This document discusses extension of time (EOT) for project contracts. It defines EOT as providing additional time for a contractor to complete a project if it is delayed past the original completion date stipulated in the contract. Common reasons for project delays include delays in site access, approvals, materials, and payments. Both contractors and employers can be responsible for delays. If a delay is approved, an EOT is granted but does not necessarily include compensation; compensation must be separately established. Record keeping of delay reasons is important to determine responsibility.

1. Project Contract Management
Extension of Time
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2. Project Contract Management
What is Extension of Time?
• Before we understand what is ‘Extension of Time’,
we need to understand what is ‘Time’ for a project.
• Every project is a time-bound event.
• The ‘time period’ for a project is mentioned in the
contract (stipulated by the Employer), within which
the project is to be completed. It may vary up to any
extent, even years, depending on the type and
volume of the project.
• If the project is not completed within the prescribed
time period of the project, then ‘Extension of Time’
(abbreviated popularly as EOT is required to
complete the balance work.

3. Project Contract Management
Illustration of EOT
• Let us consider the case of a project whose time
period is 24 months as per the contract.
• The project is delayed before or / and after
commencement of work and not completed within
the timeframe of 24 months.
• The client and contractor jointly agrees a revised
timeline to complete the balance work of the project.
The client awards an Extension of Time to the
contractor.
• The revised timeline is called the ‘Extended
timeline’.

4. Project Contract Management
Why Projects are Delayed?
• The Timeframe of a contract is stipulated at the
bid-stage of the contract and all the bidders
(including the successful bidder) must agree to
that.
• According to the timeframe the bidder
(Contractor) prepares their plans to execute. This
plan generally considers the ideal conditions
given in the contract, with some considerations
for the odds may happen during the contract
period.
• It is not possible to envisage and assess all the
problems can arise at a later stage which
hampers the progress of work.

5. Project Contract Management
General reasons for delay in work
• Delay in handing over the work site to
Contractor by the Employer due to many issues
including land acquisition issues.
• Delay in obtaining statutory licenses and
Government approvals for the project.
• Delayed release of construction drawings by the
Architects and Structural Design Engineers.
• Delay in procurement of required materials by
the contractor.
• Cessation or delay in manufacturing of
important materials by the approved
manufacturers.
Contd.

6. Project Contract Management
General reasons for delay in work Contd.
• Delay in transportation of materials.
• Delay due to Force majeure reasons
(unprecedented natural calamities, unrest or riots,
wars, pandemic conditions etc.)
• Delayed payment release by the Employers to the
Contractors.
• Unavailability of sufficient skilled manpower.
• Poorly planned completion schedules
(not considering realistic work-methodology for
tasks and thereby under-considerations of
resources)
• Addition of scope in the contract after commencement
of Project.

7. Project Contract Management
Extension of Time (EOT) – Flow Chart
Project
announced with a
stipulated
timeframe
Bidders plan
to complete
within the
timeframe
Project
awarded to
lowest price
bidders
Unprecedented
delays happen
Project is not
completed within the
stipulated timeframe
Contractor estimates
time extension and
applies to the Employer
Delay accountability is
assessed and agreed by
Employer and Contractor
Project
announced with a
stipulated
timeframe
Bidders plan
to complete
within the
timeframe

8. Project Contract Management
Delay accountability
• ‘Delay accountability’ is deciding the party
responsible for the delay happened in a project.
• Contractors are responsible for delays pertaining to
delay in mobilizing important resources for
completing the project, poor planning etc.
• Employers are responsible for delays in handing
over work-site to Contractors, issue of deliverables
(drawings, decisions, Govt. approvals etc.) on time,
payment to the contractors on time etc.
• Neither of the parties are accountable for delays
happened due to Force majeure events, changes in
Govt. policies or international laws.

9. Project Contract Management
Delay accountability – Major types of Delay
Delay by Contractor • Poor Planning for execution, resulting in
• non-timely engagement of resource
• improper / unrealistic methodology
• wrong selection of resources
• under considering resources
• Irregularity in delivery of resources at site (Supply chain
failure)
• Unable to mobilize required skilled workforce
• Delay in release of drawings by Contractor or
Consultants engaged by them (in case of an EPC
project)
• Construction error and rectification

10. Project Contract Management
Delay accountability – Major types of Delay
Delay by Employer
• Delay in handing over of work-front to the Contractor
• Delay in obtaining approvals from the local bodies or
Government authorities for which Employer is
responsible as per contract
• Irregularity in release interim payment to the Contractor
• Delay in engaging Consultants or Architects
• Delay in release of drawings and decisions by Employer
or Consultants engaged by them
• Construction error and rectification arisen out of faulty
drawings or decisions given by the Employer

11. Project Contract Management
Delay accountability – Major types of Delay
• Natural calamities (Flood, Tsunami, Cyclone,
Earthquake etc.)
• War
• People unrest or revolution
• Riot
• Epidemic or Pandemic outbreak
• Change in Govt. policies
• Change in the land of law or international law
Delay by Other Factors
(Force majeure, Change
in Govt. Policies, Law of
land or international law)

12. Project Contract Management
Implications of Delay in a contract
Delay by Contractor
• The Contractor is not eligible for claiming any cost
compensation.
• Employer may or may not charge liquidated
damage as per the applicable contract term.
• Time extension is awarded to the contractor to
complete the balance work.

13. Project Contract Management
Implications of Delay in a contract
Delay by Employer
• The Contractor is not eligible for claiming any cost
compensation.
• Employer may or may not charge liquidated
damage as per the applicable contract term.
• Time extension is awarded to the contractor to
complete the balance work.

14. Project Contract Management
Implications of Delay in a contract
Delay by Other Factors
(Force majeure, Change
in Govt. Policies, Law of
land or international law)
• Time extension is awarded to the contractor to
complete the balance work.
• Contractor will not have right to get cost
compensation if it is not explicitly mentioned in
the contract
• Employer will not be able to charge liquidated
damage to the contractor

15. Project Contract Management
Impact of EOT on the cost of contract
• EOT means staying in the contract for a
longer duration.
• Overhead of the Contractor increases.
• Employer loses on revenue generation from
the project.

16. Project Contract Management
EOT – What need to be done by the parties?
• Establishing a delay and granting EOT by
Employer does not entitles the Contractor for
compensation of cost by default.
• To get the cost compensation from the
Employer, the Contractor must establish that the
delay is not attributable to the Contractor.
• To establish the reasons of delay, the reasons
are to be recorded by both the parties jointly
since the commencement of the contract.
• Every details of the delay must be recorded so
that the responsibility can be easily assessed
later.

17. Project Contract Management
Delay register – A Sample Format

18. Project Contract Management
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