CASE HISTORY UWI Contractors v Trin C.C.

1 INTRODUCTION
Major redevelopment of Trin City has been funded by a mixture of public and private finance. The redevelopment has necessitated the
award of ten separate contracts for schemes including retail development, transportation, drainage and coastal improvements. In order
to facilitate ease of construction, Trin C.C. has acted as Employer for every scheme in the overall programme.
UWI Contractors submitted successful tenders for three of these schemes and were subsequently awarded a single contract to include
the schemes known as TDS, Penguin and Tower.
This case history relates to the construction of reinforced concrete basements, which form part of each of these three schemes and were
to be constructed within sheet pile cofferdams.
2 CONTRACT
The contract comprises a tender submitted on 19 January 2005 by UWI Ltd ('the Contractor') to the Trin City Council ('the Employer')
which includes the schemes known as TDS, Penguin and Tower, and the employer's implied acceptance thereof in that the
employer's engineer, Thomas Telford ('the Engineer'), instructed the Contractor to commence work on 1 April 2005. Analysis of the
tender total and the accompanying bill of quantities valued the three basements in the scheme at $tt2.786 million. The time for completion
for the basements stated in the Appendix to Form of Tender is 18 months.
3 The contract incorporates the FIDIC Conditions of Contract for Construction
For Building And Engineering Works Designed By The Employer Multilateral Development Bank Harmonised Edition March 2006.
Other documents incorporated in the contract are the drawings, specification and bill of quantities, and the contractor's letter dated
19 January 2005 wherein those other documents are listed.
4 NARRATIVE
Work on site was commenced in accordance with the engineer's instruction on 1 April 2005. On 7 April 2005 the contractor submitted to
the engineer a programme of the works pursuant to Clause 8.3 of the conditions of contract, which programme provided inter alia for work
on the basement at TDS to be commenced on 1 June 2005 and to be completed by 31 October 2005.
Thereafter the basements at Penguin and at Tower were programmed to be constructed, in that order, each basement requiring 20
working weeks of construction time. No comment on the programme was made by the engineer at any time.

5 By 20 May 2005 the access road to the TDS basement had been constructed and steel sheet piling, a piling hammer and crane,
together with ancillary equipment, had been assembled on site in preparation for construction of the temporary cofferdam needed for
the deep excavation, all in accordance with the programme.
6 On 25 May 2005 the engineer telephoned the contractor's agent, Mr Brassey, requesting him to defer work on the TDS basement
because of impending alterations to the design, and to start work instead on one of the other basements. Mr Brassey replied that
that alteration would result in substantially increased costs and that he was unwilling to comply unless instructed to do so. The
Engineer thereupon instructed Mr Brassey to defer work on TDS basement, which instruction was confirmed in the contractor's letter to
the engineer of 26 May 2005.
7 In that letter the contractor pointed out the probable consequences of the instruction as follows:
The contractor had intended to construct the three basements consecutively because they all required the same type of equipment
which could therefore be used three times. TDS basement had been programmed for construction before the other two firstly because
it involved the deepest excavation which determined the length of the steel sheet piling needed for the temporary cofferdam to support
the sides of the excavation. Because of the nature of the subsoil as indicated by the borehole logs it was likely that driving conditions
would be hard, and that the steel sheet piling would sustain damage during driving. By using the piles at the deepest cofferdam first it
would be possible to burn off the damaged ends after the first use and still have piling of sufficient length for the subsequent
shallower cofferdams. Hence the change could result in a need to buy additional piling for the TDS cofferdam since the piling already on
site would have to be used initially for one of the shallower cofferdams if further delay was to be avoided.
Secondly it had been intended to construct the TDS cofferdam between the months of June to October 2005 inclusive because the
cofferdam is situated on low ground with a groundwater level that rises during the rainy season. Any substantial deferment was likely to
throw the construction of the TDS cofferdam into the rainy season and hence to incur the risk of flooding.
8 In compliance with the engineer's instruction steel sheet piling, pile driving equipment and the crane were moved to the site of the
Penguin cofferdam as soon as an access road thereto had been constructed. Thereafter construction of the Penguin cofferdam
proceeded without incident except that considerable damage was caused to the steel sheet piling during driving, as had been
expected. Work on the Penguin cofferdam was commenced on 20 June 2005 and was completed on 31 October 2005.
9 Meanwhile the engineer had in a letter dated 6 October 2005 stated that there was now no intention to alter the design of the
TDS basement and that work on that cofferdam could therefore proceed.
10 After having extracted steel sheet piles from the Penguin cofferdam it was found that 30 of the 56 piles used had had to be cut to such
a length that they were not suitable for use in constructing the TDS basement cofferdam. Replacement piles were ordered immediately
but were not available on site until 6 December 2005.
11 Meanwhile driving of the original undamaged piles had proceeded and the TDS cofferdam piling was completed by 18 December
2005. Excavation within the cofferdam was commenced after the Christmas/New Year holiday and was completed by 22 January 2006,
by which date timbering inside the cofferdam had been partially fixed but had not been secured against flotation.
12 On 24 January 2006 heavy rainfall and high groundwater level resulted in the site flooding to a level approximately 2 meters above the
top of the cofferdam, flooding that cofferdam and causing the timbers to float to the surface. In consequence the sides of the
cofferdam collapsed causing extensive damage to the steel sheet piling.
13 As soon as weather conditions permitted a heavier crane and a pile extraction hammer were brought to the site and the steel sheet
piling, which was then badly damaged, was removed.
14 Meanwhile new steel sheet piling was ordered as soon as it became clear that the original piling was so badly damaged as to
be unusable, and was delivered to the site on 26 February 2006. Construction of a new cofferdam at the TDS site was however delayed
by the need to drive steel sheet piling through the irregular ground surface resulting from the collapse, and using a crane capable of lifting
the piling hammer from a greater radius because the crane was not then able to stand close to the cofferdam as originally intended. Work
on the construction of the new cofferdam was not completed until 14 April 2006 and excavation was completed on 29 April 2006.
15 By letter dated 1 February 2006 the contractor gave notice under clause 13.3of the contract that a delay had been caused as a result

of the events outlined in paragraphs 6 to 14 above, and requesting an extension of time of 30 weeks.
16 The engineer failed to reply to that letter until 14 April 2006 when, in response to a telephoned request from the contractor to grant
the extension applied for, the engineer refused any extension stating that the delay had been caused by the inadequate design of
the cofferdam timbering, for which the contractor was responsible.
17 Construction of the TDS basement was further delayed by late issue of reinforcement detail drawings, of which notice had been given
by the Contractor to the Engineer that such drawings were required no later than 4 January 2006. This was necessary because
the contractor intended to obtain reinforcement ready cut and bent from the supplier, who quoted a delivery period of 8 weeks from receipt
of full details and schedules. Reinforcement detail drawings and schedules were not in fact received by the contractor until 4 April 2006;
and although the contractor immediately ordered the reinforcement from his supplier it was not delivered to the site until 7 June 2006.
18 Thereafter construction work at TDS proceeded according to a revised programme prepared by the contractor on 8 June 2006 and
issued on that day to the engineer except that completion of the basement was further delayed by the late delivery of mechanical
equipment from the nominated sub-contractor Fulflow Ltd, against whom the contractor is pursuing claims in respect of delay
and consequential cost.
19 Reinforced concrete work at the TDS basement was completed on 30 September 2006. Building work in the basement
continued thereafter until 25 November 2006, and mechanised installation until 20 January 2007.
20 Making good and internal decoration after the completion of the mechanical installation took a further two weeks. The contractor
applied for and was granted a certificate of completion which was effective from 3 February 2007.
21 The engineer failed to comply with the requirements of clause 13.3 of the contract in that he failed to notify the contractor of
his assessment of the extension of the time for completion to which the contractor was entitled on the due date for completion which, in
the absence of any extension, remained 30 September 2006, or as soon as possible thereafter.
22 On 8 February 2007 the engineer wrote to the contractor stating that completion of the works was not achieved until 18 weeks after
the due date for completion and that accordingly he had advised the employer that he was entitled to deduct liquidated damages at the
rate of $tt50,000 per week for 18 weeks, making a total deduction of $tt900,000, which sum has been withheld from sums otherwise due
to the Contractor.
23 The contractor claims the following:
Pursuant to Clause 13.3 of the contract, a nett extension of time of 12 weeks, after allowing for available float time, in respect of delays
resulting from the engineer's oral instruction of 25 May 2005 confirmed by the contractor's letter of 26 May 2005, and consequential
effects thereof, to suspend progress on the TDS basement, together with the extra costs incurred by the contractor in giving
effect to the engineer's instruction; of which site costs amount to $tt823,800, particulars of which are given in Appendix 1 hereto.
Pursuant to clause 8.4 of the contract, an extension of time of 13 weeks in respect of the late issue of reinforcement details of the
TDS basement together with extra costs incurred by reason of the said delay; of which site costs amount to $tt276,600, particulars of
which are given in Appendix 2 hereto.
Pursuant to clause 8.7 of the contract reimbursement of the sum of $tt900,000 deducted by the employer from payments otherwise due
to the contractor as liquidated damages in respect of late completion of the works.
Off-site overheads in respect of the total period of delay for which the employer is responsible, namely 18 weeks, in the sum of
$tt303,260, particulars of which are given in Appendix 3 hereto.
Pursuant to clause 14.8 of the contract, interest on the amounts due to the contractor in the sum of $tt201,160, particulars of which are
given in Appendix 3 hereto.
APPENDICES
(All of which will be supported by documentary and other evidence)

Appendix 1: Costs arising from engineer's suspension order

Labour:

Rate/man-week

Man-weeks

1 no. Ganger
2 No. Plant operators
4 No. Labourers

2,800
2,600
2,400

12
24
48

Total labour costs

Amount
33,600
62,400
115,200
211,200

Plant:

Rate/week

Weeks

Crane, tracked 20t

9,000

12

Pile extractor 1.5t

1,000

6,000

Piling hammer 2.0t diesel

6,000

48,000

Pump, 102mm diesel

600

12

7,200

Total plant costs

108,000

169,200

Materials:

Rate

Quantity

Steel sheet piling

4,500/t

34t

Timbers

2,500/m3

12m3

Total material costs

153,000
30,000
183,000

Site Overheads:

Rate/week

Weeks

Agent (including car)

3,200

38,400

Site engineer

2,800

33,600

General foreman

3,000

36,000

Secretary/clerk

2,200

26,400

Tea boy/cleaner

2,000

24,000

Office incl services

1,600

19,200

Site workshop/stores

2,500

30,000

Contract insurances

2,800

33,600

Performance bond

1,600

19,200

Weekly site overheads

21,700

12

Amount

$tt260,400

Summary
Labour

211,200

Plant

169,200

Materials

183,000

Site Overheads

260,400

Total of site costs

$tt823,800

Appendix 2: Costs arising from late issue of drawings

(Drawings required for constructoin of the reinforced concrete sub-structure of TDS basement were issued 13 weeks late. The nett delay to the
works was 6 weeks).
Labour:

Rate/man-week

Man-weeks

1 No. Ganger

2800

16,800

1 No. Plant operator

2600

15,600

2 No. Craftsmen

2600

12

31,200

3 No. Labourers

2400

18

43,200

Total labour costs

Amount

$tt106,800

Plant:

Rate/week

Weeks

Crane, tracked 5t

6000

36,000

Pump, 102mm diesel

600

3,600

Total plant costs

Site overheads (details as Appendix 1)

$tt39,600
6

$tt130,200

Summary
Labour
Plant
Site overheads
Total of site costs

106,800
39,600
130,200
$tt276,600

Appendix 3: Off-site overheads and interest

Total of claim under clause 13.3 (Appendix 1)

823,800

Total of claim under clause 8.4 (Appendix 2)

276,600

Total of site costs (including site overheads)

$tt1,100,400

Add for off-site overheads in respect of a delay of 18 weeks:

using adjusted Hudson formula: Contract value $tt27,860,000
HO overheads percentage (including 1% profit)=6%
Total of site costs = $tt27,860,000 x 100 / 106 = $tt26,283,020
HO overheads claim = 5% x 26,283,020 x 18 / 78 =

303,260

Claim for reimbursement of liquidated damages

900,000

Total of claims excluding interest

$tt2,303,660

Interest (calculated up to 30 June 2007)

Interest of claim

When due

%(Mean)

Amount

Clause 13.3

28.11.2005

10.5

136,960

Clause 8.4

28.07.2006

9.5

24,090

Clause 8.7

28.02.2007

10.0

30,000

Off-site overheads

28.02.2007

10.0

10,110

Total of interest

Total of all claims

$tt201,160

$tt2,504,820