4
Project progress
4.1 Most building contracts include provisions that require the contractor to complete by a specific date or set of dates as this is often a matter of great importance to the client. Late completion may well result in losses to the client, in particular the costs of alternative accommodation and additional consultants’ fees. However, the obligation to complete is normally subject to some exceptions; for example, the client will be required to allow the contractor additional time if the client itself causes delay. This chapter examines the contractor’s obligations regarding time, programming and completion under the RIBA Building Contracts, including the mechanisms for monitoring progress and the sanctions for non-completion.
The site: possession
4.2 An address for the site is to be given in item C of the Contract Details. However, far more information may be needed than simply the address. If the contractor is not to have full access to the whole plot at that address – for example, if only part of the plot can be used, or if there are restrictions on entry points – this should be made clear at the tender stage. Similarly, if the building is to be occupied, the details of this should be given, including which parts and between which dates. Where the property shares common parts with other properties (e.g. stairs, parking), it may be sensible to explain exactly what the contractor may use of these.
4.3 The client has to allow access to the contractor for carrying out the works (cl. 1.2). Unlike some of the JCT contracts, the RIBA Building Contracts do not refer to the contractor having ‘possession’ of the site (which is normally held to be a licence to occupy the site up to the date of completion; H.W. Nevill (Sunblest) Ltd v William Press & Son Ltd and Impresa Castelli SpA v Cola Holdings Ltd). In the RIBA Building Contracts, the extent of the access will be interpreted in the light of all the information made available to the contractor at the time of tender. If little information is given, the courts will imply an obligation that the contractor should be given such possession, occupation or use as is necessary to enable it to perform the contract (London Borough of Hounslow v Twickenham Gardens Development). This may include access not just to the building where the work is to be carried out, but also to other areas in the control of the client (see The Queen in Rights of Canada v Walter Cabbott Construction Ltd).
The Queen in Rights of Canada v Walter Cabbott Construction Ltd (1975) 21 BLR 42
This Canadian case (Federal Court of Appeal) concerned work to construct a hatchery on a site (contract 1) where several other projects relating to ponds were also planned (contracts 3 and 4). The work to the ponds could not be undertaken without occupying part of the hatchery site. Work to the ponds was started in advance of contract 1, causing access problems to the contractor when contract 1 began. The court confirmed (at page 52) the trial judge’s view that ‘the “site for the work” must, in the case of a completely new structure comprise not only the ground actually to be occupied by the completed structure but so much area around it as is within the control of the owner and is reasonably necessary for carrying out the work efficiently’.
Starting the work
4.4 The contractor is required to ‘carry out and complete the Works in accordance with the Contract, in good and workmanlike manner, by the Date for Completion’ (cl. 2.1.1). This wording has been amended slightly since the 2014 editions, which specifically required the contractor to start on the date stated in the contract.
4.5 It is often crucial that work actually starts on the defined date. In cases where the site is empty, the client needs to be assured that from that date the contractor will be responsible for security, health and safety, and general compliance with local authority requirements. An empty site is exposed and hazardous, so the client will be at risk of claims if security is not being addressed. Even where a client intends to remain in residence, it is disconcerting, and sometimes extremely inconvenient, if work does not commence on the planned date. Although there is no express requirement to begin work on the ‘Start Date’ specified in the contract details, it is likely that obligations regarding site security, etc, would run from that date. Clause 2.4, for example, requires that security is maintained ‘at all times’ and the contractor would have statutory obligations to ensure that the site is safe. However aside from this, there would be no obligation to begin building activity on the start date, provided that the work is finished by the completion date; if an early start is important then additional terms may need to be added.
4.6 There are provisions to allow the client to defer access to the whole site, or to ‘Sections of the Site’, if needed (cl. 1.4). This can be very helpful if, for example, the client has problems arranging alternative accommodation, or for removal of furniture or equipment to storage. The contract does not place any limits on the length of deferral allowed, nor does it require the client to give any advance warning notice. However, the contractor would be entitled to a revision of time, and to additional payment to cover costs arising as a result of the delay. As these could be considerable, especially if little or no warning is given, the client would be wise to exercise the right to defer only in emergency situations, or if the deferral and the contractual implications can be agreed with the contractor well in advance. It should be noted that the term ‘Sections’ refers to sections that are predefined in the Contract Details (see below), so that in theory clause 1.4 does not allow the client to defer access to parts of the site on an ad hoc basis without prior agreement of the contractor. However, as the contractor will be compensated for any losses, in practice it is unlikely to object.
Completion in sections
4.7 The RIBA Building Contracts include an optional clause (cl. 17) providing for completion in sections. Although the clause refers only to ‘Completion’, it is possible to arrange for the work to be started and/or finished in sections. This would be useful where the client cannot make all areas of the site available at the same time, or needs certain parts of the building before others. On large projects, phased working is quite often more economical for the contractor, as it can move its resources around the various sections in a phased programme. On smaller projects, however, it may actually be less convenient, so this may need to be negotiated following tender submissions. If this option is selected, separate start and completion dates and rates of liquidated damages are specified for each section in item R of the Contract Details.
The contractor’s programme
4.8 Both versions of the contract contain an optional clause (cl. 14), whereby the contractor is required to provide a programme. It is recommended that this should always be selected (item O), except on the very smallest of projects. The programme is of great help for:
- giving the client a general idea as to what to expect (especially important to the client if they are in residence);
- giving the contract administrator an indication as to when the contractor will require further information;
- alerting the contract administrator as to when it may be wise to inspect the site;
- acting as an early alert if the contractor is slipping behind programme or getting into financial difficulties.
4.9 The programme is not identified as being one of the contract documents under item F of the Contract Details. Nevertheless, it would be sensible to ask that the contractor provides a programme before the contract is entered into. This could be done either by requiring tenderers to provide a programme with their tenders, or, once the tenders have been received, by requesting the preferred bidder to submit a programme before its tender is accepted. Otherwise, the programme is to be provided no later than the date of the pre-start meeting (cl. 14.1).
4.10 There are no sanctions for non-production of a programme, therefore it would be sensible to insist on it before the contract is executed. The 2014 editions contained some alternative sanctions, which were a useful provision (it is not clear why these were removed). Under these, the contractor could either be subject to a financial penalty or prevented from starting work until the programme is produced. The contractor was still bound to finish by the completion date, despite the delayed start. The financial penalty involved withholding 10 per cent of the value of the first payment certificate until the programme was produced. Either option would be effective, but preventing start on site would offer a more stringent sanction. If required, the contract could be amended to add one of these sanctions back in.
Content of programme
4.11 The parties are required to set out some information in the Contract Details, under item O, namely: ‘the activities the Contractor will carry out to complete the Works, the start and finish dates of each activity and the relationship of each activity to the others, which may include lead and lag times’. In the 2014 version, this was stated to be something that the contractor should include in its programme; in the 2018 version the information must actually be inserted in the Contract Details. This could only be done, of course, if this has already been provided – it appears to assume that the contractor’s programme will have been submitted before the contract is executed (as noted above, this is good practice).
4.12 This information will, among other things, give a clear idea of the sequence of work operations throughout the project. Including ‘the relationship of each activity to the others’ will show whether an item needs to be finished before another can start, i.e. which items are time critical. The shortest route through all time-critical activities is usually referred to as the ‘critical path’. Knowing the critical path is extremely useful when it comes to assessing revisions of time. It should be noted that the critical path is not fixed and may change throughout the project, therefore having regular programme updates is essential.
4.13 There are other matters than can be very useful to know, for example the number of people and other resources. This gives an immediate indicator of whether the contractor is not resourcing the project as planned, and therefore may be evidence that the contractor is responsible for a delay. In extreme cases it may signal that the contractor is getting into financial difficulty.
4.14 Exactly what information is required would need to be set out at tender stage, otherwise there would be no obligation on the contractor to provide it. These days most contractors use software packages to work out their programmes, and the packages would always show both sets of information (in fact, an input of resources is required in order for the package to calculate the durations of activities).
Drawings/information required/provided
4.15 One of the further requirements for the programme might be to show the dates when the contractor will require additional information or drawings. There is no requirement in the contracts for further information to be provided, but it is likely that such a duty would be implied (see para. 5.10). It would therefore be useful for the contract administrator to be aware of when the contractor anticipates it will need information. Nevertheless, as the programme is not a contract document, any dates shown would not be binding.
Progress
4.16 The contractor is required to ‘carry out and complete the Works in accordance with the Contract’ (cl. 2.1.1). Unlike the equivalent clause in CBC/DBC 2014, this clause no longer contains an express provision to proceed ‘regularly and diligently’. However it should be noted that cl 12.1.2 gives failure by the contractor to proceed regularly or diligently as a ground for termination by the client (see paras 9.6 and 9.8–9.11), therefore the contractor must maintain reasonable progress. The contractor does not have to stick precisely to its own programme, so long as it completes by the date for completion; if the client requires any parts to be completed before others, or to use any parts during the course of the works, it will need to make use of the sectional completion provisions, or those for partial possession before practical completion (see paras 7.9–7.12).
4.17 The contract administrator will not normally intervene in matters concerning the day-today programming. As the contract administrator is given the specific power to issue instructions ‘postponing the Works or one or more Sections of the Works’ (cl. 5.4.2) it would be entitled to alter the working sequence, but should generally only use this power where no other option is open. Examples might be if the local authority requires work to cease for a period of time, if an unanticipated health and safety hazard is encountered, or if the client has second thoughts about the design of a part of the project and work has to be put on hold while discussions are held. There will almost always be significant effects on the completion date and the costs of the project.
Updated programmes
4.18 The 2014 edition of CBC (but not DBC) included a useful provision which required the contractor to submit regular programme updates. As published, the 2018 no longer requires the contractor to do this, even following revisions to the contract period (as it would in JCT contracts). In most projects, the original programme is amended many times, even when the overall completion date is met, and certainly if there are major delays or an extension is awarded. As such, the original programme is usually of little use by the time the project is even halfway through. The parties may wish to consider adding a requirement for a monthly update to be provided.
4.19 In CBC 2014, the updates were linked to progress meetings (also omitted), and the contractor was required to submit an updated programme to the contract administrator no later than 5 days before each progress meeting, and a revised version shortly after if amendments were agreed. This is the system used in the Government General Conditions of Contract for Building and Civil Engineering (GC Works) contracts, and which has proved to be very effective in practice (it is also used in NEC4). For clarity, the ‘update’ was to be provided even if there were no changes to the programme. Even without any delays being experienced, the contractor will in practice regularly review and make adjustments to the resourcing and sequencing, and it is very useful for the contract administrator to be made aware of these.
Finishing the work
4.20 The Contract Details require the insertion of a ‘Date for Completion’ (and if completion in sections is selected, a date for completion for each section), and the contractor is required to complete by this date (cl. 2.1.1). However, this is rarely the date the works are actually completed. If delays occur that were not the fault of the contractor, the contractor will be entitled to a ‘Revision of Time’; this will mean that the date for completion of the works or a section will be postponed, and the contractor’s obligation will be to meet the revised date. If the contractor simply fails to finish by the original or revised date for completion, liquidated damages will be claimable by the client (note: the damages may need to be repaid if the date for completion is subsequently revised).
4.21 Once the works are complete, the contract administrator will certify ‘Practical Completion’, which is then followed by a ‘Defects Fixing Period’. When all defects have been corrected, the contract administrator will issue a final payment certificate. The rest of this chapter considers delays to the programme. Practical completion and the remedying of defects are dealt with in Chapter 7.
Delay
4.22 Delays to a project will obviously cause problems for all involved, including the client, the contractor and the contract administrator, and so should be prevented or minimised if at all possible. The ‘Collaborative Working’ section that appears in both of the RIBA Building Contracts includes provisions that are aimed at preventing or managing delay and its consequences, under the heading ‘Advance Warning and Joint Resolution of Delay’. The relevant clauses state:
- 3.2 If an event occurs which affects or is likely to affect the progress of the Works and/or the Contract Price, the Parties shall:
- 3.2.1 notify each other and the Architect/Contract Administrator of the event as soon as they become aware of it
- 3.2.2 work together to resolve the event. If necessary the Architect/Contract Administrator may hold a meeting with the Parties and other related stakeholders to do this
- 3.2.3 take reasonable steps to minimize the effects of the event on the Contract.
4.23 The obligation applies to both parties; so, for example, the client might notify of a possible restriction to access, and the contractor might notify of a problem with obtaining a material. A notification by the contractor must be given whether or not the event might entitle it to a revision of time. This requirement is repeated in clause 9.4, where the contractor must inform the contract administrator of ‘any event affecting the progress of the Works’.
4.24 There is no obligation on the contract administrator to issue a notification of events of which only it is aware, but of course it would be sensible for it to do so. Also, although the clause states ‘affects or is likely to affect’, it would be sensible for a party to alert the other to events that might occur as well as ones that will occur (if there is a reasonable probability). The aim of the warning is to allow a strategy to resolve or minimise the effect of the event to be agreed in advance of the event occurring, and some events might be entirely averted if a warning is issued sufficiently early. Whether or not a warning is given, the contractor is required to take reasonable steps to minimise the effect of any delaying event (cl. 3.2.3).
Revisions to the contract completion date
4.25 All construction contracts include provisions for making revisions to the contract period (usually referred to as ‘extensions of time’, but in the RIBA Building Contracts they are referred to as ‘Revisions of Time’). In many cases, construction contracts will list the reasons that would justify a revision, which will comprise ‘neutral’ events (i.e. things that could occur through neither party’s fault, such as bad weather) and events caused by actions of the client or the contract administrator. Such a list of events acts as a means of distributing risk between the parties; the more events are included, the more risk is borne by the client.
4.26 The main reason for including events caused by the client and the contract administrator is to preserve the client’s right to liquidated damages. If no such provisions were included and a delay occurred that was caused by the client, this would in effect be a breach of contract by the client and the contractor would no longer be bound to complete by the completion date (see Peak Construction v McKinney Foundations). The client would therefore lose the right to liquidated damages, even if some of the blame for the delay rests with the contractor. The phrase ‘time at large’ is often used to describe this situation. However, this is, strictly speaking, a misuse of the phrase as in most cases the contractor would remain under an obligation to complete within a reasonable time.
Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111 (CA)
Peak Construction was the main contractor on a project to construct a multi-storey block of flats for Liverpool Corporation. The main contract was not on any of the standard forms, but was drawn up by the Corporation. McKinney Foundations Ltd was the subcontractor nominated to design and construct the piling. After the piling was complete and the subcontractor had left the site, serious defects were discovered in one of the piles and, following further investigation, minor defects were found in several other piles. Work was halted while the best strategy for remedial work was debated between the parties. The city surveyor did not accept the initial remedial proposals, and it was agreed that an independent engineer would prepare an alternative proposal. The Corporation refused to agree to accept his decision in advance, and delayed making the appointment. Altogether it was 58 weeks before work resumed (although the remedial work took only six weeks) and the main contractors brought a claim against the subcontractor for damages. The Official Referee, at first instance, found that the entire 58 weeks constituted delay caused by the nominated subcontractor and awarded £40,000 damages for breach of contract, based in part on liquidated damages which the Corporation had claimed from the contractor. McKinney appealed, and the Court of Appeal found that the 58-week delay could not possibly entirely be due to the subcontractor’s breach, but was in part caused by the tardiness of the Corporation. This being the case, and as there were no provisions in the contract for extending time for delay on the part of the local authority, it lost its right to claim liquidated damages, and this component of the damages awarded against the subcontractor was disallowed. Even if the contract had contained such a provision, the failure of the architect to exercise it would have prevented the Corporation from claiming liquidated damages. The only remedy would have been for the Corporation to prove what damages it had suffered as a result of the breach.
4.27 In both CBC and DBC, the provisions are set out in clause 9.3, which states:
- 9.3 The Contractor may apply (with supporting documentation) for a Revision of Time if the Works are or are likely to be delayed by any of the following:
- 9.3.1 the Architect/Contract Administrator issues a Change to Works instruction
- 9.3.2 the Client defers or withdraws access to the Site
- 9.3.3 the Client or its agents cause delay or disruption to the Works or part of the Works
- 9.3.4 the Client or its agents cause the Works or part of the Works to be suspended
- 9.3.5 subject to clause 5.5.1, an instruction issued for work to be uncovered and inspected/tested under clause 5.5
- 9.3.6 the action or omission of a utility company or statutory body, subject to advance warning notification under clauses 3.2 and 3.3
- 9.3.7 any event under clause 8 (Contractor’s Right to Suspend)
- 9.3.8 any event under clause 9.1 (Force Majeure).
4.28 Many of these events are dealt with at other points in this Guide: for change to works instructions, see paragraphs 5.23–5.31; for deferring access and postponing work, see paragraphs 4.6 and 4.17 above; for inspections and tests, see paragraphs 5.19–5.22; and for inconsistencies, see paragraphs 2.44 and 2.45. In regard to other events, the following points should be noted:
- The client or its agents causing delay or disruption (cl. 9.3.3) acts as a useful ‘catch-all’, to pick up any actions not covered elsewhere in the list. ‘Agents’ would include the contract administrator if acting on behalf of the client, and may include other third parties whose actions have been authorised by the client.
- ‘Force Majeure’ is a defined term, and covers matters for which the client has agreed to accept the risks of any delay. It is more widely defined than the normal understanding in law.
4.29 There is no reference to delays due to bad weather – any application for delays due to weather would need to show that it fell within the definition of force majeure, in which case the weather event would have to be exceptionally bad, and not one that could be expected at the time of year in question. Any ambiguity here can usually be resolved by consulting the contractor’s site records and/or Meteorological Office records.
Applying for a revision of time
4.30 If the contractor is delayed by a clause 9.3 event and wishes to apply for a revision of time, it must do so, with supporting information ‘within a reasonable time of its occurrence’. The contract administrator and contractor are required to ‘aim to agree the Revision of Time promptly’ (cl. 9.5). If no agreement can be reached, the contract administrator is required to ‘make a reasonable assessment of the Revision of Time, taking into consideration all the supporting documentation’ (cl. 9.6). Although the clause states ‘may’, the contractor administrator should make a decision within a reasonable period, so that the parties understand the position. Note that the clauses overlap to a certain extent those dealing with change to works instructions. These essentially follow the same sequence, except that if the contractor wishes to make an application it should do so within 7 days of receiving the instruction.
4.31 Surprisingly, having decided a revision is appropriate, there appears to be no obligation on the contract administrator to amend the date for completion, or to inform both parties, although obviously it would be sensible to do both.
4.32 It not clear whether the contractor’s application is a condition precedent to the award of a revision of time, i.e. not only would it lose the right, but the contract administrator would have no power to issue a revision unless the contractor has made an application. It is unlikely that the contractor would object to a revision made by the contract administrator on its own initiative, and therefore unlikely that any such revision would cause problems. Nevertheless, it would be wise for the contract administrator to seek the agreement of both parties before making the revision.
Assessment of an application
4.33 Assessment of revisions of time is a complex process that often causes difficulty in practice. What follows is a brief outline only. If faced with difficult claims, the contract administrator should consult one of the published texts on the subject (e.g. Birkby et al., 2008; Eggleston, 2009) or take expert advice.
4.34 All assessments must be made in a fair and reasonable manner. If the parties have agreed to use any rules, such as the SCL Delay and Disruption Protocol, then these should be taken into account. The objective is always to assess what effect the event will have on the final completion date, and the contract administrator should take into account the fact that the contractor should use reasonable endeavours to minimise the effects of any delaying event. This would include giving an early warning of any event of which it ought to be aware, and taking reasonable steps to reorganise the works and adjust the programme (cl. 3.2.3).
4.35 It should be remembered that the standard of proof is ‘on the balance of probability’ (the civil standard), i.e. the contractor has to convince the contract administrator that it is more likely than not that it suffered delay due to the event. The contract administrator should not expect the application to prove the contractor’s case ‘beyond all reasonable doubt’ (the criminal standard). The contractor must demonstrate not only that an event listed in clause 9.3 has occurred, but also that the event has delayed the work, and that the particular work delayed is on the critical path, i.e. its delay will ultimately delay the completion of the project; put simply, it must show a causal link between the event and delay to completion.
4.36 The contract administrator is required to take into account any supporting documentation when making adjustments to the time (cl. 9.6). This could include, for example, the contractor’s programme. The contract administrator could also take into account any advance warning notices. There are probably two ways in which the notices may be relevant: first, the fact that they were given is evidence that the contractor has been vigilant and used reasonable endeavours to avoid the delay (conversely, if no warning is given this must be taken into account, cl. 3.3); and second, the notices should contain useful contemporaneous evidence of the nature and anticipated effects of the event. The contract administrator could also consult any other available records as to the history of events on site, and use its own knowledge and experience when making the decision.
4.37 Two issues in particular can cause problems when assessing revisions of time: ‘concurrent delay’ and ‘contractor’s float’. The following sections present very brief explanations of these issues.
Concurrent delay
4.38 Where two separate events contribute to the same period of delay, but only one of these is an event listed in clause 9.3, the normal approach is that the contractor is given a revision of time for the full effect of the clause 9.3 event (i.e. the contractor gets the benefit of the contributing but approximately equal cause, unless another competing cause can be identified as the dominant cause). The courts have normally adopted this approach (see Walter Lilly & Co Ltd v Giles Mackay & DMW Ltd; note, however, that the same does not apply to claims for loss/expense).
4.39 The instinctive reaction of many assessors might be to ‘split the difference’, given that both parties have contributed to the delay. However, it is more logical that the contractor should be given a revision of time for the full length of delay caused by the relevant event, irrespective of the fact that, during the overlap, the contractor was also causing delay. Taking any other approach, e.g. splitting the overlap period and awarding only half of the extension to the contractor, could result in the contractor being subject to liquidated damages for a delay partly caused by the client.
Walter Lilly & Co. Ltd v Giles Mackay & DMW Ltd [2012] EWHC 649 (TCC)
This case concerned a contract to build Mr and Mrs Mackay’s, and two other families’, luxury new homes in South Kensington, London. The contract was entered into in 2004 on the JCT Standard Form of Building Contract 1998 Edition with a Contractor’s Designed Portion Supplement. The total contract sum was £15.3 million, the date for completion was 23 January 2006, and liquidated damages were set at £6,400 per day. Practical completion was certified on 7 July 2008. The contractor (Walter Lilly) issued 234 notices of delay and requests for extensions of time, of which fewer than a quarter were answered. The contractor brought a claim for, among other things, an additional extension of time. The court awarded a full extension up to the date of practical completion. It took the opportunity to review approaches to dealing with concurrent delay, including that in the case of Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (where the contractor is entitled to a full extension of time for delay caused by two or more events, provided one is an event which entitles it to an extension under the contract), and the alternative approach in the Scottish case of City Inn Ltd v Shepherd Construction Ltd (where the delay is apportioned between the events). The court decided that the former was the correct approach in this case. As part of its reasoning the court noted that there was nothing in the relevant clauses to suggest that the extension of time should be reduced if the contractor was partly to blame for the delay.
Float
4.40 Another area that sometimes causes problems is the question of float. Float is essentially planned early completion, i.e. a period shown on a programme between the contractor’s planned completion date and the contractual date for completion. If a revision of time is applied for at a relatively early stage in the project, it may be that the delay suffered will not push the planned date beyond the contractual date for completion. Therefore, strictly speaking, no revision should be given. However, if the contractor is later delayed through its own errors, it may wish it had had the benefit of the earlier revision, as it now appears unlikely that it will complete on time. In such cases it is generally considered that the contractor should be given the benefit of the ‘float’, therefore the contract administrator may need to review earlier decisions and account for the float period.
Final assessment of revisions of time
4.41 The RIBA Building Contracts do not require the contract administrator to review any revisions of time after practical completion. However, the RIBA has confirmed that it would be possible to do this, provided that it extended, not reduced, the contract period. After practical completion, the contract administrator will be able to review all the earlier revisions of time and to adjust the date for completion as necessary with the benefit of full information, including the final programme. Such an adjustment would only be to extend the date further; the contract administrator would not be entitled to shorten the programme at that stage.