Construction Law/Calculating delay claims
QUESTION: Dear Sir,
There was a delay for giving work front to our contractor. Now the contractor is claiming idling charges (Lump sum). I have been asked to justify the cost. How do i calculate the idling charges for machinery, labour and overheads (rent of accommodation and office space etc.). Also, the contractor has demobilized some of the equipment and manpower after some time. How to proceed with the calculation. Till now i have calculated the total cost of m/c(excluding fuel), manpower and rent on daily rate basis. Kindly advise.
ANSWER: Dear Jitesh
I am taking the opportunity to reply your question.If the contractor mobilised the machinery, labour & overheads after getting due order from the client/Engineer after signing the contractagreement.The work front was not make available to the contractor within specified time. Contractor may proceed for the claim of idle charges of machinery, labour and overheads.
For the calculation of idle charges;You may proceed with the actual verified period of idling of machinery & labour multiply with hire rate on per day basis plus overheads and deduction of week days(if included).Please note that valid documents should be produced by the contractor against the claim like information of entry and exit of machinery & labours.
I hope this will help you.
With due regards
---------- FOLLOW-UP ----------
Thank you for your response. I have the type and no of equipment's on mobilization up to six months. Also, the contractor landed a job near by our site after six months. As there is no clause for payment due to idling in the contract and the contractor has never claimed for idling up till now we have not kept any record of the equipment's and labour. I would also like to inform that the contractor has done some ancillary jobs for which they have raised bills. How to proceed with the calculations for the next six months.
This is my pleasure to listen you again;
Please clarify the matter properly for detail of claim of the contractor. In the mean time trying to reply the question. Contractor has no reason for the claim of idling of Machinery and Labour as the mobilisation of the contractor was not done. Contractor has done some ancillary work during the contract period for the same, contractor liable to receive the payment as agreed upon.There is no tool to calculate the claim of next coming months.
With best regards