OPI NION
‘ T HE OGP S HOULD M IND IT S OW N B US INE S S ’ JOHN FFF O’BRIEN writes that the Office of Government Procurement should refrain from interfering with live contracts between public works employers and private contractors.
I
am in somewhat of a unique position to have advised over the past 12 months on a significant number of matters where public works employers are in dispute with contractors in respect of Covid-19 related claims. I am disappointed to say that my opinion is that the positions being adopted by public sector employers do not stand up to any objective scrutiny and certainly not when properly viewed in the context of the applicable contract terms.
WHAT CONTRACTORS ARE CLAIMING
The Covid-19 pandemic has essentially brought about three separate heads of claims for contractors, all of which fall under events listed in Part 1K of the Schedule to the Public Works Contract (PWC). These are: 1. Event 3: Suspension – This occurs on account of the closure of sites in periods of lockdown. 2. Event 1: Change Order – Due to imposed constraints resulting from the employer requiring the contractor to return to complete the works before the Covid pandemic event has ended. 3. Event 1: Change Order – Due to imposed constraints as a result of the lack of availability or increased costs of material or labour. An Event 3 in Part 1K of the schedule designates “Yes” to a delay entitlement and “Yes” to a compensation entitlement. This means that the contractor is entitled both to an extension of time (EOT) and
40 irishconstructionnews August 2021
compensation because of the event. In other words, the date for “Substantial Completion” is extended proportionate to the event’s impact, and the contractor gets paid its incurred costs as a result of the event. In the context of Covid, this means that the contractor gets sent home, gets an EOT for the duration that they are at home, and gets paid while at home. And An Event 1 is a Change Order resulting from either additional scope or imposed constraints that change how the works are to be executed, and Part 1K of the Schedule designates “Yes” to a delay entitlement and “Yes” to a compensation entitlement.
THE APPROACH OF PUBLIC SECTOR EMPLOYERS...
Notwithstanding what the contract actually says, I have found that in defence to these claims, public sector employers generally deny entitlement “across the board” using a mixture of the following reasons: (i) “Sorry, but our hands are tied”, the Office of Government Procurement (OGP) won’t allow any compensation for any Covid-19 related claims whatsoever, and any and all such delays associated with the Covid-19 shutdowns are an Event 15*, not an Event 3 and “We can give you time but not any money”. And, “We are prohibited from discussing the matter any further”. *An Event 15 is a “Delay to the works caused by the order or other act of a court or other public authority exercising