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Construction Law/claim against idling of resources

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Question
Dear Mr.Shrivastava,
My question is related to under utilisation of resources or idling of resources. Lets assume in a 30 months project there was a delay of three months on various account not attributable to MC & Client also  agreed and granted three months EOT without imposing any LD. Contract is clear about time extension but not very specific about financial compensation. In this situation we like to make a financial claim against "Idling of Resources" or "Underutilisation of resources" during the slow period. How to quantify our claim ? How to make our claim logically strong and viable ? Is there any standard method / code of practice to follow ? If you kindly advise,  thanks & regards

Answer
Hi Kallol

Thanks for your question.

The idling of resources can be claim only through disruption claim.

If you have 3 months of EOT granted, you should claim Prolongation cost. Prolongation cost is based daily cost of resources (manpower and equipment). Generally a average daily rate is mentioned in the contract preliminaries.

Another way to calculate the daily average rate by taking any 3 (consecutive) month cost during the peak period of project and divide by no of days (total of 3 months).

Than multiply average daily cost with the no of days of EOT granted.

For disruption claim, 1st think to note that you must have full proof documentation to prove idling of resources. You must notify your client for that.

for disruption analysis, you need to do a monthly or weekly window analysis of project progress. Than you need to create a measured mile for the a particular window period.
Than you need to compare with the rest of the windows to analysis disruption.

It is not a easy job to do. It takes very long time analysis each window.

For code of practice you need to look at AACE website. Off hand I don't remember anything.

If you need any further help, feel free to contract me on my Mobile (+65)-91450446.

If you satisfy with my answer, please leave a positive feedback.

Regards
Vineet  

Construction Law

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Vineet Shrivastava

Expertise

I can answer any question on 1. Project Planning 2. Delay Analysis - Extension of Time 3. Project Management 4. Contract Management 5. Construction Methodology I can't Answer any question 1. Cost related issues

Experience

I have 22 year experience in construction industries at Singapore, India and Australia. I worked as Planning Manager and delay analyst for contractor. I am currently working with claim consultancy as Associate Director.

Organizations
Navigant Consulting APAC Pte Ltd E C Harris Sinagpore Pte Ltd McConnell Dowell SEA Pte Ltd Kajima Oversea Asia Pte Ltd Taisei Corporation

Education/Credentials
B.E (Civil), PGDMA(PM), Graduate Diploma (Const. Management), MSc (Intl. Const. Management),LLM In Construction Law (Arbitration & Adjudication), FSIArb, MCIArb, MIES, MSIB MIIAM, MMIArb

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