Extension of Time, EOT

Extension of time is not a strange word for a Quantity Surveyor. When we say this, we will automatically link the EOT to the following:-

a) Additional preliminaries which the Contractor will be entitled to
b) Amended Completion Date
c) Liquidated damages

Recently, the Contractor of my project claimed for 4 months EOT with over 30 million USD claim for additional associated cost. It was a surprise to us as a Consultant while the project has just started for 1 year and still have 2 years to go. Well, the most surprise thing is the monetary claim of USD 30 million. Therefore, what I intend to write on this post is relating to the monetary claim associated with EOT - we referred it as compensation due to prolongation.

As normal, it would put it in question and answer form as it is a better way to illustrate.

Question: Will be Contractor be automatically entitled to compensation due to prolongation when EOT is granted to him?

Answer:
NO. Entitlement to an EOT does not automatically lead to entitlement to compensation and vise versa. Contractor will only be entitled to compensation if EOT is granted because of the delay is caused by the Employer. The Contractor will not be entitled to compensation if the EOT is granted due to force majeure, as per the conditions of contract. There may be other reasons which the Contractor can be granted EOT but not for monetary compensation which will be stated in the conditions of contract.

Question: Will be Contractor be entitled to compensation due to prolongation for concurrent delay (where Contractor Delay to Completion occurs or has effect concurrently with Employer Delay to Completion)?

Answer:
If the Contractor incurs additional costs that are caused both by the Employer Delay and concurrent Contractor Delay, then the Contractor should only recover compensation to the extent it is able to separately identify the additional costs caused by the Employer Delay from those cause by the Contractor Delay. If it would have incurred the additional costs in any event as a result of Contractor Delays, the Contractor will not be entitled to recover those additional costs.

Question: What is the basis of calculation of compensation for prolongation

Answer:
Compensation for prolongation shall be assessed based on work that actually done unless otherwise expressly provided in the contract (e.g. by evaluation based on contract rates). The objective is to put the Contractor in the same financial position it would have been if the Employer Risk Event had not occurred.

Question: When is the period for evaluation of compensation

Answer:
It should be evaluated as soon as possible when the Employer Risk Event was felt. The evaluation is not recommended to be done only the the end of the contract as will be difficult to assess the effect at that time if no proper records have been kept.


Having other questions? Feel free to write down some so that we can discuss together.

Just To Share Some of My Experience Gained During My Industrial Training

In March 2002, after I completed my 3-year QS course in a university in Malaysia, I sent a couple of application letters to a few QS consultant firms in order to get my industrial training done – which was one of the faculty requirements before I could graduate from the university.

A boss of a QS firm (lets name it “The Firm”) asked me for an interview after 1 week. I was interviewed by 3 bosses (lets name them “Boss 1”, “Boss 2” & “Boss 3). Within 20 minutes of interview the Bosses accepted my application and allowed me to having my industrial training in their firm.

It was merely a three-month period. In the first week I was instructed by Boss 1 to tidy up the racks storing Tender Documents, Contract Documents, Tender Reports, Feasibility Studies, Final Accounts, etc. I was told to arrange those documents in accordance with developers, then followed by projects, then followed by date. Even though the racks were messy and dusty, after spending few days in touching with all these stuffs, I got a little more familiar with the projects handled or being handled by The Firm, as well as the documents that a QS will normally need to prepare.

Later on I was asked to help a senior QS to do taking off for a high rise service apartment. It was actually a remeasurement based on as-built drawings in order to prepare final account for the project. I was responsible for the taking off of concrete, formwork and reinforcement for floor beams. At the beginning I found it was a tedious task, but later I felt I was lucky to be part of the team. In those few weeks I have learned how to use QS software (VQSM) to do measurement; My skill in MS Excel has improved; My knowledge in taking off has increased after being taught by my senior and Bosses.

Sometimes I was also brought by Boss 2 or Boss 3 to attend progress meeting, client-consultant meeting, technical meeting and tender interview – other places for me to learn. I met developers (i.e. the clients), architects, engineers and contractors. In fact I was happy to attend such meetings with my Bosses as during the meeting I wouldn’t need to ask and wouldn’t be asked too. I merely needed to listen, understand and learn. From those meetings I started knowing the issues that are normally discussed within the meetings; the questions that are normally asked by the client and consultant during the meeting; and most importantly the role of a QS in a construction project.

After few weeks, Boss 1 requested a few junior staff, including me, to do a quick measurement for a office building. It was a initial design prepared by an architect and Boss 1 had to prepare a preliminary cost estimate for such building. I was responsible for floor and ceiling finishes this time. I was taught the ways of doing rough and fast measurement, making logical and practical assumptions, as well as getting useful information by analysing previous similar projects. Again my skill in using software and taking off improved a lot.

I was also assigned to execute a very important task during this three-month training – receiving calls for The Firm everyday. I improved my communication skill as well as my English language. I became braver when talking with somebody in English. Apart from this, once in a while Bosses or seniors would ask me to help them asking quotations for certain products. It was again the time for me to learn my communicating skill. In fact it updated me with the up-to-date cost of materials and building technology too.

I’ve learned some other skills and gained some other experiences during this industrial training, which is not able to be fully shared with you all here. The Bosses were very knowledgeable, experienced and very willing to share while the colleagues were helpful and friendly. Thus I decided to work for The Firm after I completed my industrial training. I worked for The Firm for three years plus before I went for my further study in 2006.