I was tucking in my Power Ranger last night when he asked me, "Dad, if the clock is unplugged, does time stand still?" I was awed by the brilliant question by this six-year-old mind. "Of course not," I responded. "Okay, Dad. Goodnight." As simple as that, my genius went to sleep.
On a construction project, time is one of the most important variables that must be considered by the parties. IT DOES NOT STAND STILL. Here are some things to think about when allocating risk in the parties’ agreement relating to time:
- Commencement Date. Although the parties’ agreement may define the Commencement Date, it is better to tie this date to when the contractor receives a Notice of Commencement from the owner. An often-litigated issue is when the contractor actually begins the work on site and whether there were delays prior to commencement. Try to clarify when the clock starts ticking for purposes of contract time.
- Liquidated Damages. In the world of litigation, liquidates damages ("LDs") are a fruitful area of disputes. The LD provisions in the prime contract are often incorporated into subcontract agreements so that delays caused by subcontractors will be grounds for the prime contractor to assert claims against the responsible subcontractor. As a practical matter, the contractor should make sure any changes by the owner or delays beyond the reasonable control of the contractor allow for a time extension in order to get relief from any assessment of LDs.
- Scheduling Obligations. Make sure you identify scheduling obligations, whether you are a prime contractor or subcontractor. In some instances, you may not have a contractual obligation to maintain a critical path schedule, but you will want to do so nonetheless for claims support. In other words, you will want to maintain an accurate schedule in order to pursue claims even if you are not contractually required to produce a schedule for the owner.
- Notice Provisions. Time is also important from the perspective of providing notice of claims. It is important to identify the notice provisions in the contract and outline them in a separate document. When all your project members have access to this "notice" document, they can track the dates when notice should be given for particular events (i.e., notice of any delay affecting time of completion or the cost of the work shall be given within seven days of the event giving rise to the claim).
These are just a few of the important "time " considerations on a construction project. What tips do you have when discussing time?