The time passes and no one can stop it.

What we do is allocate “finite blocks of time”

to get things done, thus defining definite points of start and finish in the timeline. When
someone has defined such a block of time to carry out a certain activity, chances are
there that he deviates from his original plan for timings due to various reasons. Mostly,
these deviations are “delays” rather than early finishes.
A construction project has an own slot of time (finite duration) within which it has to
be completed. Construction projects are also executed by humans and like in every
other case, it is natural to see in construction projects too that delays occur. Such
occurrence of delays is not good for almost all parties involved in. Especially, there is
a great chance for the client to suffer losses due to such delays. It’s said that it is
someone can hardly see a construction project without delays. Despite the fact that
all people involved in the construction industry are aware of this nature of the
business, they still undertake the risks. It’s a business.
However, regardless of who created / who is responsible for the delay, the project
duration will be prolonged. This prolongation is the actual thing that happens due to
the delay(s) that occurs. Granting Extension of Time (EOT) to the Contractor, paying
additional payments and everything goes within are mere management approaches
to counter the effects of prolongation of the block of time reserved.
Although Prolongation and Extension of Time walk together, they are completely two
different things.
EOT is granted to a Contractor as a compensation for a ‘delay’ that he
cannot be held responsible for. I.e. for delays created by others. Extension of Time
(EOT) is the term that has been used to identify such a compensation (of time).
EOT has been granted or not, prolongation occurs. The important thing is to establish;
• Whether the occurrence of the delay is a fault of the Contractor or is fault of
others, i.e. the Employer or any third party for which the Employer could be held
responsible.
• Whether the Contractor has taken necessary corrective steps to ‘mitigate’ the
effects of the delay
• The reasonable relief / compensation for the party suffered by the delay. I.e. if
the party suffered,
o is the Contractor, granting additional time, paying additional monies to
cover the additional costs,
o is the Employer, Liquidated damages / penalties and the like.
When getting into a construction contract, there a three (3) primary things that you are
looking into, i.e.;
1. the work to be done (the Scope of Works) at the specified level of quality;
2. The price to pay;
3. The ‘duration’ within which the work will be executed and handed over.
Extension of Time is a concept that is directly related to the project duration.
In normal construction contract tender documents, the project duration is mentioned
(generally in days) in the “Appendix to Tender” (which becomes contract data when
the contract is signed).
This duration is called “Time for Completion” contained within the “Commencement
Date” and the “Date for Completion”.

Time for Completion is calculated FROM the Commencement Date (i.e. EXCLUDING
THE THICKNESS of the Commencement Date)
The date of ‘Substantial Completion’ is mentioned in the “Taking Over Certificate:
issued to the Contractor (by the Engineer)

Substantial Completion
Not the full completion. But as the name suggests it is the level of completion achieved
that permits the intended use of the building (or infrastructure).
E.g. – A hotel building completed except for the painting of ceiling of staff accommodation – the hotel can be functioned
without the ceiling painting of the staff accommodation.

Taking Over Certificate

Taking Over Certificate issued to denote basically the Substantial completion of the
project. Depending on the context, this could be issued within a couple of days or
weeks, months or even years after physical taking over of the building or whatever
the facility (by the Employer). There could be partial / sectional taking over depending
on the project configuration.
Such as Administrative Building Complex for the government. The Government can take-over building by building for
their use whilst the others are under construction.

Obtaining the Taking-Over Certificate is a very important milestone to a Contractor as

it establishes / activates certain important aspects on the project trimline.
There are three (3) dates, generally mentioned on a Taking Over Certificate that are
crucially important.
1st Taking-Over Certificate is From this date, the period of 84 days starts within
date issued date which the Contractor shall prepare and submit his
“Statement at Completion”
The Statement at Completion is also a very important
statement to the contractor as it carries generally a
large sum of money due to
• high value work items done towards the
substantial completion
• release of the 1st half of the Retention
2nd The date of Taking Over by the From this date onwards, the Employer cannot apply
date Employer (the date of Liquidated Damages or Penalties on the Contractor.
Substantial Completion) Understandably, that is ALSO the date up to which the
Contractor requires Extension of Time (EOT)
3rd The date of the start of Defects A day after the date of Taking Over, the Defect Liability
date Liability Period period starts.
 The Clause 44.1 is the only clause in the whole
of the FIDIC 4th ed that provides for
EXTENSION OF TIME.
There are no other clause provides for EOT.
The Contractor shall claim EOT / the Engineer
shall grant EOT pursuant to this clause

1. The clause describes FIVE (5) delaying categories.

2. On the occurrence of any of delaying event (that could be contained in these
categories), the Engineer MUST determine the amount of Extension of Time
to be given to the Contractor.
3. However, the Engineer MUST liaise with the Employer and the Contractor
prior to determining the entitlement and the amount of EOT
4. The Engineer MUST notify the Contractor with a copy to the Employer.
5. The determination of EOT entitlement and the amount of EOT (time) MUST be
done fairly, i.e. the particulars of the EOT claim and the actual context prevailed
shall be thoroughly looked into when making the determination.
6. The Engineer is duty bound to consider the EOT claims raised by the
Contractor. If he does not acknowledge, the Engineer is in negligence, then the Contractor can sue him for
remedies.

7. The Engineer must look into depths of the relevant delaying event(s) to
check whether the Contractor is GENUINLY entitled (or not entitled) for the
EOT.
8. Amount of EOT can be ‘zero’ (0) - If the Engineer finds that the Contractor is
NOT entitled for the EOT.
Delaying categories

(a) the amount or nature of extra or additional work

(b) any cause of delay referred to in these Conditions

(c) Exceptionally adverse climatic conditions

(d) any delay, impediment or prevention by the Employer

(e) Other SPECIAL circumstances which may occur

Category A (extra works / additional works / variations)
1. All extra works / additional works DO NOT cause delays. The amount of extra /
additional works and the timing (of the instruction) matter to cause delays.
E.g. In a 20km long road project, additional 5 m of road won’t create a delay if the Engineer
issues an instruction during the road way excavation may be…but if the Engineer instruct this
additional 5 m of road after fully constructing the 20km road, it would take additional time.

Category B (Any cause of Delay referred to in these Conditions)

1. Easiest to establish the EOT entitlement and the cost.
✓ There are 7 Clauses where Cause of delay is mentioned, Effect of the
delay is mentioned, Relief available to the Parties mentioned
✓ Two sub-points (a and b) listed separately for EOT entitlement and the
additional payment to the Contractor (as the relief).
✓ Sub-point (a) refers to Sub-Clause 44.1 (b) for EOT entitlement
✓ Sub-point (b) refers to the clause itself, providing the Contractor for
additional payment.
2. The Clauses entitle the Contractor for EOT + the COST (cost only, NO PROFIT)

Category C (Exceptionally adverse climatic conditions)

1. the normal rain falls, snow falls, draught, high-temperature conditions
(especially in the Middle East) are NOT EXCEPTIONAL.
2. the climatic conditions which have been / could have been predicted and for
which the necessary allowanced has been built in to the project programme,
project execution plan is NOT EXCEPTOINAL.
3. Climatic condition is exceptional but if it does not pose any adversary effect on
the progress of works THE EFFECT IS NEGLIGIBLE.
4. The frequency, Intensity, timing, adversarial nature shall be proven.
5. NO PAYMENT (COST) ENTITLEMENT. ONLY THE EXTENSION OF TIME
WILL BE GIVEN TO THE CONTRACTOR. LOSS LIES WHERE IT FALLS
(explained later in this document).

6. Sub-Clause 44.1 (c) for EOT entitlement

Category D (any delay, impediment or prevention by the Employer)
1. Delays caused by the Employer and for any third party that he is responsible
for including the Engineer
2. Delays, hindrance / obstruction or prevention by the Employer
3. EOT can be claimed under Sub-Clause 44.1 (d)

Category E (Other SPECIAL circumstances which may occur)

1. For anything that cannot be allocated under a, b, c or d above.
2. Visit of a VIP to the country, Demise of a VIP of the country…special situation.
3. EOT can be claimed under Sub clause 44.1 (e)

The Clause 44 has nothing to do with money.

It is just the time that it talks about!!!

The Contractor has always been burdened with the responsibility of taking “mitigation
action” against any delay that occur.
It does not matter whether the delay is caused by the Contractor or the Employer.
The Contractor cannot simply sit there and is doing nothing to minimise the effects of
delay…
When considering an EOT claim raised by the Contractor, the Engineer will essentially
look into the matter to check if the Contractor has taken mitigation action(s) in order
to minimise the loses due to delay. If the Contractor has not taken any such actions,
there is a great chance that the Engineer will state that “you Mr. Contractor, are not
fairly entitled to be granted with an extension of time, ultimately rejecting his claim for
EOT.
The Contractor in proving himself will need to put up two separate “delay analyses”.
1. General Analyses of delay on “As Planned Programme”
The impact of the delay is depicted on the “As Panned Programme”, which is
the “base line” programme. Total delay is shown…
 2. Final Delay Impact Analysis
The Contractor will take a copy of the above, and will superimpose the mitigation
action(s) that he has taken in order to mitigate the effects of the delay. Then the
recovery of time due to such mitigation actions is clearly visible to the Engineer.
However, there could be a “residual delay” for which he could not recover via
the mitigation action(s). For that bit of the delay, the Engineer will provide
the Contractor with an extension of time.

Even though someone can see that the Contractor has been given
solid chances in claiming for EOTs, the discretion has been given
to the Engineer in deciding whether the Contractor is fairly entitled
for the EOT.

Time required to complete the works elongated further…this happens naturally…

The Time does not get extended unless the Engineer extends…
What happens is that when delaying occurs, the prolongation occurs…
If the Contractor becomes entitled to be compensated, the Engineer will grant him
Extension of Time (EOT)
On the other hand, if the Contractor is not entitled for any extension and the project is
delayed due to Contractor’s defaults, the Employer would apply Liquidated Damages
(LD) / Penalties.

See next page…

 NATURE OF ADDITIONAL PAYMENT ENTITLEMENT

COST (only) COST + PROFIT NO COST

5.2 (a) Priority of Documents

Delays and Cost of Delays

6.4 (b)
of Drawings

7.1 (a) Supplementary Drawings

Not foreseeable Physical

12.2 (b)
Obstructions or Condn.
Work to be done in accordance
13.1 (a)
with the Contract

17.1 (a) Setting Out

Boreholes and Exploratory

18.1 (a)
Excavations
Loss or Damages due to
20.3 (a)
Employer’s Risks

27.1 (b) Fossils

Opportunities for Other

31.1 (d)
Contractors
Facilities for the other
31.2 (a)
Contractors
Engineer’s Determination
36.5 (b)
where tests not provided.
Uncovering and Making
38.2 (a)
Openings
Engineer’s Determination
40.2 (b)
following suspension
Failure to Give
42.2 (b)
Possession

44.1 (c) Climatic Conditions

49.3 (a) Cost of remedying defects

50.1 (a) Contractor to search

51.1 (a) Variations

Definition of Nominated
59.1 (d)
Sub Contractors
Damage to Works by Special
65.3 (a)
Risks
Contractor’s Entitlement
69.4 (b)
to Suspend Work
Easiest of clauses against which the determination of entitlement and the additional
payment are highlighted in the Green above. Because the entitlement naturally comes
under Sub-clause 44.1 (b). The type of additional payment also clearly provided within
the clause itself.

If the Contract does not clearly state that the Contractor is entitled for extension of
time and/or additional payment, it is a bit difficult to determine…
TESTS SHALL BE APPLIED…Tests is to check if a particular delay event could
be “fitted into” any of the 5 categories mentioned under Sub-Clause 44.1, i.e. a,
b, c, d & e

The delaying effect of variations shall be taken into account by the Contractor and
the Engineer and should be claimed for EOTs, additional payments accordingly.
Clauses giving rise to variations / varied works (so for the associated delays) are
highlighted in Pink/Orange above.
A delay caused by a variation / varied work…The entitlement for the Extension of time
comes under Clause 44.1 (a). The additional payment shall be determined as a part
of the valuation of the variation under Sub-Clause 52.1 (Direct Valuation) and Sub-
Clause 52.2 (Indirect Valuation)
Almost all cases of delays / prolongation, the affects work items are “Time-related”
items. Considering the original ‘Time for Completion’ (duration), the Contractor prices
his overheads, especially the Site Overhead, i.e. Supervision / Staff Salaries, Site
Office Maintenance, Tower Crane…and the like. He includes rates & prices taking
into account the total original duration of the project / or the original duration for which
the resource is required.
When a delay induced by a variation prolongs the project duration, the Contractor
would say that…
the nature and/or amount (i.e. the quantum but not the commercial value) of the
variation that the Engineer has instructed rendered his rates & prices
inappropriate or inapplicable to value the variation…
In such a case, he would issue a notice to the Engineer within 14 days from the
instructions to the variation asking for varied rates and/or prices to value the variation
pursuant to Sub Clause 52.2 (a).
In a case where there is NO preliminaries bill section available in the Contract,
generally the cost of preliminaries has been distributed across the direct work items.
If a variation issued delays the project, the Contractor would say that all if not most of
rates & prices have become inapplicable or inappropriate. He would require a fixed
mark-up on all or several rates as the compensation. His claims would be made
pursuant to Sub-clause 52.1 (a).
However, regardless of having a Preliminaries bill or not, the ideal approach
would be to claim for an “extra payment” pursuant to Sub-clause 52.1 (a),
properly calculated based on contemporary site records that the Contractor
maintains.

An interesting scenario…
The Employer creates a delay…assume that the Employer makes a delayed
appointment of a Nominated Sub-Contractor or a third-party contractor appointed by
the Employer delays the progress on site, the Contractor can claim for extension of
time pursuant to Clause 44.1 (d). But what if there is no provision in the Contract to
claim prolongation cost?
The Contract includes the “Expressed terms” that regulates the performance of the contract.
The “LAW” governing the Contract includes the “implied terms” that regulates the performance
of the contract. If in any case, the Contract does not include a necessary provision (as an
expressed term), the governing LAW comes in to play in order to fill the gap…

In many jurisdictions around the world, provides that a party to a contract shall NOT
prevent the other party from performing the obligations under the Contract.
In the above case, by appointing a Nominated Sub-contractor late or delaying the
Contractor’s progress, the Employer has ‘prevented’ the Contractor from performing
his obligations under the contract. By doing so, the Employer is in “breach of the
contract”. The Contractor can claim damages! Damages are what, the ‘prolongation
costs’ in this case…
However, there is something which is not quite right…isn’t it?
The contract was being performed…everything was going as intended until the
unfortunate incident about the Nominated Sub-contractor. Shall the Employer be sued
by the Contractor always to get the prolongation costs in all of this kind of events that
happen always? No…!
The FIDIC includes the necessary provision in place…
A blanket clause wrapping up Contractor’s all other entitlements to cost and also the
Contractor’s entitlements which are NOT expressly written in the contract but exist in
the governing law which the Engineer is DUTY BOUND to look at when determining
Contractor’s entitlement to the costs…

“Notwithstanding any other provision of the contract, if the Contractor intends to claim
any additional payment pursuant to any clause of these conditions OR OTHERWISE,
he shall give a notice of his intention to the Engineer with a copy to the Employer
within 28 days after the event giving rise to the claim has first arisen.”
 IMPORTANT!!!
The Governing law applies only when a party to the
contract is in breach of the contract

1st Test:
To check if the entitlement for cost is mentioned in the clause it self

2nd Test:
To check if any other clause gives the entitlement for cost in the Contract.

3rd Test:
To check if the sub-clause 52.2 (a) provides the entitlement as varied rate / prices or
extra payment.

4th Test:
To check if the whole Contract is silent? The provision in the Law or customs in use
in the country? [Only applies when a party is in breach of the contract].
TIME AT LARGE
It is very important that the Contractor is given Extension of Time (following a fair
evaluation) …
It protects the interest of the Employer…
If extension of time is not granted, the Employer would lose his right to apply
Liquidated Damages (LDs) / Penalties on the Contractor for any future/ further delays
occur after…
BECAUSE THE TIME BECOMES AT LARGE…
It’s like a Prisoner breaks away from his cell. Until the prisoner is re-captured and put
in his cell, the PRISONER IS AT LARGE. Similarly applies to time as well.
If there is no Date for Completion (i.e. if there is no any Time for Completion) defined,
there is no confinement of time…
Or in case where “Time for Completion is in place”, BUT if there is
1. no EOT clause mentioned in the Contract;
2. very badly drafted EOT clause which is good for nothing;
3. or the Employer (thru the Engineer) does not give EOT compensating a delay
occurred,
the ‘old’ confinement voids. Again, there is NO confinement for time…Time becomes
at large…

The Contractor is on track to Emp’s Delay Contr’ Delay

complete the project on time
Total Time Overrun

The Contractor could not complete

the work by this point due to his
own delay.
The EOT clause is absent in entirety OR EOT clause is very badly drafted…
Employer creates a delay (may be due to extra / additional work that he needs). The
Employer would say, I don’t want to penalise the Contractor… because he is doing
my work…
However. due to Contractor’s own delay, he could not finish the project by the time
the Employer required the project (i.e. by the revised date for completion).
NOW, the Employer arranges to apply LD/penalties on the Contractor for as a
compensation for his loses.
HOWEVER, the law does not allow Employer to penalise the Contractor since the
Employer could not grant an EOT to compensate for the delay caused by him (due to
the absence of an EOT clause).
The Employer’s right to apply LDs/Penalties has been abolished... due to Employers
failure to grant the EOT. From the moment that the Employer failed to grant the EOT,
the TIME BECOME AT LARGE!!!
EOT clause provides to extend the time to re-confine it within the Commencement
Date and The Date for Completion thus restoring the Employer’s right to apply LD /
penalties beyond the extended Date for Completion.

Special Note:
There is no way that a Contractor is penalised first and then granted an EOT.

In a scenario where the Contractor has delayed the project and then the Employer
makes another delay by himself.
What could happen???
Assume that the contractor has caused delay of 6 weeks and the Employer’s has
caused a delay of 3 weeks.
Please refer to the image in the next page showing the ‘dotting-on’ of time Employer’s
delay after the original Date for Completion. The resultant period for which the
Contractor will be held liable and LDs will apply is 6 – 3 = 3 weeks only.

IT MUST BE REMEMEBRED THAT,

PROLONGATION COSTS ARE NEVER PAID FOR THE
EXTENSION OF TIME.
PROLONGATION COSTS ARE ALWAYS PAID FOR THE
PERIOD OF DELAY.
The Contractor is on track to Cont’s Delay
Emp’s
complete the project on time
Delay

The Contractor is on track to

complete the project on time Emp’s Cont’s
Delay revised
Delay