wisdom or else, a planner is just a scheduler or an operator.


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