BUSINESS AND TRAINING 17
Role of the contract administrator ( CA ) All SfCs require the appointment of a neutral Contract Administrator ( CA ) ( FIDIC : the engineer , GCC : the employer ’ s representative , JBCC : the principal agent , NEC : the project manager ). The CA must , within the period stipulated , adjudicate claims fairly based on the available information , following the SfC procedures dealing with the revision of the date for practical completion , adjustment of the contract value , and / or dealing with expense and loss .
Role of the contractor All contractors , and each subcontractor , must , within the period stipulated , submit a claim with as much information as possible – following the SfC procedures dealing with the revision of the date for practical completion , adjustment of the contract value , and / or the clause dealing with expense and loss .
Role of the employer in terms of the SfC , the employer is not directly involved but should be kept informed continuously by the CA of the implications of all claims , and progress .
The claim The Covid-19 scenario differs from all other delay and cost claims . The typical time bars in all SfCs to give notice or lose the opportunity to claim , should not necessarily strictly apply to this event . However , if all parties promptly provide all the relevant information to the CA and the employer to resolve the Covid-19 claim , any potential disputes resulting from not following the process may be avoided .
Further implications
• The Covid-19 scenario differs from all other delay and cost claims as it includes legally enforced ( lock down , social distancing , etc ) closure of sites , workshops , and factories to prevent person-to-person transmission of the virus .
• Owners , managers , and staff may be affected by the virus and their ability to work may be reduced when the state of emergency is lifted .
• Owners , managers , and staff may suffer serious financial hardship during the legally enforced lock down if salaries cannot be paid regularly as no money is earned . Certain government sponsored grants may be claimed – but payment may take some time and the quantum is unlikely to be ‘ generous ’.
• Registration is open on the website www . smmesa . gov . za for small- and medium-sized businesses that require help during the coronavirus crisis .
• The global pandemic will disrupt international and local supply chain delivery of materials and goods .
• The likely scenario is that subcontractors will be affected more than principal contractors as , on expiry of the lockdown period , materials and goods will not necessarily be available for some time .
Note : The advice from the JBCC on their website … Delays may be a ‘ force majeure ’ event but a claim must be based on ‘ compliance with the law ’ and specifically ‘ the disaster management act ’ to justify the time lost and expense incurred . Note that the contractor must adhere to Notices in terms of the contract . The claim must differentiate between ‘ normal ’ health & safety procedures and additional precautions when work is resumed i . e ., personal protection equipment , masks etc . in addition to additional handwashing facilities and provision of sanitizer etc . The programme must show the effect of working with a limited staff compliment on site at a given time . Adjudication of such claims will not be easy and require the parties to cooperate in good faith !
Conclusion
• Resorting to the dispute resolution clauses to determine the allocation of costs incurred is unlikely to result in a fair settlement if the parties cannot agree in the first instance .
• Covid-19 is an extreme contract frustration event with no winners and only a limited number of survivors who may have to restart their businesses , probably in a new format .
• Whatever is agreed – the parties must record such agreement and their respective obligations and sign such document as an addendum to the contract .
Note : The opinions expressed are those of the author who assumes no responsibility arising from any actions implemented by readers
About the author : Uwe Putlitz was born in Johannesburg , qualified as an architect at the University of the Witwatersrand and subsequently awarded the first M . Sc in ‘ Building ’. He practiced as an Architect and / or as a Project Manager for various firms and as managing member of Building Strategy Network until 2010 when he was appointed as CEO of the Joint Building Contacts Committee until his retirement in 2019 . Uwe is a visiting lecturer at the University of the Witwatersrand , and the RICS , regularly contributing articles to various industry journals about ‘ dispute avoidance ’ when using Standard-form Contracts as well as involved with the review of applications for registration by the SA Council for Project and Construction Management Professions . www . uwe @ buildstrat . co . za PA
“ Covid-19 is an extreme contract frustration event with no winners and only a limited number of survivors who may have to restart their businesses , probably in a new format .”
November 2021 Volume 27 I Number 9 www . plumbingafrica . co . za