Construction Law/Idling of resources


Dear Sir,
My question is related to under utilisation of resources or idling of resources. It's an item rate contract and let's 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 , as MC, likes 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 - Kallol Seal , Kolkata , India.

Dear Kallol,

You do not mention the form of contract, nor the applicable law, so the following comments will be general in nature.  

In the first place, you need good records of the actual plant on site that was compliant and operational. Hopefully these records will be on a daily basis and agreed with the Engineer.  You also need evidence of the expected and actual output of the plant.  Then you calculate the non-productive time.  Once you have the non-productive time, you calculate the cost of the non-productive time, including fixed costs, such as labour and depreciation or financing, but no running costs such as fuel or maintenance.  

If you google using the keywords 'construction idle plant costs', you will find several articles on the subject.  

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


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