Claiming for late information on the JBCC Contract
This sounds like a misnomer doesn’t it? But let me post an excerpt from the Hoffmans’ case (Hoffman v Mever) where the learned Judge Ogilve Thomson J observed the following (I’ve added my own emphasis to the passage):
Under a JBCC contract, a contractor plans to finish a portion of formwork by day 20 of his programme. Then, the plan is to start placing the reinforcing steel on day 21. The information on the steel is issued to the contractor on day 20. Was the information issued timeously? Can the contractor claim for a delay?
Today we take on a controversial topic. It refers to the dreaded RFI schedule! Also known as the “Request for Information” schedule and the controversy surrounding late information.
This has become the topic and reason for many disputes, claims and arbitration cases we managed recently. Here follows a brief list of the most popular industry arguments outlining this issue:
- Some contractors scoff at the notion of not having ALL the information ready when they move on to site.
- Professionals on the other hand argue that modern-day projects are fast-tracked. They cannot deliver everything on day one of the project, nor is it an obligation under JBCC for them to do so.
- Many Architects also revealed that they need to see a space evolve which guides their decision on final tiling specifications, colours, textures etc. As a result, they require some room to maneuver before they want to commit to the final finishes on certain elements of a building.
- When there is a circumstance of late information causing delay, some professionals argue that if it was never requested by the contractor, it doesn’t trigger a claimable event.
- Some contractors try and issue their requests unreasonably early in an attempt to impose a delay on the project and place the professionals in default.
What does the JBCC say?
When is information considered late under the JBCC Principal Building Agreement and more importantly, when is a contractor entitled to claim for an extension of time as a result?
Construction Information in JBCC is defined as all information issued by the principal agent and/or agents including the contract documents, specifications, drawings, schedules, notices and contract instructions required for the execution of the works.
The first clause dealing with this issue is clause 5.0 of JBCC where it places an obligation on the principal agent to timeously provide construction information to the contractor at no cost. This forms part of the clause dealing with a number of documents to be provided to the contractor after the contract came into existence initially.
Clause 12 is of importance here. It obligates the Employer to ensure that the principal and/or other agents provide construction information timeously to the contractor (Clause 12.1.14).
Clause 12 also deals with the obligation on the contractor’s side. The contractor must submit a progress report and a schedule of outstanding construction information to avoid delays to the works (Clause 12.2.8).
The question of entitlement to claim is dealt with under clause 23 as follows: The contractor is entitled to a revision of the date for practical completion (and adjustment of time-related cost) for a delay caused by the late issue of construction information (See Clause 23.2.5).
The 5.0 version of JBCC has slightly different wording but the principles are essentially the same as shown above. Both version’s principles can be summarised as:
The Employer must ensure that his agents provide information timeously.
If agents fail to provide information timeously, the contractor is entitled to claim and extension of time for a delay he suffered as a result.
In order to avoid delays, the Contractor must also submit progress reports and a schedule of outstanding construction information to the principal agent at regular intervals.
Interpretation
What is the timeous provision of information? Under most standard forms the accepted opinion is that information must be issued when it should reasonably have been provided. This is a very good rule of thumb in these situations and ensures fairness to both sides. However, it leaves us with another big question.
The big question is this: on what date and under what circumstance is an employer risk event initiated for a delay caused by late information? Is it (a) the date after which information is reasonably required (irrespective of notice) or is it (b) the date after which information was needed in accordance with a notice by the contractor (i.e. programme or schedule of outstanding information)? These two questions flow naturally from the obligations placed on the parties by the JBCC contract as we explored above.
The answers however are now open to interpretation and some fee-mongering claims consultants rejoice.
The Answers
It must be noted that JBCC provides no guidance on what is required in terms of a schedule of outstanding information or a programme. It simply obligates the contractor to furnish the programme to enable the principal agent to monitor the progress of the works and to furnish the progress updates and schedule of outstanding information to avoid delays. The word schedule is however indicative of a plan showing intended dates or times for certain events.
We can therefore accept that the contractor is obligated to indicate dates for when he would require outstanding information. This is needed to avoid delay and nowhere does the contract state that it relieves the employer of the obligation to issue information timeously.
In the same breath, we must accept that a contractor cannot unilaterally impose unreasonable information required dates on any agent. In other words, we cannot assume an employer risk event took place just because information was provided later than stated on the contractor’s schedule.
Therefore, we can deduce: An employer risk event would be initiated under JBCC, when a delay is caused by issuing information later than reasonably required. This reasonable required date should be a question of fact. If the contractor failed to avoid the delay by not providing updates or a schedule of outstanding information, then he would be liable for a loss suffered by the employer as a result.
Another case in point is t
he judgement in the Hyde Construction case where Judge P.A.L Gamble noted that when a principal agent accepted the appointment as principal agent, that person knew that he would have to make decisions on behalf of his principal which would directly affect other contracting parties. As such he would have known that he was required to behave impartially and could not be seen to be “cheating? (to use the analogy in Hoffman v Meyer) either the employer, the contractor or any of the sub-contractors to the project. Similarly, those other parties would have been entitled to look to the principal agent to discharge his functions professionally, fairly and in accordance with accepted practices. (My own emphasis)
How to prevent these claims?
This whole subject powerfully demonstrates the important role of an accurate, proper programme and the schedule of outstanding information to facilitate claims prevention.
When the contractor clearly indicates in his programme, updates and schedule of outstanding information, reasonable times for when he would require information, it helps the team to facilitate the flow of information to prevent claims.
If a late issue circumstance becomes inevitable, the effect on progress and completion becomes much easier to pin down and clarify when we have an accurate, proper programme and schedule of outstanding information.
Kindly note that our posts on our website does not constitute professional advice and the comments, opinions and conclusions drawn from this post must be evaluated and implemented with discretion by our readers at their own risk.