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Proposed Approach for Extension of Time based on delay in approval of engineering

documents.

Background
In case of Noor-II, the document approval time from CLIENT COMPANY is ten (10) days from date
of submission of documents by Contractor [Appendix 9, Clause 3.4(c)].
CLIENT COMPANY however takes much longer time and it is more or less twenty eight (28) days
to approve or comment the documents.
We as a Contractor now want to claim Extension of Time based on such delay.

Contractual Requirements
(i)

(ii)

Document Approvals
Contractor has to submit engineering document as per Document Submittal
Schedule [Appendix 9, Clause 3.4(c)].

CLIENT COMPANY shall check, assess and comment upon documents within ten (10)
days from date of submission. [Appendix 9, Clause 3.4(c)].

If CLIENT COMPANY do not take any action within ten (10) days it shall be deemed
to have returned to the Contractor with no comments (in other words deemed
approval).

Notification of Delays
The Contractor shall notify the Owner as soon as it can reasonably foresee an
Event of Delay or, if the same is not foreseeable, as soon as it shall become aware
of the Event of Delay and in any case within fourteen (14) days of such Event of
Delay become apparent to the Contractor or of the date upon which the same
ought reasonably to have become apparent to the Contractor.[Clause 37.3 of
EPMoC Contract]

The Contractor may within seven (7) days of such notification apply for an
extension of time to take account of Event of Delay, informing the Owner in
writing of the circumstances which in its opinion shall cause such Event of Delay
and of the extent of the actual or estimated delay that shall be caused thereby.
[Clause 37.3 of EPMoC Contract]

If the Contractor fails to notify the Owner as required by this clause 37.3 then
the Owner shall have no obligation to grant any extension of time and the
Contractor shall be obliged to minimise the impact of any delay at its own cost.
[Clause 37.3 of EPMoC Contract]

Pre-condition of extension entitlement: ..the Contractor and the Construction


Contractor shall have demonstrated, to the Owners reasonable satisfaction, that

it has used its reasonable endeavours to minimise or absorb any delay arising from
the occurrence of the events set out in the clause 37.1.. or clause
37.2 [Clause 37.4 of EPMoC Contract]
(iii)

Notifications for Extra Cost


the Contractor shall notify the Owner as soon as the Contractor is reasonably
of the opinion that the occurrence of any event mentioned in clause Error:
Reference source not found (Events giving rise) is likely to give rise to extra
direct cost and expense stating the reason by virtue of which it considers it is
entitled to an adjustment to the Contract Price. [Clause 36.2 (a) of EPMoC

Contract]

within fourteen (14) Days of such notification the Contractor shall, in


writing, have given the Owner a preliminary estimate of the likely consequence
of such event on the Contract Price [Clause 36.2 (a) of EPMoC Contract]

within fourteen (14) Days of such notification the Contractor shall, in


writing, have given the Owner a preliminary estimate of the likely consequence
of such event on the Contract Price [Clause 36.2 (a) of EPMoC Contract]

the Contractor shall not be entitled to assert any claim for extra costs until such
time as all claims exceed the equivalent of Moroccan Dirhams ten million (MAD
10,000,000) in the aggregate (provided that only claims in excess of Moroccan
Dirhams one hundred fifty thousand (MAD 150,000) shall be counted in such
aggregate) in respect of the Works, at which time all such claims may be
asserted. After any claims in excess of such amount have been asserted, no future
claims may be asserted until such time as all future claims exceed such amount in
the aggregate. [Clause 36.2 (e) of EPMoC Contract]

Constraints in filing a claim of Extension of Time based on delay in Document


approval
(i) Document Approvals
CLIENT COMPANY can argue that Contract has provision of deemed approval within
ten (10) days, so if CLIENT COMPANY did not granted approval the Contractor shall
have proceeded with the submitted documents. [The Contractor never used the
right of deemed acceptance and never went ahead with the engineering works
based on deemed accepted documents. Contractor also never notified on
comments sent by CLIENT COMPANY Power after ten (10) days submission of
documents that complying with such comments is a variation to approved
documents.]
(ii) Notification of Delay

If there were any delay because of CLIENT COMPANY comments on deemed


approvals, then the Contractors should have informed as soon as CLIENT COMPANY
commented on those documents or as soon as Contractor become aware of it (and
it should be reasonable time). [The Contractor never notified on comments sent by
CLIENT COMPANY Power after ten (10) days submission of documents that
complying with such comments is a variation to approved documents and will have
a time impact.]

(iii) Notification of Cost


If there were any cost implication because of CLIENT COMPANY comments on
deemed approvals, then the Contractors should have informed as soon as CLIENT
COMPANY commented on those documents or as soon as Contractor is reasonably of
the opinion that the occurrence of such event is likely to give rise to extra direct
cost and expense. [The Contractor never notified on comments sent by CLIENT
COMPANY Power after ten (10) days submission of documents that complying with
such comments is a variation to approved documents and will have a cost impact.]

Proposed Strategy for claiming Extension of Time for document approval


One possible way of enforcing Extension of Time and dealing with CLIENT COMPANY arguments
can be:
(i)
Argue to CLIENT COMPANY that the condition of Contract regarding deemed
acceptance of documents have been modified and annulled by consent of both
parties during the execution of the Contract by the virtue of conduct of the parties
to the Contract.
(ii)

Adopt either of the following method filing claim:


a)
Put forward a disruption claim and file for extension of time and
extra cost due to disruption.
b)
Put forward a delay analysis of critical path delay and claim for
extension of time showcasing the cause and effect of engineering delay on
procurement and also construction.
c)
Both of the above.

Arguments for annulling of deemed acceptance of documents


CLIENT COMPANY even with full knowledge of deemed approval condition of EPMoC Contract,
commented the documents after ten (10) of submission of documents and asked the Contractor
to comply with their comments. This comments and request to comply with the comments was
never issued as an Owners Variation request. Thus CLIENT COMPANY instructed the Contractor
(though not through express request) to forfeit the deemed approval right and follow their
instruction.
The Contractor even with full knowledge of deemed approval condition of EPMoC Contract,
never started their work on deemed approved documents nor did they notified to CLIENT
COMPANY that their comments post ten (10) days of documents submission is not valid as per

Contract. Thus the Contractor affirms the CLIENT COMPANY request (though not through express
confirmation) and waived their deemed approval right and followed CLIENT COMPANYs
instruction.
The above method of submission, commenting and approval of documents continued and is
continuing during the course of Contract execution. It is very evident by the action of both the
parties, i.e. CLIENT COMPANY as well as the Contractor, that even though both the both the
parties are fully aware of the deemed approval condition of the Contract but still their course of
dealing during the entire execution of Contract is inconsistent with the originally agreed terms
of Contract. It will not be wrong to infer here that by virtue of both parties conduct, their
actions and inactions that they have mutually decided (though not through expressed
agreement) to vary the terms of the agreed Contract agreement. More specifically the parties
have mutually modified the condition of deemed approval and annulled it.
Since, CLIENT COMPANY throughout the execution of Contract have continuously commented
after ten (10) days and instructed the Contractor to comply it and the Contractor have complied
to non-contractual instruction without any notice, therefore it is also evident that this decision
of annulling the deemed approval condition is a mutual decision and not one sided.

Note:
1. We shall only use this if we do not want to use our deemed acceptance
clause anywhere is future.
2. This argument of annulling the deemed approval should be used
retrospectively i.e. from the date of first incident when CLIENT COMPANY
asked the Contractor to comply their comments (which was issued after
ten (10) days of document submission).

Arguments for no previous Notice on delay and its cost and time impact
Each individual delay did not impact the project but the ripple effect of multiple small impacts
due to the delays in approval has the potential to disrupt the performance of the project and in
deed can delay the performance. Also, such impact cannot be observed by separate analysis of
each delay in approval and comments to a document and therefore the Contractor did not knew
the real impact about this till now. It was only possible after the analysis of all these cumulative
and continuous delay that the impact on the project schedule or cost can be quantified.
Since the Contractor was not aware of the impact nor did he foresee such inordinate delay
therefore the Contractor did not informed the CLIENT COMPANY about any Event of Delay or
Extra Cost.

Now, as soon as the Contractor have become aware of such situation after the analysis of all the
cumulative and continuous delay, they are informing CLIENT COMPANY.

Approach for Filing Extension of Time


(i)
Approach-1

(ii)

We notify CLIENT COMPANY that since there have been a continuous delay in
approval and comments of Contractors documents, therefore the Contractor
consider this cumulative delay as an Event of Delay/disruption and foresee that it
can have time and or cost impact on the project. The detailed estimate will be
submitted subsequently as we are not sure of real impact now.
In this approach of we will have to submit our time extension with
actual/estimated delay within seven (7) days of such Notice.
Also, within fourteen (14) days of such Notice, we will have to submit at least a
preliminary estimate of extra cost because of such delay.
Approach-2
We wait a little time carry out our delay analysis and extra cost estimate and then
submit our Notice to CLIENT COMPANY that there has been a consistent delay in
approval of documents and we are afraid that this disruption/delay will have time
and cost impact, though as of now, we are not aware of any consequence of such
event but we are assessing it and will inform about the impact as soon as we know
it.
Then within seven (7) days we submit the extension of time and extra cost to
Owner.
In this approach we can fulfil both the obligation of notifying the possible delay as
soon as we foresee that there can be a delay and also submit our assessment
within seven (7) days of such Notice.

In both cases, we shall not put forward any of our arguments. It should only be a simple Notice
of delay/disruption and quantification of delay and cost. In the next step based on CLIENT
COMPANY arguments and Contractual conditions and our above arguments we can decide what is
in best interest of the Project.

May be the argument to prove that condition of deemed approval has been annulled is very
difficult to prove but in any way our case of Time Extension due to delay in document approval
is weak, because we as a Contractor never notified CLIENT COMPANY about Deemed Approval or
delay in document approval having impact on Project Schedule.
Possible CLIENT COMPANY Argument that we will have to defend

1. We as Contractor has also delayed in answering to Owners comments within 10 days of


receiving their comment and under such situation Owner can argue that Contractor did
not took reasonable endeavours to minimise the delay. I understand maybe we can
answer, that we may also have delayed but we are only seeking for relief for delays
caused by CLIENT COMPANY and not by us. We are responsible for our delay and
therefore this impact assessment is based exclusively on delays caused solely by CLIENT
COMPANY.
But I think this is not a sufficient strong argument and we may need more supporting
statements and proof to substantiate our statement.
2. CLIENT COMPANY can comment that it is unreasonable that the Contractor could not have
foreseen the delay if such delay was caused by a continuous small delay of document
approval. The delay analysis can quantify the delay but being an experienced and
qualified Contractor, the Contractor should have foreseen such risk and notified to CLIENT
COMPANY to mitigate or minimise such delay. Since, Contractor has delayed
Though we have tried to put arguments above but we need to have more and much
stronger argument for this as well.