Status of the programme

It is clear that there is a general misconception in the construction industry as to the status of the programme. Many people remain of the view that the programme is a contractual document. What it should be is simply a management tool to enable the contractor to properly plan his work and to assist the Principal Agent to assess the contractor’s progress towards completion by the completion date. In addition it provides the Principal Agent with the basis for assessing claims for extensions of time.

Generally, contracts create an obligation on the contractor to create a programme within the time period stipulated. This time period is usually specified as being a number of days after the award of the contract itself. Whilst the obligation to provide a programme is clearly a contractual obligation and failure to provide the programme would be a breach of contract, the programme itself does not become a contractual document if provided in accordance with the provisions of the relevant clause.

It would be a relatively easy matter to make a programme a contractual document, but the question must be asked, why on earth would the parties want to do so? For example, a programme submitted with a tender would become a contractual document if the tender, inclusive of the programme, were accepted by the Employer. It would be relatively easy to draft a clause within the contract making the programme a contractual document. None of the four CIDB approved contracts do this. The second and third editions of the ECC (part of the NEC suite of documents) as well as GCC 2004, require the contractor to produce the programme within the time period stipulated in the Contract Date. FIDIC 1999 requires the contractor to produce a programme within 28 days of receipt of the Letter of Acceptance, whilst the JBCC 2000 series, in the general conditions of contract, has never heard of a programme!

It is clear from the above provisions that the contracts themselves recognise the advisory status of the programme and deliberately avoid making the programme a contract document. Usually, where there is a requirement for “acceptance”, the “acceptance” is by the Principal Agent, who is NOT a party to the contract but simply a role player. Since, in the absence of an express provision to this effect, only the parties to the contract can amend the terms of the contract, this is further evidence of the non contractual status of the programme.

What would the consequences of making the programme a contractual document be? Firstly, any change to the programme would require the consent of the parties since such a change would be an amendment to the contract. Imagine the consequences of the Employer refusing to allow the programme to be amended. Secondly, the start and finish of each activity would become a contractual obligation and both parties would be in danger of breaching the contract if either the contractor did not start or finish an activity on the date illustrated in the programme or the Employer could not give access to allow the contractor to start each activity. This would not only be a major inconvenience it might also give rise to a claim for damages arising out of the above failures. Such rigidity is clearly unwelcome and it is therefore appropriate to maintain the programme as it is intended to be, an advisory document only.

Of course, Employers may well want to see a programme together with the tender submission. In such a case the Employer should make it clear that the programme submitted will not be incorporated into any subsequent contract, and where the Employer does not make this clear then the tenderer should stipulate that the submission is for information only and that should it be successful it will submit the requisite programme in accordance with the relevant provisions of the contract.

Exactly the same considerations apply to the submission of Method Statements. These should also never be made contractual documents. They should also be advisory only and the contractor should be free to amend its Method Statement to deal with changed circumstances on site. The dangers inherent in making a Method Statement a contractual document were well illustrated in the Yorkshire Water Authority (YWA) case where  Sir Alfred McAlpine and Son tendered for the construction of a culvert at Grimwith reservoir in Yorkshire and submitted a programme and a Method Statement with its tender. McAlpine’s tender was successful and the YWA accepted their tender together with the programme and Method Statement thus incorporating both as contract documents. The Method Statement stated they intended to construct the culvert working upstream. When they came to construct the culvert there was too much water flowing downstream to allow McAlpine to construct working upstream. McAlpine requested a variation order to allow them to work downstream arguing that they were contractually obliged to work upstream and this was physically impossible. The Engineer argued that it was McAlpine’s choice as to how they constructed the culvert and refused their request probably anticipating a significant claim in respect of such V.O. In the face of the impasse, McAlpine proceeded to arbitration and the Contractor subsequently appealed to Court. The Court upheld their position. Although the Court application does not reveal the details of the monetary consequences of the change I am certain they were not without significance. Had the Method Statement been non contractual, then it would have been up to the Contractor to deal with the situation and amend its method of working to suit the conditions encountered. The Employer was accordingly significantly disadvantaged by locking the Method Statement in as a term of the contract.

Yorkshire Water Authority v Sir Alfred McAlpine and Son (Northern) Ltd (1985) 32 BLR 114

There is simply no benefit to either party to make the programme or Method Statement contractual documents. They should be treated as what they are, merely advisory documentation which neither requires contractual status nor should they be accorded such status. Our own Courts have also supported the above contentions byemphasising the fact that most programmes are not adequate for placing the Employerin mora.  In the Transvaal provincial Division of the High Court, coincidentally also a McAlpine case versus the Transvaal Provincial Administration in respect of the construction of the road from Pretoria to Bronkhorstspruit, the Court stated:

“The obvious purpose of such a programme is for the employer and the engineer to see that the contractor intends to execute the work at a sufficient rate or speed to complete the contract within the allotted time shown in the programme.  Generally speaking, it is not intended to serve as an interpellatio.  However, such a construction programme, depending on the details it contains and the way in which it is phrased, can fulfill the function of an interpellatio, but, in my view, that is not the position in the present instance.”.

Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1977 (4) SA 310 (T)

There are enough complications in the construction industry without creating more unnecessary ones and contractors and Employers alike would be well advised to avoid the pitfalls which can arise by introducing programmes and Method Statements as contractual documents.