Spec Finish

Contractors Corner 22 www.thefis.org schedule. This lets the project planner plot the new critical path network reflecting anticipated delay to a project as a whole. If an impact is forecast for future occurrence, then the use of a prospective analysis (e.g. time impact analysis) will allow revision of the programme and this can be correctly reflected in a subsequent retrospective approach. The process would be supportive of a loss of productivity claim and would be most useful for employers in forecasting the completion of the works with some alacrity. Loss of productivity and general principles Many practitioners suggest that claimants should avoid the simple assessment of the cost of a group of operations compared with the tender allowances by claiming the difference. The main issue with this approach is discussed later in this article but is mostly premised on its perceived ignorance of other issues that impact production, in some instances, these being issues that the tender ought to have considered. Loss of productivity and other considerations The general principle in claim submissions is that the claimant establishes an ‘evidential burden to a balance of probabilities’. This in itself does not require every single record 5 to be provided – in some instances, it is not always possible to have a record for each and every impact of an event. If we were to consider the practicality of this requirement then claimants would face great difficulties in providing accurate records of each hand that was washed, each temperature that was taken and each mask that was replaced. For example, the claimant would need to establish a satisfaction on a balance of probability which may include e.g. photographic evidence of the hand sanitising process, route maps of access into and around site with the provision of an average additional time spent, invoices for masks and equipment in addition to those tendered for, and material delivery tickets denoting a reduced frequency. Many of the impacts will be repetitive so the evidence provided will be representative of the claims made, identification of these by a time chart cross referenced to a cost coded impact will allow the respondent to sample the records with relative ease. A concentration and focus on the records for the events and impacts that are claimed is the most suitable approach ensuring that when challenged there are sufficient records to evidence the cost or time impact claimed. Without discussing each and every issue, claimants are reminded that mitigation has its place in the construction industry, often as an express term 6 within the contract but also as a common law duty. Claimants are generally advised against spending more on mitigation than it would ordinarily have cost, and to circumvent the additional costs often caused by thickening of preliminaries (see box out explanation) and labour resources. Loss of productivity and the respondent rebuttal The responding party will be left with a large number of documents to work through, as it endeavours to address the complexities of the lost productivity that followed the event and ultimately give entitlement to the claimant for full reimbursement of its costs. If it can counter argue, the responding party will be clearly entitled to question why it is liable for the full cost of lost productivity and prove that part of these costs are the liability or, in the very least, the responsibility of the claimant. In the absence of details and indices For many claimants, the costs that arise from COVID-19 for the resulting lack of productivity may become payable by the employer in a resulting claim. It would therefore be to the advantage of the claimant to submit on a global cost basis. It is also unlikely, that a claimant would include such detail in its claims. The responsibility for the event is that of the employer, the responsibility to manage the event is that of the claimant. It is for the claimant to ensure that its management system provides resolution against such problems, either by its induction process or its hands-on role on site where it discusses specific issues with its operatives. The respondent should not have to incur costs that are attributable to the claimant’s supervisory failings. And the claimant should not just clumsily bundle all of its costs into claims for loss of productivity which will result following a change or an event and expect a dispute resolver to make an informed decision on such. In general, the contract provides for the tenderer to propose its costs, activities and sequences and, importantly, its objectives for the programme that make the execution of the work a success. This should include how it intends to react to changes without causing loss of productivity costs that arise from its own management operations. In the situations without particularised claims or an index of authority, claimants may find immense difficulty in agreeing their claims. Explainer: Thickening of preliminaries In construction terms, this usually means the reimbursement of the contractor’s costs for the extended time in providing site management, site establishment, plant and equipment, insurances, additional financing costs head office costs and the like, which are usually priced in the preliminaries section of the bill of quantities. 5 Society of Construction Law provides a commentary on records in its Core Principle 1 “Programme and records Contracting parties should reach a clear agreement on the type of records to be kept and allocate the necessary resources to meet that agreement.” “Contractors and subcontractors will likely need to develop and shape bespoke record keeping systems, as it is unlikely that the traditional project controls systems will capture the relevant information.” 6 Most contracts refer to the obligation to use reasonable endeavours to minimise/mitigate with NEC specifically including the early warning notice as soon as becoming aware.