Construction Law/Preparation and Presentation of a Disruption Claim
QUESTION: I am grateful, if you would kindly let me know, how the disruption claims are framed and presented in an acceptable manner.If a such sample document is available, it would be a great assistance.
The related Contract is governed by FIDIC 1988 - For Building and Engineering Works Designed by the Contractor.
There was a delay in possession of part of site due to some dispute between the Client and a Third Party. The Contractor was ready to commence work with all the necessary resources on the specific date as instructed by the Client,but could not proceed as expected due to the dispute quoted above,instead the Contractor was given some extra works(Variations) as a compensation by which only a little part of the originally expected income could be received.
If you are not familiar with FIDIC 1999, you may reply as per some other Conditions of Contract.
ANSWER: Dear Basil,
THANK YOU FOR THE QUESTION.
BEFORE I CAN ANSWER FIRMLY,MAY I FIRST REQUEST YOU TO CLARIFY IF CONTEMPORARY RECORD AS REQUIRED UNDER CLAUSE 4.21(h) FIDIC 1999 IN THE FORM OF MONTHLY REPORTS HAS BEEN MAINTAINED?Secondly, Any extension of time granted sofar or not?What sort of record is available to justify a disruption claim in respect of impacted activities?I shall be happy to advice further after receipt of this info.
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QUESTION: Dear Sir,
Thank you very much for your quick response. Sorry for my delay in replying you due to some urgent activities.
I am pleased to provide the details requested as follows.
1. Availability of Contemporary Records: Yes.
2.Extension of Time: Still the possession of the site in question is not given. Work in other parts are in progress.
The Client has given written consent to provide Time equivalent to that depicted in our original Work Programme once the site is handed over.
3. Records available to justify Disruption Claim:
i. Details of actual work to be done as per the original work programme
and the period(nearly one year.)
ii.Details of work done instead of above as Variations and the period
which was also equivalent to nearly one year.
During this period, only part of resources reserved for actual work
were utilized, while the balance was idling.
After this period, some other site in the Contract for some other work
was released, for which all the above resources were deployed.
iii.Details of all the resources reserved with respect to the actual
work to be done.
iv. Details of resources deployed to attend to the Variations offered
v. Details of resources idled and compelled not to fully utilized
during nearly one year period including Labor, Plant,Electricity,
Water, computers, Buildings for offices and accommodation.
The above are those I am having in my mind to include in the Claim. If some more are available, please advise.
Thanks for a detailed response and offer following comments to initiate further action as deemed necessary.
1. Claims for additional payments usually are dependent on (i) evaluation of direct cost consequences of change and (ii) time consequences of the change in the form of EOT and prolongation costs etc. and (iii) quantum meruit evaluation or global claim considerations in case there are multi-reasons for time loss. We shall presently discuss direct cost consequences only and take up others later after this stage has been fully worked out. This is almost same what you have provided info on.
2. The direct cost consequences can at best and easily be dealt with under the contract as “variations” which means practically review of unit prices given in BOQ for varied items depending on its applicability in the instructed change of works. I am not sure if you have already taken a step on this account or not.
From your provided info it appears that the project whole consist of several packages and you are involved in more than one. It is one contract which is giving you problem due to non-possession of site but at other places you can work. Secondly, my understanding is that during the suspension of referred package, you could work on other instructed variations as well in the first year but later you have been given some other works on the project to compensate or to enable utilization of your deployed resources. Is it correct?
Before we proceed further may I suggest to collect initially all data in form of following these two tables in brief form including amendments as considered necessary by you to enable the assessment of overall scenario and specific activities that have been delayed / stopped etc. Also it is a scenario in which balance work has been omitted and in lieu replaced with additional works as variation in the first year. Is it possible to take this line?
(a) Work record sheet (what has been in reformed one year)
Location Description of work Qty. of work planned in Baseline Prog. Qty. of Work Actually Executed Deployed resources for the work in this one year Reasons and periods for Disruption if any
Manpower Hours Machinery Hours
(b) Record of Time Lost
Location & Description of work Period of Disruption Time Stopped Time Disrupted Remarks
Time Lost Cause Duration Cause
3. The data presentation in above form will give you an idea how to proceed further. I will be pleased to review your draft claim presentation once you have compiled to make further specific comments as felt necessary. My email is firstname.lastname@example.org (Cell # 92-333-5610760)