Voice of
the client

How should we deal with the uncertainty of project completion dates? Is there an approach we should take in estimating programme and financial impact?

Ross Gates
E: ross.gates@rlf.co.uk
T: +44 (0) 20 7566 8400
M: +44 (0) 7973 490 890

Top-down approach

Since Lockdown, there has never been so much ‘free advice’ from the construction industry’s legal community on a single subject. Even BREXIT did not receive the coverage that COVID-19 now has. Whilst incredibly useful, these legal articles tend to take a top down approach, advising Employers under building contracts and Main Contractors on matters that can help protect them from inherent contractual risk in untested scenarios. Many advise:

  • Check contract terms
  • Ensure all necessary contractual notifications are in place
  • Keep accurate records
  • Put robust mitigation measures in place.

Pragmatic approach

Our goal is to get our clients to their destination with the least possible pain. This often involves adopting a more pragmatic and nuanced approach that also considers the need to balance short-term and longer-term business relationships, reputational considerations, and the basic practicalities of overcoming project challenges.

We strongly recommend that all this needs to be done in an open and collaborative environment, whilst not compromising the contractual positions for any party. If parties feel they can promote their ideas without risking their contractual rights and protections, then we will all be doing the right thing.

We don’t necessarily take the straightest route along that journey, but it is our job to help project teams to identify and mitigate potential pitfalls BEFORE they happen and not just find solutions to problems WHEN they happen.

Factors to consider when estimating programme and financial impact

No two project programmes are the same and financial impact will vary, but there are common factors to consider:

  • Understand your programme and cost risks – ensure everyone is ‘on the same page’
  • Understand the true critical path for the programme on your project
  • Scenario test programme risks – seek to eliminate where possible, include float where not
  • Scenario test cost risks – seek to eliminate where possible, include risk allowance where not
  • Test supply chains – for surety of programme, fabrication, logistics and delivery
  • Test supply chains – for financial stability
  • And then…
    • Keep comprehensive and accurate contemporaneous records
    • Keep comprehensive and accurate contemporaneous records
    • Keep comprehensive and accurate contemporaneous records!

We have always had uncertainty in our industry and projects have always demanded a positive and collective approach to de-risking the project life cycle. COVID-19 is one more project challenge. The best route to managing that challenge is to adopt constant, open, practical and challenging dialogue throughout. I strongly recommend that you strive to identify the true nature of risks and the opportunities to mitigate them, rather than default to a position that focuses on which clause of a contract will present the best opportunity to either off-load responsibility or recover costs.

Ross Gates
E: ross.gates@rlf.co.uk
T: +44 (0) 20 7566 8400
M: +44 (0) 7973 490 890

Other questions in the series

Business
Continuity

Programme Delay
Benchmarking