prolongation cost claims

We were recently consulted by a contractor who had had his extension of time and associated prolongation cost claims under a FIDIC contract rejected by the Engineer. The Contractor was convinced that he was entitled to both time and costs so, he asked us to provide an impartial opinion on the matter.

Unfortunately, we had to advise the Contractor that the Engineer acted correctly in not awarding the costs as presented in the claim. Why? Well the Contractor had used an impacted as planned delay analysis to demonstrate the extension of time and this method does not demonstrate the absence of concurrent delay. Secondly, the Contractor had based his ‘Cost’ calculations on the preliminaries section of the bill of quantities and not on the actual costs incurred.

If you are a contractor and you would like your prolongation cost claims to be accepted, here are 7 tips for success when preparing your claim:

  1. Select an appropriate method of delay analysis that demonstrates the absence (or otherwise) of concurrent delay;
  2. Ensure that you have accurate contemporaneously recorded progress updates, so that you can utilise a suitable form of delay analysis;
  3. If true concurrent delay does exist (which is actually quite rare), accept it and take this into account when calculating the prolongation costs;
  4. Make sure that you have adequate contemporaneous records to establish the resources that were present on Site during the time of delay;
  5. Ensure that the costs are calculated based on the number of days extension of time, and on the cost incurred during the period of delay;
  6. Your costs should be calculated as actual costs incurred and not estimated costs from the preliminaries or general items of the bill of quantities; and
  7. Ensure that each cost head is substantiated by reference to payroll, invoices, audited accounts, or other company data.

Hewitt Decipher Partnership’s expert consultants have been preparing and responding to claims for many years. Can we help you? Get in touch via our contact page; we would be happy to discuss any support that you may need.