How to fairly determine Contractor's EOT Claim - A guide for Employers and Engineers

Employers and Engineers must carefully evaluate EOT claims to determine their project validity, ensuring that contractual obligations are met while maintaining fairness. This guide provides a structured approach to assessing EOT claims systematically.

Step 1: Review the Contractual Provisions

Before assessing an EOT claim, it is crucial to understand the contractual framework governing time extensions.

1.1 Identify the Governing Contract

The first step is to determine which standard form of contract applies, such as:

• FIDIC (Red, Yellow, or Silver Book)
• NEC (New Engineering Contract)
• JCT (Joint Contracts Tribunal)
• Bespoke Contracts tailored to the project

Each contract has specific provisions regarding delays, notice periods, and entitlement to EOT.

1.2 Examine the EOT Clauses

Review the contract clauses that define:

• Time for Completion – The agreed construction period and completion date.
• Events qualifying for EOT – What constitutes an excusable delay.
• Notice and Claim Submission Requirements – The timeframe within which the Contractor must notify the Engineer and submit supporting documents.

For example, under FIDIC 2017 Clause 8.4, the Contractor is entitled to an EOT for completion in case of Employer’s delays, unforeseeable events, or force majeure.

1.3 Check Conditions Precedent

Most contracts require Contractors to provide timely notice of delay.

• If the Contractor fails to submit an early notification, the EOT claim may be rejected.
• Some contracts include a time-bar clause, meaning late notices lead to the forfeiture of claims.

Proper documentation and adherence to contractual notice periods play a crucial role in EOT entitlement.

Step 2: Assess the Delay Event

Not all delays entitle a Contractor to an EOT. Employers and Engineers must classify delays into different categories:

2.1 Excusable vs. Non-Excusable Delays

• Excusable Delays – Events beyond the Contractor’s control, such as:
• Non-Excusable Delays – Contractor’s own inefficiencies, such as:

2.2 Compensable vs. Non-Compensable Delays

• Compensable Delays – If the delay is caused by the Employer, the Contractor may be entitled to both time and cost compensation (prolongation costs).
• Non-Compensable Delays – If the delay is due to force majeure or neutral events, the Contractor may receive only time, with no cost reimbursement.

Understanding these distinctions is crucial in determining entitlement.

Step 3: Establish Causation

The Contractor must demonstrate that the delay event directly caused an impact on the project schedule. Employers and Engineers should:

3.1 Verify Contemporaneous Records

• Site diaries
• Daily progress reports
• Meeting minutes
• Correspondence (emails, RFIs)
• Progress photos

3.2 Establish Direct Impact

• Does the delay affect the project’s critical path?
• If the event does not impact the critical path, it may not warrant an EOT.

A well-substantiated claim should clearly link the delay event to its effect on the completion date.

Step 4: Conduct Delay Analysis

To accurately determine the impact of a delay, Engineers must perform a delay analysis. Several methodologies are available:

4.1 As-Planned vs. As-Built Analysis

• Compares the original planned schedule against actual progress.
• Suitable for simple projects but lacks depth for complex claims.

4.2 Time Impact Analysis (TIA)

• Inserts delay events into an updated schedule to determine their effect.
• Used when multiple events have contributed to the delay.

4.3 Windows Analysis

• Divides the project timeline into separate “windows” and evaluates delays within each period.
• Useful when delays occur in multiple phases.

4.4 Collapsed As-Built Analysis

• Removes delay events to determine what the completion date would have been without them.
• Helps in determining how much delay was caused by Employer-related events.

Selecting the appropriate analysis method depends on project complexity and available records.

Step 5: Evaluate Mitigation Efforts

The Contractor is responsible for minimizing the delay’s impact. The Employer and Engineer should:

• Assess alternative solutions proposed by the Contractor.
• Check acceleration measures (e.g., additional shifts, resource mobilization).
• Review communications – Did the Contractor inform the Employer early enough?

If the Contractor did not take reasonable steps to mitigate the delay, the EOT claim may be reduced.

Step 6: Assess Concurrent Delays

Concurrent delays occur when both the Contractor and the Employer contribute to project delays. Different contracts handle concurrency differently:

• FIDIC Approach – If there is concurrency, the Contractor typically gets time but not cost.
• UK Approach (SCL Protocol) – Apportions responsibility for delay impact.
• US Approach – Favors the Contractor unless the Employer proves otherwise.

Clear contractual provisions must guide the decision on concurrency.

Step 7: Determine the EOT Entitlement

After evaluating all factors, the Employer and Engineer must determine:

1. Whether the EOT claim is fully justified, partially justified, or rejected.
2. The revised completion date based on the critical path analysis.
3. Whether any cost compensation is applicable.

The EOT determination must be well-documented and aligned with contract terms.

Step 8: Document and Maintain Transparency

To avoid disputes, the final decision must be transparent and well-supported. Key actions include:

Prepare a Detailed EOT Determination Report, including:

• Delay analysis findings
• Justification for EOT approval/rejection
• Revised completion date

Communicate the Decision Formally

• Issue a well-reasoned determination letter.
• Provide contractual references to support the decision.

By maintaining transparency, Employers and Engineers can reduce disputes and ensure that EOT determinations are legally and contractually sound.

Final Note

Evaluating an EOT claim requires a structured approach involving contract review, delay event assessment, causation analysis, and proper delay evaluation methodologies. Employers and Engineers must ensure that claims are supported by robust evidence and that decisions are communicated clearly. A well-handled EOT determination process helps in maintaining fair contractual relationships while protecting project timelines and budgets.