DVPM - Project management specialists in construction
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info@dvpm.co.za
PO Box 2541 • Cape Town • 8000
m. +27 82 449 7470 • f. +27 86 2608649
DVPM is a goal-orientated project management team which integrates all services relating to the built environment, from concept through to completion. We work closely with the client to ensure expectations are managed and strategic objectives are met. Our role is to streamline operations and be a single point of contact for all projects stakeholders. DVPM was established in 2001.

RESEARCH PROJECTS



Professional Indemnity Insurance –  Risk Model for Underwriting (current)
The purpose of the project is the development of a qualitative risk-based assessment model for the evaluation of risk in regard to applications received for "Single Project Principal Controlled Professional Indemnity Insurance". The model is focussed on the underwriting of risk in regard to "….any negligent act, error or omission in the professional duties undertaken by the Principal and/or Insureds".

The project is premised on an understanding that insurance risk related to professional duties on projects in the Built Environment should consider the project type in relation to the nature, level and competence of the professional services required. In other words, that a balance should be achieved between the project risk and the service risk.

The second issue is that the risk profile of any project is not static over time. It changes as the project passes through its development cycle. The risk profile of the project at any given stage, therefore, is the balance achieved between project and service risk, except that, in making the assessment, consideration should also be given to the effect(s) of the build up of unresolved risk - together with the risk predicted for the forthcoming and/or ensuing phases.

The project commenced in 2008 and is still on-going (see downloadable PDF of project plan)
The Formulation & Adjudication of Delay & Disruption Claims (current)
Construction contracts contemplate circumstances under which it is possible for the Contractor to recover the costs of delay and disruption, and/or to have the period for the completion of the Works extended. Whereas much work has been published in other parts of the world to assist contractors and principal agents both in the formulation and adjudication of these claims, very little definitive material exists in South Africa to assist with in this process.

DVPM decided at the beginning of 2010 to prepare a handbook for industry.

A few key concepts have been resolved thus far and are proving useful in giving direction to the project:

a. Delay
Delay causes prolongation of the period stipulated for the completion of the works under the contract. Entitlement to prolongation of the contract period depends on the terms of the contract and the cause of the prolongation. Prolongation costs may be caused by any Employer Risk event – a variation, a breach of contract, or any other identified provision in the contract. Prolongation, however, does not automatically lead to compensation on cost. For this reason, whether the prolongation is governed by a provision in the contract or a breach of the contract, it is up to the Contractor to demonstrate that it has actually suffered loss and/or expense before it becomes entitled to compensation, that is unless the contract provides otherwise.

b. Disruption
Disruption is often treated by the construction industry as if it were the same thing as delay. They are, however, two separate matters. Delay is lateness. Disruption is the loss of productivity arising from disturbance, hindrance or interruption to the contractor's normal working methods. Disrupted work, therefore, is carried out less efficiently than it would have been had it not been for the cause of the disruption.

Disruption compensation, however, is only recoverable to the extent that the Employer caused the disruption. Most standard forms of contract do not deal expressly with disruption, but disruption may be claimed as a breach of the terms generally implied in construction contracts that the Employer will not prevent or hinder the contractor in the execution of its work.

c. Acceleration
Acceleration normally occurs when a contractor must expedite the pace of the project's construction. This acceleration may occur when a delay occurs, but the scheduled end-date is not modified to accommodate the delay. In order to meet the contract mandated completion date, the contractor must increase its rate of progress to make up the lost time. When the Employer directs acceleration to offset delays that are not the contractor's fault, then the acceleration is considered to be a directed change, and the contractor is entitled to reimbursement for the extra work. If the contractor causes the delay, the cost of acceleration is non-compensable.

d. Constructive Acceleration
Where the contract provides for acceleration, payment for acceleration should be based on the terms of the contract. Where the contract does not provide for acceleration but the Contractor and the Employer agree that accelerative measures should be undertaken, the basis of payment should be agreed before the acceleration is commenced.

Acceleration frequently becomes an issue when constructive acceleration occurs. Constructive acceleration occurs when:
  • the Contractor is delayed for reasons entitling it to a time extension;
  • the Contractor requests a time extension;
  • the Employer fails or refuses to grant a time extension;
  • the Employer directs the contractor to complete work per the original schedule or indicates intent to penalize contractor for a late finish, typically via liquidated damages (i.e. through the application of a daily cost penalty); and
  • the Contractor endeavours to accelerate and incurs costs in doing so.
  • All of these events must occur for a Contractor to demonstrate constructive acceleration.
However, it is not recommended that claims be made for so-called 'constructive acceleration' after the event. Instead, prior to any accelerative measures, steps should be taken by either party to have the dispute or difference about entitlement to prolongation resolved in accordance with the dispute resolution procedures applicable to the contract. 

e. Claim formulation and adjudication
A construction claim is a process, and whereas the process begins either in terms of the provisions of the contract between the parties, or in dispute, the process required to be followed both for the formulation and the adjudication of a claim must include an accurate interpretation of the facts surrounding the dispute, the contract wording, and the applicable law. Typically, the process includes:
  • the preparation of the statement of claim
  • the identification of the event giving rise to the claim
  • the contractual entitlement to relief or compensation
  • contractual compliance required to institute the claim
  • the analysis of cause and effect required to establish the validity of the claim
  • the analysis of the delay and/or loss
  • substantiation of the delay and/or loss
  • steps taken to mitigate the effects of the delay and/or loss
  • adjudication of the extent of prolongation to be granted and/or of the compensation to be made.