| Date | 29 November 2006 |
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| Judgment | Balfour Beatty Construction Limited v The Mayor and Burgess of the London Borough of Lambeth (2002) |
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| The Issue | Contractor’s failure to prepare adequate programmes. |
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| Implication |
A contractor involved in a dispute concerning matters of time is likely to fail in the absence of an adequately prepared contract or master programme. |
printMany claims in construction arise from disputes over matters of time – usually because of alleged delay and/or disruption resulting in claimed entitlement to extensions of time. It is often the case that a contractor is claiming time (and therefore money) but has put forward no meaningful analysis to substantiate it. Much has been said and published in recent months on the subject of delay analysis, and on the different methodologies that can be applied to it, and some of the debate has concerned the existence (or otherwise) of an adequate base programme. It is still possible to find that a contractor has entered into a contract on the strength of a programme which was apparently drawn up on the back of a fag packet. So, why do some contractors apparently place such little importance on the planning function and why, for that matter, is there no standard method of programming? In the first analysis, one answer satisfies both questions. The fact is that few of the traditional standard forms of contract specify anything with regard to programming other than that 'a programme will be submitted'. For example, the JCT 2005 edition of the Standard Building Contract states at 2.9.1.2: "the Contractor shall without charge provide ... 2 copies of his master programme for the execution of the Works ..."and the ICE 7th edition is similarly incisive requiring at 14.(1) that: "... the Contractor shall submit ... a programme showing the order in which he proposes to carry out the Works ..."This is not particularly helpful. Even the relatively recent NEC form (Clause 31) gives no indication of the required form of the programme, although it does give some guidance as to what the programme should include (e.g. key dates, order and timing, float, etc.). Whilst most contractors are used to working with standard forms of contract and standard methods of measurement, their programme preparation, on the evidence we have seen, is often subject to as many diverse approaches as wallpaper design. Why should this be so? Few contractors are involved in truly innovative work and in most instances the current project will have similarities to previous work, which means that a reasonable attempt at the programme can be made. Even construction projects involving innovative or radical design (e.g. the Scottish Parliament, Wembley Stadium) generally use construction techniques that are tried and tested, so estimating the sequence and time required to carry them out should not be difficult – neither should the development of a properly constructed programme. Furthermore, nearly all contractors will have been involved in a dispute at some stage and will therefore be aware of the need to demonstrate delay/disruption against a reliable programme. A standard method of programming might help – at least everyone would know what it was supposed to look like. The SCL Protocol gives some guidance in this respect but stops short of either advocating a standard method or giving any detailed indication of how the programme should be produced. So why is so little emphasis given to programming? I suspect that the real answer is that planning using Critical Path Analysis (CPA) is relatively new – CPA was only invented in the 1950s and the computers (which make it easy to do) have only been around and affordable since the advent of the PC in the early eighties. Relying heavily on estimation, planning is regarded by many as a ‘black art’ which is only semi-accurate at best, and at worst, little more than fortune telling. There are well-documented instances of contractor’s progress reports for the last ten months of a project predicting "we'll be finished inside a month!” Finally, in monetary terms, planning is often not seen to add value to the contract. In fact, quite the reverse, planning is often regarded as just another overhead, or something that has to be done to appease the client because the contract calls for it. The approaches adopted in the NEC contracts (and GC Works) to expressly state some minimum requirements for what must be shown on a programme are welcome, but greater emphasis is required both on the proper programming of projects by contractors and upon the need for consultants to better understand programmes, particularly for example if the NEC contract is to be operated as intended. This is especially so if the programme is required to provide a basis for the analysis of delay. The price of failing to establish a proper programme is well illustrated by the case of Balfour Beatty Construction Limited v The Mayor and Burgess of the London Borough of Lambeth (2002). The case concerned a challenge to the enforcement of an adjudicator’s decision on the basis that the adjudicator prepared his own collapsed as-built analysis in the absence of a delay analysis from the referring party, and reached his decision without giving the responding party an opportunity to comment on his methodology. In reaching his decision, His Honour Judge Humphrey LLoyd QC observed that “Despite the fact that the dispute concerned a multi-million pound refurbishment contract, no attempt was made to provide any critical path … It seems that BB had not prepared or maintained a proper programme during the execution of the works. By now, one would have thought that it was well understood that, on a contract of this kind, in order to attack, on the facts, a clause 24 certificate for non-completion (or an extension of time determined under clause 25), the foundation must be the original programme (if capable of justification and substantiation to show its validity and reliability as a contractual starting point) and its success will similarly depend on the soundness of its revisions on the occurrence of every event … Proper planning can save time, and agreement on programmes between client and contractor, at an early stage, can make dispute resolution much less contentious. Add the missing ingredient of some form of standardisation (which will help planners to prepare programmes and non-planners to understand them) and we might be getting somewhere. Perhaps it is just a matter of time?
CJ-0647
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