Bottom line
Extension of Time (EOT) changes the contractual completion date when an excusable event delays completion. It is not automatic, it does not by itself grant additional money, and it does not excuse delay caused by the contractor. A defensible EOT needs a contractual ground, timely notice and application, proof of critical-path delay, mitigation records, a revised programme, and written approval by the competent authority before the existing contract period expires.

1. What an Extension of Time actually does

An Extension of Time moves the date by which the contractor must complete the works. Its main contractual effect is to protect the contractor from delay damages for the approved extended period. It may also adjust milestone dates where the decision expressly does so.

EOT must be kept separate from four related questions:

  • Additional payment: time entitlement and money entitlement are tested under different clauses. An event may justify time but no cost.
  • Variation: a variation changes the work. It produces EOT only if its time effect delays completion.
  • Acceleration: finishing within the existing date despite an excusable delay may require a separately instructed and priced acceleration arrangement.
  • Contractor delay: weak mobilisation, inadequate resources, poor planning, rework or ordinary procurement failure do not become excusable merely because completion is late.

The correct question is not simply, “Did a delay occur?” It is: Which event caused how many days of delay to the contractual completion date, under which clause, after what notice and mitigation?

2. The legal and contractual hierarchy

Layer Role in an EOT decision What to verify
Public Procurement Act (PPA) Establishes the statutory basis for including and granting an extension Sections 52 and 56
Public Procurement Regulations (PPR) Prescribes the application, grounds, authority, timing and security consequences Rule 120 as amended; Rule 120A only where its special route remains legally available
Bidding document and signed contract Defines the operative delay events, notices, programme duties and assessment process ITB/BDS, GCC, SCC, Letter of Acceptance and agreement
Approved programme and records Demonstrate cause, critical-path effect and mitigation Baseline, updates, instructions, diaries, correspondence and progress data
EOT decision Records the competent authority’s reasoned determination Event, clause, approved days, revised date, securities, cost position and delay damages

The signed contract must be read as a whole and in its stated order of precedence. FIDIC principles can improve the analysis where relevant, but they do not replace Nepal’s procurement law or clauses actually incorporated into the contract.

3. Public Procurement Act: the statutory foundation

3.1 Section 52 requires the contract to address time

PPA section 52(2)(e) identifies supply time, performance time and whether time may be extended as matters that may form part of the procurement contract. EOT therefore begins with the contract itself, not with an informal administrative understanding.

3.2 Section 56 makes the contract the first reference

PPA section 56(1) provides that extension of the procurement-contract period is governed by the provision stated in the relevant contract.

Section 56(2) then permits the competent authority, on the application of the contract recipient and on the prescribed basis, to extend the period where extension becomes necessary because of:

  • force majeure or circumstances beyond control;
  • failure of the public entity to provide something it was required to provide; or
  • another reasonable cause.

This is enabling authority, not an automatic entitlement. The applicant must still comply with Rule 120 and the executed contract, and the approving authority must record why the event qualifies and how it affected completion.

4. PPR Rule 120 after the 16th Amendment

The Public Procurement (Sixteenth Amendment) Regulations, 2083 amended Rule 120. The current reading requires the earlier consolidated text and the separate 16th-amendment Gazette to be read together.

4.1 Application at least 21 days before expiry

Under Rule 120(1), the supplier, contractor, service provider or consultant must apply for extension at least 21 days before the contract period expires. The application must state the cause and attach:

  • the revised work schedule; and
  • the necessary supporting evidence.

Filing an application does not by itself extend the contract. Rule 120(4) requires the extension process to be concluded within the existing contract period.

4.2 Grounds examined under Rule 120(2)

After receiving the application, the competent official may conduct or commission an inquiry. Rule 120(2) identifies these circumstances:

  1. the public entity did not provide something it was required to provide under the contract;
  2. work was delayed because documents were called for under PPA section 67A; or
  3. a disaster or another force-majeure circumstance made contractual performance impossible.

The PPA also refers to another reasonable cause. Where a contractor relies on a variation, compensation event or another contractual ground, the decision should expressly connect the PPA, Rule 120 and the applicable GCC/SCC provision instead of using a generic statement that the delay was “unavoidable.”

4.3 Who may approve the extension

The 16th Amendment inserted Rule 120(2A), which redistributes approval authority:

Contract situation Authority stated by Rule 120(2A)
Annual contract (sālabasālī ṭhekkā) Head of the concerned public entity, up to the next one fiscal year
Other procurement contract: extension up to 50% of the original contract period Head of the concerned public entity
Extension beyond the 50% limit above Authority one level higher than the head of the public entity

The percentage is a limit on time, not on contract price. Calculate it from the original contract period and keep cumulative extensions visible. The decision file should show both the cumulative days already granted and the days now proposed.

4.4 Decision, reporting and validity of securities

Rule 120 requires more than a letter changing the date:

  • The extension process must be completed within the existing contract period.
  • The approving authority must state the period and reasons.
  • A detailed report of an approved extension is to be submitted to the authority one level higher.
  • Under new Rule 120(4A), the supplier, contractor, consultant or service provider must extend and submit the performance security, insurance and advance-payment-related security within 15 days after receiving notice of the extension.
  • Under Rule 120(4B), failure to do so within the first 15 days attracts, for a further period of up to 15 days, a daily penalty of 0.01% of the contract amount.
  • Under Rule 120(4C), if the securities and insurance are still not extended within that further period, the public entity may terminate the contract.

The extension letter should therefore state the new completion date, revised milestones, security and insurance deadlines, the position on delay damages, and any separate treatment of cost.

4.5 Rule 120A is not the ordinary route

Rule 120A created a special, time-bound route for specified unfinished contracts. Its application window ran for 30 days from commencement of the relevant amendment. It included conditions such as a revised schedule, assurance of completion and a commitment not to make an additional financial claim because of that extension.

It should not be treated as a permanently open alternative to Rule 120. A project relying on Rule 120A must establish that its application fell within the original legal window or that a later legal instrument expressly reopened or extended that window.

5. How the current PPMO Works SBD operates

The current PPMO Works NCB, Single-Stage Two-Envelope SBD converts the legal framework into a contract-administration process. The clause numbers below refer to that SBD; another issued document or amended SCC may use different wording.

5.1 Programme obligations: GCC 34

The contractor submits a programme showing methods, sequence and timing. Updated programmes must show actual progress and the effect on the remaining work. A revised programme must also show the effects of variations and compensation events.

Approval of a programme does not transfer the contractor’s obligations to the Project Manager. It provides the time model against which delay can be assessed.

5.2 The operative EOT test: GCC 35

Under GCC 35.1, the Project Manager extends the Intended Completion Date when a compensation event occurs or a variation is issued and it makes completion by the existing date impossible without acceleration that would cause additional cost.

Under GCC 35.2:

  • the contractor asks for a decision and supplies full supporting information at least 21 days before the Intended Completion Date;
  • the Project Manager decides whether an extension is due and its duration within 21 days of the request;
  • delay attributable to the contractor’s failure to give early warning or cooperate is excluded from the assessment;
  • the contractor submits a revised work schedule and ensures that performance security, insurance and advance-payment security remain valid; and
  • the SBD requires the extended security and insurance documents within 7 days of receiving the extension letter.

The signed SBD therefore imposes a seven-day contractual requirement even though amended Rule 120 provides a 15-day statutory deadline before the additional penalty mechanism begins. For compliance, meet the stricter contractual deadline unless the executed SCC lawfully states otherwise.

5.3 Employer approval remains necessary

The SBD’s GCC 80 requires the Project Manager to obtain the Employer’s specific approval before determining an extension under GCC 35. A Project Manager’s technical recommendation is therefore not necessarily the final approval.

The public entity must also confirm that the person signing the decision has authority under amended Rule 120(2A). Contract administration cannot enlarge statutory delegation.

5.4 Compensation events: GCC 50

The SBD lists compensation events that may affect time, money or both. Important examples include:

  • late possession of part of the Site;
  • an ordered delay or late drawing, specification or instruction;
  • an additional test that shows no defect;
  • substantially more adverse ground conditions than could reasonably have been assumed;
  • an instruction dealing with an unforeseen condition caused by the Employer;
  • delay by other contractors, public authorities, utilities or the Employer against contractual dates and constraints;
  • delayed advance payment;
  • effects of an Employer’s risk; and
  • unreasonable delay in issuing the Completion Certificate.

GCC 50.2 allows an increase in the Contract Price and/or an extension where the event adds cost or prevents timely completion. The Project Manager assesses the forecast effect, assuming competent and prompt reaction by the contractor. Failure to warn early or cooperate reduces the entitlement to the extent it harms the Employer’s interests.

5.5 Force majeure: GCC 61 to 64

The SBD defines force majeure through four tests: the event is beyond the party’s control, could not reasonably have been provided against before contract, could not reasonably be avoided or overcome, and is not substantially attributable to the other party.

The affected party must give notice within 14 days after it became, or should have become, aware of the event. Both parties must use reasonable efforts to minimise delay and give notice when the effect ends.

Where force majeure prevents substantial performance and delays completion, GCC 64 can support EOT under GCC 35. Cost is narrower: it is available only for the specified categories and conditions in the force-majeure clause. A natural catastrophe may justify time without automatically justifying every prolongation cost.

5.6 Delay damages: GCC 55

The SBD’s SCC template states delay damages at 0.05% of the final Contract Price, excluding VAT but including Provisional Sums, per day, capped at 10% of that price. Verify the executed SCC before applying these figures.

Delay damages run when the Completion Date is later than the Intended Completion Date. If an EOT is granted after delay damages were deducted, GCC 55.2 requires correction of the overpayment in the next payment certificate, with contractual interest.

This is why the EOT decision must identify a clear revised date. An extension should not be issued merely as a narrative statement that the delay was accepted.

6. A practical entitlement matrix

Delay event Potential time relief Potential cost relief Main test
Employer gives Site possession late Yes, if critical Potentially, as a compensation event Actual access date, affected activities and mitigation
Approved variation Yes, if it delays completion Valued under the variation provisions Instruction, quotation, programme effect and approval
Project Manager orders delay or issues necessary drawings late Yes, if critical Potentially, as a compensation event Written instruction, required-by date and causal link
Unforeseeable adverse ground condition Potentially Potentially Tender information, reasonable foreseeability and actual condition
Qualifying force majeure or exceptional event Yes, for proven prevention and delay Only where the relevant clause grants cost Notice, prevention, duration and mitigation
Ordinary seasonal weather Normally contractor risk unless the contract says otherwise Normally no Contract data and evidence of abnormality
Poor mobilisation, inadequate labour or late material ordering No, unless caused by a separate qualifying event No Contractor’s plan, resources and procurement records
Employer delay concurrent with contractor delay Contract-specific; do not simply add both periods Contract-specific Actual overlap, critical paths and Special Conditions

An event label does not decide the result. “Heavy rain,” “local obstruction,” “budget problem,” “festival shortage” or “variation” must be tested against the actual contract and its effect on the critical path.

7. What FIDIC adds to the analysis

FIDIC forms offer a disciplined way to think about time, notice, programmes and determination. They apply only when incorporated into the contract, and the edition and Particular Conditions must always be identified.

7.1 FIDIC 1999 forms

In the 1999 Red, Yellow and Silver Books, the principal EOT provision is Sub-Clause 8.4, while Contractor claims are generally administered under Sub-Clause 20.1. The standard claim route uses a 28-day notice period from awareness, or when the contractor should have become aware, of the event.

Common EOT grounds include a variation, another clause giving time entitlement, exceptionally adverse climatic conditions, qualifying unforeseeable shortages caused by epidemic or governmental action, and Employer-caused delay or prevention. The exact allocation differs across the books and Particular Conditions.

7.2 FIDIC 2017 forms

The 2017 Red, Yellow and Silver Books move the main EOT provision to Sub-Clause 8.5. Claims for payment and/or EOT follow Sub-Clause 20.2, which retains the 28-day notice mechanism and expressly structures contemporary records, the fully detailed claim, continuing claims, and agreement or determination.

The 2017 programme provisions require clearer presentation of the critical path, float, access dates, key deliveries, actual progress and remedial measures. In the Red and Yellow Books, agreement or determination is administered under Sub-Clause 3.7; the Silver Book uses its Employer’s Representative mechanism.

FIDIC 2017 also expressly recognises concurrent Employer and contractor delay but leaves the assessment rules to the Special Provisions. There is no safe universal rule that every day of Employer delay produces one day of EOT when an independent contractor delay is operating at the same time.

7.3 The transferable lessons

Whether the contract is a PPMO SBD or a FIDIC form, four principles travel well:

  1. Notice preserves the issue; evidence proves it.
  2. EOT follows delay to completion, not merely disruption to an activity.
  3. Time and money require separate entitlement findings.
  4. Contemporary programmes and records are stronger than a retrospective narrative prepared at the end.

8. A defensible EOT assessment method

Step 1: Fix the contractual baseline

Record the Start Date, original Intended Completion Date, milestones, approved baseline programme, access dates and programme-update interval. Identify all previous extensions and the current contractual date.

Step 2: Identify each delay event separately

Create an event register. For each event record the start, finish, responsible risk, instruction or notice, clause relied on, activity affected and documents available. Do not combine unrelated events under a heading such as “various site problems.”

Step 3: Check notices and application timing

Confirm early warning, event notice, force-majeure notice where relevant, and the Rule 120/GCC 35 application. Record any late notice and evaluate the contractual consequence instead of silently ignoring it.

Step 4: Prove cause and critical-path effect

Compare the approved programme immediately before the event with actual progress and the revised forecast. Establish:

  • which activity was affected;
  • whether it was critical when the event occurred;
  • how much usable float existed;
  • whether another delay was already controlling completion; and
  • when the event’s effect actually ended.

A delay to a non-critical activity does not justify EOT until it consumes available float and delays completion.

Step 5: Examine concurrency and contractor contribution

Map overlapping delays by date. Separate Employer-risk delay, neutral events and contractor-risk delay. Do not add overlapping periods twice. The governing contract and SCC determine how concurrent delay is treated.

Step 6: Test mitigation

Review resequencing, alternative access, extra shifts, procurement alternatives and recovery proposals. Mitigation is not free acceleration: where the Employer requires costly acceleration to preserve the original date, the instruction and price must be dealt with under the contract.

Step 7: Quantify the net excusable delay

Award only the net period by which qualifying events moved the completion date after float, overlap, mitigation and contractor-caused delay are considered. State the analysis method and assumptions.

Step 8: Decide time and money separately

The EOT decision should say whether it decides only time or also any cost consequence. If cost information is incomplete, reserve and process the cost claim under the applicable compensation-event, variation or claims clause rather than treating EOT as automatic cost approval.

Step 9: Complete the legal and security actions

Obtain the approval required by Rule 120(2A) and GCC 80, issue the written decision before expiry, receive the revised programme, extend all securities and insurance, revise milestone monitoring, and correct delay damages where necessary.

9. Contractor’s EOT submission checklist

A useful submission should contain:

  • covering application identifying PPA section 56, PPR Rule 120 and the relevant GCC/SCC clauses;
  • contract particulars, original duration, current completion date and previous extensions;
  • event-by-event chronology;
  • early warnings, notices, instructions and correspondence;
  • approved baseline and all relevant programme updates;
  • delay analysis showing the critical path before, during and after each event;
  • site diaries, labour and equipment records, photographs, weather data, measurements and meeting minutes;
  • details of actual and proposed mitigation;
  • calculation of days claimed, with overlapping periods removed;
  • revised work programme and realistic completion forecast;
  • status and proposed validity dates of performance security, insurance and advance-payment security; and
  • a separate, clause-based statement of any cost claim.

The revised programme should not simply move every remaining bar by the number of days claimed. It should show actual status, remaining logic, resources, mitigation and the forecast path to completion.

10. Public entity’s evaluation checklist

Before recommending or approving EOT, verify:

  1. Is the application within the 21-day requirement and can the process be completed before expiry?
  2. Which exact PPA, PPR and contract clauses create possible entitlement?
  3. Did the event actually occur, and which party carried its risk?
  4. Did it affect the critical path and the contractual completion date?
  5. Was notice timely, and did any late notice prejudice the Employer?
  6. What mitigation was reasonably available and actually attempted?
  7. Is there concurrent contractor delay?
  8. Are the days claimed net of float, overlap and non-excusable delay?
  9. Is the proposed approving authority competent under Rule 120(2A)?
  10. Does the Project Manager have the specific Employer approval required by GCC 80?
  11. Are the revised schedule, milestones, securities and insurance internally consistent?
  12. Does the decision separately address EOT, cost, price adjustment and delay damages?

11. Worked example: do not add delays mechanically

Assume the contractual completion date is 30 June.

  • The Employer hands over the only available work front 18 days late. The contractor had mobilised and the affected foundation activity was critical.
  • An approved variation later adds seven days to another critical activity.
  • A five-day contractor mobilisation delay occurs entirely within the same 18-day late-possession period and does not move completion beyond the Employer-delay effect.

Subject to timely notices, records and the contract, the net EOT may be:

Event Gross delay Overlap or adjustment Net EOT contribution
Late Site possession 18 days — 18 days
Approved variation 7 days — 7 days
Contractor mobilisation delay 5 days Fully overlaps the controlling 18-day period 0 additional days
Total 30 event-days 5 overlapping days removed 25 days

The revised completion date would be 25 July, not 30 July. Any cost entitlement for late access and the variation must be evaluated separately. Delay damages would apply only to contractor-responsible delay after the revised date, subject to the contract.

12. Common mistakes that weaken an EOT decision

  • Applying after expiry and assuming the application keeps the contract alive.
  • Approving “until completion” without a specific revised date.
  • Counting every period of disruption as critical delay.
  • Adding overlapping events twice.
  • Treating a variation order as automatic proof of EOT.
  • Granting EOT and prolongation cost in the same sentence without separate entitlement analysis.
  • Ignoring early-warning, notice and mitigation duties.
  • Using an unapproved or retrospectively reconstructed programme without explaining its limitations.
  • Allowing the Project Manager to approve beyond delegated authority.
  • Extending the date but leaving performance security, insurance and advance security unchanged.
  • Continuing to deduct delay damages for days later covered by an approved EOT.
  • Using Rule 120A as though its original 30-day application window were permanently open.

13. Recommended structure of an EOT decision

A reasoned approval or rejection should record:

  1. contract details and existing completion date;
  2. application date and timeliness;
  3. delay events and clauses relied on;
  4. documents and programmes reviewed;
  5. findings on cause, criticality, concurrency and mitigation;
  6. days claimed, days accepted and reasons for any difference;
  7. revised completion and milestone dates;
  8. decision on delay damages for the assessed period;
  9. whether cost is approved, rejected, reserved or to be assessed separately;
  10. security and insurance extensions required, with deadlines;
  11. revised programme and monitoring requirements; and
  12. name and authority of the approving official.

14. Sources and use note

This guide was prepared from the following primary and contract sources checked on 25 September 2026:

This article is a contract-administration guide, not a substitute for the signed agreement, legal advice or approval by the competent authority. Always check the exact PPA/PPR text, the issued SBD, amendments, SCC, financing-agreement requirements and project-specific delegation before deciding an actual case.