CONSTRUCTION — contractor engaged to engineer, procure and construct power station in remote WA for $78 million — small site nestled between two existing power stations operated by Alinta and BHP — principal says it will move existing underground services before the contractor starts, to avoid problems with neighbours — extensive delay until underground services are removed, ultimately with the assistance of the contractor — contractor serves extension of time (EOT) claim on principal but omits to copy superintendent — contractor required to undertake work on Alinta’s existing power station — principal obliged to, but fails to, perform electrical isolations for the contractor to undertake works — contractor asked to perform work near live cables — refuses — delay while isolations done — COVID-19 border restrictions and quarantine interrupt interstate fly-in fly-out (FIFO) workers getting to remote site — local labour hired but less productive, causing delay — complex commissioning and testing process for new power station — principal required to, but fails to, make electricity network available during this process, causing delay — when was practical completion achieved — is contractor entitled to EOTs and delay costs — yes.
SUPERINTENDENTS — parties agree that superintendent’s determinations may be challenged in Court — how Court to approach its task at [12]-[18] — principal to ensure superintendent “acts honestly, fairly and reasonably and arrives at reasonable determinations” — role of superintendent at [19]-[21] — superintendent “overwhelmed” and makes no determination — replaced — second superintendent privately indicates to principal that inclined to issue certificate of practical completion — superintendent immediately replaced — private communications between superintendent and one contracting party undermines role of superintendent — removing a superintendent to stop them giving a determination that you do not want effectively destroys the role.
EXTENSIONS OF TIME — time impacted analysis at [407]-[408] — programs — who ‘owns’ the float at [130]-[134] — whether change of logic in subsequent program may indicate baseline program should not be used — yes, at [832] — whether it matters that the work was ultimately done differently — no, at [834] — whether EOT should include loss of ‘activity float’ — no, at [524]-[526].
DELAY COSTS — “reasonable additional costs and expenses directly incurred … as a result of that delay” includes usual margin — contractor not obliged to provide goods and services without gain, absent clear words at [536]-[538] — contractor entitled to overheads and profit margin, at [544]-[547] — whether delay costs include lost days of ‘activity float’ — no, at [528].
Quick Take
1In an EPC contract providing that the principal may issue a notice to proceed 'at its sole discretion', the implied duty to cooperate obliges the principal to be satisfied, before issuing the notice, that it will be in a position to provide the contractor with access to the site sufficient to perform the work within the contractually stipulated period — the discretion does not relieve the principal of this obligation.
2Where a contract entitles a contractor to 'reasonable additional costs and expenses directly incurred' as delay costs for compensation events, those costs include the contractor's usual profit and overheads margin; a contractor is not obliged to provide goods and services on a non-profit basis during periods of principal-caused delay absent clear exclusionary language (following Built Qld v Pro-Invest).
3A principal who chooses to have a disputed EOT claim determined substantively by a replacement superintendent, after initially relying on the contractor's failure to copy the original superintendent as a procedural bar, waives reliance on the conditions precedent — and replacing a superintendent to prevent them issuing a determination the principal does not want effectively destroys the superintendent's role.
