Late Shop Drawings, Late Chillers and a Request to Over-Certify in Assiut
A consultant administers a FIDIC-based contract (Red Book 1999, as amended) for a hospital HVAC package in Assiut. The contractor submitted a claim 45 days after the event alleging a 35-day delay and EGP 4.2 million of additional cost, caused by the Engineer approving plant-room shop drawings 21 days late and by the Employer delivering the imported chillers 40 days late. In the same window, the contractor's ductwork subcontractor lost 20 days reworking a failed pressure test, and the contractor already holds an extension of 10 days for a sandstorm. The payment certificate is overdue; the contractor has stopped work on the second floor and threatens formal suspension. The Employer's project manager asks you to 'just certify the full claim to keep the programme moving', and reminds you that the Employer is a repeat client.
1. Assess the time entitlement using a proper delay analysis and state the extension of time you would recommend.
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Notice first. The claim came 45 days after the event against a 28-day notice requirement. The Engineer should record the late notice and seek the Employer's view; strict forfeiture may be tempered by the governing law and by the Engineer's own knowledge of the events, but it cannot simply be ignored, and the contractor is invited to justify the delay in giving notice.
Analysis method. Elite the 35-day global figure and demand a time impact analysis against the accepted programme: which activity each event actually hit, whether it was on the critical path at the time, and what float was consumed.
Working through it.
- Late shop drawings, 21 days: these would bite only if plant-room works were critical at that moment and the approval was a genuine precondition; verify the submission date and completeness of the contractor's own submission, since an incomplete submission resets the clock.
- Late chillers, 40 days: an Employer risk event only to the extent it delayed setting-to-work; check whether secondary steelwork or pipework could have proceeded and whether the chillers were on the critical path.
- Contractor's 20-day pressure-test rework: contractor risk, and where it runs concurrently with either Employer event it does not extend time, and it is a direct answer on prolongation cost for the overlap.
- The 10-day sandstorm already granted: check the claim for duplication.
Recommendation: grant extension of time on a proper TIA - on the face of it around 21 days of Employer/Engineer delay, subject to the concurrency analysis - and reject the global 35 days. Do not adjust the completion date until the TIA is submitted and reviewed.
2. Value the EGP 4.2 million claim and state what you would certify, separating prolongation from variation and assessing the cost build-up.
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Classify. Late drawings and late Employer-supplied chillers are not variations; they are claims for time and, if the delays are on the critical path and not concurrent, prolongation cost. No valuation of new work arises unless the Engineer instructed additional work, which is not alleged.
Prolongation. Pay time-related site costs actually incurred and demonstrably caused by the delay: site staff, site facilities, plant standing, security, temporary services, insurance and bond extensions, at the rates in the priced contract or agreed daily rates rather than new mutually invented figures. Head-office overhead and profit on prolongation are not recoverable under the unamended form and should be excluded. Where plant is on standby, use idle rates, not full operating rates, and exclude any period already recoverable under the 10-day sandstorm extension.
Chiller-specific costs. Storage, double handling, preservation and additional craneage caused by early or late delivery may be recoverable if evidenced; ask for delivery notes, warehouse invoices and site records.
Illustration. If the sum of entitlement is 21 days of time-related preliminaries at, say, EGP 28,000/day, that is about EGP 588,000 plus documented storage costs - not EGP 4.2 million.
Certify: the substantiated portion, and return the balance with a request for further particulars and a proper daily cost breakdown. Set out the determination in writing with reasons, within the contractual time limit, so that either party can take it to the dispute process if dissatisfied.
3. The Employer's project manager asks you to certify the full claim to 'keep the programme moving', while the contractor has stopped work and is threatening suspension. How do you respond?
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Decline clearly and in writing. Certification is a professional determination of value due, not a goodwill gesture. Certifying EGP 4.2 million that your assessment does not support is a misstatement that prejudices the Employer, distorts the final account, and exposes you personally and your firm to liability and to disciplinary action under the profession's code of conduct and the Engineers' Syndicate framework. That the Employer is a repeat client is precisely why the advice must be independent now rather than disputed later.
Give the Employer a route out of the impasse:
- Issue the determination on the claim within the contractual period, with reasons, so the contractor can see the money is being assessed seriously.
- Certify the undisputed amount and any interim payment properly due, and release it promptly.
- Offer a without-prejudice meeting to agree a joint programme recovery, with a bank guarantee or a milestone-linked interim payment if the Employer wants to accelerate - but documented as a commercial agreement, not as a false certification.
- Warn that stopping work and any suspension must comply with the notice and cure requirements; if they do not, the Employer's remedies, including delay damages, should be reserved.
Housekeeping: record the instructions, the pressure applied and your reasons in the project file, copy the correspondence to both parties, and recommend legal review if a dispute notice follows. Do not allow a legitimate commercial pressure to become an ethical failure.