1. RISK REVIEW
What is a Risk Review?
1.1. A Risk Review is a review or analysis of any aspect of a construction project involving commercial, contractual or quantum issues that carry or is likely to carry a risk.
1.2. The cost benefit of a Risk Review is established by enabling Clients to make informed decisions before embarking upon expensive formal processes or pursuing planned strategies.
1.3. Ordinarily Risk Reviews are priced in a band, typically ranging from between £1,500.00 to £15,000.00. It takes on average around 2 weeks to produce (following receipt of all information) and is usually presented in a bullet point report.
What is the Purpose of a Risk Review?
1.4. To provide a high-level assessment of liability and entitlement in respect to commercial, contractual and quantum related matters and identify the risk and any potential leverage which can be vital in a successful negotiation.
How is a Risk Review Presented?
1.5. The Risk Review Report will vary in size depending on the complexity and the number of issues under review.
What are the Benefits of Conducting a Risk Review?
1.6. A cost effective and quick approach which establishes the risk and opportunities within a project.
1.7. Information is provided in a precise and clear manner which can be easily interpreted by senior management.
1.8. It causes minimal disruption to the Client’s project teams.
1.9. A quick turnaround of the Report minimises the likelihood of differences escalating.
1.10. It avoids the likelihood of aborted effort by developing a case which is unsustainable.
1.11. It quickly provides a high-level assessment of liability and entitlement with regard to commercial, contractual and quantum matters.
How is the SWOT Analysis and Cost Benefit Analysis Utilised in a Risk Review?
1.12. A SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) is often required by Clients and this can be utilised during strategic decision making or negotiations.
1.13. On occasion, and to simplify the Report, Clients can choose to have simply the “Strengths and Weaknesses” identified.
1.14. The Cost Benefit Analysis is often adopted by Clients to enable them to consider the financial viability of progressing a claim or commencing a formal process at an early stage.
1.15. The Risk Review (including the SWOT Analysis and Cost Benefit Analysis) provides the Clients’ decision makers with the requisite information to develop and progress an appropriate strategy and/or to be equipped with the key information during negotiations.
1.16. Where the pursuance of a claim is not viable in a formal process RM will, wherever possible, provide advice on alternative commercial strategies.
2. COMMERCIALLY FOCUSSED DELAY ANALYSIS (“CFDA”)
What is a Commercially Focussed Delay Analysis?
2.1. A specific and highly focussed review and analysis of an identified delay event, a window or a period is referred to as “the Focussed Scope” and that is what constitutes the CFDA.
2.2. Depending on our Client’s requirements, the cost benefit of using CFDA in place of a full Delay Analysis can provide up to a 90% reduction in an otherwise expensive fee bill.
2.3. Ordinarily priced in a band, typically ranging from between £6,000.00 to £18,000.00. It takes on average around 2 to 4 weeks to produce (following receipt of all information) and is usually presented in a bullet point report.
2.4. CFDA is an alternative yet direct approach for dealing with delays. The objective of the CFDA is to establish the entitlement and liability for a particular delay event, a window or a period without expending the resource time and cost of an extensive Delay Analysis. It is a quick and cost effective way of establishing delay entitlement and liability without having to incur long periods of preparation time and excessive fees on a full Delay Analysis.
What is the purpose of a Commercially Focussed Delay Analysis?
2.5. The CFDA approach provides a targeted, relevant and easily understood report which:
2.6. Quickly provides a high level assessment of liability and entitlement in respect to delays and time.
2.7. Identifies the risks and the potential leverage vital in a successful negotiation and reduces the likelihood of an escalation to a formal and protracted dispute resolution procedure.
How is the Commercially Focussed Delay Analysis presented?
2.8. The CFDA report is often no more than 10 to 12 pages long, with selective and focussed Appendices, normally including a Risk Register and a summary programme illustrating the conclusion of the CFDA.
2.9. CFDA is not appropriate for Expert Witness appointments because it is very focussed and selective in terms of matters and periods considered and therefore does not take into account the “big picture”. It is, however, extremely appropriate and useful when providing Expert Advisor Services and, in certain circumstances, for Adjudications. CFDA is extremely effective during mediations, when incorporated into Risk Reviews for Contractors and Subcontractors, and it has a proven track record during negotiations.
6 Benefits of Adopting Commercially Focussed Delay Analysis
2.10. A cost effective solution to otherwise expensive problems.
2.11. It provides precise and clear information which can be easily interpreted.
2.12. It causes minimal disruption to our Client’s project teams and resources.
2.13. A quick turnaround of the report minimises the likelihood of differences escalating.
2.14. It reduces the requirement for a full Delay Analysis.
2.15. It helps Clients to avoid formal disputes.
Section 1: INTRODUCTION
1. The vision of Ramskill Martin (“RM”) is developing solutions that make business sense for our Clients.
2. When developing these solutions the intention is to preserve ongoing business relationships wherever practicable.
3. RM’s approach is always proactive with the aim of resolving issues before they escalate into a contentious state or a formal dispute.
4. The objective in taking this proactive approach is to protect our Client’s business by preserving both its profit margins and its relationships whenever possible.
5. RM’s Risk Analysis and Risk Management (“RAM”) Services are focussed on providing early independent assessments in respect of entitlement and liability for commercial, contractual, quantum and delay.
6. RM’s RAM Services comprises of two main pillars:
6.1. Risk Reviews for commercial, contractual and quantum matters.
6.2. Commercially Focussed Delay Analysis (referred to as “CFDA”) for delays and time.
7. The RAM Services can consist of either a Risk Review of commercial, contractual and quantum matters or a CFDA on time or it can be a combined analysis utilising both elements.
Section 2: BENEFITS OF CONDUCTING RISK REVIEWS AND ADOPTING COMMERCIALLY FOCUSSED DELAY ANALYSIS SERVICES
8. RM’s RAM Services provides the following benefits:
8.1. The Analysis can include commercial, contractual, quantum and delay in the same report.
8.2. Where necessary, early or preliminary advice (almost like a Risk Feasibility Study) can be provided based on provisional or indicative information.
8.3. The nature and basis of the Report is always provided to assist the reader’s understanding, but also to provide gravitas to it.
8.4. The Analysis is usually delivered in one of three ways:
8.4.2. Bullet point report.
8.4.3. Detailed and reasoned report.
8.5. The advantage being that, due to the structure and details established from the exercise, the report is naturally expanded upon with very little abortive or redundant work carried out.
8.6. The analyses can also provide an indication of the likely solutions to any risks that are identified.
8.7. Ordinarily, RM’s fee budget is set within a band and, unless our Client changes the brief, the outturn cost will be within the quoted banding.
Section 3: RISK REVIEW
- The following is a description of a Risk Review together with a summary of its benefits.
What is a Risk Review?
- A Risk Review is a review or analysis of any aspect of the project involving commercial, contractual or quantum issues that carry or is likely to carry a risk.
11. Typical topics under review may include:
11.1. The likely success of a Variation Account.
11.2. The merits of an Extension of Time claim.
11.3. The review of the status of a whole account including valuation of the Contract Works, Variations, Loss & Expense, merits of an Extension of Time and any commercial, contractual or quantum matter identified (by RM or the Client as a risk).
What is the Purpose of a Risk Review?
- Provide a high-level assessment of liability and entitlement in respect to commercial, contractual and quantum related matters.
- Identify the risk and potential leverage vital in a successful negotiation and reduce the likelihood of an escalation of a difference to a protracted formal dispute resolution procedure.
How is a Risk Review Presented?
- Following the initial submission of the Report many of RM’s Clients require the Risk Review to be presented to key individuals within their business.
- The Risk Review Report will vary in size depending on the complexity and the number of issues under review.
What are the Possible Benefits of Conducting a Risk Review?
- It is a cost effective and quick approach which establishes the risk and opportunities within a project.
- Information is provided in a precise and clear manner which can be easily interpreted by senior management.
- It causes minimal disruption to the Client’s project teams.
- The quick turnaround of the Report minimises the likelihood of differences escalating.
- It avoids the likelihood of aborted effort by developing a case which is unsustainable.
- It quickly provides a high-level assessment of liability and entitlement with regard to commercial, contractual and quantum matters.
How is the SWOT Analysis and Cost Benefit Analysis Utilised in a Risk Review?
- A SWOT Analysis Strengths, Weaknesses, Opportunities and Threats is often required by Clients and can be utilised during strategic decision making or negotiations.
- On occasion, and to simplify the Report, Clients can choose to have simply the “Strengths and Weaknesses” considered.
- The Cost Benefit Analysis is often adopted by Clients to enable them to consider the financial viability of progressing a claim or commencing a formal process.
- Where the pursuance of a claim is not viable in a formal process RM will, wherever possible, provide advice on alternative commercial strategies.
- The Risk Review (including the SWOT Analysis and Cost Benefit Analysis) provides the Clients’ decision makers with the requisite information to develop and progress an appropriate strategy and/or to be equipped with the key information during negotiations.
Section 4: COMMERCIALLY FOCUSSED DELAY ANALYSIS
- The following is a key point description of a CFDA together with a summary of its benefits.
- CFDA is a pragmatic approach to assessing delays with the aim of avoiding the requirement for a detailed, comprehensive and expensive Delay Analysis. Its objective is to establish the entitlement and liability for a particular delay event or period/window without the extensive resource and cost expenditure of a traditional Delay Analysis.
What is a Commercially Focussed Delay Analysis?
- A specific and highly focussed review and analysis of an identified delay event or period/ window is referred to as “the Focussed Scope”.
- The review and analysis (Report) does not consider progress, delays or issues that occurred prior to or after the Focussed Scope.
- The Report includes a bullet point Risk Register of key issues that were identified whilst preparing the Report.
- The Report also includes a bullet point list of caveats arising out of this CFDA approach.
What is the purpose of a Commercially Focussed Delay Analysis?
33. The CFDA approach provides a targeted, relevant and easily understood report which:
33.1. Quickly provides a high level assessment of liability and entitlement in respect to delays and time.
33.2. Identifies the risks and potential leverage vital in a successful negotiation and reduces the likelihood of an escalation to a formal and protracted dispute resolution procedure.
How is the Commercially Focussed Delay Analysis presented?
- Following the initial submission of the report many of our Clients require the CFDA to be presented to key individuals in a meeting.
- The CFDA report is often no more than 10 to 12 pages long, with selective and focussed Appendices, normally including a Risk Register and a summary programme illustrating the conclusion of the CFDA.
What are the possible benefits of adopting a Commercially Focussed Delay Analysis?
- Cost effective approach to an otherwise expensive solution.
- Information is provided in a precise and clear manner which can be easily interpreted.
- Causes minimal disruption to our Clients’ project teams and resources.
- The quick turnaround of the Reports minimises the likelihood of differences escalating.
- Avoids the need for a Full Delay Analysis.
- Quickly provides a high level assessment of liability and entitlement with regard to the focussed scope.
- Avoiding formal disputes.
Section 5: MAXIMISING THE CLIENT’S OPPORTUNITIES AND MINIMISING THE RISKS – WHEN TO INSTRUCT?
43. The opportunities are maximised and the risks are minimised if our Client’s involve RM as soon as possible:
43.1. At the point when a claim/risk is identified.
43.2. When a claim/risk involves commercial, contractual, quantum or delay/time.
43.3. At the point when an Expert Opinion is required, to clarify entitlement and liability and/or to aid with negotiations.
43.4. Ideally before the differences or issues have escalated.
Section 6: BENEFITS PARTICULAR TO DISPUTE AVOIDANCE AND DISPUTE RESOLUTION
44. The principle benefits of RM’s RAM Services are:
44.1. Quick turnaround.
44.2. Early assistance by Expert Advisor, assisting with the merits of the case and potential early settlement.
44.3. The Analysis can include commercial, contractual, quantum and delay in the same Report.
44.4. The RAM Reports can provide an indication of the likely solution to any risks which are identified.
44.5. The RAM Reports are often a useful tool during mediations and negotiations.
44.6. RM’s fee budget is set within a band and, unless our Client changes the brief, the final cost will not exceed the quoted banding.
Section 7: BENEFITS PARTICULAR TO INSURANCE CLAIMS
45. The principle benefits of RM’s RAM Services are:
45.1. Quick turnaround.
45.2. Early preliminary advice based on provisional or indicative information.
45.3. The Analysis can include commercial, contractual, quantum and delay in the same Report.
45.4. The RAM Reports can provide an indication of the likely solution to any risks which are identified.
45.5. RM’s fee budget is set within a band and, unless our Client changes the brief, the final cost will not exceed the quoted banding.
SECTION 1 – BACKGROUND
- Ramskill Martin (RM) was appointed to prepare a submission to challenge two Withholding Notices issued by XXXXXX and that submission was made on the 19 April 2011. The details of the two notices are:
SECTION 2 – OVERVIEW OF KEY ISSUESXXXXXX has commenced negotiation of the final value and we offer the following points for consideration when decisions have to be made as regards offers made by XXXXXX in settlement of the account.
- XXXXXX acknowledges that XXXXXX has carried out remedial works to floor and wall panels.
- XXXXXX claim is particularised for House Block A, but is generally doubled up to provide a forecast for House Block B – the Blocks are identical and XXXXXX is assuming the same problems will exist.
- At the time of preparation of the submission, XXXXXX had not started remedial works on Block B and XXXXXX was carrying out a detailed survey of House Block B and will undertake remedial works as required.
- XXXXXX has appointed XXXXXXX to offer expert opinion on the alleged defects and XXXXXX has issued an Expert Report offering opinion on the reasons for the matters in issue – XXXXXX is of the opinion that:
- One of the BS specifications stated in the Contract Documents is no longer applicable and was withdrawn from use in 1985
- That XXXXXX has achieved the specified Class 1 Type C finish to the internal walls as required by the specification and that the joints are in accordance with specification.
- That the problems with the alignment and positioning of the “Cast-in Components” are the result, in part, of the inaccuracy of the ‘free issue’ components.
- RM has shown examples of the late issue of drawings and other design information that has disrupted the manufacture of pre-cast units and which have, in all probability, led to some of the problems regarding the quantity and positioning of certain cast-in components. It is apparent that some of these issues are being classified by XXXXXX as defective works. Demonstrating which items are defective works of XXXXXX and which are variations caused by XXXXXX will be a time-consuming and costly exercise.
- In attempting to substantiate its evaluation of withholding, XXXXXX has issued copy invoices from specialist contractors employed to make good the ‘defects’ – brief consideration of the supporting evidence shows inaccuracies, which XXXXXX/RM could challenge.
- All relevant design information should have been available by 19 October 2009, to allow XXXXXX to finalise the detailed design and commence the precasting in a cost-effective manner, but revisions were still being received in July and August 2010, that is after the start of on-site works on 07 June 2010.
- XXXXXX should have a claim for disruption caused by the late issue of information, but that would require detailed analysis of drawing issue dates and consequences. That would be a long exercise, but XXXXXX should use the argument in settlement discussions.
XXXXXX Prolongation Costs
- XXXXXX costs include £340,000 for LADs, which may or may not be applied by the Employer.
- For the purposes of the Withholding Notice, XXXXXX has applied the following periods of delay costs:
- XXXXXX has applied (in the RM submission of 19 April 2011) for extensions of time to equate with the actual date of completion of their works, on the grounds that it has completed at the earliest possible date having regard to the late issue of information and the effect on the precasting process, for example:
- The manufacturing programme shows the planned start dates for manufacture as follows:
- Floor slabs starting on 11 January 2010; and
- walls starting on 15 February 2010.
- This window of time was reserved in XXXXXX factories for the manufacture of the precast units for the XXXXXX project; however, the late provision of design information by XXXXXX caused the manufacture of slabs to be delayed as follows:
- Manufacture of slabs actually started on 10 February 2010
- Manufacture of walls actually started on 3 March 2010
- Units were manufactured when information was available and the opportunity for cost-effective bulk precasting was lost.
- It would appear that XXXXXX is entitled to an extension of time and that will reduce XXXXXX prolongation costs and should provide additional value to XXXXXX by way of recovery of its prolongation costs.
- XXXXXX is advised to continue to give notice of delay and to apply for further extensions of time and give notice of direct expense.
The Overall Delay
- On 01 April 2011, XXXXXX issued a withholding notice of £607,000 for delays of six weeks.
- The final Section of XXXXXX work should have been completed on 06 February 2011, but is not expected to be completed until 10 June 2011 (17 weeks late overall). Some sections have been delayed by a longer period.
- Some finishing works are more than 30 weeks late.
- Clearly, further risks in terms of LADs and general damages exist in this regard.
What RM has done
- RM has reviewed XXXXXX contractual position and has identified and reviewed events that delayed XXXXXX.
- RM has prepared an extension of time claim, which was submitted to XXXXXX on 19 April 2011.
SECTION 3 – STRENGTHS AND WEAKNESSESS
- The main arguments in support of XXXXXX position were presented in the extension of time claim. These arguments are:
- The late provision of design information (particularly M&E information) by XXXXXX, delayed manufacture, delivery and erection
- The late provision of design information disrupted the manufacturing process and meant that precast units were produced in an inefficient sequence
- The late provision of design information caused the window for manufacture in XXXXXX factories to be missed, causing manufacture to take longer than planned.
- RM has identified and provided to XXXXXX examples of XXXXXX being late at providing information and demonstrated how this delayed the installation of a small sample of individual units.
- Based on what RM has seen, it would be extremely difficult and time consuming to prove XXXXXX This is primarily due to the sheer volume of documentations (700+ drawings and 4,000+ panels), but also there are apparent elements of culpability on XXXXXX part.
- From RM’s review of the actual design process for specific precast units, XXXXXX did cause substantial delays. In some instances, XXXXXX took several months to update drawings and manufactured to drawings that were out of date.
- XXXXXX completed the design in September 2010. From receipt of the final information, it has taken XXXXXX longer than the original contract period to complete the works.
- XXXXXX could claim it is entitled to damages for longer periods of delay than the six weeks it has currently claimed.
- The damages for delay are substantial. Liquidated damages in the main contract are:
First 2 weeks – £20,000 per week
Next 2 weeks – £50,000 per week
After 4 weeks – £100,000 per week
XXXXXX claim for loss and expense must be added to these.
SECTION 4 – RISK REVIEW OF XXXXXX VARIATIONS
- XXXXXX has issued £481,000 worth of variations to XXXXXX and of this £56,000 was for variations that had been issued and agreed during the project. The remaining £425,000 was issued on 19 April 2011, following the issuing of the response to the withholding notices and extension of time claim. XXXXXX has informed RM that the original £56,000 has been agreed and RM has not, therefore, carried out any work on these variations (a risk is that these will be opened up by XXXXXX). A summary of the £425,000 variations, the current issues and risks is shown in the table below:
SECTION 5 – RISK REVIEW OF XXXXXX WITHHOLDING
- XXXXXX issued withholding notices on 01 April 2011 and 18 March 2011 totalling £1,022,482. XXXXXX entitlement to withhold is assessed in this section of this skeleton risk review and in the table below.
- It is highly likely that further heads of claim and additional costs will be presented by XXXXXX. The figures in the ‘XXXXXX Valuation’ column of the table above are likely to increase.
- The period of delay has increased since XXXXXX issued its withholding notices. The costs associated with delays, which have been claimed by XXXXXX, will almost certainly increase.
SECTION 6 – CONCLUSION
- Taking the above into consideration, the following is a summary of the likely outcome of the Final Account negotiations:
Set a realistic ‘cut-off’ date when all information has to be frozen and ensure that the date is a contractual requirement.XXXXXX case would require considerable strengthening before further submissions could be made and that would involve a detailed review of the issue of drawings and an assessment of the effect of that late issue. The principles of the XXXXXX case are good, but the evidence is not readily available.
- It is likely, if the matter was referred to Adjudication, that the preparation of the Referral and the cost attached to the long process, which would be required by the Adjudicator to satisfy himself of the merits of the case, would incur costs in the order of £100,000.
- For the future, the lesson must be:
- Set a realistic ‘cut-off’ date when all information has to be frozen and ensure that the date is a contractual requirement.
- Keep details records of all information that revises the frozen information and start a register to set down the effect of the revision
- Keep accurate costs of the precast process to compare with the tendered productivity levels
- The above summary figures do not take into account any further costs associated with the detailed analysis required, or for the pursuit of a formal process such as adjudication. The cost of these exercises could be between £80,000 and £160,000, which is not recoverable.
- Further disruption to XXXXXX management team would also be experienced in fulfilling these objectives.
SECTION 7 – PROPOSED STRATEGY TO TAKE THIS CASE FORWARD
- The present position is that XXXXXX, with RM’s assistance, has and continues to issue documents, notices, and information in support of its case. To date, all submissions have likely put pressure on XXXXXX to review its position and realise that XXXXXX position is stronger than XXXXXX original assessment.
Option to Adjudicate
- XXXXXX could proceed to develop its case with evidence to defend XXXXXX withholding notices, and its prolongation costs, together with XXXXXX variation assessment with direct expense claims.
- RM’s best estimate for this exercise is £60,000 for the analysis of all changes and drawings and to identify the liability and valuation of each and £100,000 for the preparation for and the running of the adjudication. Overall, RM believes the likely outturn cost will be between £80,000 and £160,000 for these two exercises.
Evidence and Culpability
- As stated above, the submissions made to date by XXXXXX have likely put pressure on XXXXXX.
- Over the next week or two, the impact of such submissions is likely to reduce because, to date, XXXXXX has utilised its best evidence and strongest examples. A full analysis will reveal that there are numerous examples where XXXXXX is culpable and, therefore, future submissions will start to expose these risks, or at least enable XXXXXX to expose them when it interrogates the evidence.
Negotiation – Preferred Position and Fall-back Position
- It is clear from the above summary of XXXXXX position, that RM considers £6.1m to be the likely settlement. However, the £6.1m does not include any consultant or legal costs, which, as already stated, could range from £80,000 to £160,000. However, in a negotiation situation, RM would recommend that XXXXXX takes a preferred position of £6.2m and prepare for a fall-back position of £6m.
- RM considers that if XXXXXX receives an offer within this band, then taking into account the cost and uncertainty of adjudication, the disruption on its remaining business and the cash injection of £900,000 (subject to retention), then that offer would be considered to be a good offer.
KEY POINT SUMMARY
- The XXXXXXXXXXXXX development consists of two new build, steel frame buildings. The XXXXXXXXXXXX Building (XXXXXXXXXXXX) given a contemporary finish, the XXXXXXXXXXXX Street Building (XXXXXXXXXXXX) clad in a more traditional manner with the existing façade on the XXXXXXXXXXXX Street Elevation being retained and fixed to the new building.
- The steel frame subcontractor, THE SUB CONTRACTOR, was responsible for erection of the steel frame and installation of metal decking to the composite floors. Concreting of the composite deck floor was carried out by another subcontractor.
- The brief for this report was provided by XXXXXXXXXXXX of THE CONTRACTOR as:
“the primary (and probably only) objective here is to establish in our own minds (with evidence) exactly what delay and impacts were caused to the project programme and to other trades as a result of XXXXXXXXXXXX own levels issues with the frame installation [on the XXXXXXXXXXXX]. Primary Purpose is to inform and help sensible negotiated agreement of XXXXXXXXXXXX account with possible spin off benefits in agreement of other accounts”
- The sub contract referenced the following period for structural steelwork to the XXXXXXXXXXXX:
“XXXXXXXXXXXX Structural Steelwork including decking and plant screens – Completion within 23 weeks from the agreed start on site date”.
- The sub contract references the THE CONTRACTOR programme XXXXXXXXXXXX /TP/001 rev C. This programme gives THE SUB CONTRACTOR a period of 24 weeks and 1 day to complete its structural steelwork to the XXXXXXXXXXXX. The last 5 weeks and 1 day of the programme is to allow works by others and installation of plant screens. These works do not fall on the critical path of the works by THE SUB CONTRACTOR. This review concentrates on the critical path works being a 19-week period up to the handover of metal deck at level 8.
- Appendix A Document 1 illustrates the subcontract programme and subsequent planned works.
- The critical path of the 19-week period of planned works is:
- 2 weeks – Install Fin Weld Plates
- 16 weeks – Erect steel frame to XXXXXXXXXXXX
- 1 week – Complete metal deck to level 8 and handover
- On 22 September 2014, THE CONTRACTOR issued a notice to commence works to XXXXXXXXXXXX for a 06 October 2014 start.
- A revised start on site of 08 October 2014 was communicated to XXXXXXXXXXXX. Works to the XXXXXXXXXXXX commenced on this date.
- At a meeting on 16 October 2014 the commencement date for works to the XXXXXXXXXXXX was agreed with XXXXXXXXXXXX as 27 October 2014.
- This revised start date has been used for this review with the 19-week period of critical works concluding at a planned handover for the level 8 metal deck of 20 March 2015.
Ramskill Martin Report Versions to date
- Version 1 of the Ramskill Martin (RM) report assumed a commencement of works to the XXXXXXXXXXXX of 08 October 2014. Version 1 also assumed that the plant screen installation works had been carried out during the period between identification of the levels issue and handover of the level 8 deck.
- Version 2 of the RM report corrects the start date of the XXXXXXXXXXXX to 27 October 2014 (see 10) and removes the plant screen works from the critical path of the planned works. This activity was carried out following the handover of the level 8 deck and in some cases by other subcontractors.
Delays to Levels 6, 7 and 8 – THE SUB CONTRACTOR’s Slow Progress in Installing Studding and Trimming
- Studding and trimming at levels 6 and 7 were scheduled to be handed over 3 days following the completion of the steel frame, giving a planned handover of 21 April 2015.
- Site progress records show that studding and trimming works to level 6 decking continued to 29 April 2015, a delay to the planned completion of 1 week and 1 day (D1).
- Handover of level 6 was delayed further to 19 May 2015. A period of 2 weeks and 4 days (D2). The cause of the delay to the handover of the deck cannot be defined without further detailed analysis.
- Site progress records show that studding and trimming works to level 7 decking continued to 22 May 2015, a delay to the planned completion of 4 weeks and 3 days (D3).
- Handover of level 7 was delayed further to 05 June 2015. A period of 2 weeks (D4). The cause of this delay is not known at this stage. Further detailed analysis is required.
- Level 8 was scheduled to be handed over 1 week following the completion of the steel frame, giving a planned handover of 23 April 2015.
- Site progress records show that studding and trimming works to level 8 decking continued until handover of the deck on 17 June 2015, a period of 7 weeks and 4 days (D6).
Delays and Impact Caused by THE SUB CONTRACTOR’s Own Level Issues
- The levels issue to levels 6, 7 and 8 was identified by THE SUB CONTRACTOR on completion of the steel frame erection on or around 16 April 2015.
- The schedule of actual handovers for the floor levels is recorded as follows:
- Level 6 – XXXXXXXXXXXX
- Level 7 – XXXXXXXXXXXX
- Level 8 – XXXXXXXXXXXX
- Following completion of the steel frame THE SUB CONTRACTOR should have had 1 week’s remaining work to install the metal deck to level 8 prior to handover.
- Level 8 deck was handed over 8 weeks and 4 days later than erection of the steel frame. Therefore, the impact of all delays to the critical path of the project was 7 weeks and 4 days (D7). Delays are summarised in Appendix A Document 2.
- A period of 2 weeks was required to carry out the remedial jacking works to the steel frame which commenced on 11 May 2015, some 3 weeks and 1 day from THE SUB CONTRACTOR identifying the levels issue. THE CONTRACTOR has not provided evidence to establish the cause of the delay between 16 April 2015 and 11 May 2015, although it would seem likely to be linked with the levels issue.
- During this period (16 April 2015 to 11 May 2015), some studding and trimming works took place, but it would seem to have been carried out at a much slower pace than planned.
- From the evidence provided and the level of analysis carried out at this time, the delay caused as a direct result of THE SUB CONTRACTOR’s levels issue is as follows:
- If the delays caused to the level 8 studding and trimming activities was in turn caused by the levels issues, then the levels issue has caused the full 7 weeks’ and 4 days’ delay.
- THE CONTRACTOR has not provided sufficient evidence to establish the reasons for the slow pace of installation of the studding and trimming.
- If the slow progress is caused by the levels issue, but the period between 16 April 2015 and 11 May 2015 was the result of another cause, then the delay caused by the levels issue is from 11 May 2015 to 17 June 2015 and is 5 weeks and 3 days.
- If the slow progress to the installation of studding and trimming and the period between THE SUB CONTRACTOR identifying the levels issue (16 April 2015) and the subsequent period between 16 April 2015 and the commencement of the rectification work (11 May 2015) D5 are both caused by the levels issue, then the total delay caused by the levels issue is 7 weeks and 4 days.
- If the slow progress to the studding and trimming and the period between 16 April 2015 and 11 May 2015 are caused by something other than the levels issue, then the levels issue has caused a delay of 2 weeks.
Delays and Impact Caused by THE SUB CONTRACTOR to Other Trades as a Result of THE SUB CONTRACTOR’s Levels Issues
- The delay to the cladding subcontractor will be directly affected by the delayed handover of the crane. This is assumed to be equal to the delay of the handover of level 8 at 7 weeks and 4 days following the identification by THE SUB CONTRACTOR of the level issues. Any earlier recorded handover of the crane will directly mitigate this delay.
- The delay to the concreting subcontractor will be equal to that of the delay to the handover of level 8 metal deck. This is 7 weeks and 4 days following the identification of the level issues.
Fit Out Trades
- The delay to the fit out trades and the completion of relevant works packages appears, from assessment of the THE CONTRACTOR programmes to be 6 weeks. Although testing and commissioning of lifts and services remains on the critical path and therefore equals the delay to the concreting subcontractors of 7 weeks and 4 days.
Other THE SUB CONTRACTOR Culpable Delays Identified
General Progress Delays
- It has been calculated that THE SUB CONTRACTOR was 1 week and 3 days in delay in its planned progress at 20 December 2014. THE SUB CONTRACTOR has not demonstrated its entitlement to this time although it refers to ‘disruption’ to its works prior to Christmas 2014 in its letter of 02 March 2015. There has been no formal notice of delay issued by THE SUB CONTRACTOR.
THE CONTRACTOR UK Culpable Delays Identified
- A request for an extension of time of 2 weeks and 1 day for the delay incurred in relation to façade clashes was issued by THE SUB CONTRACTOR in its letter of 16 June 2015. This is considered to be a THE CONTRACTOR culpable delay.
Summary of THE SUB CONTRACTOR’s Delays
- The critical delay to the XXXXXXXXXXXX arising out if the levels issue is 7 weeks and 4 days (D7). See 22-28.5.
Register of Other Issues Identified
- The contractual status of the acceleration agreement is uncertain.
- This review does not analyse other concurrent delays.
- There may be an issue in respect to the adequacy of THE SUB CONTRACTOR’s contractual notices.
- The position in respect to L&ADs in the sub-contract is not clear and requires further consideration.
- The review of the delays to other trades is an assessment only and for certainty a more detailed analysis would be required.