Construction Law/Prolongation Cost evaluation
Dear Mr. Liaqat
What I know well; when a Contractor has been awarded an EOT due to delays attributable to the Employer, he becomes entitled to prolongation costs. What I know from practice, these prolongation costs are the recurrent indirect costs incurred by the Contractor during the time extended i.e. after the contract completion date gets finished and the EOT period continues. However; SCL protocol and other sources say that such costs are to be estimated referring to the actual period of delay that took place within the original time frame of the project:
1- I can't understand how come does this may be calculated? I need your help Sir to clarify this issue to me with supporting examples please . I really prefer to do it as I said first (in extended period) , since it is too much easier as the time is identified and remaining activities within extension are also identified.
2- is there any contradiction between this and the disruption costs that already compensated to the Contractor under the Contract when he faced interruption to his Work caused by the Employer?
Dear mr. khaled,
let me deal with this question in a general manner as follows so that my basic reason of my views may be clear.
!.Due to extension of time ,the contractor has to incurr extra costs for extended stay for no fault of his.This way he has to keep his resources enaged for a longer period than envisaged in his tender price or in other words he is to be paid all time - related charges whether they fall
under headoffce overheads or site overheads of the firm for the extended period as proven/assessed from contemporary record .The contemporary record helps you to calculate these realistically from daily reports etc.
2.The extension also results into out of sequence work than originally planned with some idling of labour and machine working and hence these are also claimed by the contractor on the basis of its recording in the daily reports and duly countersigned by both sides.These are also called disruption costs and are concerned with idling of resources due change in sequence in work activities
3.I feel SCL has more convincing reasons for using actual period of delay as a result of delay analysis
With best wishes,