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EOT Claim Using Windows Analysis

The report by Pauling Middle East Co. L.L.C. outlines the delays and additional costs incurred during the construction of the VVIP Terminal at Al Ain International Airport, primarily due to the Employer's failure to issue necessary permits and relocate utility services. The Contractor claims entitlement to an extension of time of 244 days and seeks reimbursement of AED 2,939,473.97 for costs incurred as a result of these delays. The report details the basis for these claims and emphasizes the need for a thorough assessment by the Engineer and Employer.

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0% found this document useful (0 votes)

177 views89 pages

EOT Claim Using Windows Analysis

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You are on page 1/ 89

PAULING MIDDLE EAST CO. L.L.C.

Extension of Time and Commercial Assessment Report

VVIP Terminal at Al Ain International Airport Project, (Package 2), Terminal

Building & Ramp Controllers Offices Building,
Al Ain, Abu Dhabi, UAE

30 June 2017

Name Designation Signature Date

Prepared by: -- -- --

Peer Review by: -- -- --

PAULING MIDDLE EAST CO. L.L.C. Extension of Time and Commercial
VVIP Terminal at Al Ain International Airport Project,
t, (Package2), Assessment Report
Terminal Building & Ramp Controllers Offices Building,
Al Ain, Abu Dhabi, UAE

CONTENTS

EXECUTIVE SUMMARY ....................................................................................................................3

Introduction to the Project ..........................................................................................................3
The Claim .....................................................................................................................................6
Basis of entitlement .....................................................................................................................8
Conclusion ...................................................................................................................................9
1. INTRODUCTION ................................................................................................................10
1.1 Background to the Contract ..........................................................................................10
1.2 Delay Events ..................................................................................................................12
1.3 Document Layout ..........................................................................................................12
1.4 Abbreviations ................................................................................................................13
2. BASIS OF ENTITLEMENT ...................................................................................................15
2.1 Introduction ..................................................................................................................15
2.2 Entitlement to an extension of time .............................................................................15
2.3 Variations ......................................................................................................................17
2.4 Contractor’s Claims .......................................................................................................17
2.5 Summary .......................................................................................................................18
3. DELAY EVENTS..................................................................................................................19
3.1 Introduction ..................................................................................................................19
3.2 Delay/Disruption Event No.1 – Employer’s delay to issue the Notice to Commence ....20
Introduction/background information ......................................................................................20
3.3 Delay/Disruption Event No.2 – Employer’s delay to relocate utility services ................35
Introduction/background information ......................................................................................35
3.4 Delay/Disruption Event No.3 – Employer’s delay to obtain necessary Building Permit 53
Introduction/background information ......................................................................................53
4. DELAY ANALYSIS...............................................................................................................64
4.1 Introduction ..................................................................................................................64
4.2 Verification of the Baseline Programme .......................................................................67

Date: 30 June 2017 Page 1

PAULING MIDDLE EAST CO. L.L.C. Extension of Time and Commercial
VVIP Terminal at Al Ain International Airport Project, (Package2),
Package2), Assessment Report
Terminal Building & Ramp Controllers Offices Building,
Al Ain, Abu Dhabi, UAE.

4.3 The Critical Paths...........................................................................................................69

4.4 Methodology of delay analysis......................................................................................70
4.5 Window 1, 22 May 2015 – 12 January 2016 .................................................................73
4.6 Window 2, 12 January 2016 – 23 May 2016 .................................................................76
5. QUANTUM ANALYSIS .......................................................................................................81
5.1 Introduction ..................................................................................................................81
5.2 Prolongation/Extended Site Running Cost ....................................................................83
5.3 Head Office Overheads .................................................................................................85
5.4 Prolongation Cost Incurred ...........................................................................................86
5.5 The Contractor is not liable for any Liquidated Damages .............................................86
Summary of claimed amount ....................................................................................................86
6. CONCLUSION....................................................................................................................88

APPENDICES
Appendix 1 – Supporting Documents

Appendix 2 – Delay Analysis

Appendix 3 – Quantum Analysis

Date: 30 June 2017 Page 2

PAULING MIDDLE EAST CO. L.L.C. Extension of Time and Commercial
VVIP Terminal at Al Ain International Airport Project, (Package2),
ackage2), Assessment Report
Terminal Building & Ramp Controllers Offices Building,
Al Ain, Abu Dhabi, UAE

EXECUTIVE SUMMARY

Introduction to the Project

1. This report has been prepared by Pauling Middle East Co. L.L.C. (hereinafter referred to as the
“Contractor”).

2. The Contractor entered into a contract with the Ministry Of Presidential Affairs (hereinafter
referred to as the “Employer”) for the construction of a VVIP Terminal at Al Ain International
Airport, (Package 2), Terminal Building and Ramp Controllers Offices Building, located at Al
Ain city of Abu Dhabi Emirates in the country of United Arab Emirates.

3. The fixed Lump Sum Contract Price is Fifty Million, Nine Hundred and Forty Thousand UAE
Dirhams (AED 50,940,000), hereinafter referred to as the “Contract Price”1.

4. The Contractor has stated in his 1Contract Price an assumption that is excluding the re-
routing/shifting of utility services line for the existing building from his scope of works, and
which constitutes a particular condition to the Contract.

2
5. n 01, April, 2015.
The Contractor’s Letter of Appointment was issued by the Employer on 2

6. The Contract was signed between the Employer, acting as the first party, and the Contractor,
acting as the second party, on 2015.3
n 22 May, 2

7. The Employer’s Consultant (hereinafter referred to as the “Engineer”) proclaimed the Project
starting date as of 12 January, 2016, and which is officially issued after more than seven
months from the signing date of the Contract.4

1
Contractor’s Price Offer reference PME/VVIPA/102 dated 05 January, 2015
2
Employer’s letter reference 2015040100049 dated 01 April, 2012
3
Signed Contract reference 65 for the year of 2015
4
Engineer’s letter reference AD1303S/41804 dated 12 January, 2016

Date: 30 June 2017 Page 3

8. The Contract period to complete the works shall be counted from the Site Handing Over as
per the conditions of Contract. While, the Project records registered earlier instructions to
the Contractor followed by site activities that have started before the date of the official 4Site
Handover Minutes initiated by the Employer.

9. The Employer failed to relocate the underground services before to initiate the official Site
Handover. Furthermore, he was instructing the Contractor to complete this job before issuing
any Notice to Commence, ignoring in his practice earlier start date of the Project to take into
consideration.

10. Therefore, any effective commencement date of the works should have been established
before the official starting date of the Project, especially when the works to execute during
this period implied necessary mobilisation of the Contractor’s Staff, Manpower and
Equipment, following the instructions to the Contractor to start Project’s activities related to
re-routing/shifting of the utility services line for the existing building, and which constitute a
variation order to his scope of works.

11. The Contractor has been granted the right to access the site at earlier stage and to start
works related to the Project after he started mobilising himself on 24 August, 20155.

12. While, in the consequence of such practice and imminent fact of evidence to hand over the
site to the Contractor, the Employer has failed to issue the conventional ‘Notice to
Commence’ or to establish accordingly the Commencement Date of the Project as stipulated
in 3Sub Clause 3-1 of the conditions of Contract.

13. Although, the official 4Commencement Date was pronounced by the Engineer on 12 January,
2016, but the Contractor was prevented from efficiently commencing the Works due to
delays on the part of the Employer to relocate the existing services and in obtaining the
necessary building permit, matters which are beyond the Contractor’s control.

5
Contractor’s letter reference PME/VVIP/195, dated 26 August, 2015

Date: 30 June 2017 Page 4

14. The Employer was aware of the presence of the Contractor on site from the date he started
5
mobilisation the 24 August, 2015, and of his capability to start works. Consequently, he was
persisting that the Contractor relocates all existing utilities during the period extending from
the date of mobilisation himself and establishing till the date of issuing the building permit on
20166.
23 April, 2

15. In anticipation of issuing the Notice to Commence and receiving the Building Permit, the
Contractor maintained a presence on site and office, consisting of the followings:

x Dedicated site and office staffs (Management, Engineering, etc.).

x Dedicated Manpower, Equipment.
x Cleaners, Security guards, Safety, etc., and
x Site logistics and Site offices.

16. The Contractor also incurred additional insurance and bond costs during this period.

17. While the time for completion was 12 months and the official starting date has been
established the 12 January, 2016, the completion of the Project was therefore required by
11 January, 2017.

6
Will be discussed in details in section 3.3

Date: 30 June 2017 Page 5

The Claim

18. This claim submission identifies events that have caused the Contractor to incur delays to the
progress of the works resulting in delayed completion and additional costs in executing its
obligations under the Contract.

19. The delay and disruption events, as discussed in section 3, include the following:

Delay
Description Section
Event No

1 Employer’s delay to issue the Notice to Commence 3.2

2 Employer’s delay to relocate utility services 3.3

3 Employer’s delay to obtain necessary Building Permit 3.4

20. Throughout the duration of the Project, the Contractor submitted various notifications of
delay beyond his control and requested for extension of time (called hereinafter “EoT”). 7

21. The Employer, in response to the Contractor’s submissions and claim for extending the
completion date of the Project, informed of his no objection for the Contractor to submit all
substantiation documents with the necessary justifications relevant to the delayed periods in
order to proceed with the determination of EoT, subject to be awarded to the Contractor on
the following grounds:8

x Analysis of the delay events impact on the activities/Project dates.

x All activities to be followed as per approved Baseline (called hereinafter
“BLP”).
x Detailed narrative of the delay events.

7
Contractor’s EoT letter ref. PME/VVIPA/546, dated 24 August, 2016.
8
Engineer’s EoT reply letter ref.AD13035/46544, dated 22 March, 2017.

Date: 30 June 2017 Page 6

x Time Impact Analysis (TIA) in accordance to approved schedule updates and

BLP.
x Submission of substantiation documents pertinent to the identified delay
events.

22. The Contractor asserts that he is entitled for EoT and the reimbursement of costs incurred as
a result of late start and extension of the Project Time of Completion (ToC) beyond his
control, and which he intends to demonstrate in this report for the fair assessment of the
Engineer and determination of the Employer.

23. The Engineer asserts in his letter to the Employer that EoT claims raised by the Contractor will
be subject to the Engineer study concerning each party responsibility that have caused the
delay and accordingly he will give his recommendations for EoT claim validation and
determination.9

9
Engineer’s letter to the Employer, ref.AD13035/44889, dated 18/10/2016.

Date: 30 June 2017 Page 7

Basis of entitlement

24. As discussed further in section 2 of this Report, the Contractor is contractually entitled to an
EoT and associated costs.

25. The following Sub-Clauses of the conditions of 3Contract entitle the Contractor to an
extension of time and additional costs:

x Sub-Clause 2-3 entitles the Contractor EoT to account for the occurrence of
delay events and their additional costs impact upon the Contractor’s inability to
complete the works within the allocated timescales and prescribes the
procedure to be adopted in dealing with Contractor’s claims properly justified
beyond his control.

x Sub-Clause 1-4 requires the Employer’s part to provide necessary documents

pertained to the construction enabling the Contractor the completion of the
construction on time and as planned in the Contract.

x Sub-Clause 5-7 entitles the Contractor the right to claim for extension of the
time to complete.

x Sub-Clause 7-5 entitles the Employer the right to request any addition or
omission of works to the extent of 30 % of the Contract works volume.

x Clause 8 entitles the Employer the right to award additional works relevant to
the Project scopes and prescribes the procedure to be adopted in dealing with
Contractor’s incurred fees.

26. The time and cost impact of each delay event is described in detail in section 4 and 5 of this
Report.

Date: 30 June 2017 Page 8

Conclusion

27. The Contractor submits, as demonstrated in this Report, that various acts, omissions and
defaults on the part of the Employer caused severe delays and/or disruption to the progress
and completion of the project, which the Contractor (despite its best endeavours) was unable
to recover.

28. This Report particularises and demonstrates that the Contractor is entitled to an extension of
time for completion of 244 calendar days, resulting in a revised completion date to 23
3 May,
2017.

29. As a direct result of these delays, the Contractor incurred additional costs for which it seeks
reimbursement. As detailed in section 5 and Appendix 2 (Quantum Analysis) of this Report,
the Contractor seeks the Engineer assessment and Employer determination that the loss and
expense cost off AED 2’939’473.97 tto be paid to the Contractor.

30. The direct costs associated with anyy variations are expressly excluded from
f this Report.

31. The subject matter of this Report includes delay events up to 23 May, 2016.

32. The Contractor reserves the right to revise, renew and update the claims in this submission
to take into account new details relevant to the effects of delay events or where any
additional event becomes known to the Contractor after 23 May, 2016.

33. The Contractor also reserves the right to claim any additional costs and cost incurred in
preparation of this Report.

34. It is imperative that this executive summary is read in conjunction with all following sections
and supporting Appendices.

Date: 30 June 2017 Page 9

1. INTRODUCTION

1.1 Background to the Contract

1.1.1 On 22 May, 2015, the Employer and the Contractor executed a contract (the
“Contract”) in respect of the VVIP Terminal at Al Ain International Airport Project,
(Package2), Terminal Building &Ramp Controllers Offices Building, Al Ain, Abu Dhabi
(the “Project”).

1.1.2 The Contract particulars are summarized as follows:

Employer Ministry Of Presidential Affairs (MOPA)

Contractor Pauling Middle East Co. L.L.C.

Project/Works VVIP Terminal at Al Ain International Airport
Project, (Package2), Terminal Building &Ramp
Controllers Offices Building, Al Ain, Abu Dhabi

Lump Sum Contract Price AED 50,940,000.00

Form of Contract Lump Sum
Contract Duration 12 months

1.1.3 The Contract is governed by the laws of the Emirate of Abu Dhabi and the federal
laws of the United Arab Emirates.

1.1.4 As set out in the Contract Agreement, the following sections shall be deemed to
constitute and be read and construed as the entire Contract between the parties:

x Employer’s Notice of Award

x Instructions to Tenderers
x Form of Tender and Appendices
x Performance Bond
x Pricing & Measurement Preambles
x Priced BOQ
x Conditions of Contract (Parts I and II)

Date: 30 June 2017 Page 10

x Specifications
x Drawings
x Tender Bulletins and Post Tender Correspondence (as appended to the
Contract)

1.1.5 The priority of documents is set out as follows:

The documents forming the Contract are to be taken as mutually explanatory of one
another. For the purposes of interpretation, the priority of the documents shall be in
accordance with the following sequence:

a) the Contract Agreement,

b) the Letter of Acceptance,
c) the Letter of Tender,
d) the Particular Conditions,
e) these General Conditions,
f) the Specification,
g) the Drawings, and
h) the Programme and any other documents forming part of the Contract.

If an ambiguity or discrepancy is found in the documents, the Engineer shall issue any
necessary clarification or instruction.

1.1.6 The Contractor’s 1offer was based on certain exclusions, which were attached to the
Contract Agreement and included in the signed Contract document. It is clear to
state that any conditions or limitations mentioned in the list of exclusions overrule
and take precedence over all other contract documents such as Specifications, BOQ,
drawings, Conditions of Contract (General or Specific).

Date: 30 June 2017 Page 11

1.2 Delay Events

1.2.1 A number of critical delays, resulting from acts, omissions or defaults on the part of the
Engineer and / or the Employer, occurred during the course of this Project.

1.2.2 These delay events, listed below, are discussed further in section 3 (Delay Events):

Delay Event Description

1 Employer’s delay to issue the Notice to Commence

2 Employer’s delay to relocate utility services

3 Employer’s delay to obtain necessary Building Permit

1.2.3 The above events caused the Contractor to incur delay and disruption to the regular
progress of the works which resulted in a delay to the contractual completion date.
Furthermore, the above events and the delay in completion caused the Contractor to
incur additional costs which are reimbursable under the Contract. The delay costs are
identified in Section 5 of this Report. The Contractor does not, at this stage, include
disruption or sub-contractor costs which have yet to be ascertained.

1.3 Document Layout

1.3.1 This Report is structured as follows:

Section Description

Section 1 Introduction
Section 2 Basis of Entitlement
Section 3 Delay Events
Section 4 Delay Analysis
Section 5 Quantum Analysis
Section 6 Conclusion

1.3.2 The Contractor’s entitlement to claim additional time and cost, as allowed for in the
Contract Document, is examined in section 2.

Date: 30 June 2017 Page 12

1.3.3 An overview of the delay events is provided in section 3.

1.3.4 Section 4 (Delay Analysis), including Appendix 1 (Delay Analysis Supporting

Information), examines the time impact of the delay events identified in section 3.

1.3.5 The cost impact of the delay events are dealt with in section 5 (Quantum Analysis),
which is further supported by Appendix 2 (Detailed Quantum Analysis). This does
not include disruption or sub-contractor costs which have yet to be ascertained.

1.3.6 Section 6 provides a summary of the Contractor’s assertions, as detailed in this

Report.

1.3.7 Documents supporting the Contractor’s assertions are included at Appendix 3

(Supporting documents).

1.4 Abbreviations

1.4.1 The following is a (non-exhaustive) list of abbreviations used in this Report:

AAM Al Ain Municipality

AASSC Al Ain Sewerage Service Company

AADC Al Ain Distribution Company

ADAC Abu Dhabi Airport Company

BoQ Bill of Quantities

Employer Ministry of Presidential Affairs

Engineer Dar Al Handasah Nazih Taleb &Partners sarl –

Abu Dhabi

Contractor Pauling Middle East Co. L.L.C.

Contract Contract ref. 65 for the year of 2015, dated 22

May, 2015

EoT Extension of the Time for Completion

Date: 30 June 2017 Page 13

LDs Liquidated Damages

LPO Local Purchase Order

MAF Material Approval Form

MEP Mechanical Electrical Plumbing

NCR Non-Conformance Report

NOC No Objection Certificate

Project VVIP Terminal at Al Ain International Airport

Project, (Package2), Terminal Building &Ramp
Controllers Offices Building, Al Ain, Abu Dhabi,
UAE

RFI Request for Information

VO Variation Order

Works All works undertaken by the Contractor

pursuant to the Contract

Date: 30 June 2017 Page 14

2. BASIS OF ENTITLEMENT

2.1 Introduction

2.1.1 The Contractor sets out in the following paragraphs, the contractual basis of its
entitlement to an EoT and reimbursement of additional costs incurred.

2.1.2 For ease of reference, the key Sub-Clauses which give rise to entitlement to EoT and
additional cost are summarised below:

Applicable
Description
Sub-Clause
Contract Duration 3-1

Programme 5-4

Contractor’s Claims 2-3

Fees of additional services 8

Variation of works 7-5

Contractual information to complete on time and Employer’s part 1-4

Extension of time 5-7

2.1.3 Extracts of the Contract Sub-Clauses referred to in supporting the Contractor’s basis
of entitlement are reproduced below:

2.2 Entitlement to an extension of time

2.2.1 Sub-Clause 3-1 [Contract Duration] states:

“The Second Party shall execute all the works relative to the Contractual documents
within maximum period of 12 months;; the count of this period starts as of the
effective handover date of the site to the Second Party by the First Party, and this
date shall be considered the Commencement Date of the work and the execution
period shall include all weekdays, the holidays and the official days off. And, in case

Date: 30 June 2017 Page 15

the date of the works take over is a day off it shall extend to the next first working
date, and the Second Party shall have no right to claim for any works value he did
during the period he has been awarded the works until the date of issuing the Notice
To Commence at no circumstances whatsoever”.

2.2.2 Sub-Clause 5-4 [Programme] states:

“The Second Party shall submit a detailed time programme to the First Party within
the first week after signing the Contract containing the stages in the execution of the
works and not to exceed the completion period indicated in Sub-Clause 3-1 of the
Contract. The programme shall include the anticipated timing of each stage of
execution and detail showing the Contractor’s reasonable estimate of the number of
each classs of Contractor’s Personnel and of each type of Contractor’s Equipment,
required on the Site for each major stage. The Second Party shall not proceed with
the programme unless it is approved by the First Party, and the progamme shall
form after its approval an addendum part of the Contract and binding to the Second
Party. Nevertheless, the First Party shall have the right to include any modification to
this programme that he deemed necessary for the benefit of the work and the
Second Party shall not claim for any compensation due to such modification or its
valuation and without affecting his commitment to execute the Contracting work on
time nor his liability to the way he intends to carry out the Works, the methods to
adopt and the Equipment to use“.

2.2.3 Sub-Clause 5-7 [Extension of Time] provides entitlement to the Contractor to claim
for an extension of the Time for Completion. This Sub-Clause states:

“The Second Party shall exert his best efforts to execute the Contractual works on
time and as prescribed in the Contract and Sub-Clause 3-7 shall not be valid in case
such delay was the result of Force Majeur, and beyond the control of the Second
Party. Or was raised by the First Party, or due to variations proposed by the First
Party affecting the final design of the Project, and which gave rise to such delay”.

Date: 30 June 2017 Page 16

2.2.4 Sub-Clause 1-4, Contract Document and Employer’s part (see extract below),
requires the Employer’s to provide necessary Contractual design information that
may cause delay to the completion time of the Project.

“The First Party is required to provide the Second Party his part of all necessary
documents pertained to the construction enabling him (the Second Party) the
completion of the construction on time and as planned in the Contract”.

2.3 Variations

2.3.1 Sub-Clause 7-5 [Variation of works] states:

“The Second Party shall execute any written variation requested by the First Party in
the volume of works by means of the addition or omission to the extent of 30% of
the volume of Contract works, the value of these works shall be fixed according to
the agreement of prices or market prices whichever is deemed to be lower”.

2.3.2 Clause 8, fees of additional services (see extract below), states the compensation of
the Contractor for the fees incurred in the precedent of any additional services
required to his scope of works.

“With respect to Sub-Clause 7-5 of this Contract, the first party shall have the right
to instruct the second party of additional works related to services requested from
him under this Contract”.

2.4 Contractor’s Claims

2.4.1 Sub-Clause 2-3 [Contractor’s Claims] describes the procedure for Contractor’s claims
as follows:

“The Second Party shall give notice to the First Party in the event or circumstance of
delay caused by the undersigned of the Contract or due to others and giving rise to
extension of time. Regardless of all events or circumstances, the extension of time

Date: 30 June 2017 Page 17

does not entail the First Party any additional cost unless the delay is properly
justified while attributed to him”.

2.5 Summary

2.5.1 The Contractor’s submissions with regards to time and cost entitlement for each
head of claim are set out in Sections 4 and 5 of this Report.

2.5.2 The delay events that gave rise to the claim for extension of time and associated
cost are discussed in Section 3.

Date: 30 June 2017 Page 18

3. DELAY EVENTS

3.1 Introduction

3.1.1 This section of the Report sets out the delay events which caused delay and
disruption to the progress of the Works and, in pursuant to Sub-Clause 5-7 of the
Contract, entitle the Contractor to an extension of the Time for Completion together
with reimbursement of costs incurred.

3.1.2 The loss and expense cost associated with the delay events are dealt with in section
5 of this Report.

3.1.3 The Contractor asserts that the following delay events caused him to incur delay and
disruption which resulted in a delay to completion of the Works:

Before Commencement of Works

x Delay Event 1 – Employer’s delay to issue the Notice to Commence

x Delay Event 2 – Employer’s delay to relocate utility services

After Commencement of Works

x Delay Event 3 - Employer’s delay to obtain necessary Building Permit

3.1.4 The delay resulting from event 1 (Employer’s delay to issue the Notice to
Commence) is 233 calendar days. This is acknowledged by the Engineer attempting
to issue a late commencement date (will
( be discussed in details in section 3.2).

3.1.5 Delay events 2 & 3 are critical delays, as discussed in section 3.3, 3.4 and section 4.

3.1.6 These events are considered in more detail herein.

Date: 30 June 2017 Page 19

3.2 Delay/Disruption Event No.1 – Employer’s delay to issue the Notice to Commence

Introduction/background information

3.2.1 Due to Employer’s failure to issue a Notice to Commence, the Contractor was
delayed in starting with the Works on site.

3.2.2 Notwithstanding the Engineer’s instructions, the Contract is limited to one

42
commencement date on 24 May, 2015, and the Engineer’s letter ref.
AD13035/41804 was ineffective in establishing another date on 12 January, 2016.

3.2.3 The Engineer has failed to award any costs, even though the Contactor has incurred
significant additional costs during this period of delay.

3.2.4 The Employer is in delay to issue the Notice to Commence 235 ccalendar dates, while
the Contractor has effectively accessed the site on 24 May, 2015, and mobilized on
24 August, 2015, in anticipation to start the Project construction. Accordingly, the
Contractor endured financial loss due to time prolongation fees while being not able
to complete his site mobilization on time or to start the construction works and
recover his indirect costs.

3.2.5 The Engineer did not recognise and acknowledged this delay event by the issue of
many instructions to the Contractor under cover of which he requested the
relocation of existing services without commencement date. Although contractually
incorrect as the commencement date was established at a later stage on 12 January,
2016, it is evident that the late start period between 24 May, 2015, and 12 January,
2016, resulted from the Employer impediment of not having issued the required
Notice to Commence.

3.2.6 The events/correspondence that describe the delay event are summarized below:

Date: 30 June 2017 Page 20

Chronology

Pre-Kick off Meeting 10

3.2.7 In this meeting held on 17 May, 2015, five days before signing the Contract, Abu
Dhabi Airport Company (ADAC), the Authority party in charge of the Airport
operation and premises, clarified to the Engineer and the Contractor about site
access, logistics and constraints. Accordingly, the Engineer instructed the Contractor
to access the site on 24 May, 2015, and make complete survey for the existing
utilities, as his first activity to be started.

Site Access, Engineer Instruction to proceed 11

3.2.8 While many requirements should meet ADAC safety plan for site access and to start
the survey of existing utility, the Engineer instructed the Contractor to meet ADAC
safety plan requirements and to include detailed scope of his intended work relative
to the existing utility survey as the Contractor's first activity to be started.

3.2.9 Upon the Engineer instruction, the Contractor carried on with the survey of utilities
and foundation at control building area of VVIP terminal and submitted the related
coordination 12.

3.2.10 Upon the Contractor completion of the survey of utilities and foundation at control
building area of VVIP Terminal and submission of the related coordination, the
Engineer was asking the status of the survey for the terminal building 13.

10
MOM No.00, dated 17/05/2015
11
Engineer’s Email 24 May 2015 03:57 AM
12
Contractor’s Email 27 July 2015 03:57 PM
13
Engineer’s Email 04 August 2015 02:10 PM

Date: 30 June 2017 Page 21

Issues related to site logistics 14

3.2.11 The following site logistics were forecasted to proceed, however, subject to the
Consultant (DAHNT) meetings' arrangement with ADAC to solve the following
related pending issues:

[Pending issues]

3.2.12 Temporary offices for the Ramp Controllers, whereas, DAHNT to coordinate with
ADAC regarding the required location.

3.2.13 Temporary fence for the VVIP building, whereas, the Contractor (PME) was
instructed to submit officially to DAHNT after getting ADAC requirements for VIP
access and passage during construction from DAHNT.

3.2.14 Temporary fence for the office building, whereas, PME should await formal approval
from ADAC regarding the requirement for a security gate with approved private
security personnel.

3.2.15 The Employer requested the Contractor's complete log of his intended submittals
and the construction schedule for approval, in addition to the list of Provisional Sum
(PS) items and their respective vendor's list.

[End of pending issues]

3.2.16 The Employer met with ADAC on 23 August, 2015, to discuss points related to site
logistics that require necessary further action to resolve 15.

3.2.17 During this meeting ADAC has clarified to the Employer the requirements regarding
the site logistics with all necessary directions to proceed.

14
MOM No.01, dated 17/08/2015
15
Employer’s Email 24 August 2015 09:05 AM

Date: 30 June 2017 Page 22

3.2.18 According to this meeting and upon the Employer demand, the Contractor was
required to carry on the coordination with ADAC and Police in order to settle all
issues with target to install temporary fence by early next week.

3.2.19 It is worth noting here the Site Mobilization of the Contractor is in delay due to
many important site logistics issues required from the Employer to resolve with
ADAC, the Authority party in charge of the Airport premises.

3.2.20 In anticipation of mobilizing to site, fulfilling Employer demands to solve site

logistics issues and starting the Project, the Contractor incurred overhead fees and
indirect costs to maintain necessary dedicated staff and running site presence.

Site Mobilization 16

3.2.21 The Engineer has instructed the Contractor to install the temporary fence, while he
informed him of ADAC formal approval of the site temporary fencing on 24 August,
2015, for his further action.

3.2.22 The Engineer is also asking the Contractor to join him for coordination meeting with
ADAC to solve interference issue with the security gate Contractor, whereas, ADAC
has imposed a condition to hire one security officer from Group 4 Security Company
under the sole supervision of Al Ain Police.

3.2.23 While to conclude here that any Site Mobilization of the Contractor would not be
possible unless such formalities and issues have been cleared from the Employer
side with ADAC.

3.2.24 Accordingly, the Contractor suffered delay in Site Mobilization since the day he
accessed the site on 24 May, 2015, (we refer to 3.2.8 and 3.2.10) due to the
Employer failure to arrange with ADAC all formalities deemed necessary to clear site
works.

16
Engineer’s Email 24 August 2015 04:28 PM

Date: 30 June 2017 Page 23

Site Fence 17

3.2.25 The Contractor has received the Police approval for the temporary fence on 24
August, 2015, the same date of his receipt the Employer request to coordinate with
ADAC and Police in order to install the temporary fence.

3.2.26 The Engineer asked the Employer's convenient time to arrange a meeting with the
Contractor and the Security gate Contractor for necessary coordination between
them.

3.2.27 The Employer sent an Email to all parties on 25 August, 2015, requesting the
meeting the same date and M4 Contracting to attend.

Claim Notification of Additional Works 18

3.2.28 Following the Engineer meeting with ADAC authorities the Contractor notified that
he was instructed to execute new works related to Site logistics beyond his scope of
works and which required his Site Mobilization.

3.2.29 Meanwhile, the Contractor in his letter stated his intent to proceed with the
instructed works and to submit his price proposal in due course of completing
respective cost study of the following additional works:

[Additional works]

3.2.30 Supply/install of new Port-cabins with all utility connections to services provided to
the designated location.

3.2.31 Relocation of existing security cabin with all utility to be disconnected

from/reconnected to services provided at the designated location.

17
Employer’s Email 25 August 2015 06:03 AM
18
Contractor’s letter ref. PME/VVIP/195, dated 26 August, 2015

Date: 30 June 2017 Page 24

3.2.32 The removal and reinstallation of Car Parking Sheds (4 nos.) including the demolition
and cart away fees.

[End of additional works]

3.2.33 Accordingly, the Contractor officially started Site Mobilization the 24 August, 2015,
as concluded from his 18letter and his stated intention.

3.2.34 The Consultant is informing M4 Contracting to use their gate and allow the
Contractor to access the site office building. The register of resources entry and
work progress will be maintained and coordinated between the two Contractors
using the same access gate 19.

3.2.35 Accordingly, both Engineer and Employer were exerting all necessary arrangement
and efforts for the Contractor to mobilize to site, use the same existing gate of M4
Contracting, and start site works.

Site Fence 20

3.2.36 The Contractor submitted the final temporary fence drawings as approved by the
Operation Management and informed of his intent to install the fence according to
these drawings, meanwhile, he required the Engineer to get the approval from the
Facility Management of Al Ain International Airport (AAIA) to start the installation of
the temporary site offices and store area.

Sign Board 21

3.2.37 The Contractor is sending his proposed design of the sign board upon previous
discussion with the Engineer.

19
Engineer’s Email 30 August 2015 09:18 AM
20
Contractor’s Email 03 September 2015 01:17 PM
21
Contractor’s Email 09 September 2015 02:52 PM

Date: 30 June 2017 Page 25

Project Schedule &List of Submittals 22

3.2.38 The Engineer reminded the Contractor to submit his Project Schedule and Log of
submittals the earliest.

Progress Meeting 23

3.2.39 The Engineer called for a progress meeting between all parties.

3.2.40 We would like to address the attention here of the ongoing activities that required
progress meeting and all parties follow up.

Materials &Shop Drawings Submittals 24

3.2.41 The Engineer, while advised by the Employer, has instructed the Contractor to
arrange all materials and shop drawings submission within two weeks.

3.2.42 It is worth noting that such request to complete all Engineering works, it will require
from any ideal Contractor to deploy a dedicated Engineering staff.

3.2.43 The Contractor inquired structural details clarification from the Engineer 25.

3.2.44 While here to conclude accordingly, the Engineering works were immediately
started by the Contractor as per Employer request.

Site Fence 26

3.2.45 The Contractor in his letter to the Engineer confirmed the installation of the
Temporary Fence dedicated to the proposed Ramp Controller Office Building as per
approved layout plan, and which has concluded the ongoing Site Mobilization by the
Contractor.

22
Engineer’s letter ref. AD1303S/40546, dated 15 September, 2015
23
Engineer’s Email 04 October 2015 02:38 PM
24
Engineer’s letter ref. AD1303S/40855, dated 18 October, 2015
25
Contractor’s letter ref. PME/VVIPA/245, dated 18 October, 2015
26
Contractor’s letter ref. PME/VVIPA/246, dated 18 October, 2015

Date: 30 June 2017 Page 26

Progress Meeting 27

3.2.46 In the MOM No. 4 held on 12 October, 2015 the Contractor submitted his Baseline
Schedule on 21 September, 2015, while the Engineer sends his comments for the
Employer review.

3.2.47 The Geophysical report previously requested by the Employer cannot be carried out
due to existing buildings or underground services.

3.2.48 Accordingly, a meeting with AAM was agreed to discuss the issue.

3.2.49 We note that any necessary Building Permit enabling the Contractor to work is the
Employer responsibility.

3.2.50 The Contractor confirmed in the meeting the delivery date of ADAC Port-cabins.

3.2.51 The Contractor stated the progress status of the Site Offices, whereas, 4 out 5
caravans were done.

3.2.52 The Engineer recommendation and the Employer approval of the Site Security were
still subject to discussion.

3.2.53 The Contractor is waiting directions accordingly to proceed.

3.2.54 The Employer requested the Contractor to submit a register of all submittals to the
Consultant and to expedite all urgent submittals.

3.2.55 The Contractor increased his dedicated team deployed to meet the Employer
requirements for engineering works to expedite.

3.2.56 In this meeting the transformers recovery works were mentioned as undergoing by
another Sub-Contractor where the stated actual progress to note was 87.7%.

27
Engineer’s Email 19 October 2015 09:52 AM

Date: 30 June 2017 Page 27

3.2.57 We conclude from the MOM No.4 the Contractor undergoing activities regarding
site mobilization, forecasted works preparation in addition to the Engineering works
to complete on urgent basis.

3.2.58 Notwithstanding the Employer and Engineer efforts to resolve several issues
regarding the site clearances by AAIA Authorities and enabling works.

Temporary Power Supply 28

3.2.59 The Contractor requested from AAIA to provide him with temporary power.

3.2.60 All consumption fees will be paid by the Contractor on Meter reading basis.

Site Offices 29

3.2.61 The Engineer sent a letter to the Contractor advising him of slow progress in the Site
Offices works.

3.2.62 While, the Site Offices are for site mobilization and part of the Project scope of
works, accordingly, the Contractor was requested to expedite these works and avoid
further delays to the Project.

3.2.63 In general, the Project delay to scope of works would be concluded while counting
days elapsed from Project Starting or to meet Project Completion.

3.2.64 Accordingly, we conclude the Engineer in his statement to the Contractor regarding
further delay, would have certainly estimated at least a certain Project Starting Date
of the works.

3.2.65 While the official Notice to Commence has been only issued by the Employer at a
later stage, and as such, the Commencement Date of the Project would be
incorrectly set the 12 January, 2016.

28
Contractor’s letter ref. PME/VVIPA/269, dated 26 October, 2015
29
Engineer’s letter ref. AD1303S/40972, dated 27 October, 2015

Date: 30 June 2017 Page 28

3.2.66 Despite the unjustified starting date of the Project by the Engineer after 235
calendar days from signing the Contract during the period that has extended from
22 May, 2015 to 12 January, 2016, still the effective handover date of the site to the
Second Party by the First Party was on 24 May, 2015, as stipulated in Sub-Clause 3-1
of the conditions of Contract, when the Contractor effectively accessed the site
upon the Employer request and Engineer instruction to proceed with site activities
(we refer to 3.2.8-3.2.10).

Contractor’s Activities

3.2.67 The Engineer informed of his necessary arrangement taken with ADAC enabling the
Contractor to start demolishing works of the existing RDL3 substation, the existing
ramp offices and the Mosque 30.

3.2.68 The Engineer replied to the Contractor inquiry regarding structural details
clarification on 18 October, 2015 31.

3.2.69 Up to 26 October, 2015, the following activities by the Contractor and or obstruction
of works were taking place 32:

- Construction schedule

- Geophysical report

- Temporary Port-cabins for ADAC

- Site Offices

- Site Security

- Contractor Submittals

30
Engineer’s Email 29 October 2015 01:55 PM
31
Engineer’s letter ref. AD1303S/41014, dated 31 October, 2015
32
Engineer’s Email 01 November 2015 05:32 PM

Date: 30 June 2017 Page 29

3.2.70 The Contractor has informed the Engineer his supply/install of the new Port-cabins
and required directions for the way to connect the power supply 33.

3.2.71 The Contractor inquired clarification on the Engineer proposal to provide vertical
Chilled Water pumps during a meeting held on 3 November, 2015 34.

3.2.72 The Engineer requested the Contractor to start submitting his daily Program from
the agreed date to open the Ramp Office on 25 October, 2015 35.

3.2.73 Up to 2 November, 2015, the following activities by the Contractor and or

obstruction of works were taking place 36.

- Construction schedule

- Geophysical report

- Temporary Port-cabins for ADAC

- Site Offices

- Décor Subcontractor

- Contractor Submittals

- Substation Materials Shifting

- Demolish NOC

3.2.74 It was agreed that the Engineer to follow up with Municipality to collect the
required documents for the demolition NOC.

3.2.75 Meanwhile, it is worth noting that up to 2 November, 2015, the demolition activity
of the Contractor is delayed beyond his control due to the Employer failure to

33
Contractor’s letter ref. PME/VVIPA/279, dated 02 November, 2015
34
Contractor’s Email 05 November 2015 01:08 PM
35
Engineer’s Email 08 November 2015 08:09 AM
36
Engineer’s Email 08 November 2015 07:56 PM

Date: 30 June 2017 Page 30

provide necessary information from his part for the issuing of Permits to Work by
Authorities.

3.2.76 Up to 9 November, 2015, the following activities by the Contractor and or

obstruction of works were still taking place 37:

- Construction schedule

- Geophysical report

- Temporary Port-cabins for ADAC

- Site Offices

- Décor Subcontractor

- Contractor Submittals

- Substation Materials Shifting

- Demolish NOC

- Shifting Ramp Office Building

- Pump Room

3.2.77 The Contractor completed the Temporary Port-cabins of ADAC and Site Offices.

3.2.78 The Engineer informed the Contractor to submit proposal for liaison with AADC and
to pay the fees for the VVIP terminal's additional electrical load 38.

3.2.79 Accordingly, the Contractor suffered from a prolonged mobilization period of 70

calendar days during the period extending from the date of starting mobilization on
24 August, 2015, till 2 November, 2015, and during which he incurred additional

37
Engineer’s Email 16 November 2015 09:42 AM
38
Engineer’s letter ref. AD1303S/41300, dated 26 November, 2015

Date: 30 June 2017 Page 31

indirect costs and recurring fees while being continuously unable to start Project
deliverables (will be discussed further in sections 3.3.9-3.3.15).

3.2.80 The Contractor informed that during the dismantling of the existing substation the
hazard alarm was activated and ADAC instructed for immediate stoppage of the
works until further clearance 39.

3.2.81 The Contractor is seeking from the Engineer information that is preliminary
requirement for preparation of Electrical Shop Drawings of the Project (LDN, Single
Line Diagram, as-built of the existing Main Electrical Room, feeding point of the VVIP
building) 40.

3.2.82 The Engineer replied to the Contractor inquiry regarding Electrical preliminary
information on 20 December, 2015 41.

3.2.83 This is to conclude that the Engineering works were undergoing by the Contractor
and replied by the Engineer, while, respective site constructions were unable to
start beyond control.

3.2.84 Accordingly, the Contractor spent additional overhead fees due to Engineering
works activity taking place all through prolongation period before to start any
construction under his scope of works.

3.2.85 The Employer set the official Project Commencement date and Site Handover on 12
January, 2016 42.

3.2.86 Moreover, he requested the Contractor to start mobilization activities while he has
totally ignored the effective dates of Contractor site access on 24 May, 2015 and
mobilization on 24 August, 2015.

39
Contractor’s letter ref. PME/VVIPA/306, dated 01 December, 2015
40
Contractor’s letter ref. PME/VVIPA/313, dated 13 December, 2015
41
Engineer’s letter ref. AD1303S/41541, dated 20 December, 2015
42
Engineer’s letter ref. AD1303S/41804, dated 12 January, 2016

Date: 30 June 2017 Page 32

3.2.87 After issuing the official Commencement Date, the Engineer instructed the
Contractor to consider his revised Material Submittal as first submission of the
Project records 43.

3.2.88 The Engineer intentional instruction revealed incorrect recording of facts and
evidences to the Project register about earlier submission of Materials &documents
by the Contractor and upon Employer’s instructions (we refer to 3.2.41 - 3.2.44)

Summary

3.2.89 The Employer instruction to the Contractor to access the site and to start relocation
activities of existing utilities has established thereby the effective handover date of
the site as of 24 May, 2015, in pursuant to Sub-Clause 3-1 of the Conditions of
Contract.

3.2.90 Accordingly, the official Site Handover was incorrectly set by the Engineer after 235
calendar days from the date of signing the Contract on 22 May, 2015, till 12 January,
2016.

3.2.91 The Employer, in his deliberate act of site handover at a late date, has wrongly set
the Project Commencement Date on 12 January, 2016 instead of 24 May, 2015 the
effective access date of the Contractor to the site and consequent handover. The
Employer has intentionally ignored Sub-Clause 3-1 of the conditions of Contract
stipulating that the effective handover date of the site to the Contractor (called
therein Second Party) by the Employer (called therein First Party), shall be
considered the Commencement Date of the work.

3.2.92 The Contractor improved site mobilization on 24 August, 2015, but was
continuously prevented from completing the works due to site clearance issues with
AAIA Authorities unresolved by the Employer in timely manner.

43
Engineer’s Email 14 January 2016 11:47 AM

Date: 30 June 2017 Page 33

3.2.93 The indirect costs that were planned by the Contractor in his lump sum price would
be recovered through his preliminaries and priced BOQ items, while the other parts
that couldn’t be recovered during the course of execution and delivering of the
building construction, have incurred harsh financial loss to the Contractor for which
he deserves to be compensated.

3.2.94 These prolongation fees are mainly due to indirect costs that are listed hereunder:

- Head Office

- Management

- Engineering

- Manpower

- Site Security

- Site Safety

- Equipment

- Bonds

- Insurances

3.2.95 The Contractor should also make up for the Lost Profit over loss period.

Date: 30 June 2017 Page 34

3.3 Delay/Disruption Event No.2 – Employer’s delay to relocate utility services

Introduction/background information
10
3.3.1 The Project's site is located in the middle of an operational Airport and many
existing utilities should be relocated for the construction to start.

3.3.2 Abu Dhabi Airport Company (ADAC) clarified that construction works mandate
possession of building permit while all other works like utilities survey and
relocation need only ADAC approval in addition to Authorities permission.
1 3
3.3.3 The Contractor’s offer and signed Contract was based on the following
assumption, limitation and exclusion:

“Re-routing/Shifting of Utility Services Line for the existing building are not in our
scope of work.”

3.3.4 While the Building Permit was still not issued to the Contractor due to the Employer
failure to provide his part of all necessary NOC documents in pursuant to Sub-Clause
1-4 of the Conditions of Contract, another fact-finding of the Project delay was the
failure of the Employer to shift the existing utility services in order to prepare the
site area to start with the main works under the Contractor's scope and the signed
Contract.

3.3.5 The Employer contractually has failed to relocate existing utility services that are out
of the Contractor’s scope, and accordingly any related demolition or Project
construction by the Contractor were continuously obstructed from taking place.

3.3.6 It is worth pointing out that the Contractor’s other activities during all this period
were not under his scope only assigned to him as additional works by the Employer
in pursuant to Sub-Clause 7-5 of the Conditions of Contract.

Date: 30 June 2017 Page 35

Chronology

Existing Utilities Survey

11
3.3.7 The Contractor was instructed by the Engineer to access the site and to start the
survey of existing utility on 24 May, 2015.
12
3.3.8 Upon the Engineer instruction, the Contractor completed on 27 July, 2015, the
survey of utilities and foundation at control building area of VVIP terminal and
submitted the related coordination.

3.3.9 It is worth noting here the Contractor deployed his dedicated Staff and Survey Team
during the period that has extended from the date of receiving the Engineer
instruction to proceed on 24 May, 2015 till 27 July, 2015.

3.3.10 The Contract has clearly excluded relocation works of the existing services from the
Contractor’s scope while the Employer responsibility was to clear the site from any
existing utilities.
13
3.3.11 The Engineer requested from the Contractor on 4 August, 2015, to submit his
survey status and related coordination of utilities and foundation at control building
area of VVIP Terminal.

Site Mobilization Impediments

a) Existing Materials 44

3.3.12 The Contractor during mobilization has required the removing of existing materials
in the vicinity that belong to others, and which were obstructing him from arranging
the site office and the store.

3.3.13 The Engineer, in reply to the Contractor Email to remove existing materials, has
requested the site office drawings to advise others to clear the required area.

44
Engineer’s Email Tuesday September 08 2015 05:58 PM

Date: 30 June 2017 Page 36

46
3.3.14 The Engineer confirmed the shifting of existing materials to storage yards in power
complex as discussed on 3 November, 2015, and after 56 calendar days.
27
b) Existing Buildings

3.3.15 The Geophysical report previously requested by the Employer cannot be carried out
due to existing buildings or underground services.

3.3.16 Accordingly, a meeting with AAM was agreed to discuss the issue.

3.3.17 Up to 12 October, 2015, the Contractor was dealing with existing materials that
belong to others, existing buildings (having services to be relocated) and
underground services.

3.3.18 Notwithstanding the Employer efforts to resolve several issues regarding the site
clearance and enabling works, these issues were delaying the Contractor from
completing necessary mobilization since 24 August, 2015, the date of starting
additional works (we refer to 3.2.29 – 3.2.35).

Contractor’s Scope of Works 45

3.3.19 The Engineer has incorrectly clarified to the Contractor his scope of works under the
Contract, highlighting only the following Sub-Clauses from the scope of works
definition:

2.3 "Demolitions and Alterations", and

2.0.1.11 "Existing Site Services" in particular

3.3.20 While the Engineer, in his selective reference, ignored the Contract exclusion of all
existing services' relocation from the Contractor, therefore, any works described to
be diverted or relocated under any Sub-Clause of the works definition would be the
Employer's responsibility (we refer to 3.3.3).

45
Engineer’s Email 20 October 2015 10:59 AM

Date: 30 June 2017 Page 37

Demolishing Works impediments 46

3.3.21 The Engineer was taking necessary arrangement with ADAC for the Contractor to
start demolishing works of the existing RDL3 substation, the existing ramp offices
and the Mosque (we refer to 3.2.67).

3.3.22 ADAC replied 5 days after on 3 November, 2015, of his no objection for the
Contractor to start demolishing works of the existing RDL3 substation, the existing
ramp offices and the Mosque.

3.3.23 Nevertheless, the Contractor was continuously unable to start demolition works due
to the Employer failure to provide necessary NOC documents from his part for the
issuing of Permits to Work by Authorities (we refer to 3.2.74 and 3.2.75) in addition
to the Employer hindrance to relocate existing utilities.

3.3.24 Following his meeting with AAM the Engineer informed of the possibility to have
two building permits for the following stages of the Project 47:

- VVIP

- Ramp Office

3.3.25 The Contractor was requested to provide an undertaking letter to carry out with the
Geophysical test for VVIP and to conduct 3D-Test of the Ramp Office.

3.3.26 The Geophysical test for VVIP and the 3D-Test of the Ramp Office serve Authorities
NOC requirements to detect underground existing utilities.

3.3.27 Accordingly, this will enable the Engineer to send a letter to AAM requesting the
issuance of the Ramp Office Building Permit.

3.3.28 The Contractor sent a letter to the Engineer reminding that U/G utilities are not
included in his scope of work 48.

46
Engineer’s Email 03 November 2015 02:31 PM
47
Engineer’s Email 03 November 2015 03:04 PM

Date: 30 June 2017 Page 38

3.3.29 In the same letter the Contractor informed of his arrangement with Etisalat
Authority the "re-routing" of their cable passing through the Ramp Office Building
(RCO) subject to cost impact and Contractor claim as an additional work.

3.3.30 The Contractor notified the Engineer that the required 3D Test for the Ramp Office
is a long time procedure and costly 49.

3.3.31 The 3D test is AAM requirement for the demolition permission as conveyed to the
Contractor, who was requested to carry on with the test on 3 October, 2015
through the Engineer Email 03 November 2015 03:04 PM and on 4 October, 2015
vide the Engineer 2nd Email 04 November 2015 17:44.

3.3.32 Meanwhile, the Contractor proposed an alternative under discussion with AAM to
skip any delay that may occur and reduce the fees born by the Employer.

3.3.33 While the Contractor tried to help the Employer to acquire necessary AAM
permission for demolition work, he tried to mitigate the delay to start demolition
work and assisting the Employer’s part regarding the AAM work permission
formalities.

3.3.34 The Contractor informed of one underground Etisalat cable obstructing the new
construction of the Ramp Controller Office Building that needs to be re-routed by
others 50.
37
NOC Part of the Employer

3.3.35 The Engineer provided the Contractor with required NOC documents for the
demolition.

3.3.36 The Contractor was requested to apply accordingly to AAM E-service and to obtain
clearance form of all MEP utilities.

48
Contractor’s letter ref. PME/VVIPA/280 dated 4 November, 2015
49
Contractor’s letter ref. PME/VVIPA/289 dated 5 November, 2015
50
Contractor’s letter ref. PME/VVIPA/281 dated 8 November, 2015

Date: 30 June 2017 Page 39

3.3.37 However, the demolition activity of the Contractor would have not started
accordingly as clarified hereafter.

Existing Utilities impediments 51

3.3.38 The Engineer informed the Contractor that re-routing of existing utilities is the
Contractor scope.

3.3.39 The statement of the Engineer was incorrect when disregarded the exclusion made
by the Contractor in his 1Priced Offer that forms an integral part of the signed
3
Contract.

3.3.40 ADAC instructed for immediate stoppage of the substation demolition works until
further clearance (we refer to 3.2.80).

3.3.41 We conclude that up to 1 December, 2015, the substation was not properly cleared
by the Engineer or AADC, and the Contractor was still unable to carry on with
demolition works beyond his control.

3.3.42 In reply to the Contractor letter reference PME/VVIPA/306, dated 1 December,

2015, and in order to solve the existing substation issue, the Engineer requested the
Contractor to send his electrical team to visit the main Marshalling panel in ADAC
Power Complex at the earliest to do the necessary and avoid triggering any alarm or
interruption in order to complete the dismantling of the RdI/3 Marshalling panel 52.

3.3.43 After the official Notice to Commence has been issued by the Employer, the
Contractor found unforeseen existing utility services excluded from his scope that
needed to be cleared by others 53.

3.3.44 The Contractor notified the Engineer of these existing utility services and
obstructions in the Project's site that are still not addressed by the Employer:

51
Engineer’s letter ref. AD1303S/41132 dated 10 November, 2015
52
Engineer’s letter ref. AD1303S/41378 dated 6 December, 2015
53
Contractor’s letter ref. PME/VVIPA/333 dated 16 January, 2015

Date: 30 June 2017 Page 40

- Underground Cables for Etisalat found in the vicinity of Ramp Controller Office
Building and VVIP Terminal Building.

- The troubleshooting of existing ACCM Panel, inside Sub-station subject to

demolition, was found not yet completed by specialist (out of Contractor scope).

- Underground Pump Room found under VVIP Terminal Building, and which was not
indicated in the existing utility drawing, required to be dismantled and recaptured
before demolition (out of Contractor scope).

- Unknown Cable Utility found crossing above the roof of existing ramp controller
office, and which was not indicated in the existing utility drawing, required rerouting
before any demolition.

3.3.45 These existing utility services that are out of the scope of the Contractor were
delaying the commencement of demolition works beyond his control.

3.3.46 Following the Contractor letter ref. PME/VVIPA/333, dated 16 January, 2016,
informing of the troubleshooting of existing ACCM Panel, inside Sub-station subject
to demolition, it was found not yet completed by specialist (out of Contractor
scope) 54.

3.3.47 Accordingly, the Client nominated Hermos the Specialist for the Troubleshooting of
the existing ACCM panel under the Contractor management of services.

3.3.48 The Engineer replied to the Contractor letter ref. PME/VVIP/332 dated 13 January,
2016, regarding his claimed variation to relocate the existing utility services of
Etisalat 55.

3.3.49 The Engineer referred only to the priced items of the BOQ and Tender Queries in
order to demonstrate the Contractor's scope under which he is instructed to
relocate Etisalat existing utility services, while, he failed to mention the signed

54
Engineer letter ref. AD1303S/41864 dated 17 January, 2016
55
Engineer letter ref. AD1303S/41867 dated 20 January, 2016

Date: 30 June 2017 Page 41

Contract that has clearly excluded any relocation of existing services by the
Contractor including the particular case of Etisalat that constituted no exception.

3.3.50 It is clear to state that any conditions or limitations mentioned in the list of
exclusions overrule and take precedence over all other contract documents such as
Tender Queries, Specifications, BOQ, drawings, Conditions of Contract (General or
Specific).

3.3.51 Following the Engineer Email and Contractor letter ref. PME/VVIPA/333, dated 16
January, 2016, informing of underground Pump Room found under VVIP Terminal
Building, and which was not indicated in the existing utility drawing, it required to
be dismantled or relocated before demolition (out of Contractor scope) 56.

3.3.52 Accordingly, the Employer informed the Engineer that he acquired No Objection
from ADAC to dismantle the existing Pump Room in coordination with the
concerned.

3.3.53 Following the Engineer letter ref. AD13035/41864, dated 17 January, 2016,
regarding the Client nomination of Hermos the Specialist for the Troubleshooting of
p
the existing ACCM panel under the Contractor management of services, the
Contractor informed Hermos to start the work immediately and he started
arranging for them necessary gate passes and work permission from ADAC
Authorities 57.

3.3.54 The time anticipated by the Engineer to complete the trouble shooting job of ACCM
Panel was at least 3 weeks, and accordingly, he requested the Contractor to arrange
permission for Hermos team.

56
Employer Email 20 January 2016 09:12 AM
57
Engineer Email 21 January 2016 03:36 PM

Date: 30 June 2017 Page 42

3.3.55 The Contractor informed the Engineer of an existing Security Camera fixed on the
roof of building subject to demolition 58.

3.3.56 The Contractor requested the Engineer necessary arrangement with ADAC
Authorities to relocate the Security Camera.

3.3.57 These existing utilities that are out of the scope of the Contractor were delaying the
commencement of demolition works beyond his control.

3.3.58 The Engineer instructed the Contractor to send officially his proposal for the new
route of the army camera cables in order to forward officially to ADAC 59.

3.3.59 Following his notification 58letter of an existing Security Camera fixed on the roof of
building subject to demolition and upon the request of the Engineer, the Contractor
submitted a proposal to relocate the Security Camera, and requested the Engineer
necessary arrangement with ADAC Authorities for relocation accordingly 60.

3.3.60 Whereas, the abovementioned works are acknowledged by the Engineer out of the
Contractor's scope.

3.3.61 ADAC and the Engineer made necessary arrangement for Etisalat to enter the
Airport restricted area and complete the relocation and protection of existing
Etisalat Plant under the Ramp Office area 61.

3.3.62 The Engineer requested from the Contractor to coordinate with Etisalat Engineers
for their necessary entry permit in order to relocate the Etisalat cables and to start
with civil works (demolition) at the VVIP area 62.

58
Contractor’s letter ref. PME/VVIPA/351 dated 26 January, 2016
59
Email 27 January 2016 12:22 PM
60
Contractor’s letter ref. PME/VVIPA/352 dated 27 January 2016
61
Engineer’s Email 27 January 2016 02:54 PM
62
Engineer’s Email 28 January 2016 11:31 AM

Date: 30 June 2017 Page 43

3.3.63 While reminding that such relocation can only be done by Etisalat and following
Employer request to ADAC for their necessary permission, accordingly, the
Contractor cannot be held responsible of any delay due to late start with civil works
in the VVIP area that are mainly dependent on shifting existing Etisalat cables.

3.3.64 The Contractor informed the Airport Military Authorities of existing communication
cables that belong to the Army of Military Signals in the vicinity of the VVIP area 63.

3.3.65 These cables need relocation before to start any civil work activities.

3.3.66 In his attempt to mitigate the delay to start the works, the Contractor addressed a
letter to the Army of Military Signals requesting necessary arrangement of the
existing utilities.

3.3.67 The Contractor cannot be held responsible of the delay due to the Employer failure
to undertake necessary arrangement with Airport Military Authorities in order to
relocate the existing utilities that are out of his scope.

3.3.68 The Contractor informed of new existing Electrical cables that are energized and
crossing underground the VVIP Terminal Building and its vicinity 64.

3.3.69 These utility cables were hidden under the ground while discovered and
consequently were not shown in the original tender and the as-built drawings.

3.3.70 Therefore, these existing utilities could not be foreseen by the Contractor.

3.3.71 The Contractor notified the Engineer of an existing Security Camera fixed on the
roof of the existing building that needs to be demolished and properly removed
through ADAC Authorities 65.

63
Contractor’ letter ref. PME/VVIPA/292 dated 31 January, 2016
64
Contractor’s letter ref. PME/VVIPA/355 dated 3 February, 2016
65
Contractor’s letter ref. PME/VVIPA/357 dated 8 February, 2016

Date: 30 June 2017 Page 44

3.3.72 Contractually the Employer was required for his necessary arrangement with ADAC
Authorities to relocate this existing utility and clear the area allowing further
demolition work to start by the Contractor.

3.3.73 Accordingly, the demolition of existing premises by the Contractor was delayed by
the Employer due to his failure to relocate existing utilities timely manner.

3.3.74 The Engineer replied to the Contractor's notification of existing utilities in letters
PME/VVIP/333 dated 16 January, 2016, and PME/VVIP/355 dated 3 February,
2016 66.

3.3.75 In his letter, the Engineer reminded of the tender note to all bidders that Contract
documents were based on as-built drawings.

3.3.76 Consequently, the tender document could not anticipate any existing utility
unforeseen to the awarded Contractor.

3.3.77 Meanwhile, the Engineer note to the bidders that they should have visited the site
and done the necessary investigation prior to bidding was actually fulfilled by the
Contractor.

3.3.78 Whereas, fully aware of the existing site conditions, the Contractor has clearly
established in his signed Contract the exclusion of existing utilities’ relocation from
his scope.

3.3.79 It is worth pointing out that any conditions or limitations mentioned in the list of
exclusions overrule and take precedence over all other contract documents such as
Tender Queries, Specifications, BOQ, drawings, and Conditions of Contract (General
or Specific).

3.3.80 Accordingly, the Engineer was incorrectly referring to selective excerpts from the
tender and Engineer notes to bidders, while they were superseded by the signed
Contract and the exclusion part for utilities relocation made by the Contractor.

66
Engineer’s letter ref. AD1303S/42075 dated 9 February, 2016

Date: 30 June 2017 Page 45

3.3.81 The Engineer addressed an Email to Etisalat team to submit their proposal for new
route relocation (i.e. Etisalat existing cables) and to coordinate meanwhile, any
possibility for the Contractor to start with related civil works (i.e. demolition) 67.

3.3.82 The request of the Engineer served the Employer duty under the Contract to clear
the site from existing utilities, while the Contractor was incurring continuous delay
to start the Project construction beyond his control.

3.3.83 Following the Engineer letter ref. AD1303S/41864, dated 17 January, 2016,
regarding the Client nomination of Hermos, the Specialist for the Troubleshooting of
the existing ACCM panel, the Engineer sent a follow up Email requesting Hermos to
complete the works related to the substation that was on the Contractor schedule
of demolition next day, and to reconnect necessary signals for the existing Chillers 68.

3.3.84 In view of the aforementioned, and since the site access date on 24 May, 2015, the
NOC part of the Employer for works’ clearance of the existing substation was still
not issued.

3.3.85 Consequently, the Contractor’s demolition schedule of the existing premises in

general, and of the existing substation in particular, was continuously suffering from
delay beyond control.

3.3.86 The Engineer sent to ADAC Authorities a proposal for the re-routing of existing main
power cables that belong to AGL Panel 69.

3.3.87 Accordingly, and since his effective access date to site on 24 May, 2015, the
Contractor was unable to start with civil works due to existing utilities not relocated
by the Employer.

67
Engineer’s Email 11 February 2016 02:24 PM
68
Engineer’s Email 13 February 2016 11:14 AM
69
Engineer’s Email 15 February 2016 04:01 PM

Date: 30 June 2017 Page 46

3.3.88 The Contractor in his letter to the Engineer submitted a change route proposal of
cables feeding the aviation ground light DB 70.

3.3.89 These existing utility services, amongst many others previously enumerated, are still
not resolved by the Employer, while obstructing the Contractor works and causing
delay to the Project construction to start.

3.3.90 The actual proposal of the Contractor, including other cases of similarity, was his
good intention to resolve existing utility issues and best endeavors to mitigate
delay.

3.3.91 While, such attempt would only contribute in clearing the site from existing utilities
that would have been left by the Employer unresolved, and would mitigate any
delay to occur out of any liability toward the Contractor and without prejudice to his
rights under the signed Contract 71.

3.3.92 While AAM was still not issuing the Building Permit due to additional documents
requirement not fulfilled by the Employer, the Engineer in reply to the Contractor
letter ref. PME/VVIP/362 dated 22 February, 2016, has addressed the relocation of
all underground utilities within the new building footing area and attributed it to the
Contractor original scope of works.

3.3.93 The above assessment of the Engineer was at fault and did not act in pursuant to
the Contract exclusion of relocation of services from the scope of works of the
Contractor that takes precedence over all Contract documents.

3.3.94 In reply to the Contractor proposal for the relocation of Aviation Ground Light (AGL),
the Engineer informed the proposal was sent to ADAC Engineers and it was verbally
approved 72.

70
Contractor’s letter ref. PME/VVIPA/368 dated 27 February, 2016
71
Engineer’s letter ref. AD1303S/42303 dated 28 February, 2016
72
Engineer’s letter ref. AD1303S/42299 dated 28 February, 2016

Date: 30 June 2017 Page 47

3.3.95 Meanwhile, the Engineer requested the Contractor to submit the Permit to Work
(PTW) along with a shop drawing that shows the new cables route upon the request
of ADAC.

3.3.96 It is worth pointing out to the existing utilities continuously unresolved by the
Employer while the Contractor was standing idle, whereas, he was unable to start
with the execution of construction works under his scope.

3.3.97 The Engineer sent to ADAC Authorities a proposed routing for 2 MRC cables 73.

3.3.98 The prompt response of ADAC was highly appreciated to enable the Contractor to
proceed with the necessary civil works.

3.3.99 The Engineer sent to ADAC Authorities a proposal for relocating the ANS earth
cables 74.

3.3.100 The prompt response of ADAC was highly appreciated to enable the Contractor to
proceed with the necessary works.

3.3.101 In anticipation to start the works, the Contractor accessed the site, mobilized and
recruited his staff, accordingly, he was suffering from prolongation period and
incurred indirect cost in addition to lost profit while the Project construction was
continuously obstructed and idle without any productivity due to existing utility
hindrances beyond his scope or control 75.

3.3.102 The Contractor in his 75letter to the Engineer notified of the following unresolved
issues beyond his control and continuously delaying the construction works under
his scope:

Issuing of Building Permit

73
Engineer’s Email 10 March 2016 02:40 PM
74
Engineer’s Email 10 March 2016 02:58 PM
75
Contractor’s letter ref. PME/VVIPA/381 dated 12 March, 2016

Date: 30 June 2017 Page 48

- Building Permit not issued by AAM due to design not meeting Estidama
requirements.

Authorities Site Clearance

- Removing and relocating of Fiber-Optic cable, crossing above the roof of existing
Ramp

Control Building

- New route for electrical cable under the VVIP Building.

- New route for the earth cable under the VVIP Terminal Building.

3.3.103 Following the instruction of the Engineer to re-route the AGL, the Contractor
submitted accordingly his quotation for the proposed change of route 76.

3.3.104 The Contractor was thereby instructed by the Engineer of additional works in
pursuant to Sub-Clause 7-5 of the Conditions of Contract.

3.3.105 The Engineer approved the Contractor proposal to reroute the AGL cables on 15
March, 2016, and requested his schedule to start and complete 77.

3.3.106 The Engineer informed the Contractor that ADAC approved the proposed route of
the 2 MRC cables and instructed him to proceed with related PTW, method
statement and necessary permits and relocation accordingly 78.

3.3.107 The Contractor replied to the Engineer letter ref. AD1303S/4268, dated 14 March,
2016 79.

In the re-routing of utilities

76
Contractor’s letter ref. PME/VVIPA/380 dated 13 March ,2016
77
Engineer’s Email 15 March 2016 02:22 PM
78
Engineer’s Email 156 March 2016 02:32 PM
79
Contractor’s letter ref. PME/VVIPA/396 dated 20 March, 2016

Date: 30 June 2017 Page 49

3.3.108 The Engineer reference to specification section 02050 and BOQ items, page
EWR/1332/2 is not related to re-routing works but demolishing and removing of
existing underground services.

In the site access and handover

3.3.109 The existing premises of the Project and underground services are secured by ADAC
Authority.

3.3.110 Therefore, the exploring of existing utilities was only accurate after site handover to
the Contractor on the effective date of his site access as of 24 May, 2015 (we refer
to 3.2.89) and upon clearances from respective Authorities allowing access to
existing services or trial pits.

3.3.111 Accordingly, the Contractor would have only forecasted the relocation of foreseen
and unforeseen existing services that he excluded from his signed Contract.

Project Construction impediments 80

3.3.112 In the Progress meeting the Engineer recorded the Cumulative Actual progress of
the Project as 0%.

3.3.113 Therefore, we conclude up to 16 March, 2016, the works under the scope of the
Contractor were idle.

3.3.114 The Contractor informed the Engineer his completion of the re-routing of utilities /
service lines that have been entrusted to him as an additional work 81.

3.3.115 The Engineer reconfirmed that the Ramp Office Building was not part of the critical
path while he reiterated his previous statement to conclude accordingly that the
works were not affected by the delay of the Building Permit 82.

80
Engineer’s Email 22 March 2016 02:39 PM
81
Contractor’s letter ref. PME/VVIPA/413 dated 11 April 2016
82
Engineer’s letter ref. AD1303S/42829 dated 19 April, 2016

Date: 30 June 2017 Page 50

3.3.116 While it is worth pointing out that the construction cannot start without permission
of AAM, the Authority having jurisdiction over the Project.

3.3.117 Accordingly, the construction of the Ramp Office Building should have only started
after issuing the Building Permit that has accordingly triggered additional extension
of time while being in delay.

3.3.118 Therefore, the conclusion of the Engineer that it was not part of the critical path is
erroneous and illogical.

3.3.119 However, the subject will be discussed in details in section 4.

3.3.120 Furthermore, the Contractor was instructed by the Engineer to relocate

underground utilities and which are excluded from his signed Contract, as such, the
works are additional to the Contractor's scope under the signed Contract.

3.3.121 The Engineer by denying additional works instructed to the Contractor unless
approved by the Employer is unjustified contractually by mean of his impartial role,
duties and Authority over the Project to give instructions, maintaining records of
each claimed case for his fair assessment while acting on the behalf of the Employer
and advising for unbiased determinations.

Summary

3.3.122 The works under the scope of the Contractor were standing idle up to 16 March,
2016 (we refer to 3.3.112).

3.3.123 Meanwhile, these works were undertaken by the Contractor on his own risk in the
absence of an approved Building Permit by AAM Authority and accordingly they will
be correctly accounted in the cost impact analysis study in section 5.

3.3.124 After the Engineer instruction to access the site on 24 May, 2015, the Contractor
arranged his staff and logistics that are necessary to start mobilization in

Date: 30 June 2017 Page 51

anticipation to issue the Commencement Date of the Project and to start the works
under his scope.

3.3.125 Accordingly, he deserves to be compensated for the prolongation period, overhead

fees, indirect costs and lost profit over the loss period that he incurred during the
survey of the existing utility and which he has carried on the Employer behalf and
upon his demand from 24 May, 2015 till 27 July, 2015 and to whom it was reported
on 04 August, 2015.

3.3.126 The relocation of existing utilities that were duly notified by the Contractor, have
continuously delayed the civil works from starting and incurred additional cost to
the Contractor.

3.3.127 The Contractor has suffered from prolongation period since his site access on 24
May, 2015, until 16 March, 2016, due to existing utilities not relocated by the
Employer, and which has incurred additional cost to his Contract Budget as a result
of his daily financial loss unrecovered as intended due to the Contractor standing
idle status and subsequent non-progress in his BOQ priced items.

3.3.128 Accordingly, during the prolonged period extending from 05 August, 2015, till 16
March, 2016, the Contractor deserves compensation for the harsh financial loss that
he was incurring every day, due to his overhead fees, indirect costs and lost profit
over loss period as a result of his mobilization, deploying his construction team and
logistics while he was unable to start the Construction of the Project beyond his
control.

Date: 30 June 2017 Page 52

3.4 Delay/Disruption Event No.3 – Employer’s delay to obtain necessary Building

Permit

Introduction/background information

3.4.1 Contractually, the Employer part is to provide all required NOC and documents in
his possession related to design in order for the Contractor to acquire the building
permit and complete the Project on time (we refer to 2.2.4).

3.4.2 Since the Contractor effective Site Mobilization on 24 August, 2015, (we refer to
3.2.33), the Employer was totally aware of Estidama issue and Al Ain Municipality
(AAM) requirements of the same, while, he advised during the progress meeting
held on 17 August, 2015, about the reference of the letter addressed to AAM for the
exemption of Estidama (ref. 4768/2/3, dated July, 2015) 83.

3.4.3 While, the delay in issuing the Building Permit is due to several uncompleted NOC(s)
constituting part of the necessary documents provided by the Employer in pursuant
to Sub-Clause 1-4 of the conditions of Contract and in particular Estidama design
missing package by the Employer, all were not allowing the Contractor to apply and
retrieve the Building Permit from AAM beyond his control.

Chronology

Building Permit Impediments 84

3.4.4 The Engineer instructed the Contractor to submit a proposal for Geophysical study
of the Project plot, in order to obtain the building permit from AAM.

3.4.5 It is worth noting here the Geophysical study is one of the documents which were
the Employer responsibility to provide without causing delay to Project completion
period aas per Sub-Clause 1-4 of the Conditions of Contract (we refer to 2.2.4).

83
MOM No.01 dated 17 August, 2015
84
Engineer’s Email 29 September 2015 04:58 PM

Date: 30 June 2017 Page 53

27
3.4.6 The Geophysical report previously requested by the Employer cannot be carried
out due to existing buildings or underground services.

3.4.7 Accordingly, a meeting with AAM was agreed to discuss the issue.

3.4.8 AAM informed the Engineer of two Building Permits possibility for VVIP and Ramp.
Accordingly, the Contractor was requested on 3 November, 2015, to carry out with
the Geophysical test for VVIP and to conduct 3D-Test of the Ramp Office (we refer
to 3.3.21 – 3.3.25).

3.4.9 The Geophysical test for VVIP and the 3D-Test of the Ramp Office are Authorities
requirements to detect underground existing, and which are necessary for the
issuance of the above stated Building Permits.

3.4.10 During the period that has extended from the date of instruction to the Contractor
to access the site on 24 May, 2015, (we refer to 3.2.7 - 3.2.10) until 3 November,
2015, the Employer failed to provide the Geophysical test for VVIP and the 3D-Test
of the Ramp Office as required by AAM and delayed accordingly the issuance of the
Building Permit.

3.4.11 The Engineer informed the Contractor his handover of the documents required by
municipality to issue NOC for demolition 85.

3.4.12 The Contractor is in delay to start the demolition work under his scope beyond his
control, due to AAM formalities that are still unprocessed by the Employer.
49
3.4.13 The Contractor notified the Engineer that the required 3D Test for the Ramp Office
is a long time procedure and costly. Meanwhile, he proposed an alternative solution
under discussion with AAM to skip any delay that may occur and reduce the fees
born by the Employer.

85
Engineer’s Email 3 November 2015 02:17 PM

Date: 30 June 2017 Page 54

3.4.14 The Contractor proposal was his good intention and best efforts to help the
Employer acquiring necessary AAM permission for demolition work, and to mitigate
the delay in starting the same without prejudice to his rights under the Contract.

3.4.15 The Engineer enclosed in his letter to the Contractor, the Civil Defense preliminary
approval of the Fire Strategy drawing for his necessary action. 86

3.4.16 The civil defense preliminary drawing also called Fire and Life Safety (FLS) is one
document of the Employer’s part to provide for the issuance of the Building Permit.
However, the Employer should also provide other documents that are required for
the same.

3.4.17 The Engineer provided the Contractor with required NOC documents for the
demolition (we refer to 3.2.73 – 3.2.75).
37
3.4.18 The Contractor was requested to apply accordingly to AAM E-service and to obtain
clearance form of all MEP utilities.

3.4.19 The Engineer issued a letter addressed to AAM requesting to submit the Building
Permit to the appointed Contractor PME 87.

3.4.20 The Contractor was unable to retrieve the Building Permit from AAM due to Etisalat
NOC document issue 88.

3.4.21 While reminding that NOC(s) of the design documents are the responsibility of the
Employer allowing the issuing of Building Permit by AAM, all related works were
accordingly in delay to start beyond the Contractor control.

3.4.22 The Engineer in his reply to the Contractor notification letter ref. PME/VVIPA/347,
dated 23 January, 2016, regarding delay to get Building Permit, did not recognize
and acknowledged this delay event is beyond the Contractor control, by his issuing

86
Engineer’s letter ref. AD1303S/41111 dated 8 November 2015
87
Engineer’s letter ref. AD1303S/40946 dated 21 December 2015
88
Contractor’s letter ref. PME/VVIPA/347 dated 23 January 2016

Date: 30 June 2017 Page 55

an instruction letter to the Contractor ref. AD1303S/41867, dated 20 January, 2016,

under cover of which he requested the relocation of existing Etisalat services that
are out of his scope 89.

3.4.23 Although contractually incorrect as the exclusion of existing services relocation was
clearly established in the signed Contract document, it is evident that the late start
period issue resulted from the Employer impediment of not having relocated the
existing services before the Contractor to commence site activities.

3.4.24 The Engineer sent his updated NOC status following the Contractor's request and
was arranging a CD that contains all Municipal approved drawings (design
documents) 90.

3.4.25 While reminding the NOC of design documents are the responsibility of the
Employer, they are necessary in order to issue the Building Permit by AAM.

3.4.26 The Engineer informed the Contractor to solve his blocked account issue with
AAM 91.

3.4.27 It is worth pointing out that the Contractor applied to retrieve the building permit
from AAM starting the date he received all necessary permissions and NOC(s) from
the Employer on 28 January, 2016.

3.4.28 Meanwhile, the Engineer assumption of the Contractor non readiness to apply for
the Building Permit was only anticipated following the incentive of the blocked
account by AAM.

3.4.29 Accordingly, the Engineer concern of the Contractor performance as stated in his
letter was incorrect and unfounded, whilst, he did not provide any evidence of the
Contractor's responsibility related to the blocked account by AAM.

89
Engineer’s letter ref. AD1303S/41975 dated 27 January 2016
90
Engineer’s Email 27 January 2016 03:08 PM
91
Engineer’s letter ref. AD1303S/42006 dated 31 January 2016

Date: 30 June 2017 Page 56

3.4.30 The Contractor requested the Project bench mark from

f the Engineer 92.

3.4.31 The aforementioned information is contractually the Employer part to provide as

per Sub-Clause 1-4 of the conditions of Contract in order to complete the Project on
time.

3.4.32 The Engineer informed the Contractor to submit his request for bench mark using
properly the Project manual procedure of "Request for Information" 93.

3.4.33 Although the procedure is true, however, this missing information is an essential
part of the original design that should have been provided by the Employer to the
Contractor in accordance to Sub-Clause 1-4 of the conditions of Contract.

3.4.34 Any delay in establishing the Project bench mark may lead to extend the completion
date of the Project beyond control of the Contractor, whereas, it may affect the
Project design, shop drawings, and therefore works execution.

3.4.35 The Contractor informed the Engineer his resolving of the blocked account issue
with AAM on 22 February, 2016 94.

3.4.36 While the Contractor exerted his best efforts to obtain the Building Permit by
following diligently AAM without any lapse of delay from his side, any responsibility
of the Contractor regarding his blocked account by AAM was not verified and
confirmed by the Engineer in his notification letter ref. AD1303S/42006 dated 31
January, 2016.

3.4.37 Therefore, AAM Authorities processed the Contractor's application for the Building
Permit after 25 days of delay beyond his control, starting from the date of receiving
the necessary documents from the Engineer on 28 January, 2016, until 21 February,
2016 the date of AAM receipt.

92
Contractor’s letter ref. PME/VVIPA/358 dated 03 February 2016
93
Engineer’s letter ref. AD1303S/42090 dated 9 February 2016
94
Contractor’s letter ref. PME/VVIPA/362 dated 22 February 2016

Date: 30 June 2017 Page 57

3.4.38 Meanwhile, AAM was still not issuing the Building Permit due to some additional
documents as stated in their comments.

3.4.39 Whereas, these documents were required from the Consultant beyond the
Contractor control.

3.4.40 Nevertheless, the delay in getting the Building Permit was concurrent with the
continuous delay to start civil works in the VVIP site area due to the Employer
failure to shift existing utility services.

3.4.41 The Contractor informed the Engineer of his necessary action to resolve the issue
raised by AAM in their 2nd comments 95.

3.4.42 Whereas, the Building Permit is on hold until further follow up of the Architect with
Abu Dhabi Urban Planning Council (UPC) for their necessary approval.

3.4.43 It is worth pointing out that the delay to issue the Building Permit by AAM is beyond
the Control of the Contractor.

3.4.44 While the Contractor was following up with AAM to retrieve the Building Permit,
they conveyed to him another issue to resolve 96.

3.4.45 Whereas, the Building Permit was on hold until obtaining the Building compliance
with Estidama requirements.

3.4.46 The Contractor informed the Engineer that AAM declined to issue the Building
Permit due to this un-fulfilled requirement.

3.4.47 Under the above stated circumstances, the Contractor was continuously suffering
from the delay impact to obtain the Building Permit and lately due to the Employer
failure to design the Project in compliance with Estidama requirements as
necessary.

95
Contractor’ letter ref. PME/VVIPA/365 dated 24 February 2016
96
Contractor’s letter ref. PME/VVIPA/367 dated 25 February 2016

Date: 30 June 2017 Page 58

3.4.48 The Contractor informed the Engineer that AAM has once again declined his
application to retrieve the Building Permit due to Estidama unfulfilled
requirements 97.

3.4.49 The Contractor is not responsible for any delay that may result due to the Employer
failure to meet Estidama requirements and consequently AAM from not issuing the
Project Building Permit.

3.4.50 The Contractor notified the Engineer of the unresolved Building Permit issue due to
the design that is not meeting Estidama requirements (we refer to 3.3.102).

3.4.51 Following his signed Contract document, the Contractor totally aware of the site
conditions has clearly established his exclusion of existing services relocation 98.

3.4.52 It is clear to state that any conditions or limitations mentioned in the list of
exclusions overrule and take precedence over all other contract documents such as
Tender Queries, Specifications, BOQ, drawings, Conditions of Contract (General or
Specific).

3.4.53 Accordingly, the statement of the Engineer assigning to the Contractor original
scope of works to remove and relocate the utilities is contractually incorrect.

3.4.54 Meanwhile, the Engineer in his reply letter and his rejection of the Contractor claim
that the design did not satisfy Estidama requirements was ignoring the same cause
for which AAM did not issue the Building Permit.

3.4.55 Therefore, the Engineer rejection of the Contractor claim was unfounded and
obsolete.
79
3.4.56 The Contractor replied to the Engineer letter ref. AD1303S/4268, dated 14 March,
2016.

In the Building Permit

97
Contractor’s letter ref. PME/VVIPA/372 dated 07 March 2016
98
Engineer’s letter ref. AD1303S/42468 dated 14 March 2016

Date: 30 June 2017 Page 59

3.4.57 The Engineer, in his letter, quoted an old statement of the Contractor that says:
"works have not been affected by the delay of the Building Permit".

3.4.58 Whereas, the Contractor had clarified that it was declared in his letter ref.
PME/VVIP/362, dated 22 February, 2016, when the Building Permit was not critical.

3.4.59 Nevertheless, the Engineer reference to an old statement of the Contractor in order
to prove his works are not affected by the absence of Building Permit was a catch
out of selective quote while he missed the true context meaning and therefore
invalid.

3.4.60 Whereas, such selective statement of the Contractor does not prove that AAM
Authority would have allowed him to carry on with the construction of the Building
without Permit and against the jurisdiction they possess over the Project.

3.4.61 Accordingly, the destruction of evidence by the Engineer and his intentional attempt
to agree with a testimony that is irrelevant to an applicable legal procedure was
incorrect.

3.4.62 The Engineer emphasized that the Project works have not been affected by the
delay of the Building Permit 99.

3.4.63 Meantime, he instructed the Contractor to proceed with relocating of underground

services.

3.4.64 It is worth noting that up to 23 March, 2016, the Contractor activities were only
focused on the relocation of underground services and which are works not in his
original scope of works or intended to recover his overhead fees, indirect cost or
estimated Project revenue loss.

3.4.65 The Engineer notified the Contractor that Authority approval does not relief him
from his responsibility to submit the shop drawings and to comply with tender
documents 100.

99
Engineer’s letter ref. AD1303S/42586 dated 23 March 2016

Date: 30 June 2017 Page 60

3.4.66 The Contractor without Building Permit would have incurred overhead fees due to
prolongation period in preparing and submitting the Engineering works while being
unable to start related site activities and recover his indirect cost.

3.4.67 The Contractor notified that he cannot proceed with excavation work for the VVIP
Terminal Building prior to issuing the Building Permit from the AAM, the Authority
having jurisdiction over the Project 101.

3.4.68 Accordingly, he reserves his rights under the Contract to claim for the idle
manpower and machinery.

3.4.69 The Engineer showed pictures taken on 25 April, 2016 at the same date when the
Contractor notified that he cannot proceed further with excavation works and
therefore becoming standstill 102.

3.4.70 The Engineer admitted the impact of the delay on the Project schedule in the
absence of Building Permit and instructed accordingly the Contractor to reduce
resources to his approval and to facilitate obtaining the Municipality's excavation
permit in his attempt to mitigate the delay.

3.4.71 Meanwhile, the Contractor was notified and required to ensure completing all
pending Engineering works.

3.4.72 The Engineer instruction to the Contractor to reduce resources to his approval was
late and upcoming after the latter was committed to his recruited resources in
anticipation to execute the Project. Besides it is contractually incorrect, whereas,
the Contractor is in a Lump Sum Contract under which he is solely responsible to
deliver the Project on time and within an agreed Budget, while, the act of the
Engineer was an interference role through which he imposed to reduce the
Manpower that was planned and deemed in the intent of the Contractor necessary

100
Engineer’s letter ref. AD1303S/42877 dated 20 April 2016
101
Contractor’s letter ref. PME/VVIPA/418 dated 25 April 2016
102
Engineer’s letter ref. AD1303S/43059 dated 8 May 2016

Date: 30 June 2017 Page 61

to achieve the Contractual goals. Nevertheless, such instructed order is an

immediate exemption of the Contractor responsibility to complete the works on
time under the signed Contract while any arisen consequences due to the above
instruction of the Engineer will be subject to another claim.

3.4.73 In order to complete the Engineering works, the Contractor and Subcontractors
have deployed Engineering staff and incurred overhead fees during the prolongation
period when they were unable to start any related site activities or to recover the
indirect cost.

3.4.74 The Engineer replied to the Contractor submission of AADC document and notified
him one more time that Authority approval does not relief the Contractor from his
responsibility to submit the shop drawings and to comply with tender documents 103.

3.4.75 While it is worth reminding here that any ideal Contractor without Building Permit
would have incurred overhead fees due to prolongation period in preparing and
submitting earlier the Engineering works while unable to start related site activities
and recover his indirect cost.

3.4.76 The Engineer attached pictures of the site from 20 April, 2016 up to date (15 May,
2015) with minor work progress in demolition and excavation mostly achieved
before 25 April, 2016 104.

3.4.77 While reminding that the Contractor would have taken statutory risk in progressing
with the works without Building Permit.

3.4.78 The Engineer unfairly accused the Contractor to misrepresent the daily reports
which are stating only housekeeping and site clearing, while, he did not provide in
his letter any reliable evidence of continuous works in demolition and removing
debris out of 20 April, 2016 and 25 April, 2016.

103
Engineer’s letter ref. AD1303S/43073 dated 11 May 2016
104
Engineer’s letter ref. AD1303S/43116 dated 15 May 2016

Date: 30 June 2017 Page 62

3.4.79 The Engineer attached Estidama Approval letters for the two buildings and asked
the Contractor to try issuing the Building Permit by tomorrow 105.

3.4.80 The Building Permit was issued by AAM on 23 May, 2016, after fulfilling Estidama
Pearl Rating System by the Employer 106.

Summary

3.4.81 The Employer failed to submit timely manner his part of several documents in
pursuant to Sub-Clause 1-4 of the Conditions of Contract and which are required by
AAM Authority having jurisdiction over the Project.

3.4.82 Accordingly, the Employer caused important delay to the Building Permit during the
period that has extended from the date of instruction to the Contractor to access
the site (we refer to 3.2.7 - 3.2.10) till the date of issuing the Building Permit.

3.4.83 Meanwhile, partial demolition and excavation activities under Contract scope were
undertaken by the Contractor between 20 April, 2016, and 15 May, 2016 and which
will be accounted in the calculations of loss in section 5.

3.4.84 Eventually, the Contractor was unable to start construction works under his scope in
the absence of Building Permit except some minor works, and he incurred a
financial loss on daily basis impact from 24 May, 2015, till 23 May, 2016, due to
indirect cost, overhead fees, in addition to his lost profit over the loss period, all for
which he deserves compensation.

105
Engineer’s Email 18 May 2016 05:23 PM
106
Contractor’s letter ref. PME/VVIPA/435 dated 23 May 2016

Date: 30 June 2017 Page 63

4. DELAY ANALYSIS

4.1 Introduction

4.1.1 This section of the report establishes the Contractor’s entitlement for extension of
time under Sub-Clause 1-4, Sub-Clause 3-1, Sub-Clause 5-4 and Sub-Clause 5-7 of
the conditions of Contract as referred in the Section 2.2 of this report.

4.1.2 This delay analysis focuses on events occurring between 22 May, 2015 (Contract
award date), and 23 May, 2016, this being the cut-off date of this report.

4.1.3 Contract Conditions provide that works, including mobilisation shall be completed
within a maximum of 12 Months from 12 January, 2016, the proclaimed starting
date in the Contract.

4.1.4 The Progress could not be updated by the Contractor before 16 March, 2016 due to
works under his scope and standing idle as reported in MOM No 4.

4.1.5 Despite the fact that the Contract is signed on 322 May, 2015, the Project officially
commenced on 12 January, 2016, after 235 calendar dates of delay due to existing
utilities not relocated by the Employer. The effect of this delay to the Contractor’s
programme has been also examined in Section 4.2 of this report (Window 1). This
extended the completion date to 11 January, 2017.

4.1.6 In relation to late commencement, the Contractor first submission of its

programme, namely, Baseline Programme (BLP) was on 21 September, 2015 (we
refer to 3.2.46), and the Engineer final approval of subjected programme was on 27
September, 2016, when received by the Contractor on 9 November, 2016 107.
108
This BLP having a data datee of 12 January, 2016, was copied and called hereafter
“VVIP Terminal-OBS-3”.

107
Document Submittal ref. DS-001/R3 approved on 27 September, 2016
108
BLP, VVIP Terminal at AAIA - Original Baseline (Rev.7.9.16)

Date: 30 June 2017 Page 64

4.1.7 The summary bars (level 2) of the original BLP, “VVIP Terminal-OBS-3”, having data
date 12 January, 2016, are reflected in Figure 1 109.

Figure 1 – Summary Bars (level2) of the Original BLP (VVIP Terminal-OBS-3)

4.1.8 “VVIP Terminal-OBS-3” has shown the revised completion date of the Project on 11
January, 2017.

109
Summary Bars (level 2) of “VVIP Terminal-OBS-3”

Date: 30 June 2017 Page 65

4.1.9 The common structure of Baseline programme (BLP) is reflected in Figure 2 110.

Figure 2 – Common Structure of Baseline Programme (BLP)

4.1.10 Prior to approved BLP, the Contractor tracked the progress of its work via his
submitted BLP that was under several revisions according to Engineer comments.

4.1.11 In view of the above, the latest revision of the approved Baseline Programme that
has been updated with data date 01 April, 2017, was copied and called hereafter
“VVIP Terminal-OBS-4” 1111.

4.1.12 “VVIP Terminal-OBS-4” is considered adequate and used as a basis for delay
analysis, whereas, such an approach aims to reach robust, solid and realistic results
in relation to the delays occurring throughout the project.

4.1.13 It should be noted that the Helipad and respective Road Pavement were cancelled
from the scope of the Contractor during the stage of progress and accordingly

110
Baseline Structure (level 2)
111
BLP, MR #004_VVIP Terminal at AAIA - Progress Update_01-04-2017_Rev-00[Adjusted]

Date: 30 June 2017 Page 66

corresponding activities have been properly removed from “VVIP Terminal-OBS-4”

without disturbing the sequence adopted in the original BLP, in order to remain
consistent with actual progress and the Contractor’s stated intentions.

4.1.14 The summary bars (level 2) of the latest update BLP, “VVIP Terminal-OBS-4”, having
actual start and actual finish with data date 01 April, 2017, are reflected in Figure
3 112.

Figure 3 - summary bars (level 2) of the latest update BLP (VVIP Terminal-OBS-4)

4.2 Verification of the Baseline Programme

4.2.1 Prior to any cause and effect analysis, the Baseline Programme is required to be
verified to ensure that it is satisfactory for that purpose and that the general
sequence of the activities is considered to be logical.

4.2.2 However, Contractor’s approved BLP included actual progress. As such, in order to
determine the Critical Path at the beginning of the project, the latest update

112
Summary Bars (level 2) of “VVIP Terminal-OBS-4”

Date: 30 June 2017 Page 67

schedule “VVIP Terminal-OBS-4” was freed from its actuals and the Data Date was
changed to 12 January 2016, this being the date agreed as for the official
commencement of the works.

4.2.3 The latest update BLP freed from its actuals and having data date 12 January, 2016,
is called hereafter “VVIP Terminal-OBS-2” 113.

4.2.4 The summary bars (level 2) of “VVIP Terminal-OBS-2”, are reflected in Figure 4 114.

Figure 4 - summary bars (level 2) of the latest update BLP freed from its actuals,
(VVIP Terminal-OBS-2)
109
4.2.5 We can verify that the summary bars of the original BLP “VVIP Terminal-OBS-3”,
reflected in Figure 1, have the same completion dates of “VVIP Terminal-OBS-2”
summary bars in Figure 4. Although, both summaries have almost same starting
dates except for Handover start date due to works omission and subsequent
activities that have been cancelled accordingly (we refer to 4.1.13).

113
BLP, MR #004_VVIP Terminal at AAIA - Progress Update Free_12-01-2016_Rev-00[Adjusted]
114
Summary Bars (level 2) of “VVIP Terminal-OBS-2”

Date: 30 June 2017 Page 68

4.2.6 The critical path examination of Baseline Schedule, “VVIP Terminal-OBS-3”, was
performed in the upcoming section.

4.3 The Critical Paths

4.3.1 Prior to the delay analysis, the Contractor’s critical path has been examined.

4.3.2 The approved Baseline and the latest update BLP freed from their actuals, both with
data date of 12 January, 2016, revealed to have similar critical paths as per the
below Figure 5 &Figure 6.

Figure 5 - Longest Path of “VVIP Terminal-OBS-2”, the Latest Update BLP Freed
From Its Actuals

Figure 6 - Longest Path of “VVIP Terminal-OBS-4”, the original approved BLP

4.3.3 The Site Handover, Submission of Documents, Construction Works and Final
Handing Over constitute the critical path for the project and which sequence reveals
a common practice in construction that is well acknowledged.

Date: 30 June 2017 Page 69

4.3.4 It should be noted that, along with the construction works, the Site Handover and
the Building Permit have immediate effect on the critical path itself, therefore, the
delay caused by the Employer to these main events, has directly affected the
Contractor to endure prolongation period.

4.4 Methodology of delay analysis

4.4.1 The following section of the report presents a detailed description of the
methodology of delay analysis undertaken to determine the Contractor’s
entitlement for Extension of Time.

4.4.2 The availability of contemporaneous project records permits the selection of a

detailed delay analysis methodology adequate to provide accurate results in relation
to the Contractor’s entitlement for extension of time and additional costs. As such,
the analysis undertaken in report shall take the form of a Window analysis.

4.4.3 This method breaks the project into discrete time increments (windows) and
examines the effect of delays attributable to each project participant as the delays
occur. This method makes use of the baseline programme and the subsequent
programme updates throughout the project to determine the delays within each
Window. It is a retrospective and dynamic method of analysis that takes into
consideration the progress of work performed within each window being analyzed.

4.4.4 The Method is very effective and reliable provided that the snapshot schedules
accurately and reasonably reflect the status of the works on the respective dates.

4.4.5 The three criteria that influence the analysis’ reliability are:

- The baseline programme must be detailed and “networked”.

- Each snapshot programme must be developed from accurate and detailed as-
built data.

- The future elements of each snapshot programme should accurately and

reasonably represent the status of the works on the analysis date.

Date: 30 June 2017 Page 70

The records of the project fulfill the three conditions above (refer to the
updated BLP)

4.4.6 The windows method is the preferred method of analysis as it is dependent on

contemporaneous information and takes cognizance of the actual progress of
Works. The methodology is also recommended by the SCL Protocol 115 and consists
of the following steps:-

Step 1 - Identification of Delayed Activities

Step 2 – Establishing Fragments for each of the identified Events

Step 3 – Development of an Integrated Impacted Programme

Step 4 – Comparison with Programme Update, and

Step 5 - Determination of the Contractor’s entitlement to Extension of Time, if any.

4.4.7 Following the review of the available programme updates and the occurrence of
potential critical delay events, it is considered two windows:

- Window 1 - spanning over the period between the Contract Award date on 22
May, 2015 and the official Notice to Commence date on 12 January, 2016.

- Window 2 – spanning over the period from the Notice to Commence date and
the issuance of Building Permit date on 23 May, 2016.

4.4.8 The two windows would be appropriate to investigate the delays on the project and
to identify the impact of delay caused by the Employer on the time for completion.

115
Society of Construction Law Delay and Disruption Protocol

Date: 30 June 2017 Page 71

4.4.9 In view of the above, the Windows have been analyzed in the following manner:

Window No. Window Start Date Window End Date

Window 1 22 May, 2015 11 January, 2016

Window 2 12 January, 2016 23 May, 2016

Date: 30 June 2017 Page 72

4.5 Window 1, 22 May 2015 – 12 January 2016

4.5.1 Window 1 spans between 22 May, 2015, and 12 January, 2016, the date when the
Contractor was not provided with necessary site clearances from different
Authorities having jurisdiction over the Project to effectively commence works.

4.5.2 During the time frame of Window 1, and after signing the Contract on 22 May, 2015,
the Engineer instructed the Contractor to proceed with the survey of utilities and
foundation as the first activity to be started on 24 May, 2015 (we refer to 3.2.7-
3.2.10).

4.5.3 Consequently, the Contractor accessed the site on 24 May, 2015 in anticipation to
start the works and has undertaken all necessary arrangement to start recruiting its
crews and equipment accordingly.

Delay/Disruption Event No.1 – Employer’s delay to issue the Notice to Commence

4.5.4 As referred in Section 3.2 of this report, the commencement date of the Contractor
is delayed due to reasons summarized below:

a) Site Clearances by the Employer/AAIA &Authorities,

b) Existing utilities not relocated by the Employer

4.5.5 Despite mobilizing to site as requested by the Engineer on 24 May, 2015, the
Contractor was prevented from effectively commencing the Works due to delays in
relocating existing utilities and necessary clearances from AAIA/Authorities, matters
that are beyond the Contractor’s control.

4.5.6 The Employer recognised that the Contractor was delayed and has therefore
intentionally postponed the Project Commencement Date to 12 January, 2015,
which extended the completion date to 11 January, 2017.

4.5.7 Due to the fact that the Contractor could not commence its works on site, the
Project completion date has been moved from 24 May, 2015, to 12 January, 2016, a
T
total of 233 calendar days. This delay is considered as excusable, as the late

Date: 30 June 2017 Page 73

commencement to the works was beyond the Contractor’s control as referred in the
Section 3.2 of this report.

Delay/Disruption Event No.2 – Employer’s delay to relocate utility services

4.5.8 The Contractor arranged to mobilize more crews and equipment starting 24 August,
2015, when he got the approval for the temporary fence and was instructed of
additional works (we refer to 3.3.25 – 3.3.32), but he encountered many site
impediments due to existing utilities that were preventing him from starting or
completing the works as referred in section 3.3.

4.5.9 Due to Employer delay to relocate existing services, the Contractor was
continuously unable to start the works in his scope.

Conclusion

4.5.10 Within time span of Window 1, Contractor had fully mobilized to site, started to
pursue design works, and considered ready to commence construction works as
stated in section 3.2 &3.3 of this report.

4.5.11 During the period of prolonged mobilization the Contractor is responsible of 61 days
as per his intended original duration in his BLP activity ref. Pre-Con-1050, Project
Mobilization.

4.5.12 As a result of the late commencement, the new Project completion date is recorded
as follows:

Activity ID Description Original New Completion Impact

Completion Date Date
(Calendar Days)

Pre-Con-1100 Project Completion 23 May, 2016 11 January, 2017 233

Date: 30 June 2017 Page 74

1.1.1 As a result of the delay to mobilization, the prolonged time impact is reduced as
follows:

Activity ID Description Original Start Original Reduced Impact

Date Completion Date
(Calendar Days)

Pre-Con-1050 Project Mobilization 24 August, 2015 24 October, 2015 (61)

1.1.1 The total prolongation period of the Contractor Within time span of Window 1 is
233 – 61 = 172 calendar days.

Date: 30 June 2017 Page 75

4.6 Window 2, 12 January 2016 – 23 May 2016

4.6.1 Window 2 spans between 12 January, 2016, and 23 May, 2016, the date when the
Contractor was not provided with necessary Building Permit to effectively
commence works.

4.6.2 Eventually, the Contractor was unable to start construction work without Building
Permit. However, he started some works preparation on his own risk to mitigate
delay between 20 April, 2016 and 15 May, 2016 and standstill thereafter unable to
proceed further.

4.6.3 The Contractor only applied for the Building Permit on 28 January, 2016, and after
having received necessary documents in the possession of the Employer/Engineer.
Meanwhile, the Contractor encountered block account issue that he resolved on 22
February, 2016.

4.6.4 The Building Permit was issued on 23 May, 2016 after fulfilling Estidama Pearl Rating
system by the Employer, beyond the Contractor control.

Step No. 1 – Identification of Delayed Activities

4.6.5 During the time frame of Window 2 we can identify the following delayed activity
(Pre-Con-1000, Project Start Date) that could not be started and which is critical to
the Project completion date as per the below Figure 7.

Date: 30 June 2017 Page 76

Figure 7 – Critical activity that could not be started without Building Permit

Step No. 2 – Assessment of the impact of individual events on completion date

4.6.6 As stated previously in section 3.4 of this report, due to delay in issuing the Building
Permit beyond Contractor control, the Contractor was prevented from starting the
works.

4.6.7 As such, the Contractor was unable to start the Project.

4.6.8 In order to determine the impact of this event, “VVIP Terminal-OBS-2” programme
having a data date of 12 January, 2016 was copied and renamed as EV03.
Consequently, a new activity (Activity ID: NEW03) representing the delay associated
with the Building Permit between 12 January, 2016 and 23 May, 2016 has been
introduced to the Programme. This activity was then linked to activity ID: Pre-Con-
1000, “Project Start Date” with a Finish to Start relationship.

Date: 30 June 2017 Page 77

4.6.9 After rescheduling, the impacted programme identified this event as having the
potential of causing 132 calendar days of delay to the Completion of the Project,
extending it from 11 January, 2017 to 23 May, 2017 as shown in Figure 8.

Figure 8 – Impacted Programme due to delay of Building Permit event

4.6.10 Having established the individual effect of the delay event, we will investigate the
works in the scope of the Contractor, executed between 20 April, 2016 and 15 May,
2016, while they have been undertaken by the Contractor on his own risk and which
have served to mitigate delay impact to the Project.

4.6.11 The Concurrent works duration to calculate is 35 calendar days and which should be
deducted from 132 days, thus, 132 – 35 = 97 calendar days.

4.6.12 Same for the period of blocked Account that has extended from 28 January, 2016 to
22 February, 2016, delay due to the Contractor of 25 calendar days.

Date: 30 June 2017 Page 78

4.6.13 Therefore, the prolongation period incurred to the Contractor is 97 – 25 = 72

calendar days.

Conclusion

4.6.14 Within time span of Window 2, the Project start date was not be possible without
Building Permit and which caused 132 calendar days of delay to the Project
completion date.

4.6.15 During the incurred period of prolongation the Contractor was responsible of 25
calendar days of delay and he tried to execute some works during 35 days.

4.6.16 As a result of the Building Permit delay, the new Project completion date is
recorded as follows:

Activity ID Description Original New Completion Impact

Completion Date Date
(Calendar Days)

Pre-Con-1100 Project Completion 11 January, 2017 23 May, 2017 132

4.6.17 As a result of concurrent works by the Contractor, the prolonged time impact is
reduced as follows:

Activity ID Description Original Start Original Reduced Impact

Date Completion Date
(Calendar Days)

-- Demolition 20 April, 2016 15 May, 2016 (35)

&Excavation

Date: 30 June 2017 Page 79

4.6.18 As a result of Contractor responsibility for the blocked account the time impact is
reduced as follows:

Activity ID Description Original Start Original Reduced Impact

Date Completion Date
(Calendar Days)

-- Blocked Account 28 January, 2016 22 February, 2016 (25)

4.6.19 The total prolongation period of the Contractor Within time span of Window 2 is
132 – 35 - 25 = 72 calendar days.

Date: 30 June 2017 Page 80

5. QUANTUM ANALYSIS

5.1 Introduction

5.1.1 The preceding sections 3 and 4 identified the Employer’s acts, omissions or defaults,
i.e. the causes, which prevented the Contractor from completion of the Works
within the agreed Contract period.

5.1.2 The Contract (Sub-clause 2-3) and the laws of the Emirate of Abu Dhabi (Article 246;
‘good faith’ and Article 318; ‘unjust enrichment’) accept that where the Employer
prevents completion on time, it cannot expunge its liability merely by granting an
extension of time and paying for the direct costs calculated by reference to the rules
for valuing variations under the Contract.

5.1.3 The Employer must compensate the Contractor for the indirect costs as well as the
costs of the extended bonds period, including the value of idle labour and material.

5.1.4 The recovery of costs in contract is intended, as far is possible, to put the Contractor
in the same position as he would have been had not suffered as a result of the
Employer’s delay, impediment or prevention. In other words, the Contractor is
entitled to be put in the same position as he would have been had the Employer
properly performed under the Contract.

5.1.5 The recoverable costs are those that arise naturally as a result of the Employer’s
delay, impediment or prevention and include indirect costs.

5.1.6 Indirect costs include, but are not limited to:

i. Additional site preliminary costs and overheads, and

ii. Extended Head Office Overheads, and

iii. premium wages for working overtime or night shifts, and

iv. incremental costs, i.e. demobilisation and remobilisation of labour and

equipment, and

Date: 30 June 2017 Page 81

v. Lost efficiency costs, e.g. decreased productivity resulting from disruption,

and

vi. Lost profits over loss period, and

vii. Unearned overhead contribution, and

viii. Reduced bonding capacity.

5.1.7 It is accepted practice that delay-related losses should be calculated over the time
period that was directly impacted by the delay to progress; not the time period
between the actual project completion date and an impacted or ‘but for’
completion date.

5.1.8 The Contractor, in sections 3 and 4 of this claim, demonstrated the nature and
extent of the various delays to progress and to completion for which compensation
is now claimed and the underlying causes have in all instances been connected to an
Employer cost risk event under the Contract.

5.1.9 The reimbursement claimed in this section is quantified by identifying the labour,
plant, materials and administrative costs incurred in relation to the activities carried
out, or the duration of stoppages.

5.1.10 Consideration of the Contractor’s actual costs demonstrates that it incurred

additional and, as yet, unpaid costs in the following non-exclusive areas:

i. Direct labour costs (e.g. wage increases, non-productive overtime and

travelling time).

ii. Loss of productivity.

iii. Increased material costs.

iv. Prolonged rental of plant and equipment.

v. Prolonged period for temporary works including increased rental costs.

vi. Site establishment costs.

Date: 30 June 2017 Page 82

vii. Head Office overhead administration costs.

viii. Increased and extended insurances and bonds.

ix. Financing costs.

x. Lost opportunity and loss of profit.

5.1.11 This section of the Report deals primarily with site running costs and head office
overheads. The Contractor reserves the right to submit future claims in respect of,
but not limited to, such matters as disruption, financing, insurances, lost profit over
loss period and increased labour and material costs.

5.1.12 The claimed costs are categorised as follows:

x Prolongation/Extended Site Running Cost, and

x Head Office Overheads.

5.1.13 The Contractor claims reimbursement of these costs pursuant to Sub-Clause 2-3 of
the Conditions of Contract, to recover additional costs incurred in relation to the
EoT.

5.1.14 The Contractor claims a total amount of AED 2’939’473.97 as reimbursement for
additional costs incurred, as discussed in sections 5.2 and 5.3 below.

5.2 Prolongation/Extended Site Running Cost

5.2.1 Sections 3 and 4 of this submission demonstrates that acts, omissions or defaults on
the part of the Employer or his Engineer caused the Contractor to incur delay and/or
disruption which resulted in an extension to the period on site of two hundred and
forty fourr (244) calendar days. A consequence of the Contractor has incurred delay-
related losses that are not recovered through the measured work or through
variations.

Date: 30 June 2017 Page 83

5.2.2 As previously stated, it is accepted practice that delay-related losses should be

calculated over the time period that was directly impacted by the delay to progress;
not the time period between the actual project completion date and an impacted or
‘but for’ completion date.

5.2.3 The Contractor adopted this accepted principle when identifying his costs and
applies the identified costs to those delay periods

5.2.4 The method adopted to identify the delay costs and calculate the reimbursable
prolongation expense is described below:

x Step 1: Determine the total actual costs incurred on the Project, as

extracted from the Contractor’s accounts.

x Step 2: Determine the running (time related) cost by disallowing those

recorded costs which are fixed costs, costs which have been recovered
under the contract sum and costs which have been recovered under
variations or elsewhere. The total time related cost for each month was
then converted to a cost per day by dividing the total for each month by the
number of calendar days in that month.

x Step 3: Identify the period of compensable delay in each month. 116

x Step 4: In the final step, multiply the cost per day (see step 2) by the
number of delay days in each month (see step 3).

5.2.5 The result is a total cost for prolongation incurred during the period of delay,
calculated in the period when the delay occurred.

116
See section 4 (Delay Analysis)

Date: 30 June 2017 Page 84

5.3 Head Office Overheads

5.3.1 As a result of delays to the Project, the Contractor had to provide extended Head
Office services and incurred additional Overhead costs, over and above what could
reasonably have been allowed for.

5.3.2 Similar to the Contractor’s claim for prolongation cost, the Head Office Overheads
claim is based on actual cost data, extracted from the Contractor’s audited company
accounts.

5.3.3 The Contractor has assessed the claim for additional Home Office Overheads as
follows:

x Step 1: Determine the actual Head Office Overhead costs incurred on the
Project.

x Step 2: Disallow any fixed costs and costs unrelated to delay. The result is a
total running (time related) cost per month, which was then converted to a
cost per day by dividing the total for each month by the number of calendar
days in that month.

x Step 3: Identify the period of compensable delay in each month. 117

x Step 4: In the final step, multiply the cost per day (see step 2) by the
number of delay days in each month (see step 3).

5.3.4 The result is a total cost for prolongation incurred during the period of delay,
calculated in the period when the delay occurred.

117
See section 4 (Delay Analysis)

Date: 30 June 2017 Page 85

5.4 Prolongation Cost Incurred

5.4.1 A summary of the ascertained compensable cost is as follows:

Total
Compensable
Window Period Reimbursable
Delay (days)
Cost (AED)
1 24 May, 2015 to 11 January, 2016 172 1’935’311.01
2 12 January, 2016 to 23 May, 2016 72 1’004’162.95
Compensable Cost 2’939’473.97

5.4.2 The Contractor claims a total amount of AED 2’939’473.97 for prolongation cost, as
detailed in the above table and substantiated in attached Appendix 3.

5.4.3 Detailed calculations are included at Appendix 2 (Quantum Analysis).

5.5 The Contractor is not liable for any Liquidated Damages

5.5.1 As discussed in section 4, the Contractor is entitled to an extension of the

completion date until 23 May 2017 (we refer to 4.6.9).

5.5.2 Consequently, no liquidated damages (LDs) are due to the Employer.

5.5.3 In any event, based on the results of the detailed delay analysis (see section 4); the
Contractor is not liable for any LDs to the Employer.

Summary of claimed amount

5.5.4 As a result of delays to the Project, the Contractor incurred additional Site Running
Cost and Office Expenses, over and above what could reasonably have been allowed
for.

Date: 30 June 2017 Page 86

5.5.5 The Contractor submits that he is entitled to these additional costs, in accordance
with Sub-Clause 2-3 of the Conditions of Contract.

5.5.6 The relief sought by the Contractor, as quantified in this section, amounts to AED
2’939’473.97.

5.5.7 The Contractor reserves its right to adjust the total amount claimed to account for
any delays incurred beyond 23 May 2016.

Date: 30 June 2017 Page 87

6. CONCLUSION

6.1.1 Throughout the duration of the Project, the Contractor experienced numerous
Employer caused delay and disruption events.

6.1.2 The impact of these events has been severe and has curtailed the Contractor’s
capabilities to achieve the contractual completion date.

6.1.3 The Contractor acted in good faith and took proactive steps to mitigate the effects
of the delays caused by the Employer. Although this measure did not ultimately
reduce the overall Contract duration, it stands as further evidence of the
Contractor’s continuous efforts to mitigate the delays for which it was not
responsible.

6.1.4 According to the Delay Analysis, the Contractor is entitled to an extension of time of
244 days.

6.1.5 Consequently, the Contractor submits that the completion date be adjusted to 23
May 2017.

6.1.6 The Delay Analysis conducted and described in this Report deals with delays
incurred to the Works up until 23 May 2016. Any delays incurred after this date will
be subject of a separate Delay Analysis.

6.1.7 The Contractor has suffered, and continues to suffer, significant loss as a direct
result of these delays.

6.1.8 The Contractor is entitled to recover the additional cost and losses, in accordance
with the Contract.

6.1.9 The relief sought by the Contractor as quantified in section 5 of this Report,
amounts to Two Million Nine Hundred and Thirty Nine Thousand Four Hundred
and Seventy Three, 97/100 Dirhams (AED 2’939’473.97)

Date: 30 June 2017 Page 88

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