3 Steps to Successful JBCC Extension of Time Claims

As a Contractor, obtaining an extension of time (EOT) on a project can be critical to your commercial success and viability. However, many Contractors struggle to understand the fundamental requirements of compiling a successful EOT claim under the JBCC, let alone under common law.??

The good news is that there are ways to increase your chances of success when filing a JBCC contract extension of time claim. In this article, we'll look at some effective strategies that contractors can use to improve their chances of success with EOT claims.

When it comes to EOT claims, there are essentially three steps to ensuring a winning strategy. This is also the framework that a principal agent can use to assess and evaluate an EOT claim. The steps are as follows:

1. Ensure entitlement to claim;
2. Calculate and provide evidence of the impact of the delay on the completion date;
3. Provide supporting evidence and documents to bolster the factual evidence and support your assertions. ?

What are the JBCC Contract Provisions pertaining to EOT’s

Before making an extension of time claim under the JBCC contract, it's essential to understand the contract provisions that govern the process. The JBCC contract provides clear guidelines for making an extension of time claim, including the specific conditions that must be met for such a claim to be considered valid.??

For ease of understanding, we can divide the provision into 2 categories namely “Entitlement” and “Quantum”.?When dealing with an EOT claim it helps to make this distinction.

Entitlement deals with the provisions of the agreement that entitles the Contractor to obtain/claim an extension of the completion date. The Quantum deals with the calculation of the number of days to which the Contractor is entitled.?

STEP 1 - Entitlement

The first step in submitting an EOT is to establish eligibility or entitlement. In the JBCC, entitlement is supported by two pillars:

1. Is there a circumstance that allows the Contractor to revise the date for practical completion?
2. Did the Contractor follow or fulfill the contractually mandated requirements for making a legal claim?

The circumstances that entitle the Contractor to an extension of time are listed under clauses 23.1, 23.2 and 23.3.

A simple way to remember the distinction between the clauses is as follows:

1. Clause 23.1 deals with circumstances that can be defined as excusable delay events.?It entitles the Contractor to an EOT without compensation. This means relief of penalties, but no compensation for the time-related component of the Contractor’s Preliminaries (P&G).?These are typically circumstances beyond both parties’ control and hence the impact is divided between them.
2. Clause 23.2 deals with circumstances that can be defined as compensable delay events.?This means both relief from penalties and compensation for the time-related component of the Contractor’s cost (P&G). These are circumstances for which the Employer takes the risk pursuant to the agreement.
3. Clause 23.3 is an important clause because it entitles the Contractor to an EOT for any other delay circumstance which may not have been listed under 23.1 or 23.2. However, the condition here is that the circumstance must be beyond the Contractor’s reasonable control and must be something for which the Contractor could not have reasonably provided for or anticipated. The cost component can be either excusable or compensable depending on the nature of the circumstance.

Once a circumstance occurs as listed above the Contractor must give notice to the principal agent of its intention to submit a claim for a revision to the completion date within 20 working days after becoming aware of the delay, or ought reasonably to have become aware of such delay.

This is known as a time-bar provision because it explicitly follows that if the Contractor should fail to give this notice within 20 days, the Contractor shall forfeit such a claim.

Contractors should be aware that, while still subject to South African jurisdiction, our Supreme Court of Appeal ruled that the Constitution does not prohibit time-bar provisions in contracts entered into freely and voluntarily.

The English, US, and UAE jurisdictions handle this differently, but don't be misled by proponents who read these overseas cases and believe they represent legal authority in SA. We find that contractors are frequently misinformed about this and appear to believe that a time-bar can be overturned by a court or a tribunal. Until there is updated authority and legal precedent on this, the status quo is that if a Contractor fails to notify as required by this clause, it will lose the right to make a claim, no matter how unfair it may appear on the surface.

In summary, entitlement to an EOT shall be established:

(a) when one of the listed circumstances occurs that could cause a delay in the practical completion date, and

(b) where the Contractor did notify the Principal Agent of its intention to submit a claim within the time and provisions specified in clause 23.4.2.

The aforementioned points can be referred to as the price of entry or minimum standard to obtain entitlement. ?This is not a high bar to clear and ought to be a simple standard for contractors to meet.?Ideally it should be included in the rudimentary administrative protocols on any construction site.

The difficult part of winning EOT claims is covered in the following section.

STEP 2 - Calculating and showing the impact of delay (Quantum, or Effect)

The next step, after entitlement is firmly established following a delay circumstance, is to quantify the impact of the circumstance on the completion date.?We also refer to this as the quantum of a claim.

This is the more difficult, but crucial, part of winning an EOT claim, and we frequently find Contractors submitting very poor or unsubstantiated claims.

In the case of EOT claims, the Contractor bears the burden of proof as the claimant. In other words, a claim for a specific number of days cannot be implied or assumed. It's the equivalent of accusing Tom from HR of stealing your lunch from the communal refrigerator. You might be right, and you might have even seen Tom steal your lunch, but how do you prove it?

The answer can be found in the JBCC provisions. Firstly, the agreement requires that a delay claim be filed within 40 working days of the Contractor's ability to quantify the delay in terms of the programme.

Furthermore, when the Contractor submits a claim within the JBCC's contractual framework, the provisions require the Contractor to separately state for each circumstance, the cause and effect of the delay on the current date for practical completion, as illustrated by a change to the critical path on the current programme.

As a result, the programme becomes a critical document for demonstrating and proving the impact of a delay on the completion date. As per our previous example, the programme is analogous to video footage of Tom chomping away on your peanut butter sandwich.

It is admitted that the programme is not the singular requirement here.?JBCC mentions the programme's use when appropriate. Without a programme, a delay can sometimes be substantiated, and the impact proven, but this is usually only applicable in limited circumstances.

When considering the JBCC’s requirement for a Contractor to illustrate the impact of a delay on the critical path on the current programme, Contractors and Principal Agents alike, should be aware that this provision does not refer to the baseline programme's critical path, but rather to the current programme's critical path.

This wording is vital because it corresponds eloquently with the internationally preferred delay analysis techniques found in modern authoritative standards and publications on delay analysis, such as the SCL's delay protocol. It is also the preferred method used in forensic delay analysis when appropriate.

Although we use the baseline programme to show the initially anticipated durations, resources, and planned intent, it is of little use in demonstrating a delay that occurred much later in the project and one that is too far removed from the initial intent. It is common and almost always a fact that the Contractor's baseline and critical path will change as the project progresses.

Based on this framework, it can be deduced that where an Employer risk event (as listed in 23.1-3) is shown to impact or is reasonably predicted to impact on the critical path, current at the time of the delay event, the extent of that impact should extend the date for Practical Completion comparably.

Demonstrating this impact on the programme should therefore be the focus of the Contractor's claim.

STEP 3 - Further substantiation

Where the Contractor illustrates the impact of a delay to its critical path on its current programme, it invariably makes certain assumptions or make use of certain facts.?

For instance, if the Principal Agent issues a contract instruction for additional brickwork after all other brickwork has been completed, the Contractor needs to order the brickwork, get it delivered to site, then perform the work and only then can it proceed with casting a slab on the additional and perhaps original brickwork.?

In this hypothetical example, the facts and assumptions are:

1. the actual contract instruction being issued,
2. the date of the instruction,
3. the assumption/fact that there were no surplus or leftover bricks on site.
4. the date of ordering the bricks,
5. the date of delivery of the additional bricks to site.?
6. the actual duration of executing the additional brickwork.
7. The assumption/fact that the slab could not proceed before the additional brickwork was installed.

To clearly substantiate these facts and assumptions, Contractors should provide evidence that can be attached to the claim. It is acknowledged that not all facts or assumptions relied upon can be substantiated; therefore, aim to include as much as possible and where it’s not possible simply highlight why the submission is made and why it is considered to be true.

The best evidence in this regard is referred to as contemporaneous documentation. ?Contemporaneous documents mean any document created at or around the time of the event. ?Good contemporaneous documents also pass through a recorded system so that their veracity can be independently verified. This is opposed to a document that is created after the fact, or that could be altered in hindsight.

These are some good examples of contemporaneous documents:

• The updated programme as submitted on a particular date.
• The site diaries as signed off or checked by an independent party, or which have been submitted electronically.
• Delivery notes as signed and documented on site.
• Contract Instructions as recorded on site and attached to the meeting minutes each month.
• Emails
• Minutes of meetings, signed by the parties or documented electronically.

Summary

In summary, to increase a Contractor’s chances of success with a JBCC EOT claim follow the 3 steps as expanded upon above:

Step 1 – Ensure entitlement thought timeous notice and adhering to the notice provisions.

Step 2 – Quantify the claim by demonstrating the impact of the delay on the critical path of the current programme.

Step 3 – Provide additional corroborating evidence and contemporaneous documents to support key facts and assumptions.

Example EOT Claim

Let's refer to our earlier example where the Principal Agent issues a contract instruction for additional brickwork after all other brickwork has been completed. Below is an example claim that, although very basic, illustrates the principles in the article.

In the first image, the importance of the current programme, as apposed to the baseline programme is illustrated. It shows that the brickwork initially completed a day late, which is unrelated to the instruction. At this stage in Week 3, the baseline could have changed drastically as well as the remaining intent and critical path.

In the second image below, the cause and effect of the delay on the date for practical completion is illustrated by a change to the critical path on the current programme.

When the claim is accompanied by contemporaneous documents to substantiate the dates and timelines of the delay circumstance above, it also makes it easier for the principal agent to review and approve the claim leading to better outcomes for both parties and more successful claims for the Contractor, where there is entitlement.

Thanks for reading. I'm Kobus and I'm a PMI-accredited Scheduling Professional, claims consultant and expert witness in Arbitration and Adjudication proceedings where I've acted as both a Forensic Delay Analysis Expert and a JBCC Contract Expert. To schedule an appointment on any of our services, you can reach out to us?here.

You can also?follow me, subscribe to our newsletter below or browse our previous?JBCC articles here.

Reference – Any reference to the JBCC in this article refers to the JBCC Principal Building Agreement Edition 6.2, May 2018 unless otherwise stated.

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