Prolongation Claims

1 / ©2016 NAVIGANT CONSULTING, INC.
ALL RIGHTS RESERVED
PROLONGATION CLAIMS
SHANE NASH
PAUL GREGG
RICS CPD Event

25 June 2018
2 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED
PROLONGATION CLAIMS
Prolongation Claims
Claims for the recovery of Time / Money for delays arising from Employer
culpable events
(i) Extends the project completion date
(ii) Prevents LADs being applied
(iii) Prevents the Completion Date becoming undefined
(iv) May allow recovery of associated loss & expense

PROLONGATION CLAIMS – DELAY & QUANTUM
Prolongation Claim compilation
QUANTUM ANALYSIS
DELAY ANALYSIS
Establish “per diem” rates for
Establish EOT entitlement
delay related costs
&
&
Identify periods of
Apply daily rates to identified
compensable delay
periods of compensable delay
*SCL Protocol 2017 (Para 14, page 7) Concurrent Delay

*SCL Protocol 2017 (Para 22, page 8) Period for evaluation of compensation

PROLONGATION CLAIMS – VALUATION
Claims made under the contract Society of Construction Law Delay and Disruption
Protocol
Clause 20 of SCL 2nd edition (2017)
- Occasionally valuation using contract prices
- Valuation based on cost “Unless expressly provided for elsewhere in the contract,
compensation for prolongation should not be paid for anything
other than work actually done, time actually taken up or loss and /
or expense actually suffered. In other words the compensation for
Claims for Breach of Contract prolongation caused other than by variations is based on the
additional cost incurred by the Contractor. The objective is to put
- Damages:Actual Cost incurred the Contractor in the same financial position it would have been if
the Employer risk event had not occurred.”
- Valuation based on Cost
With some exceptions Prolongation Claims are predominantly “Cost Based” claims

PROLONGATION COSTS - APPROACH
How to approach the compilation of a Prolongation Cost claim?
1. Start with the project accounting records
2. Establish the “project spend profile” for the relevant periods
3. Strip out obvious “non-time related” main Heads of Costs
4. Eliminate component “non time related” costs for each remaining main Head of Cost
5. Consider costs not captured within project accounts (e.g. Head Office Overheads)
6. Compile data and supporting information in logical and coherent format

PROLONGATION CLAIMS – DETAILED CRITIQUE OF REMAINING HEADS OF COST
Time related resource?
Task related resource?
Fixed cost?
One off cost?

Relevant to part of project / site delayed?
Relevant to delay period in question?
Would have been incurred in any event?
Evidence?

PROLONGATION COSTS - SUBSTANTIATION
1. Evidence that resource was used during time

period in question (contemporaneous records)
2. Evidence that this was the cost actually incurred

during the period in question
Examples of substantiation required
• Contemporaneous site records
• Delivery dockets
• Invoices
• Payment receipts
• Signed contracts or purchase orders
• Salary and wages slips
• Photographs

PROLONGATION COSTS – PRESENTATION & AUDITABILITY
Presentation of a Prolongation Valuation?
Must be auditable!
Cost Data Supporting Documentation
1. Logically set out & presented 1. Logically set out & presented
(preferably excel) (soft copy format)
2. Cross referenced to 2. Cross referenced to cost

supporting documentation submission

PROLONGATION COSTS – OTHER ISSUES
- Duplication
- Depreciation
- Head Office Overheads
- Profit
- Money only
- Disruption
- Disputes
- Records

DELAY

DELAY LIABILITY
• EMPLOYER RISK EVENTS
• Compensable delays
- Variations, Changes
- Failure to provide access
- Failure to provide information
- Other Contractor delays, etc.
• Excusable delays / Neutral Events

- Bad weather
- Force majeure
- National strikes, etc

DELAY CAUSES PROLONGATION
• Critical delay versus non-critical delay Overall Delay: 49 days

Contract
Completion
Start of the Project Completion
Jun Jul Aug Sep Oct Nov Dec Jan
14 Foundations Non-Critical delay

28 Steel design events
7 Steel erection
Critical delay events
caused EOT 21
21 Roof Panels procurement
Roof Panel installation
Floor
Finishes
Testing

CONCURRENT DELAY
• In the rare situation where true concurrent delay exists, the Contractor:
- Should be entitled to an EOT, and relief from paying LAD’s
- No prolongation costs.
Contract
Completion
Start of the Project Completion
Jun Jul Aug Sep Oct Nov Dec Jan
14 Foundations
28 Steel design
Contractor Delay 7 Steel erection
Period of Roof Panel installation
concurrent delay
Floor
Finishes
Testing

PERIOD OF EVALUATION OF COMPENSATION

• The period of evaluation of compensation is that in which the effect of the Employer
Risk Event was felt
of compensation of compensation
Start of the ject Sep Contract
Pro Completion
Completion
Aug 14 Fou
Jun Jul Oct Nov Dec Jan
ndations
28
28
Steel design
7 Steel erection
21
Roof Panel installation
Floor
Finishes
Testing

SUMMARY OF DELAY
Delay analysis summarised as a table showing days of delay for each month and
activities affected by the delay
DELAY ANALYSIS SUMMARY TABLE
Jun Jul Aug Sept Oct Nov Dec Jan Total

Days
Delay
Days in month 30 31 31 30 31 30 31 31
Foundations 14 14
Days Delay Per Month
Steel Design 7 21 28
Steel Erection 7 7
Roof Panels Procurement 21 21
Roof Panel Installation 0
Floor 0
Finishes 0
Testing 0
Total Delay 7 21 14 7 21 0 0 0 70

THANK YOU FOR ATTENDING
CONTACTS
SHANE NASH
Associate Director
LLM, BSc., FRICS, FCIArb, FCIOB
+974 704 66841
shane.nash@navigant.com
PAUL GREGG
Senior Consultant Navigant – Qatar office
MSc., B. Eng., ICIOB
+974 558 18006 Tornado Tower | Level 26
paul.gregg@navigant.com
Al Funduq Street | West Bay | Doha | Qatar
Tel. +974 4426 7000
16av/ig©a2n
n 0t1.6c o
NmAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

Prolongation Claims

Încărcat de

Informații document

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Prolongation Claims

Încărcat de

Drepturi de autor:

Formate disponibile

1 / ©2016 NAVIGANT CONSULTING, INC.

ALL RIGHTS RESERVED

RICS CPD Event

(i) Extends the project completion date

(ii) Prevents LADs being applied

(iii) Prevents the Completion Date becoming undefined

(iv) May allow recovery of associated loss & expense

2 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

PROLONGATION CLAIMS – DELAY & QUANTUM

Prolongation Claim compilation

*SCL Protocol 2017 (Para 14, page 7) Concurrent Delay

3 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

PROLONGATION CLAIMS – VALUATION

4 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

PROLONGATION COSTS - APPROACH

How to approach the compilation of a Prolongation Cost claim?

1. Start with the project accounting records

2. Establish the “project spend profile” for the relevant periods

3. Strip out obvious “non-time related” main Heads of Costs

6. Compile data and supporting information in logical and coherent format

5 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

PROLONGATION CLAIMS – DETAILED CRITIQUE OF REMAINING HEADS OF COST

Time related resource?

Task related resource?

One off cost?

Relevant to delay period in question?

Would have been incurred in any event?

6 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

PROLONGATION COSTS - SUBSTANTIATION

1. Evidence that resource was used during time

2. Evidence that this was the cost actually incurred

Examples of substantiation required

• Contemporaneous site records

• Signed contracts or purchase orders

• Salary and wages slips

7 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

PROLONGATION COSTS – PRESENTATION & AUDITABILITY

Presentation of a Prolongation Valuation?

Cost Data Supporting Documentation

2. Cross referenced to 2. Cross referenced to cost

8 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

PROLONGATION COSTS – OTHER ISSUES

- Head Office Overheads

9 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

10 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

• EMPLOYER RISK EVENTS

• Excusable delays / Neutral Events

11 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

DELAY CAUSES PROLONGATION

• Critical delay versus non-critical delay Overall Delay: 49 days

Jun Jul Aug Sep Oct Nov Dec Jan

14 Foundations Non-Critical delay

12 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

Jun Jul Aug Sep Oct Nov Dec Jan

13 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

PERIOD OF EVALUATION OF COMPENSATION

14 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

Jun Jul Aug Sept Oct Nov Dec Jan Total

15 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED

S-ar putea să vă placă și