There are many ways that contractors can shoot themselves in the foot when it comes to claims. Being less than truthful when reporting progress to the employer’s team is one of them. This is a problem that we often face when we have been brought in after the contractor has already suffered delay and realises that he/she needs assistance to secure an extension of time.
Why Honesty is Always the Best Policy
Yes, it’s tempting to report good news month-on-month. And a less than competent consultant on the employer’s side may even believe the reports. After all, good news will not lead to additional and tricky work for them.
The problem with this is that if delay occurs and the contractor needs and has entitlement to an extension of time, it then becomes very difficult for him to subsequently tell the employer’s team:
“I know we kept telling you that there was no delay to the completion date but actually, there is and it’s not our fault, so please can I have an extension of time.”
A progress update, as-built programme or updated programme (all different names for the same thing) is created by using the latest agreed programme. Actual start and finish dates are added for each completed activity along with the percentage progress for activities in progress, as of the data-date of the update. The logic contained in the programme and the programming software will then predict the completion date based on progress to date.
Before I started to specialise in contractual matters and claims I was a project manager for both contractors and consultants. I found that when my planning team produced a progress update, I wanted only one thing from them and that was…
THE TRUTH.
If the update predicted early or on time completion then I knew that we were doing okay. However, if the update was predicting a delay, then the planners need to tell me the cause, or causes, of the delay so that we could take appropriate action.
If the delay was caused by us or was due to something that we were responsible for under the contract, we had to find ways to recover the delay. Possibly by working longer hours, mobilising additional resources or mitigating delays caused by a supplier or subcontractor.
If the delay was caused by the employer or by something which is considered the employer’s risk under the contract, then we needed to identify this, ensure that the necessary notices were submitted and make preparations to submit a claim.
So, what would I report to the employer’s team in our monthly progress reports under such circumstances? Again…
THE TRUTH.
Burying Heads in the Sand
Many contractors will not agree with this tactic. Often they will be reluctant to tell the employer’s team that the project will experience delays for any reason. If the contractor admits to his own delay but explains the steps that he is taking to mitigate, then generally, the employer’s team will accept that delays do happen. In addition, they will accept that the contractor is being proactive about dealing with them (or, at least I would). Telling the employer’s team that the predicted delay is due to something that gives the contractor the right to an extension of time will only support subsequent claims.
This, of course, only works if the contractor is not going to just bury his head in the sand and hope that the delay will go away, which it probably won’t. The contractor must actually take mitigating action to recover his own delays. Or they must ensure that the necessary notices are sent, and a claim is submitted without undue delay.
So, what is the alternative to telling the Employer’s team THE TRUTH? Unfortunately, many contractors manipulate the forecasted parts of the programme so that it no longer predicts a delayed completion date. Subsequently, avoiding giving the employer’s team any bad news.
The fact that this knee-jerk reaction is not sustainable through many progress updates. It will also not support any legitimate claims for extensions of time seems lost on such contractors.
Fact or fiction? I will leave you to decide the best way.
Hewitt Decipher Partnership’s expert consultants have been helping contractors with efficient contract administration, programming and planning, as well as preparing and responding to claims for many years. We know how to ensure you prepare and use your programmes correctly and properly, so as to preserve any entitlement to extensions of time. Can we help you? Get in touch.