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Inclement of Weather in Contract and Extension of Time (EOT)

posted Jan 13, 2018, 4:36 PM by jeffery jim
Part I - Inclement of Weather in Contract

A friend just texted me and ask me about provision for extension of time in regards to inclement of weather. So, let us review what the JKR contract form (203, 203A, 203N and 203P) mentioned specifically on weather.

1. Both 203 and 203A forms only mentioned once about inclement weather under contract clause 43 - Delay and Extension of time under sub-clause 43.1(b).

2. As for 203N form, nominated sub-contractor delays is subjected to main contractor covenant with client through 203A. The crux to this decision is based on critical path which affects the main contractor in which will affect the nominated sub-contractor working area and access. Nominated suppliers which join in the contract through form 203P will not be entitled for any inclement of weather. You are fabricating and manufacturing under the shade.

3. So how inclement of weather links to extension of time? Is there any sort of formality or informal way to calculate and inform the superintending officer (SO) about possible delay? When we refer to contract form 203 or 203A, it is suffice to provide supporting documents and relevant references to enable SO or his delegates to form an opinion as to the cause and calculation of the delay.

4. The norm which JKR usually accept is to compare the rainy days recorded in site diary to the weather record produced by the meteorological department and then compare if there is a sudden or extreme or exceptional inclement of weather comparing to previous years. It is a simplistic approach to be frank but it works however this hardly grant additional working days. From experience, this way will only leave most contractors with 1 month of extension of time. (Remarks: hardly my best choice in manipulating clause 43 as a whole. I prefer to use other sub-clauses and tactically insert it into work program for clause 43 exploits. Further to that, most clients' SO and their representative are not well verse with technicality of such important dossier in the overall contract administration)

5. When comparing previous weather record, contract administrator should try to justify if any of the annual record of heavy downpour is due to extreme phenomena. This occurance of extreme inclement is likely due to "el nino" or "la nina". In the tropics, we are mo concern about "la nina" event which causes heavy rain and possible flooding. After identifying the year affected by this phenomena, the rainfall record should be eliminated from being compared as it stands as abnormal inclement of weather and should not be the basis for any comparison. In case of "el nino" occurance, it is hard to claim for any extension of time although workers' performance may dipped and are in danger of heat stroke; contractor should allow contingency of additional workers if progress is hampered by these setbacks through resources crashing to remedy project delay.

6. In actual fact, delay of the project shouldn't be determined as mentioned earlier. Delay should also come with tabulation of activities to risk associated and sensitivity of activities involved involving water. This should be included in method statement for government projects or schedule basis memorandum for larger scale projects or oil & gas projects. With this tabulation or matrix, we can justify impact of rainy days to our our project. 
For example, 
a) A rainy day will not affect only affect geotechnical works for one day, it may prolonged if it involves with pore water pressure and water table when it comes to slope stability when working in confined space. Apart from that, the time required for de-watering works and to have water to reach equilibrium and working with ground/soil in at-rest condition.
b) Working in a site which have high water table is proven to be an individual case which contractor can justify - avoiding lost of life and nuisance caused toward the public.

6a. When submitting, always carry out simulation of such delay. One gantt chart is only as good as a baseline. It doesn't indicate anything except that the planned activity is in the critical path or not and if there is additional float for the activity. By simulating, both of these will change. Critical path is not something dead, it changes as we track on the project. Where possible, submit the simulation based on delay of each task with possible risk (it is good to indicate based on 20% percentile and 80% percentile) and best case scenario based on the matrix i mentioned earlier in order to have an indicative but reflective simulation.

7. Further to that, the granting of extension of time for weather inclement can be affected by other issues entitled under clause 43. If both runs parallel or concurrently at the same point of time, both shall be granted the amount of days depending on calendar date and not cumulative days.

8. The followings are considerations by SO and his rep(s) when considering overall extension of time claim;
a) Records and Contract Provisions - Actual facts and record are critical; Programmes and notices should not be ignored or left
b) Sequence of works - The order in which works logically have to take place
c) Critical paths - Those items which must be completed in a certain order
d) Use of float time - Spare time / capacity in the programme between critical events; Over estimation of activity durations
e) Ownership of float - As a general rule, the party which needs it uses it
f) Mitigation measures undertaken by contractor - Limitation of actual delay impact; Contractor must progress work diligently
g) Contractual duties - Contractor must limit the impact of any delay; S.O / P.D. should grant extension of time as the works progress, wherever possible
h) Concurrency - A number of competing connected events; A number of unrelated events occurring at the same time
i) Dominant cause - The event which really causes the delay; Usually determined by using as-built programmes / critical path analysis

9. However, the most important essence in the contract which the contractor have to fulfill in order to entitle this "gift" is to ensure that notice is given accordingly. Contractually, the contractor have to serve notice to client within 30 days from such event with/without projection of period it involves and the level of aggravation on how such weather affects the activities within the contract physically and financially. For lost and expenses, contractor is permitted to submit claims no later than 90 days after the project is practically completed.

10. Contractor should also display efforts within their capacity (have worked diligently) and with due care in trying to overcome such delay(s).

11. There are many ways to justify your ground for additional time for the project as long as you are diligent enough to have enough evidence, forms proper quantum of delay and its effect(s) and render the best effort to remedy possible delay and keeping client indemnified throughout the whole time.

Part II  

Extension of Time (An extended review)

This article is (relatively and) exceptionally good for those who are new in contract management as the author is someone who is specialized in contract. The discussion is concise and is a good cross reference to the article i authored (you can refer to Part I of this post.)

(1) Nevertheless, how do you work with your lawyer to neutralize the reference of cases as stated in this article in arguments? There are ways to go around terminologies of force majeure and exceptional inclement weather? Let us go through the two clauses which are crucial in fighting for your deserving extension of time. Kindly cross-refer to my article for details on weather inclement.

(1a) Clause 42 - Delay and Extension of time
43.1 upon it becoming reasonably apparent that the progress of the worked is delayed, the contractor shall forthwith give written notice to the officer named in Appendiz as to the causes of delay and relevant information...under this clause due to any or more of the following events:
43.1(a) force majeure
43.1(b) exceptionally inclement weather
Provided that all such delays are not due to any act, negligence, default or breach of contract by the nominated sub-contractor (NSC) and/or Nominated supplier (NS) and/or the contractor, or any of the servants or agents of such NSC or NS or the contractor.

(1b) Clause 57 - Effect of Force Majeure
57.1 Neither the Government nor the Contractor shall be in breach of its obligation under this contract if it is unable to perform its obligation under this contract, other than the payment obligation as a result of the occurrence of an event of force majeure.
57.2 (c) natural catastrophe including but not limited to earthquakes, floods, subterranean spontaneous combustion or any operation of the forces of nature against which an experienced contractor could not reasonably have been expected to take precautions.
57.4 If either party considers the event of force majeure to be of such severity or to be continuing for such period of time that it effectively frustrates the original intention of this contract, then the parties may agree that this contract may be terminated upon mutual agreement of the parties.
57.6 Neither party shall be entitled to rely upon the provision above if both parties reasonably determine that an event of force majeure has not occured.
57.7 For avoidance of doubt, the parties shall continue to perform those part of those obligations not affected, delayed or interrupted by an event of force majeure and such obligations shall, pending the outcome of this clause continue in full force and effect.

(2) Now, in order to support your extension of time (EOT), the utilizing solely on clause 43.1(b) is the weakest reason for client admission and granting of EOT and weather is quite objective as it compares to previous years' data. The technicality of utilizing clause 57 needs a very good defense, call for bluffs and most importantly, the binding of documents that forms the contract. How does binding of this take effect? I will explain briefly.

(3) The attachment of these dossiers as part of the contract binding is very tactical as the supplementary paperwork will not be treated as bindings. Somehow, there is a leeway in most government contract. To most contract administrator in government contract, they are not so fond about planning and work program. In order to upheld the definition of "true intent of the contract", contractor should furnish work program in a larger document namely project execution plan (PEP) or Schedule Basis Memorandum (SBM) which includes work program which sets the possible technical or engineering details on rainfall or inclement and the outcome from such event. (Refer to my article section 5, 6 and 7) and Bina Puri Sdn. Bhd. vs. MUI Continental Insurance Berhad case cited in this article. Always argue based on intensity of each rainfall rather than total rainfall for the month. Guide the judge with summarized engineering hazard to rainfall intensity instead of furnishing everything. He is a human and you need to shade and share important issue(s). No one wins court case with bulk of documents which aren't useful for interpretation.

(4) By doing this, the court is confident of the contractors and the due diligent which have been conducted during site visit and post-contracting phase and this will neutralize clause 57.4 and 57.6. This signals that force majeure (eg. La Nina which contributes to heavy rain and beyond our control) happened but this does not severe the continuing progress as cited in clause 57.3 and 57.4 which entitled for clause 43.1(a).

(5) The use of La Nina is exclusively to neutralize the determination of the magnitude of an event which is beyond our speculation, unlike the use of rain precipitation. Secondly, this is useful since it renders acceptance of cyclic event but not annual event like precipitation. The way precipitation is use in contract is very much stone age approach which take into consideration the overall rainfall for many years and cyclic is not considered. Cyclic consideration is important which have been missed out in clause 43.1(b) and therefore the utilization of 43.1(a) give more flexibility in determining the causation of natural disaster. Take into consideration on earthquake events. Will this cyclic events be measured in a way like precipitation? No. It is and independent event. In this case, the application for extension of time should sound like this, "exceptional rainfall due to la nina" instead of "monthly site weather chart".

(6) Hopefully with this short and brief article, you can see how contract should be use and how it was manipulated when there is lack of understanding when administrating it.