Tackle problems as they occur, says Jack Russell in this part of his review of the Delay and Disruption Protocol:
In this examination of the Delay and Disruption Protocol produced by the Society of Construction Law, we focus on the thorny subject of 'disruption'. As always, my comments are in italics.
Disturbance, hindrance or interruption:
The protocol defines disruption as 'disturbance, hindrance or interruption to a contractor's normal working methods, resulting in lower efficiency'. Typical causes include premature movements between activities, out of sequence working and repeated learning cycles, work area congestion caused by stacking of trades, increased gang sizes, and increases in length or number of working shifts.
If the client causes disruption, but not otherwise, the contractor may be entitled to financial compensation. This entitlement may arise under the terms of the contract itself (under most JCT forms and allied sub-contracts there are clauses providing for loss and expense due to 'disturbance of regular progress'. This term is generally thought to cover disruption).
In the absence of a specific term, the contractor's remedy may arise under common law for breach of contract. This would often be as breach of an implied term (that the client will not prevent or hinder the contractor in the execution of the works).
Disruption is not necessarily linked to delay in progress, but can also occur where the works are completed by the due date. An extension of time is not a pre-condition for reimbursement of disruption costs.
The protocol emphasises that disruption is not merely the difference between what actually happened and what the contractor planned to happen. The contractor must demonstrate 'cause and effect'. The object is to put the contractor back in the same financial position he would have occupied had the disruption not occurred.
Site records:
It is absolutely essential that the contractor maintains good site records. Although contractors generally keep good records of delays, this is not true of disruption. Every sizeable project should have a baseline programme, daily site diary recording key events; daily staff and labour register giving names, job functions and hours allocated to specific areas/activities; weekly progress reports showing planned and actual percentages with comments for each activity; daywork sheets recording instances of standing time, special return visits and so on.
Disruption should be notified to the client in writing at the time. If contractors are likely to incur loss and expense, they should give prompt written notice and apply for reimbursement. Contemporary records should be maintained to evaluate the costs of the notified disruption.
Measured mile:
The protocol recommends the ‘measured mile’ approach to evaluation. This method compares the ‘good’ productivity on a part or period of the job where there has been little or no disruption, with the ‘bad’ productivity on the disrupted area. This can be done by comparing hours earned with actual hours expended, or by measured units of work achieved per day or week.
Where it is difficult to identify a ‘good’ area, then other projects may be used as a source of information, if there is adequate evidence and comparability. Obvious disparities should be avoided. The ‘good’ area may just be an ‘easy’ area, defeating the object of comparing ‘like with like’.
If the ‘measured mile’ approach is not practical, it may be appropriate to use published productivity research about working hours and gang strengths, for example, such as that published by the CIOB. However, such an approach should only be used where it can be demonstrated as relevant (similar working conditions and type of construction, for example) and backed up by evidence. The arbitrary addition of unsupported percentages is frowned upon.
The protocol emphasises the need to exclude elements that are the contractor's responsibility (adverse weather, plant breakdowns, poor management and acceleration, for instance).
Variations:
Disruption caused by variations should be identified and evaluated at the time the work is done and, if possible, included with the individual variation. It is inadvisable to wait until the end of the project before rolling up the disruptive effects of many variations into a ‘global claim’.
For disruption due to ‘other events’ such as standing time, abortive work or special visits, the protocol recommends reimbursement as actual reasonable costs incurred plus a reasonable allowance for profit, if it is allowed under the terms of the contract. In practice, this equates to the prompt submission of daywork sheets for signature on a ‘record only’ basis.
Conclusion:
All too often, problems go unrecorded for fear of ‘upsetting the client’. Experience shows that this leads to worsening of relations later in the job, as events take their toll. The key is to promptly flag up all problems involving time and/or money, for resolution and evaluation. A little upset at the time is preferable to an acrimonious dispute at the end of the job. www.jrconsultant.co.uk.
This article was published in Electrical Times magazine (November 2003 issue) and has been used courtesy of publisher and Voltimum UK partner Highbury Business Communications.
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