Literature review on Extension of time (EoT) in Construction Project.

1. Literature Review
on
Extention of Time (EoT)
in Construction Project

2. INTRODUCTION
EOT is one of the provision clauses in the
standard contract form. The purpose is to
preserve an employer’s right in liquidated
damages. In the circumstances that the
delays are caused by inevitable reason, EOT
allows contractor to set an agreed completion
date. [1]

3. Factors causing Extension of Time [2]
 Improper Project Feasibility Study
 Delay in Instructions from Consultants
 Extreme Weather Conditions
 Unfavorable Site Conditions
 Poor Professional Management
 Delay in Interim Payment Certificates

4. Factors causing Extension of Time [2]….
 Land Acquisition Problems
 Delay in Issuance of Drawings
 Lack of Baseline Schedule
 Poor Design
 Mistakes with Soil Investigations
 Improper Investigation of Foundations at Site

5. Factors causing Extension of Time [2]….
 Late Deliveries of Materials
 Late Variation Orders Approval
 Difference between Building Code & Specification
 Delay by Sub-Contractors
 Slowness in Decision Making
 Shortage of Fuel, Materials and Equipment
 Lack of Capable Representative
 Poor Site Supervision

6. LITERATURE REVIEW
General condition of contract clause no. 35
of standard bidding document for
procurement of work prepared by Public
Procurement monitoring office state that: [3]

7.  The Project Manager shall extend the Intended
Completion Date if a Compensation Event occurs
or a Variation is issued which makes it impossible
for Completion to be achieved by the Intended
Completion Date without the Contractor taking
steps to accelerate the remaining work, which
would cause the Contractor to incur additional
cost.

8.  The Project Manager shall decide whether and by
how much to extend the Intended Completion
Date within 21 days of the Contractor asking the
Project Manager for a decision upon the effect of
a Compensation Event or Variation and submitting
full supporting information at least 21 days prior to
the intended completion date.

9.  If the Contractor has failed to give early
warning of a delay or has failed to
cooperate in dealing with a delay, the delay
by this failure shall not be considered in
assessing the new Intended Completion
Date.

10. Standard contract forms, especially that of the
International Federation of Consulting
Engineers (FIDIC) has included Extension of
Time for completion on sub clause 8.4. This
includes: [4]

11. The Contractor can claims for an extension of
the time for completion subject to sub clause
20.1 [ Contractor’s Claims] or due to delayed
by any of the following causes:
 Variation due to change in quantity of an
item of work
 Exceptionally adverse climatic conditions

12.  Unforeseeable shortages in the availability of
personnel or goods caused by epidemic or
governmental action.
 Any delay caused by the employer, the employer’s
personnel or employer’s other contractors.

13. If the Contractor considers himself to be entitled to any
extension of the Time for Completion under any Clause of
these Conditions, the Contractor shall give notice to the
Engineer, describing the event or circumstance giving rise to
the claim. The notice shall be given as soon as practicable,
and not later than 28 days after the Contractor became
aware, or should have become aware, of the event or
circumstance.

14. Within 42 days after receiving a claim or any further
particulars supporting a previous claim, the Engineer
shall respond with approval, or with disapproval and
detailed comments. He may also request any necessary
further particulars, but shall nevertheless give his
response on the principles of the claim within the above
defined time period.

15. If the Engineer does not respond within the
timeframe defined in this Clause, either Party may
consider that the claim is rejected by the Engineer
and any of the Parties may refer to the Dispute
Board in accordance with Sub-Clause 20.4 [
Obtaining Dispute Board’s Decision ].

16. Prevailing Legislations
regarding Extension of Time in Nepal

17. Eligibility Conditions/Requirements for EOT:-
As per the section 56 of Public Procurement Act 2063, the
conditional requirements for EOT are: [5]
 Provision of EOT must be incorpotated in Agreement
Document.
 Force Majeure
 Failure of the Public Entity to make available the materials to
be made available by it
 Miscellaneous genuine reasons.

18. Procedure/Process for EOT:- [6]
As per the rule 120 of Public Procurement Regulation 2064, the
following process must be followed and fulfilled before the
approval of EOT.
 Application for EOT must be submitted to PE before 21 days
of deadline by Contractor/Consultancy/Importer/Service
Provider with reasons for the requirement of EOT.

19.  Investigation by Public Entity's responsible officer over the
EOT application and respective documents on following
terms:
 Whether the concerned contractor has endeavored his/her
100% to complete the work as per contract agreement in time
or not
 Whether the concerned public entity has provided the
construction entrepreneur, supplier, service provider or
consultant with the matters required to be provided under the
contract or not

20.  Whether the delay is due to PE's taking the
required documents associated with contractor
for the purpose of Investigation or not.
 Whether the delay is due to Force Majeure
(Earthquake, Flood, Landslide, Soil Erosion,
Pandemic/Epidemic or not.

21. Approval of EOT:-
On rigorous study or investigation, if the reasons
provided on the application are found genuine, the
approval of EOT can be done based on:
 For the EOT of up to 15% of initial Project
Duration, approval can be done by the Officer
who had approved the Procurement.

22.  For the EOT of above 15% up to 25% of initial Project
Duration, approval can be done by the Departental Chief.
 For the EOT of above 25% up to 50% of initial Project
Duration, approval can be done by the Secretariat of the
Concerned Ministry/Entity.
 No EOT of above 50% of initial Project Duration can be
done. For such requirements, the Contract should be
terminated.

23. Liquidated damages:
The following provisions may be made in the procurement contract
in regard to the liquidated damages:
(a) If the work under the procurement contract could not be
completed within the time specified in the contract due to the delay
on the part of the supplier, consultant, service provider or
construction entrepreneur, he or she shall pay to the public entity
liquidated damages, generally of zero decimal zero five (0.05)
percent of the contract price per day not exceeding ten percent of
the contract price;

24. however, he or she is not required to pay liquidated damages if the
performance of work or delivery of goods is delayed due to the
occurrence of a force majeure event or without any fault or
negligence on his or her part, and
(b) The concerned construction entrepreneur, supplier, service
provider or consultant shall not be released from the obligation of
performing the work under the procurement contract even upon
payment of the liquidated damages referred to in clause (a).

25. Reward may be given to those who complete work prior to time:
1. It may be provided that the public entity may reward the
construction entrepreneur who completes the work prior to the
period specified in the procurement contract.
2. The amount of reward referred to in sub-rule (1) shall be
determined on the basis of sub-rule for such a number of days by
which the work was completed before the period specified in the
procurement contract.

26. (3) While determining the rate referred to in sub-rule (2), the rate
shall be so determined as equivalent to the same amount that the
construction entrepreneur has to pay as liquidate damages to the
public entity on daily basis for failure to complete the work within the
period specified in the procurement contract.
(4) Notwithstanding anything contained elsewhere in this Rule, the
total amount of reward shall not exceed ten percent of the contract
price.

27. REFERENCES
1. Lian, Y. L., Hassim, S., Muniandy, R., & Ling, T. M. (2012). The
Assessment of Applications for Extension of Time Claims in Malaysian
Construction Industry. IACSIT International Journal of Engineering and
Technology, 4, 446-450.
2. Hanif, H., Saleem, Y., Shahid, Z. A., Hanif, A., & Zeb, A. (2014).
Assessment of Extension of Time Claims in Hydropower Projects of
Pakistan. International Journal of Engineering and Advanced
Technology (IJEAT), 4, 29-32.

28. REFERENCES
3. GON, P. P. (2019). Standard Biddding Document Procurement of Works
National Competitive Bidding (NCB). Nepal: www.ppmo.gov.np.
4. (FIDIC), I. F. (2010). Condition of Contract for CONSTRUCTION FOR
BUILDING AND ENGINEERING WORKS DESIGNED BY THE EMPLOYER.
Geneva: www.fidic.org.
5. The Public Procurement Act, 2063 (2007). (2019). Nepal:
www.ppmo.gov.np.
6.The Public Procurement Regulation, 2064 (2007). (2019). Nepal:
www.ppmo.gov.np.