…and why it should not bother you.

This debate, especially within JBCC, is as old and run down as that weathered fishing boot your dog keeps chewing on. Yet when it is raised in a meeting, it still manages to loosen thick dust clouds into the air while trapping the unfortunate onlookers in dazed coughs of confusion.

I have witnessed many professionals shriek out the answer with austere, schoolboy confidence or maybe arrogance rather: “The employer owns the float!” or “The contractor owns the float!”.

If the answer is more arrogant than sincere I like to add my two cents to the confusion by asking the now distended commentator what float he/she is referring to? “What do you mean?” is the often-sneered comment slung in my direction.  Well there are free float and total float and then also float created by the contractor through working a bit faster than he initially planned called terminal float.  So, what type of float are you referring to when you presume that the employer/contractor owns this float.

This is what makes the debate a bit complex to start with but don’t run away yet, I won’t cloud the issue. When we discuss the issue of float, we have to clarify our own understanding of float ownership. I have witnessed many heated shouting matches between parties only to sheepishly realise later on that they share the same opinion, it is but their concept of float or the claim that differs. Once they are aligned on meaning, they actually find they agree.

If we see float ownership as being entitled to claim time, then within JBCC principal building agreement we find the contract being quite explicit in its handling of this issue. Such float belongs to the employer. In terms of time claims that is. Not in terms of cost claims.

So, focusing on time claims this statement is true not by an express provision but by the simple fact that the contractor cannot claim an extension of time unless he suffers a delay to practical completion. If delays do occur on his project and it does not impact his practical completion date, he has no entitlement or mechanism to claim such an extension. In other words, these delays would then have taken place on activities with float, irrespective of their position or status indicated on a programme.

To substantiate, JBCC states the circumstances for which the contractor is entitled to an extension of the completion date are delays to practical completion caused by one or more of the following, and then it lists a number of delays/circumstances. Delays to practical completion garners the entitlement to claim, nothing else. What other delays can there be?  Well there are delays known as slip. Slip is caused by activities being delayed in terms of their planned date, but such delays are not necessarily delaying practical completion and hence such activities have float.  Further validation is found in terms of the claim itself where the contractor shall indicate how the circumstance impacted on his critical progress towards practical completion.

Simply put, the contractor is not entitled to claim an extension of time for delays which are not delays to practical completion and where he cannot show an impact on critical progress towards practical completion. It simply finds no contractual footing.

And now I hear the contractors shouting in my ear! “Do you mean to tell me that if I’m delayed on a section of work, incur standing time and additional costs as a result of that delay, I cannot claim if this section was not on the critical path towards completion? “

The answer is a resounding of course you can claim, but not an extension of time! You can still claim costs under clause 32.5 if the delay is caused by one of the factors listed.  In that sense then, from a cost perspective or penalty perspective the float could belong to the Contractor.  However, be sure to dust this clause off before use as it is the most important yet most neglected clause within the Agreement. It entitles a contractor incurring expense and loss due to no fault of his own to claim such expense and loss. If not done within 40 days, you lose the entitlement and it is left abandoned on the shelf again, collecting dust.

So yes, if you are delayed by a factor listed under 32.5, but not critically so and not impacting your practical completion date, you cannot claim for an extension of time, but you can still claim for any expense and loss incurred as a result.

The vexed question I want to ask you is what about terminal float. This is float created by the Contractor as he progresses and works a bit faster than planned. Under such a circumstance we sometimes find no critical path on the programme, i.e. no activities with zero float. Who owns this kind of float within JBCC? I’m looking forward to your comments!

This post was compiled by  Kobus le Roux for Le Roux Consulting, all rights reserved. Please contact us for your professional project and program management, project control, claims or adjudication assistance services in the heavy civil and building industry.

http://www.lerouxconsulting.com/

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