“If you fail to plan, you are planning to fail” – Benjamin Franklin

Planning is one of the most important aspects of construction.

A contractor’s initial plan to execute the works is submitted during the tender stage. These plans are commonly referred to as tender programs. Contractors generally prepare tender programs in the following manner:

1. Optimistically – to ensure contractual time frames are met, despite not necessarily being achievable.
2. Rapidly – because of the timeframes involved in preparing tenders.
3. At high level – also dictated by the time constraints involved in preparing tenders. The cost of the exercise may also be a factor.

In the event that a contractor is awarded a project, it is important for the contractor to ensure the credibility of its tender program. Particularly if the tender program was not carefully thought out during the tender time. If the contractor fails to do so, the risks and effects can be potential problems in the future.

Despite this, it is common that a tender program automatically becomes a contract program and/or a construction program. Only when works on-site commence, do flaws in the program become apparent.

In preparing tender programs, common errors and consequences include:

Error	Potential Issues
Missing scope	Insufficient detail. May affect the critical path. Uncertainty as to when the missing scope will be performed. The project end date may be unachievable.
Planned logic different to actual sequencing & Execution	Incorrect sequencing. Incorrect critical path. Incorrect float values. Confusion and miscommunication.
Insufficient duration	Insufficient allowances to begin with. Unrealistic timeframes.
Lack of subcontractor consultation	Contractors make incorrect assumptions without consulting their subcontractors. Under-estimating scope durations and their consequential effects on the program logic.

 

What does this mean?

If an Extension of Time (EOT) claim is based upon a poorly constructed program, it may not provide a clear and realistic representation of the cause and effect of a purported event. Therefore, a ‘poorly made’ program can undermine the integrity of a programming analysis and reduce the credibility of a claim.

As an example, if a program is incorrectly showing critical activities as non-critical activities, this will undermine the basis of a claim, and serve as grounds for which a superintendent may reject a claim.

 

What should a contractor do?

In our view, prior to any programming analysis, it is always best to correct the shortfalls and provide full transparency of the changes required. This will ensure that the program used as a basis for analysis, accurately reflects a contractor’s position before the rise of any unforeseen events. When doing so, a contractor should be mindful of the following:

1. Confusion may arise from all parties, as to which programs are current and which programs are not.
2. Providing clarity around which program will be the plan moving forward.
3. The contractual ramifications that arise, when deviating from a contract program.

Therefore, it is always best to ensure a clear and concise program from the beginning. The process of maintaining and updating the program, along with the preparation of claims, becomes a simpler, clearer and more efficient process.

 

I hope you have found this blog helpful and if you require further clarification please do not hesitate to get in contact with us at info@anvelo.com.au or LinkedIn

 

N.b. Nothing in this article constitutes legal, professional or financial advice.