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Last updated on 2024年10月2日

What are the best practices for managing time-related claims under FIDIC contracts?

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Time-related claims are one of the most common and complex issues that arise in construction projects under FIDIC contracts. FIDIC stands for the International Federation of Consulting Engineers, which publishes standard forms of contracts for various types of works. Time-related claims can involve delays, disruptions, acceleration, prolongation, and extensions of time, and they can have significant financial and legal implications for both the contractor and the employer. Therefore, it is essential to manage them effectively and efficiently, following the best practices and procedures outlined in the FIDIC contracts and the relevant contract law. In this article, we will discuss some of the best practices for managing time-related claims under FIDIC contracts, focusing on the following aspects:

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Paul McArd

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Amardev Mutiwi

Tomorrow’s Leaders Representative Sub Saharan Africa | Jnr Quantity Surveyor
Chandhu Sujatha

Graduate Quantity Surveyor (Civil Engr.) at Pennon Group PLC, UK…

1 Notice of claim

The first step in managing a time-related claim is to notify the other party and the engineer (or the employer's representative) of the occurrence and the cause of the event giving rise to the claim. This is required by most FIDIC contracts, such as the Red Book (for building and engineering works), the Yellow Book (for plant and design-build works), and the Silver Book (for turnkey projects). The notice of claim should be given as soon as practicable, but no later than 28 days after the contractor became aware or should have become aware of the event. The notice should also include a brief description of the claim and an estimate of the extension of time and/or the additional payment sought.

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Paul McArd
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Demonstrate cause and effect in the claim and break down the cost into prelims, labour plant and equipment. Only claim cost incurred during the delay period.

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Chandhu Sujatha

Graduate Quantity Surveyor (Civil Engr.) at Pennon Group PLC, UK [MSc in Quantity Surveying I MSc in Structural Engineering I BSc in Civil Engineering ]
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Timely Submission: Submit the notice of claim as soon as the event or circumstance giving rise to the claim is recognized. FIDIC contracts typically require notice within 28 days. Clear Documentation: Ensure the notice is clear and concise, detailing the event, its date, and the contract provisions under which the claim is made. Receipt Confirmation: Obtain and document confirmation of receipt from the other party to avoid disputes about whether the notice was received.

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Furkhaan Ahmed Khan

Quantity Surveyor | ISO 9001:2015 | CAPM? - PMI? | QA/QC Specialist | Delivering Excellence in Project Costing & Quality Control.
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In FIDIC contracts a notice of claim is a formal notification from a contractor or employer regarding a claim for additional payment or time due to specific circumstances, this process typically requires the party to provide details about the claim, its impact on project performance, timely submissions is crucial as FIDIC contracts have strict deadlines for notifications to ensure fair resolution of claim.

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2 Details of claim

The second step in managing a time-related claim is to provide the engineer or the employer's representative with a fully detailed claim, supported by relevant evidence and documentation. This should be done within 42 days after the contractor gave notice of the claim, or within such other period as agreed by the parties. The details of the claim should include the following elements: the contractual basis of the claim, the factual circumstances and the causal link between the event and the delay or disruption, the method and the calculation of the extension of time and/or the additional payment, and the mitigation measures taken or proposed by the contractor to reduce the impact of the event.

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Paul McArd
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Demonstrate cause and effect, Stick to the facts and keep it simple. Contractual does not mean legal. In or are a cause and effect delay analysis.

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Chandhu Sujatha

Graduate Quantity Surveyor (Civil Engr.) at Pennon Group PLC, UK [MSc in Quantity Surveying I MSc in Structural Engineering I BSc in Civil Engineering ]
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Comprehensive Information: Provide detailed information about the claim, including the nature of the delay, the impact on the project schedule, and any relevant contractual provisions. Supporting Evidence: Include all relevant supporting documents such as site diaries, correspondence, schedules, and any other pertinent records. Methodology Explanation: Explain the methodology used to quantify the delay and its impact on the project, such as the critical path method (CPM).

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3 Determination of claim

The third step in managing a time-related claim is to obtain a fair and reasonable determination of the claim by the engineer or the employer's representative, in accordance with the FIDIC contracts and the applicable contract law. The engineer or the employer's representative should consult with both parties and review the details of the claim and the evidence provided by the contractor. They should also consider any comments or objections raised by the employer, and any relevant contractual provisions, such as the programme, the variations, the force majeure, and the limitations of liability. The engineer or the employer's representative should then issue a written determination within 42 days after receiving the details of the claim, or within such other period as agreed by the parties. The determination should state the reasons and the basis of the decision, and specify the amount and the date of any extension of time and/or additional payment awarded to the contractor.

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Chandhu Sujatha

Graduate Quantity Surveyor (Civil Engr.) at Pennon Group PLC, UK [MSc in Quantity Surveying I MSc in Structural Engineering I BSc in Civil Engineering ]
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Objective Analysis: The Engineer (or Contract Administrator) should perform an unbiased assessment based on the evidence provided. Consultation with Parties: Engage in discussions with both the contractor and the employer to understand all perspectives and ensure transparency. Timely Decision: Make determinations within the contractually stipulated time frame to avoid unnecessary project delays.

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4 Dispute resolution

The fourth step in managing a time-related claim is to resolve any dispute that may arise from the determination of the claim by the engineer or the employer's representative, or from their failure to issue a determination within the prescribed time. The FIDIC contracts provide for a multi-tiered dispute resolution mechanism, which typically involves the following stages: amicable settlement, adjudication by a dispute adjudication board (DAB), and arbitration by an arbitral tribunal. The parties should follow the procedures and the time limits specified in the FIDIC contracts for each stage of dispute resolution, and comply with any decision or award issued by the DAB or the arbitral tribunal, unless and until it is revised by a subsequent decision or award.

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Chandhu Sujatha

Graduate Quantity Surveyor (Civil Engr.) at Pennon Group PLC, UK [MSc in Quantity Surveying I MSc in Structural Engineering I BSc in Civil Engineering ]
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ADR Mechanisms: Utilize Alternative Dispute Resolution (ADR) mechanisms such as mediation or conciliation before resorting to arbitration or litigation. Dispute Adjudication Board (DAB): Refer disputes to the DAB if included in the contract, as this can provide a binding but temporary resolution. Arbitration: Ensure that arbitration clauses are clear and that both parties understand the process and potential outcomes.

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5 Record keeping

The fifth step in managing a time-related claim is to keep accurate and comprehensive records of all aspects of the claim, from its inception to its resolution. This is crucial for substantiating and defending the claim, as well as for avoiding or minimizing any disputes or delays in the determination or payment of the claim. The records should include, but not be limited to, the following: the notice and the details of the claim, the correspondence and the communication between the parties and the engineer or the employer's representative, the evidence and the documentation supporting or opposing the claim, the determination and the reasons of the engineer or the employer's representative, any comments or objections by the parties, any decision or award by the DAB or the arbitral tribunal, and any payment or adjustment made in relation to the claim.

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Amardev Mutiwi

Tomorrow’s Leaders Representative Sub Saharan Africa | Jnr Quantity Surveyor
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Effective management of time-related claims under FIDIC contracts requires meticulous record-keeping that captures every aspect of the claim from initiation to resolution. This ensures substantiation and defence of the claim, mitigating disputes and delays. Comprehensive records should include: -Notice and claim details -Correspondence and communication - Supporting evidence and documentation - Determinations and reasons - Comments and objections - DAB/arbitral tribunal decisions and awards - Payments and adjustments Accurate record-keeping promotes transparency and efficiency in the claims resolution process, ensuring timely project delivery while minimizing the risk of potential disputes.

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Chandhu Sujatha

Graduate Quantity Surveyor (Civil Engr.) at Pennon Group PLC, UK [MSc in Quantity Surveying I MSc in Structural Engineering I BSc in Civil Engineering ]
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Daily Logs: Maintain daily site logs and records of all activities, including weather conditions, workforce levels, equipment usage, and any disruptions. Correspondence Archive: Keep a comprehensive archive of all correspondence related to the project and the claim. Document Management System: Use a document management system to organize and retrieve documents efficiently.

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6 Communication and cooperation

The sixth and final step in managing a time-related claim is to maintain effective and constructive communication and cooperation between the parties and the engineer or the employer's representative throughout the process. This can help to avoid or resolve any misunderstandings or disagreements, to facilitate the exchange of information and evidence, to expedite the determination and the payment of the claim, and to preserve or restore a good working relationship between the parties. The communication and cooperation should be based on mutual respect, trust, and transparency, and should comply with the contractual obligations and the ethical standards of the parties and the engineer or the employer's representative.

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Chandhu Sujatha

Graduate Quantity Surveyor (Civil Engr.) at Pennon Group PLC, UK [MSc in Quantity Surveying I MSc in Structural Engineering I BSc in Civil Engineering ]
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Regular Meetings: Hold regular meetings between the contractor, engineer, and employer to discuss progress and any potential issues that could lead to claims. Open Dialogue: Foster an environment of open communication where issues can be raised and addressed promptly. Collaborative Approach: Encourage a cooperative approach to problem-solving, focusing on finding mutually acceptable solutions to time-related claims.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Murat Sen, MSc, PMP

Subcontracts Manager & Lead QS at Tekfen
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As per FIDIC, the contractor shall formally notify the engineer of the claim within 28 days after it first becomes aware of the occurrence (or vice versa depending on claiming party), including a rough estimate for the time and cost (if any) impacts. The detailed claim submission shall be made within 42 days after the notification, covering contractual basis and entitlement, facts (background), relevancy b/w delay event and delay / disruption, and quantum (delay analysis method used (usually TIA), EoT calculation, any cost impact, etc.). The engineer has to issue its determination within 42 days after the claim submission. In case of any dispute, FIDIC respectively refers to amicable settlement, adjudication through a DAB, and arbitration.

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What are the best practices for managing time-related claims under FIDIC contracts?

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1 Notice of claim

2 Details of claim

3 Determination of claim

4 Dispute resolution

5 Record keeping

6 Communication and cooperation

7 Here’s what else to consider

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