-50%
Solution
Extension of time is identified as “a strategy for a contractor requesting for an increase in the timeline which has contractually been agreed for completion of a contract as agreed upon at the initial phase of contract” (CIPS, 2024a). Time is of essence in a contract as it make sure overall assigned tasks and milestones evidenced in the contracts are pursued and completed within their time. Specifically, when sourcing for the IT consultancy services, time is essential owing to the high rate in which technology becomes obsolete. For these technologies, they tend to become obsolescence in a period of 18 to 36 months (Ma, 2021). Hence, the time extension in the selected IT consultancy spend category. To support this, ROSHN terms and conditions note;
As evidenced in the terms and conditions in ROSHN, apart from ensuring timely delivery of goods and services, it is essential to deliver it in normal business hours during scheduled delivery date and location. Failure to adhere to the requirements of time lead to buyer requesting for liquidated damages. In CIPS (2023), liquidated damages are “agreed sum of money which are payable by a party to the other when there is a breach of contract terms conditions in terms of timelines”. ROSHN selected contract terms and conditions protect the organisation against time extension. The terms and conditions note;
With the terms and conditions on time extension being a command as opposed to warranty owing to the provision of potential of termination of the contract, liquidated damages are similarly identified. This include 0.2% daily to a maximum of 10% of the overall contract cost.
Extension of time is also associated with other aspect including Force Majeure. In CIPS (2023a) this is identified as “provision integrated in terms and conditions for eliminating liability for unforeseeable/unavoidable catastrophes interrupting expected course of events and preventing supplier/vendor from fulfilment of expectation”. The terms and conditions highlight;
Hence, in line with the terms and conditions, occurrence of the Acts of God necessitates for the contract to be extended without any costs being incurred. There is nevertheless a requirement for the affected party to provide a detailed validation of the existence of Force Majeure. The best strategy include adoption of 4R’s model (C3 Consulting, 2024). The factors considered include;
Source: CIPS Module Notes
Hence, with occurrence of Force Majeure,
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