Construction, schedule delay, acceleration, cost explosion?

• Real Estate
• SME

Construction projects can become very complex very quickly. If the completion date is unalterable (or sanctioned with a contractual penalty) and delays occur in the schedule, acceleration measures may become necessary. Acceleration measures require a disproportionately high increase in personnel combined with additional organizational and coordination resources. The causes of decreasing efficiency are time, organizational and spatial factors. Significantly higher overall costs are incurred.

Who has to bear these additional costs if it is assumed that the delay in the schedule is not the fault of the contractor affected? If the contractor’s performance presupposes that preliminary work by other companies involved in the construction was completed in accordance with the contractually agreed schedule, there may be a breach of contract and/or a change in order on the part of the owner. Accordingly, the client would have to bear the additional costs. This is because if the time window for the provision of the service is reduced, the resource requirements on the time axis and thus the calculation basis for the service offered change fundamentally.

How can a company protect itself against having to bear the additional costs of such acceleration measures? Before submitting an offer, the company’s own contractual service must be analyzed in the context of the construction process in order to identify possible risks (company’s own resource requirements on the time axis according to the project plan, possible third-party influences, etc.). Based on this, both the contractual bases of the offer are adapted and all essential aspects are formulated, which are put up for discussion and recorded in the award negotiations. The work contract submitted is to be checked for conformity with the specifications in the offer. During construction, the required “obstruction notices” or reminder letters are to be sent to the client in a timely manner and in accordance with the form of the contract.

The law governing contracts for work and services can be adapted by the contracting parties in most respects, which is why particular attention must be paid to the drafting of the contract.

AMATIN AG  Rechtsanwälte  │  Attorneys at Law  │  Conseiller juridiques/Avocats

Für Firmen/KMU und Privatpersonen.  │  For companies and individuals.  │  Pour particuliers et PME/entreprises.    Phone +41 61 202 9191   contact@amatin.ch

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