1. Introduction

In most construction projects, situations arise where the subcontractor notifies, and subsequently demands, a deadline extension. The standards therefore have provisions governing such situations, and that is the topic of this article.

These provisions may also apply if the main/general contractor demands an extension of the deadlines for its deliveries or its participation. We don't spend space on it because this rarely becomes any big problem.

As you know, the subcontractor's deadline is daymulch and the daymulch can be very burdensome for a subcontractor. If daycare has to be paid, money goes straight to the subcontractor's bottom line, and of course this should be avoided as far as possible.

The deadline extension rules are therefore very practical and they are central to any construction project.

As mentioned in the article “Overview — Introduction”, we do not treat deadline extension as a result of force majeur.

2. Overview of the rules

We find the provisions on deadline extension in NS 8415 paragraph 24, NS 8416 paragraph 22 and NS 8417 paragraph 33.

Below we have prepared a matrix showing which provisions belong to this topic, and where in the standard contracts to find them.

As before, we start from NS 8417 since this is the most widely used contract standard today.

We do not deal with the two topics dealt with in NS 8417 paragraphs 33.2 and 33.3, ref initially.

Although the starting point is NS 8417, we, as otherwise, try to make the most comprehensive processing possible and therefore use “main/general contractor” except where it is quoted from provisions.

3. The subcontractor's claim to an extension of the deadline as a result of the principal/general contractor's relationship

In order for a deadline extension to be required, two main conditions must be met.

First, the subcontractor's progress must “hindered” and secondly, the obstacle must be due to circumstances in which the main/general contractor has the risk.

In NS 8417 paragraph 33.1, several types of obstacles are listed that may entitle the subcontractor to claim an extension of the deadline.

These are listed in the letters a, b and c.

In letter a we refer to changes, and we have dealt with that in the article “Changes and Irregular Changes”.

In the letter b refer to “delay or failure of the main/general contractor's benefits pursuant to paragraphs 22, 23 and 24”. These points apply “Participation of the general contractor” (paragraph 22), “The risk of conditions at the ground” (paragraph 23) and “The general contractor's choice of solutions and other engineering” (paragraph 24).

Corresponding provisions are found in NS 8415 and NS 8416, as shown in the matrix above.

In conclusion, in NS 8417, paragraph 33.1 (c), there is a clause stipulating that the subcontractor may also demand an extension of the deadline if progress is hindered as a result of “other conditions the general contractor has the risk of”.

A similar determination is found in NS 8415 paragraph 24.1 and NS 8416 paragraph 19.4, first paragraph.

It falls far too far to go into all types of such relationships.

Instead, we must refer to the wording of the relevant provisions of the NS contracts and to the articles we have written on these topics, see “General Contractor's Benefits”.

4. Notice of deadline extension

It follows from NS 8417 paragraph 33.4 and NS 8415 paragraph 24.4 that the subcontractor must notify the main/general contractor “without undue residence” even if one cannot make a specified claim.

In other words, you are obliged to notify that you have been, or will be, impeded in your progress even if you cannot say anything about how long you will demand an extension of the deadline.

If you do not notify within the deadline (“without undue residence”) It follows from NS 8417, paragraph 33.4, that the requirement for an extension of time is lost. The same applies according to the provision of NS 8415 paragraph 24.4, second paragraph.

In NS 8416, paragraph 19.4, second paragraph, it only states that the subcontractor must notify the main/general contractor “within a reasonable time”, and the provision is also silent on the consequence that neither does that deadline — which is longer than “without undue residence” - overlooked.

The latter means that the subcontractor's oversitting of the deadline “within a reasonable time” does not have the consequence that the requirement for an extension of the deadline is lapsed.

5. Calculation of deadline extension

In NS 8417 paragraph 33.5 and NS 8415 paragraph 24.5, provisions have been introduced which, to some extent, specify how to calculate the number of days of deadline extension.

It is understood that the extension of the deadline “must correspond to the effect on the momentum” the current conditions “has caused”.

If the extension of the deadline has the consequence that the works are shifted so much that it is not possible to carry them out at the time that would in that case result from the progress plan in the event of such a shift of work tasks.

A not impractical example is work in the final stages such as the paving of courtyards and supply roads, the works of a landscape architect, etc. If the winter is particularly cold, the casting works may also have to be shifted to a milder season, but it usually takes quite a bit before something like this happens.

Further to this, we must highlight the second paragraph of the provision, which states that the parties have a loss limitation obligation.

The contractor shall try to “Preventing and Limiting Harmful Effects” as far as this can be done. At the same time, the parties are obliged to work together to make the deadline extension as short and non-intrusive as possible if possible.

If we start from the example of paving, a collaboration can be based on the fact that the main/general contractor still paves the asphalt in the autumn, but that the developer accepts the additional wear and tear applied to the asphalt as a result of the road being used as a construction road for a possibly shorter period until the takeover.

Whether the example is perceived as good by all parties is not given, but the point is that the standard provision encourages the parties to cooperate. You have to be pragmatic and find solutions.

Section 22.5 of NS 8416 states, inter alia, that the parties shall: “seek to reach agreement on the deadline extension”. If such agreement is not reached, the extension of the deadline shall: “correspond to the impact on the momentum”

In practice, the calculation of the deadline extension creates many challenges.

In a good number of cases, building conditions will not hinder progress at all. None of the work operations of contractor lie on the critical line, there are a number of alternative attack points that do not require special preparation and the work in alternative attack points can be carried out with the same workforce. The conditions that delay the contractor in a place will therefore be able to be dealt with in parallel with the contractor working in these areas.

Contractor will have a “certain duty” to reschedule their work operations in this way, but there is a tolerance limit to how extensive this duty is. In the example we have pointed out some moments that must be taken into account, and there are certainly several factors that must be included in a real situation.

The counterpart is where the contractor's production is located on the “critical line”. Any obstacle regardless of location has the consequence that other work tasks are hindered. In that case, even minor circumstances attributable to the builder could have major implications for progress.

Often you will also be faced with a situation where there are very many change orders and where the contractor has notified a request for an extension of the deadline for each individual change. Claims for deadline extension should also be specified at some point, see more in paragraph 6 below. In such a situation, one can easily imagine that the contractor has demanded a certain number of days deadline extension for each individual change order. If you add up all the days, you get, for example, a 100 day deadline extension.

Most often, the work on these changes will have been carried out more or less in parallel, and not sequentially.

Then it goes without saying that the “net” impact of the changes on the construction time is not as much as 100 days. On closer analysis, one might conclude that the changes have caused an overall delay of only 12 days, and then 12 days are required.

In writing on this topic, we must also mention the discussion of contractor “slack” and whether this should be used to overcome such delays caused by the builder's circumstances. In this case, the issue becomes whether the contractor's slack should be used before the contractor gets the right to demand a deadline extension.

By “slack” we think of the safety margins that the contractor usually inserts into its progress planning to deal with unforeseen circumstances of which the contractor himself has the risk.

In our view, this “slack” belongs to the contractor, and thus cannot be expected to be used as a buffer in the interests of the builder.

True, the contractor has a certain obligation to cooperate and mitigate the consequences of builder relationships that affect progress, but that is something else.

6. Subcontractor's submission of concrete claim for deadline extension

It follows from NS 8417 paragraph 33.6.1 that the subcontractor shall notify and justify his claim for a specific number of days deadline extension “without undue residence” after he “has a basis for calculating the extent”.

The corresponding provision follows from NS 8415 paragraph 24.6.

If the subcontractor does not do this, it follows from the provision that he is only entitled to the number of days extension of the deadline as the main/general contractor “had to understand that he had a claim”.

In other words, it means that failure to comply with this notification provision does not result in the claim being dropped altogether.

In our view, it is best for subcontractors to concretize their requirements for deadline extension on an ongoing basis, and then one can rather make an overall assessment when approaching the end of the project, please refer to our example above.

7. General Contractor's Enquiry

In NS 8417 paragraph 33.6.2 there is a provision that gives the general contractor the right to provoke a clarification on how many days the deadline extension the subcontractor will require.

We find no equivalent provisions in NS 8415 and NS 8416.

This provision can easily act as a trap for a subcontractor if the general contractor asks this question too soon.

Therefore, the subcontractor has the opportunity to answer that one cannot give such an answer, but if so, he must justify why he cannot answer.

If he has the opportunity to give an answer about the number of days the deadline extension, he must do so.

What the subcontractor must not do in such a situation is neither answer what number of days deadline extension one will require nor provide a justification for why he cannot respond at that particular time.

If this is the case, it follows from NS 8417 paragraph 33.6.2, third paragraph, that the requirement for a deadline extension is dropped.

Since this mechanism can have such major consequences, such a request from the general contractor shall “sent by letter”, and the general contractor must inform the subcontractor that “the deadline extension claim is lost” firewood “lack of response”.

The subcontractor must at least provide “a justification for why the basis for calculating the claim does not exist”, see paragraph 33.6.2, first paragraph.

Further, it follows from the second paragraph of 33.6.2 that the subcontractor must answer “without undue residence”.

8. Main/General Contractor Obligation to Respond to Subcontractor's Notice of Extension of Deadline

After the subcontractor has submitted a specified claim for the number of days of deadline extension, the main/general contractor is obliged to respond “without undue residence” about how he relates to the claim.

If he fails to do so, the objections are lost and the subcontractor is entitled to the appropriate number of days deadline extension that has been demanded.

This follows from NS 8417 paragraph 33.7, but the provision is the same in NS 8415 paragraph 24.7.

9. On enforcement in case of unjustified refusal of a justified claim for an extension of the deadline

The rules on this can be found in NS 8417 paragraph 33.8, NS 8415 paragraph 24.8 and NS 8416 paragraph 21.

A subcontractor who does not obtain acceptance of a deadline extension claim runs the risk that the works will be delivered after the agreed completion date.

The closing date in a construction contract is, as is known, day-mulched.

If the parties do not agree on a new completion date, the subcontractor risks daymulch liability and in such a situation a subcontractor may have a vested interest in proceeding with the works.

An extension will usually result in additional costs for the subcontractor.

True, part of the cost of a forfeiture will only involve performing the work at an earlier time than planned. For that part of the costs, the subcontractor will not have any claim to make in the event of a forfeiture since these would have been incurred anyway.

However, a forfeiture will often entail other types of costs that are solely due to the forfeiture.

There may be materials that one has to buy outside fixed discount schemes, hiring personnel at higher costs than usual, increased costs to supervise the increased staffing, one operates more irrationally because people walk up to each other or are left waiting for the use of stationary equipment intended for a more trimmed organization, etc.

If it was right for the main contractor to refuse the subcontractor's claim for a deadline extension, the subcontractor must bear such costs himself. The counterpart will -- hopefully -- be that he managed to deliver to the agreed end date and thereby avoided daybreak.

If, on the other hand, it turns out that the main/general contractor's refusal of the claim for a deadline extension was unjustified, the subcontractor will be able to claim reimbursement of its insurance costs from the main/general contractor.

Before such an amendment can be implemented, it follows from the provisions of the standard that the main/general contractor shall “be notified indicating what the forsertion is thought to cost”, cf NS 8417 paragraph 33.8, last paragraph, NS 8415 paragraph 24.8, second paragraph and 8416 paragraph 21, second paragraph.

In order to avoid such requirements being so high that they are not commensurate with the savings achieved by the subcontractor by releasing a possible daily allowance, the standards contain a quantitative limitation.

It follows from the provisions that the estimated remuneration for the work must not exceed the daymulch requirement that would be applicable if the delay were to prove to be the subcontractor's risk, plus 30%.

This can be illustrated with an example.

The requirement for an extension of the deadline is 20 days and the daily allowance is NOK 100,000. The total daily allowance will thus be 2 MNOK if the claim for an extension of the deadline is unjustified and the handover is 20 days late.

The subcontractor may then choose to recoup and claim the reinsurance costs replaced by the main/general contractor if the assumed maintenance costs do not exceed the assumed daily allowance by more than 30%.

That is, the cost of the foregoing must not be assumed to be higher than NOK 2.6 million in order for the subcontractor to be able to proceed. It is important to note that the assumed settlement costs must include all types of costs — including plunder and heft.

It is also important to note that the provision refers to those “putative” costs at the time you decide to proceed.

If the actual costs turn out to be higher, it mostly advocates that all costs can be required to be replaced by the main/general contractor, but that assumes that the assessments made were justifiable.

We would also like to emphasize that there is no unconditional requirement that the subcontractor be able to extend the entire period required as a deadline extension. If the cost is 2.6 MNOK and the subcontractor is only able to proceed in 15 of the notified 20 days, he is still entitled to 2.6 MNOK.

This provided that the deadline extension requirement was justified, of course.