Day 2 (Claims Preparation and Dispute Management)

Claims Preparation Day 2
Table of Contents
I Glaims relating to Time..... 2
1.1 Extension of Time...... 2
1. Contractor's Basic Entitlement in accordance with FIDIC 2
1.2 Liquidated damages 5
1.3 Concurrency................ 7
2 Claims relating to Money.. l0
2.1 Prolongation............... .10
2.2 Damages and Compensation .12
2.3 Claims for Payment in accordance With FlDlC.. .14
3 Gommon Heads of Loss .....15
3.1 Disruption 16
3.2 Acceleration............ 22
3.3 Mitigation 24
4 Procedures or Processes of Glaims 25
4.1 Development of Claims. 25
2. Progress Records...... 27
3. Cost Records ............... 29
4. Records/Minutes of Meeting 29
5. Site diaries 30
4.2 Procedure Steps in accordance with FIDIC 30
1
1 Claims relating to Time
1.1 Extension of Time

An extension of time relieves a contractor of liability for liquidated damages only for periods
before a new contractual completion date. People often, incorrectly, think that an entitlement
to an extension of time automatically carries with it an entitlement to compensation for
additional costs that have been incurred during the extended period. Whilst it may be that
under other terms of the contract, a contractor is entitled to recompense for the extended
period, the main effect of an extension of time is merely that the contractor is relieved from
its liability for liquidated damages during the period of the extension. lt is best practice that
applications for extensions of time should be made and dealt with as close in time as
possible to the events that give rise to the application.
Most construction contracts contain provisions under which the period allowed for the
contractor to undertake and complete the works can be extended. These provisions cater for
delays which are neither the fault nor the responsibility of the contractor, or for risks the
employer has taken. Provisions benefit the contractor in removing liability for damages for
delay during the period for which time is validly extended; the power to extend time is also
for the employer's benefit.
ln common law a contractor's obligation to complete the works by the specified date is
removed if it is the employer who delays the contractor. Therefore, if the engineer issues an
instruction which increases the amount of work to be done, or is late in giving the contractor
necessary instructions, the specified completion date no longer applies. ln this situation time
is said to be 'at large', and the contractor's obligation is merely to complete the works within
a reasonable time. ln order to ascertain what is 'reasonable' all the circumstances of the
particular project must be taken into account. However, in practical circumstances this will
simply mean that the amount of delay for which the employer is responsible will be added to
the original completion date.
1. Gontractor's Basic Entitlement in accordance with FIDIC
The basic clause for the contractor to claim an extension of time is clause 8.4. lt is there to
allow the contractor to point out where he has been delayed by reasons beyond his control.
lf he could not do this, and the engineer did grant an extension of time, he would be liable for
liquidated damages arising from the delay. Further, if the contractor obtains an extension of
time, he may be in a position to recover his time-related costs of remaining on site longer.
However it is important to note that there is no automatic link between clause 8.4 and
money. lt is a time clause.
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Assessment of Delay
The clause can be activated when the contractor suffers delay, or will be delayed. The only
realistic way of assessing delay is by comparison with the clause 8.3 programme. lf the
programme is of sufficient quality it will act as a good basis for assessing delays.
Grounds for Extensions of Time
The possible grounds for an extension of time are:
L Variations
ll. A cause of delay referred to in the conditions (see below)
lll. Exceptionallyadverse climaticconditions
lV. Unforeseeable shortages of personnel or goods such as those caused by epidemics
or governments
V. A delay caused by the employer or a third party under his control
A cause of delay referred to in the conditions
These are found throughout the conditions. Try to find them! The following is a list:
L Clause 1.9 - late information

il. Clause 2.1 - denied or late access or possession
ilt. Clause 4.7 - errors in information provided
tv. Clause 4.12- adverse physical conditions
V. Clause 4.24 - fossils
vt. Clause 7.4 - testing
vil. Clause 8.5 - delays caused by authorities
vilt. Clause 8.9 - engineer's instructions to suspend work
IX, Clause 10.3 - employer's interference with tests on completion
X. Clause 16.4 - termination by contractor
xt. Clause 17.4 - employer's risks
xil. Clause 19.4 - force majeure
xilt. Clause 19.6 - optionaltermination
Unforeseeable Physical Gonditions
Physical conditions are defined in clause 4.12 as'natural physical conditions and man-made
and other physical obstructions and pollutants'. According to the definition in clause 1.1.6.8,
the criterion for judging what is unforeseeable is that it is 'not reasonably foreseeable by an
experienced contractor by the date for submission of the tender'.
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Full Supporting Particulars: Basic Requirements
The contractor must provide full supporting details of his application within 42 days of the
delaying event. ln practice it will be difficult for the contractor to produce full supporting
particulars within 42 days, especially if the project has been underway for some time or is
complex. This makes continuous record keeping, of a high standard, and the rapid
compilation of a claim, imperative.
ln reality, the quality of details varies considerably. Some claims are simply not detailed and
others do not even include particulars. This type of claim does not deserve success. The
basic requirement is for the claim to be particularised. lf there are several different causes of
delay, a period of delay should be attributed to each one. That is the basic requirement of
linking cause and effect. lf there is concurrent delay then the contractor needs to say so and
he also needs to decide which delay, if any, had the greatest duration.
ln order to do this, the contractor will have to produce evidence based on demonstrable
facts. lt is a discipline which helps him put his case, and helps the engineer follow and
understand the arguments. The details should reasonably include correspondence, meeting
minutes and any other documents he deems necessary and relevant.
Full Supporting Particulars: Presentation
The mere inclusion of hundreds of sheets of photocopied letters and other documents alone
will not get a claim accepted. There has to be a narrative, which refers to these documents,
and then draws some conclusions. lt is not necessary or even desirable, to repeat and quote
at length from documents.
It is most helpful is to let facts speak for themselves, but add interpretation. ln these times in
which electronic documents are used it is not unreasonable to expect a contractor of
substance to produce schedules to his claim, by way of Microsoft Excel or Project
documents, and using digital cameras, photographs.
MicroSoft Excel is an excellent tool for showing events chronologically and for annotating
them with comments. The types of delay can be listed on separate worksheets (tabs) with
particular items highlighted in different colours. Text can be given vertical orientation in
column headings, and letters or numbers entered into cells to show what the contractor is
claiming.
Microsoft Project is a very potent evidential programme and the results helps you produce
can be very telling. Remember that a picture paints a thousand words. Project has the
advantage that it enables the contractor to compile an as-built programme, and set it
alongside the original clause 8.3 programme, showing the causes of delays. Links can be
added, if they would help.
Photographs are invaluable. lf anyone's memory is cloudy a photograph, dated and given a
descriptive title, can provide conclusive evidence.
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Claims Preparation Ðay 2
The Engineer's Obligations
Clause 20.1 directs the engineer to provide his decision, approval or rejection, with detailed
comments. This must include responses to the key principles of the claim. When
determining whether to grant an extension, he must proceed in accordance with clause 3.5.
This requires him to consult with the contractor and to try to reach agreement. lf it is not
possible to reach agreement, he must make a fair determination of the extension of time.
The engineer is the first-step adjudicator and arbitrator. However, because he has worked
on the contract he is informed, unlike the tribunals who come on to the scene later on. The
engineer is not there to reject claims, but to deal with them fairly. That does not mean he has
to allow unmeritorious claims but that, if the contractor makes valid points, then he should
look into them and arrive at a reasoned conclusion.
As he is an informed adjudicator or arbitrator, the engineer will have knowledge of the facts.
This means he should not need the contractor to prove absolutely everything in the same
way that a tribunal might be expected to do.
Note that, under clause 8.4, the Engineer may have to make a number of determinations.
When doing so, he must review, and may revise, previous determinations. But he may not
decrease them.
1.2 Liquidated damages

Liquidated damage clauses require that a contractor pays the employer a predetermined,
amount of compensation should certain events occur. A common example is the
requirement that the contractor pay the employer a fixed sum for each day, week or month
that it is late in completing the work.
The main reason why construction contracts almost always contain provisions for liquidated
damages is certainty. The employer wants the work completed by the contracted date. lf
they are not then the employer will likely suffer some loss. Often this amount is difficulty to
calculate. For example, if a project is building office accommodation and the employer only
intends to obtain tenants on completion and not before, it can be difficult to calculate the rent
that has been lost arising from late completion. This is because the precise date when rents
would become payable from tenants is unknown.
Although losses can be estimated, they are difficult to prove, and such litigation can be
prolonged. Liquidated damages have the advantage that they avoid the need for having to
calculate and prove these losses. lnstead everyone knows where they stand in advance.
Whilst a contractor may find himself facing a large liquidated damages claim if it is in delay,
in fact the liquidated damages may only be a fraction of the actual loss sustained by the
employer. Of course on occasion this can work the other way in that the employer may be
entitled to damages in excess of its actual loss.
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For liquidated damages to be claimed for a delay the contract must make it clear when the
contractor will be in delay. lf it is not clear when the contractor should complete works a
court will not insert such a date and any claim for liquidated damages will fail because
liability cannot be established. The obvious starting point is that the contract must state the
date by which the works are to be completed.
ln many circumstances some of the delay to project completion might be due to actions, or
inactions, that are the responsibility of the employer. For example, the employer may delay
giving the contractor access to the site, vary the work to be or require the contractor to carry
out additional work not in the original contract. ln these cases employer's actions could
prevent the contractor from being able to complete work by a contract date. As we saw
earlier, in order to have a right to damages, an employer needs the extension of time clause.
lf thisclause is complied with, and an extended date is set, then the right to liquidated
damages will begin on that new, extended completion date. ln some cases it will be hard to
begin to estimate the likely loss of the delay. However, provided the amount of liquidated
damages is a genuine estimate of the potential loss it will not be punitive though it might still
hish.
Although every employer wishes to avoid using a contractor who is in financial difficulties,
this sometimes happens. lt may be in the employer's and contractor's interests to keep the
contractor afloat until the end of the project and therefore the employer may not wish to set
off liquidated damages but instead seek payment of what can be recovered at the end of the
project. As a result it is often usefulto choose a liquidated damages clause which allows the
employer to either set off liquidated damages against payments due to the contractor or to
require the contractor to pay liquidated damages. lf the contract only allows for one method
of payment and the employer fails to follow that then the right to liquidated damages will be
deemed to be waived and the employer will be restricted to claiming for actual damages.
Equally if payment of liquidated damages is subject to an architect's or engineer's certificate

then failure by the architect or engineer to provide that certification, or if this certification is
given late, the employer will be limited to a claim for actual damages.
A final word of warning with regard to subject of liquidated damages. There are many ways
in which a right to liquidated damages can be lost and the employer limited to a claim for the
actual losses sustained. Where the employer finds itself in this situation then the amount of
the actual damages that the employer will be able to recover is often capped at the level of
the maxmum value of any liquidated damages that it could have claimed under the contract.
So if a contract provides for damages of f 100,000 per week to a maximum of Êl million, then
the employer will only be able to claim up to Ê100,000 per week up to a total of Êlmillion,
however great its actual losses were. (lf the actual losses are less than the liquidated
damages the employer can only recover his actual losses).
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1.3 Goncurrency
Concurrent delay is one of the most important issues in reviewing and validating any claims
for the extension of time. Where a delay to completion caused by a contractor occurs
concurrently with a delay caused by the employer, the contractor's concurrent delay should
not, as a matter of course, reduce any extension of time due. Therefore, it is essential to
establish a proper understanding of concurrent delay and its effect on time impact analysis.
Generally, concurrent delay can be described as the situation in which delay is caused by
two or more different events at the same time during the delay periods being considered.
Whether such delays are excusable, and should be compensated, depends on the terms of
the contract, the cause of the delays, their timing and duration, the party or parties
responsible and the availability of contingency time (contingency time is time in critical path
analysis that allows non-critical activity or activities to be delayed beyond a planned date
without impacting the overall project completion date).
There are three different situations in which concurrent delay could occur. Firstly there is the
situation in which both the employer and the contractor each simultaneously, and separately,
delay an activity on the critical path and therefore the overall project. Secondly there is the
type of concurrent delay that occurs when one party is being delayed by another party in two
separate ways at the same time (different activity paths in the project plan), and in which
both affect the overall completion of the project. The third type occurs when, in a project
involving multiple-prime contractors, three different parties cause delays that occur at the
same time and in which each delay has an impact on the overall project completion date.
ln all cases of concurrent delay the contractor is entitled for an extension of time but
additional compensation will be declined unless the contractor can clearly identify and
segregate the part(s) of the delays it has caused from those that are attributable to the
employer or third party.
lf a contractor delay to completion occurs concurrently with a delay to completion caused by

the employer, the contractor's concurrent delay should, not as a matter of course reduce,
any extension of time due.
Note that the term "concurrent delay" is often used to describe a situation where two or more
delay events arise at different times but that the effects are felt in whole or in part at the same
time. Programmers, or schedulers, more correctly call this the concurrent effect of sequential
delay events.
The key elements of the generic extension of time are
The contractor is required to notify the engineer when it is reasonably apparent

that the progress of the work is being delayed, or is likely to be delayed, by any
relevant event.
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il Upon being notified the engineer is under an obligation to act i.e. he must form an
opinion. lf he is of the opinion that any of the events stated in the contractor's
notice are relevant and that the completion of the contract is thereby to be
delayed beyond the contracted completion date, he must award an extension of
time that is fair and reasonable.
For example, suppose a building is to be clad in marble and to be completed in 50 weeks.

Midway through the project the employer varies the contract so that the building is now to be
clad in granite such a way that the work can now only be completed in 55 weeks. However,
because of delays by the contractor, the building would have taken 60 weeks to complete
before the variation by the employer. ln this circumstance the contractor would be entitled to
a five week extension of time. The variation may not have delayed the works up to practical
completion (because of the contractor's own delays) but it has delayed the works beyond the
original contract completion. That is, because of the employers' variation the contractor
could not have been completed any earlier than 55 weeks. To take the example above, if the
works would have been delayed anyway because of delays which were the employer's
responsibility; the employer would suffer no loss for the five weeks caused by its own delay.
lf, quite fortunately from the employer's perspective, the contractor happened to be late
through its fault at the same time, and on this basis was denied an extension of time, the
employer would receive a windfall if it were allowed to recover liquidated damages for that
period.
It is sometimes said that the approach outlined above fails to recognise the importance of
the completion date. Also it looks at the question of the contractor's entitlement to an
extension of time by asking 'but for the contractor's delay by how much would the contract
have been delayed'? lf the answer is not at all then it is said that the contractor is not entitled
to an extension of time at all. lf, conversely, the employer's delay overruns the contractor's
delay then the contractor will receive an extension of time equivalent to the extent to which
the delay caused by the employer is longer than that caused by the contractor.
It is considered that this approach is in error for the following reasons:

L lt fails to recognise the approach the engineer is to adopt under the mechanism set
out above, namely to award an extension of time in the event that the works are likely
to be delayed beyond the completion date.
ll. lt involves a test which is grossly unfair and commercial unrealistic. lt can result in
the employer receiving a windfall simply because the contractor was unfortunate
enough to have been in delay for reasons of his own at the same time.
lll. lt fails to recognise the fact that delay would in any event have occurred as a
consequence of matters which are the responsibility of the employer; and
lV. lt results in a windfall for the employer and penalises the contractor twice, firstly
because he suffers liquidated damages and secondly because he also bears his own
additional costs arising from working on the project for longer. Recent cases
considered by the English Courts have come to the following conclusions:
I
The objective of the architect or engineer in assessing an extension of time is to

decide whether the relevant event is causing further delay to the works when a
contractor is already, and if so, by how much. Having done so, the engineer must
extend the period for completion by the amount of this further delay.
Where there are two concurrent causes of delay, one of which entitles the contractor
to an extension of time (a relevant event) and the other does not, the contractor
would be entitled to an extension of time for the period of delay caused by the
relevant event. This is irrespective of the concurrent effects of the other event.
Undertaking a proper analysis is the only way to dealwith concurrency.
Approval of extension of time claims
Most contract administrators separate the extension of time claim and its related costs
because approval is a lengthy especially when it comes to the financial part of it. The
engineer and employer are always reluctant to approve any claim for money. Therefore, it is
highly recommended that the contractor separate the claim for an extension of time and the
associated claim for costs arising from that extension.
The contractor has to submit the extension of time claim first with a notification that the
related cost claim will be submitted once the claim to extend the time is approved. The
critical issue for the contractor is the prevention of damages or penalties.
The employers engineer may take a long time to verify the extension claims and they often
request detailed documents normally only required by an external arbiter. This is also
applies to any interim extension claims. Most contracts restrict, or stop, the payment of
contractors on the completion date if there is no approved extension of time. The contractor
will not get paid for any work executed after the contract completion date if there is no
approved extension of time by the employer. Consequently, the contractor will suffer
financially as his cash flow will be negatively impacted. This could, in turn cause disruption
to progress and lead to additional costs. Only the most prestigious contractors could
continue performing in such cases while small contractors will be unreasonably impeded
because they are not in a position to indirectly finance the job. lf the contractor exercised this
situation he may claim "Time At Large".
Time at large is a very important concept and often missed by contractor despite the fact
that it would help them to avoid the application of liquidated damages, or penalties, in cases
where the employers engineer delays approval for an extension of time claim.
The time at large concept describes the situation where there is no identified date for
completion, either because it's not specified in the contract terms or because of events that
nullify the original date or because of the operation of law. Time is said to be at large
because the time, or date, for completion was not fixed before carrying out the work, but
determined after the work has been completed.
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The concept of 'time at large' is applicable only in common law countries such as the United
Kingdom, the USA and Australia where there is no civil law or written law to follow. Common
law draws on a case by case analysis using references to previous cases and the decisions
previously made in court. Taken together these show the importance of 'precedent' when
assessing legal claims. Common law is not applicable in all Arab countries because each
has its own civil law where there are conditions that need to be followed. Civil laws may not
allow for the time at large concept as described in common law as liquidated damages
cannot be waived. Time at large could be applied partially in the countries under civil law by
allowing the contractor to complete the remaining works in a reasonable time but with
liquidated damages to be applied after this time. ln other words, under the civil law, the
liquidated damages cannot be waived completely but are to be applied after the reasonable
time allowed for by the concept of time at large.
The term time at large is usually used in construction contracts in the situation where
liquidated damages or penalties are an issue. lf the time is assessed as being at large then it
is argued that liquidated damages cannot be applied. This is because there is no date fixed
from which the liquidated damages can be calculated. ln some situations, the date for
completion may be relevant to termination and to the issue of whether or not there has been
a breach of contract by failure to complete.
2 Glaims relating to Money
2.1 Prolongation
Delay prolongs the timescale of the contract. The recovery of compensation for this
depends on the terms of the contract and what caused the work to be prolonged. Such
costs could be caused by an act or omission on the part of the employer. To illustrate, an
employer variation, a breach of contract or some other contract provision such as
unforeseen condition of the ground. Whether the cause is governed by a provision
of the contract or a breach of the contract, the responsibility is with the contractor to
prove that it has suffered a loss or incurred additional expenses before it is entitled to
any compensation.
Of course, if the reason for the delays is the fault of the contractor, then there is no
sustainable claim for prolongation costs. However, if the delay and prolongation arises from
what may be called an 'Employer Risk Event', a prolongation claim made by a contractor will
be based on the contractor's increased use of time-related resources together with such
other types of recoverable loss the contract may allow.
Where prolongation costs occur because of a breach by the employer, tender allowances
are not relevant as the contractor is able to recover actual costs. lt is a regular mistake found
in the construction industry to believe that if the contractor has made no, or inadequate,
allowance for site overheads in its tender, this limits or removes its entitlement to
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compensation for extended time. This isn't correct. ln such cases calculating the amount of
compensation requires the actual costs of remaining on site to be calculated.
The following are generally implied in most construction contracts and but may be expressly
included:
The employer, or its representatives, shall not hinder or prevent the contractor from
performing his contract obligations.
a Acts by an employer (e.9. instruction, variation order, open-up inspection, etc.) which
cause delay to a contract may cause prolonged maintenance of resources by the
contractor;
Prolongation is found in most construction contracts, which describe it as a reimbursement

to which the contractor is entitled under the provisions of the contract in respect of
prolongation andior delay. A prolongation cost is not a disruption cost.
Prolongation costs consist of the costs of on-site overheads and off-site overheads, are time
related and do not support fixed costs. These time related costs normally represent the costs
of the contractor's site establishment, site overheads, general plant, and so on that are
typically affected by a delay to the critical path of the construction work. The entitlement to
prolongation costs incurred as a consequence of the delay very much depends on the
contract (variations and events). This involves a comparison between the actual costs
incurred by the contractor and what the contractor's costs would have been had no delay
occurred.
When should delay costs be evaluated?
Let us assume that a critical delay occurs to external envelope works because we are
awaiting details of external windows, and the contractor is awarded a 6 week time extension.
For which time period should the costs be evaluated? Should it be those costs associated
with the 6 weeks following the original completion date, or the costs incurred during the 6
week period when the information was late?
The Society of Construction Law's 'Delay and Disruption Protocol' offers good advice on this
matter in paragraphs 1 . 1 1 .2 and 1 .11 .3 as follows. . .
Arguments commonly arise as to the time when recoverable prolongation

compensation is to be assessed: rs ff fo be assessed by reference to the period when
the Employer Delay occurred (when the daily or weekly amount of expenditure and
therefore compensation may be high) or by reference to the extended period at the
end of the contract (when the amount of compensation may be much lower)?
The answer to this question is that the period to be evaluated is that in which the effect
of the Employer Risk Event was felt.
It is recommended that this sensible solution is followed.
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The 'heads' of a prolongation, or loss and expense, claim
Claims related to time are, as the phrase implies, derived from a time analysis, which
identifies:
(i) Prolongation to the contract period

(¡i) Other non-critical delays to work activities
Goncurrent Delay Events
Where concurrent delay events occur, the contractor may not recover compensation for
delay arising from the employers responsibilities unless it can separate the loss or expenses
that are caused by each of these from those due to those arising from events that are the
contractors own responsibility. lf the contractor would have incurred the additional costs in
any event as a result of the delays that are its own responsibility then the contractor will not
be entitled to recover those except for the extent of any period by which the delay caused by
the employer exceeds that caused by the contractor.
Equally important is the need to understand which calendar weeks the contractor is entitled
to be paid for. This is because the amount of his entitlement will depend on his actual costs,
particularly his time-related preliminary costs which will vary throughout the project.
Classification of 'delays'
Delays can first be classified as either'excusable' or'non-excusable'. Excusable delays are

those for which the contractor can be excused due to an act or omission by the employer or
his agents. For example, design information is issued late by the engineer. Non-excusable
delays are those arising from the contractor's own actions or inactions. For example, a
contractor fails to provide sufficient manpower to complete a project on time.
Excusable delays are in turn divided into 'compensable' and 'non-compensable' categories.
The former entitles the delayed party, usually the contractor, to monetary compensation for
the period of delay through acts or omissions by the employer or his agents. Non-
compensable delays on the other hand arise from neutral events (such as exceptionally
inclement weather), third parties, etc. lndeed any event for which under the contract
between contracting and employing parties there is no recompense for loss and expense.
2.2 Damages and Compensation

The means of compensating an innocent party for loss or harm suffered as a result of
another's breach of contract are damages. The accepted rule is that damages must be
sufficient to compensate for losses that can be reasonably considered to arise from that
contract breach.
ln order to justify entitlement to damages for breach of contract, the injured party will have to
prove that:
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I the breach actually causes loss

il the particular loss is recognised as giving an entitlement to compensation
ilt the loss is not too remote
IV the quantification of compensatory damages is fair and reasonable under the
circumstances
Prolongation costs and disruption are claims which arise in essence from the extended use
of time-related resources.
One of the biggest misunderstandings in construction is the idea that if a contractor is

entitled to an extension of time then he is automatically entitled to compensation for the
additional time taken to complete the contract. This is not so. There is no absolute link
between an entitlement for additional time to finish work and an entitlement for
compensation for that additional time.
A contractor's prolongation elaim will invariably include a sum in respect of finance charges,
the argument being that they have been 'underpaid' for periods of time, which has
necessitated borrowing to make up the shortfall. Or, if money has been taken off of deposit,
there has been a subsequent loss of interest.
Established case law makes it clear that contractors are entitled to include finance charges
in their prolongation, or loss and expense, claims.The contractor will still need to show that
the loss was actually suffered.
These provisions cannot cover every possible occurrence, in some instances where there
isn't provision for compensation then either party may decide to claim damages for a breach
of contract. lt is therefore important to distinguish between damages for breach of contract
on and for contractual compensation on the other. ln practice the sum of money that might
be recovered with either could be very similar.
This compensation can be separated into an element which arises as a result of variations
and an element which arises from different defined circumstances which is given different
names in different contracts. For instance:
l. FIDIC provides for recovery of "Cost" which is defined as "all expenditure reasonably
incurred by the contractor, whether on or off the site, including overhead and limited
charges, but does not include profit."
ll. ICE 6th Edition calls this "loss" and,
lll. JCT family of contract refers to this as "loss and expense".
The contractor who is making a claim must prove an actual loss and will be entitled these
only if they were incurred as a consequence of the event in question or as a result of any a
directly linked consequence of this event. Contracts can have clauses which limit liability for
consequential loss or damage caused by a range of general issues, such as late supply. The
objective of these is to limit damage arising from unforeseeable situations.
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2.3 Glaims for Payment in accordance With FIDIC

Procedures
The way in which claims are to be dealt with is contained in clause 20.1. Put simply, the
contractor is not entitled to payment if he does not comply with the procedural requirements.
On the other hand, if there are genuine reasons why the times cannot be strictly observed,
the engineer should hear the contractor's point of view. lf the employer is not prejudiced, it
seems to matter little if something is a day or two late.
Notices and Supporting Particulars
The contractor's obligations are set out in clauses 20J. He must start by giving notice of his
intentions and then he starts putting together his particulars. All through he must keep
accurate records.
Some have the view that if the contractor fails to give a notice and particulars on time then
the claim fails. That is a harsh view, especially with regard to particulars, and is probably not
sustainable before third party arbitrator. lf the employer does not suffer prejudice as a result
of the lack of notice, and the contractor is hardly late at all, it is hard to see why the claim
should be rejected.
Engineer's Obligations in Regard to Claims
The engineer has to arrive at a decision on the claim. He cannot merely reject it, or deny it
completely for want of one or two pieces of paper. On the other hand, he is not there to
make the contractor's claim for him, or to certify payment due from the employer in a
carefree manner. lt can be a hard balance to strike.
lf the engineer receives a claim, he cannot put it aside and leave it until the project has
finished. The engineer's has a duty owed to the contractor as well as to the employer. lf the
claim is paid later than it should have been, because the engineer has done nothing for
months, then the employer may be liable for financing charges. The employer may seek to
recover this additional cost from the engineer who caused the delay.
Gontractor's Bas ic Entitlement
The contractor's basic entitlement is summarised in clause 12.1, which says that the Works
shall be measured and valued. The onus is on the engineer to do this.
14
3 Common Heads of Loss

The general legal principles which are employed in making claims have been discussed, so
now we will look some of the practical difficulties encountered in pursuing some of the most
common heads of claim.
The heads of claim would normally be, as follows:
I Direct cost
il lndirect cost
ilt Overheads
IV Financing Charges
V Profit
VI Loss of Profit
Costs incurred while preparing a claim, economic and consequential losses are generally
not allowable and nor are costs that are remote.
Recovery of Cost
The first three items shown above are primary costs. Financing is a secondary cost and is
described below. Taking the direct and indirect costs and overheads together, what are the
criterions for recovering costs?
The things to consider when claiming costs are breaches of contract. The inclusion in the
conditions of claims clauses provides the engineer and the contractor with a mechanism for
agreeing damages, instead of the contractor having to sue for them. Costs that may be
recoverable by the contractor must therefore follow the common law damages rule. This
relies on showing that the damage arises from the breach, and that the cost arises from the
event complained of.
This is known as causation or cause and effect. The contractor must show a link between
the cause and the effect. He should may not need to provide as much evidence as he would
in arbitration, because the engineer should already be aware with the facts. However, the
engineer must ask if all the cost arises from the event. Contractors can be tempted to
inflated costs in their claims, and neglect to link cause and effect. The value of the damage
is can be a difficult matter to assess. The general rule is that damages should put the
claiming party in the position he would be in, had the issue not arisen at all.
Particulars of cost should not prove to be a problem. Direct costs are the site labour and
plant and any sensible contractor will have record sheets. They will show who and what was
on site. What they might not show in sufficient detail is what the resources were doing and
why they were doing it. This will inevitably lead to some assessment being made.
15
Head office overheads can usually be proved by reference to pricing information supporting
the contractors tender, or by using the contractor's audited accounts. lf the accounts for
years other than those in which the work was carried out, are used, care should be taken to
ensure that the attribution of overheads to the project is appropriate, and not inflated.
3.1 Disruption
Prolongation is one of two major forms of claims a contractor may make, generally speaking.
The second is the disruption claim. This is not related to the contractual completion date for
the work. Disruption (as distinct from a delay) is a hindrance or interruption to a contractor's
normal work or to their methods which often leads to a reduction in efficiency. lf the
employer causes the disruption, the contractor may be entitled to compensation either
because of a particular contract clause or as general damages under breach of contract.
Disruption is incorrectly referred to in the industry as if it is the same as delay. lt is not.

Disruption to work may lead to late completion, but not necessarily so. lt is common for an
employer to disrupt works but for the contractor to be in a position to finish by the contracted
date. ln these situations, there are no grounds for the contractor to make a claim for an
extension of time. lnstead it may have grounds for a claim arising from disruption because of
the reduced efficiency and consequently, increased costs.
One of the major obstacles any contractor faces is pursuing a disruption claim in that most
standard contracts do not expressly provide for disruption. There is no disruption clause. lf
there is no specific clause in the contract to rely upon, the contractor will have to rely on
breach of an implied term, such as breach of a term that the employer will not prevent or
hinder the contractor in carrying out its works.
When looking at time (delay) issues, the importance of cause and effect analysis is
considered. This is equally relevant here. Disruption has to be established in exactly the
same manner. lt does not follow that simply because events on site did not occur as the
contractor had planned that there is a valid disruption claim. Examples of what disruption
cause are:
I Premature moves between activities

il Out of sequence working
ilt Congested working areas with 'stacking' of trades
IV lncreased size and number of working gangs
V lncreased number or lengths of shifts leading to decreased productivity
How does the contractor prove a disruption claim? The starting point is again the
contractors' own records. They must show the employer what work was carried out, when it
was done and what resources were used.
One of the better methods is to compare progress between a comparable and unaffected
part of the project with the disrupted part of the works. ln doing this the contractor will be
able to show a man-hours comparison and a work product (deliverable) comparison. But this
16
Claims Preparation Ðay 2
only works if you can truly compare like with like. lt is of course possible that there are no
parts of the project that are unaffected. lf this is the case the contractor may rely upon
statistics from comparable projects they have undertaken previously or use industry norms,
for such things are productivity. These would need to be a last resort as they need to be
relevant and comparable to type of work the contractor is undertaking in order to be of value
in proving a claim.
A successful and well-presented disruption claim will remove the issues which affected
productivity but which were not the employer's responsibility. A claim must not include
anything that was the responsibility of the contractor. For example plant problems, problems
with supervision should be removed from the claim.
What the contractor should present is an accurate claim based on the actual costs incurred
as a consequence of disruption caused by the employer. Site records which can be
exhibited and cross-referenced are an invaluable help in doing this.
By way of example, there are some breakdowns of potential claim items within a disruption
claim and at the type of evidence that might be used to support them:
Higher labour costs per hour
(a) Causes
1. More work performed during increased wage rate periods
2. Unanticipated overtime or shift premiums when
. Overtime is ordered by the owner or designers
. Overtime is essential in order to complete on schedule
. Evening or weekend work is needed to permit use and occupancy of the
premises prior to completion.
(b) Proof of damages
(c) Assessing wage escalation can be done by comparing the expected labour use with
actual use
(d) Use the contractor's bid estimate to build an as-planned labour distribution
(e) Examine the contractors' payroll records to construct the actual labour disruption
(f) Use an expert to assess whether or not the planned distribution is reasonable. This is
best be done in conjunction wíth CPM when supported by visual aids and graphics
(g) Carrying out extensions of the labour hours and wage rates (when adjusted for premium
time) planned base labour expenditures and actual labour costs.
(h) The difference between the two values represents totalwage escalation
17
(¡) Assess if the labour distribution understood before the disruption coincide with what was
originally planned. lf it does then it shows that the contractor's estimate is reasonable
and that subsequent deviations in the distribution are due to the impact of the
disruption(s) in question.
Û) Remember, for beginning-of-job delays, the actual labour expenditures will initially be
lower than what was planned but will later greatly exceed the anticipated labour.
(k) To establish additional overtime attributable to the delays (and to resultant acceleration):
l. From payroll records show actual costs paid in the "pre-impact" period and establish
"typical" monthly figure from which you can calculate a total planned overtime for the
original contract period. Caveat: the anticipated overtime costs together with the
planned base labour costs should be consistent with the contractor's total planned
labour estimate.
The difference between the total "planned" overtime and the actual premium time as
per the contractor's payroll records represents additional overtime due to the delay
and subsequent acceleration.
Loss of productivity (i nefficiency)
(l) Causes
L Substandard productivity per man-hour due to fatigue, poor morale and other factors
during extensive periods of scheduled overtime.
il Loss of productivity due to stacking of trades and congestion in work areas.
ilt lnefficient use of work forces while waiting for preceding work to be completed.
IV Delays and costs of recruiting, selection, hiring and training of new, additional
workers not accustomed to the job.
V Necessity of retaining less productive workers to have enough manpower.
vl, lnefficient use of manpower while "working around" work for which change proposals
have been made but no final action has been taken.
vil. Loss of momentum due to shifting, retraining and under-utilisation of crews.
vilt. Loss of worker morale and incentive in a disorderly and confused working
environment.
tx. Unexpected amount of work performed under unfavourable conditions following

owner or tenant occupancy.
18
X. Cost of hiring and breaking in new crews and regaining momentum following partial
or total suspension and lay-off of previous crews.
xt. More work than planned during periods of adverse weather
xil. Wasted manpower when equipment breaks down due to lack of maintenance during
acceleration or due to use of equipment in adverse weather.
xilt. Limited site accessibility costs (for example not being able to follow normal routines,
such as rolling scaffolds or hoists).
XIV. Piecemeal workers
XV. Savings lost by not being able to have labourers engaged in repetitive job operations
because of disruptions to the normal flow and sequence of work.
(ll) Proof of damages - alternatives

i. The best method is if contractor has kept and retained accurate job performance
records by trade on previous projects. Thereafter, if an inefficiency claim is asserted
by the contractor, there is a corporate database showing normal performance under
a given set of job conditions. While such a standard may vary from job to job or from
crew to crew, such cost data would be very useful in proving the reasonableness of a
contractor's manpower estimates.
The next best method (which may be used in combination with the above) involves
the comparison of job records showing performance during the time the work is
inefficiently performed compared with performance periods when the work was done
under normal circumstances.
ilt Through the use of the expert testimony, establish that the contractor's anticipated
productivity was reasonable. This can be corroborated by once again plotting
anticipated man hour expenditure and distribution versus actual man hour
expenditure and distribution (on the base contract) and determining whether
significant deviation only occurred upon the onset of acceleration and/or the various
impacts previously mentioned.
IV lndustry studies and trade publications are also available which provide statistical
analyses based on empirical evidence of the adverse effects on the productivity of
various trades and activities resulting from such factors as sustained overtime, trade
congestion and adverse weather conditions etc.
Head Office Overheads
It seems likely that on any contract where there has been some delay and disruption there
will be some consequential increase in direct head office administrative costs. This arises
19
during the delay period itself but also accounts for increased management costs in dealing
with that delay.
ln making a claim for additional head office overheads, a contractor must be able to show
that it had other work which could have been done during the period of delay. lf there was no
other work, other contracts would not be contributing to the cost of the head office during the
period and it is reasonable to suppose that no additional sources of income would have
been in place for those involved in the 'recovery'work.
It is convenient to divide head office overheads into
l. Dedicated overhead costs which can be attributed to the specific delay
'Unabsorbed overhead costs such as rent, lighting, heating, salaries, office

equipment and such like.
It is important to distinguish between these two types of overhead. Unless the terms of the
contract do not allow a contractor to recover unabsorbed overheads, they are generally
recoverable as a foreseeable cost resulting from prolongation. The contractor has to be able
to show that because of activity arising from disruption which is the employers' responsibility,
the contractor was prevented from taking on other overhead earning work.
ln so doing the contractor has to be able to show that it has
Not been able to recover the overheads it would have expected to have recovered
during the delay period; and
Been unable to recover those overheads because its workers were tied up dealing
with the disruption which is the fault of the employer.
A contractor will be required to show; using its records, that the head office overheads it
claims it has been unable to recover from other activity. lf he cannot do this, it is possible to
rely on one of a number of formulas. However formulae are a last resort which will only
prove successful when backed up by supporting evidence. The formulae assume a healthy
construction industry and that the contractor does not have enough resource to take on
other work. Formulae therefore, are not good methods in a recession.
The best known formulae, is Hudson's formula which takes the allowance made by the
contractor for head office overheads and profit in his original tender, divides it by the original
contract period and multiplies the result by the period of contract overrun:
HO/Profit percentage x Contract Sum X Period of delay (weeks)
100 Contract Period
20
There is a major criticism of this formula in that it allows for double recovery of overhead in
that the contract sum already includes the overhead figure. ln any event, it should only be
used after an accurate delay analysis has been performed to establish its period.
Loss of Profit
Under the standard forms, profit on other contracts which a contractor alleges it was
prevented from earning because of an employer risk event, is not generally recoverable.
lf the contract does allow profit recovery that recovery will be limited so as to account for the
fact that there is no risk involved in 'earning' that profit. ln a similar fashion to the dead office
overheads, whether or not a loss of profit claim is successful may depend on the economic
climate at the time. Contractors also need to consider that if a prolongation claim contains
profit on that extra work, double recovery through a separate profit claim will not be
entertained.
Labour & Plant
How does a labour and plant claim come about? A contractor may have to employ additional
labour and plant, or alternatively, the contractor's existing labour and plant may be under
used or even standing idle.
The difficulty a contractor faces is in proving the actual amount of additional expenditure it
has occurred. The without proof, the contractor may pursue global or total cost claims which
are unlikely to be successful. lf the contractor follows good record keeping practice, they will
be able to establish the actual costs incurred. From this, they should be able to identify the
planned use of those resources based on the original programme and tender. Further
problems are faced, however, in trying to show that the tender allowances were not
inaccurate. Perhaps the answer is to follow the comparable period method explained earlier
in relation to general disruption.
lf the contractor has hired plant, matters are more straightfonrvard: the amount claimable is
the amount actually incurred. The difficulties arise where the claim relates to the contractor's
own plant. lt is rare to find a contractor who keeps such detailed cost records which allow
the actual cost to be referred back to the particular disruptive event. What should be looked
for are invoice or contractor records documenting additional maintenance, repair and fuel
costs. This is difficult when considering one event, and more so when more than one
disruptive event happens concurrently. lf a contractor can show actual costs, it will be
entitled to recover that money. lf not then the contractor will recover a nominal amount,
reflecting depreciation in the value of the assets in question.
lnterest or Financial Charges
Financing charges became a type of claim as a result of the case of F G Minter v. Welsh
Health Technical Services Organisation (1980). lt established that there are two types of
financing charge. One is the loss of interest on money that the contractor has not been paid.
21
The other type is any interest he has to pay because of an overdraft he develops from using
his own money to finance work instead of money paid to him by the employer.
Financing charges are a secondary cost. lf his claim fails, his claim for financing will also fail.
lf the primary cost claim succeeds it is inferred that he has incurred financing charges. There
is not usually anything to be gained by looking at bank statements. They may show the
contractor had an overdraft, but that could be due to any reason, not necessarily connected
with the matter in hand. ln general when calculating costs it is sensible to use a current
lending rate, plus 2%.
Claim Preparation Gosts
Most standard forms of construction contract do not allow a contractor to recover costs
incurred in preparing the claim. Most allow the contractor to recover the cost, loss or
expense that it has actually incurred. Therefore fees paid to claims specialists or to
independent professional advisors are not recoverable unless the contractor can the costs
arise because of the employer's unreasonable actions when dealing with its claim.
There is one exception. lf the claim proceeds to arbitration or to a legal case (litigation) then
the contractor is entitled to claim these costs as well.
3.2 Acceleration
Acceleration can best be defined as the execution of the planned scope of work in less time
than originally planned or the execution of an increased scope of work within the original
planned duration. What is likely to be included in the cost of acceleration?
The following are the most likely things to be claimed by a contractor who has been required
to accelerate work:
t. working additional hours

il. providing additional labour
ilt. providing additional or different equipment
tv. advancing the date of delivery of manufactured items
The position in standard forms of contract is that the contractor, once in delay for which he
can receive an extension of time, is not contractually required to make up any of the delay
he has incurred. lf the employer wants to complete work earlier, he must secure the
agreement of the contractor to accelerate the works. This would either by using a variation to
the terms of the original contract or as a separate agreement.
The best course of action for both parties to take is sit together with the existing contract and
makes it clear exactly what is covered by the new agreement.
22
Claims for acceleration may arise where an employer decides to have the work completed
earlier than the originally planned date. An important point for the employer to this is whether
or not the costs of acceleration are less than the amount that could be recovered for early
use of the building. The most difficult issue for employers is in trying to determine the likely
costs of acceleration and how costs should be established, because acceleration is an
unknown quantity. The employer needs to be wary of simply laying himself open to
potentially large claims from the contractor(s).
An issue which frequently arises is whether there was an instruction to accelerate which
could be explicit or implied.
This can arise where an extension to a contract is denied and the contractor is required to
work to the original completion date. However, subsequently, the contractor is held to be
entitled to an extension of time. This is known as "constructive acceleration".
A contract may entitle the employer to require the contractor to accelerate the carrying out of
the works so as to make up for any delay caused by the employer or delays caused by
unforeseen events. ln this situation, the contractor would be rewarded, financially.
This can cause problems. The contractor may be tempted to try and say that the cause of
any delay, and therefore the need for him to accelerate the works, is a ground by which he
can seek reimbursement from the employer under the terms of the contract. This underlines
the need for good record keeping and to always demonstrate the link of cause of effect
between events and additional costs and/or delays arising from them.
lf a contractor makes a claim for acceleration, express or constructive, there are guidelines
that can be followed. ln the first instance, you need to identify the types of cost, define how
to calculate the extra resources you have employed and how to evaluate their individual
expense.
ïhe cost factors which offers need to be considered are
(a) Labour
l. A contractor may seek premium time payments arising from having to work a longer
week. This is usually demonstrated by reference to a recognised study and applied
by way of a percentage addition to the basic hourly rate.
A contractor may claim for increased labour costs if in order to meet the accelerated
programme, it has to bring in additional labour for example.
lll. lf the accelerated programme requires a larger labour force, working more hours and
in different sequences, for example, a contractor may make a claim for the reduction
in the level of productivity. This is best shown by contractor records which monitor
how productivity has been affected by the accelerated programme. lf the contractor
does not keep this sort of record it is possible to rely on research studies and
23
statistics to support the claim. lt is important that these studies are reasonably
current.
IV It is likely that a contractor's supervisory staff costs will increase during a period of
acceleration.
(b) Preliminaries
(c) ln addition to additional labour costs a contractor can seek to recover the cost of the
extra resources it requires to meet the acceleration programme.
l. There will usually be a claim for an increase in the amount of plant and tools
associated with the larger labour force. The larger labour force will probably require
more cabin and site office space.
il lf sub-contractors and suppliers have to increase the pace of supply, there might be
a claim for priority payments.
To the extent that the acceleration requires a greater commitment from head office, there
may be a claim for a greater margin on overheads and profit than would be expected when
pricing variations.
3.3 Mitigation
A contractor has a duty to mitigate against any losses it might suffer. Therefore a contractor
must do all it reasonably can to avoid and or reduce delay and the financial consequences of
it.
Most standard forms of construction contract include a requirement that the contractor has to
do all it can to avoid, overcome or reduce delay. However therefore are limits. For example,
it does not have to carry out any variation more efficiently than the original works. Further, it
does not have to spend money to alleviate the effects of an employer's risk. lf it does have to
introduce additional resources, then the employer is responsible for that additional cost.
Some contracts actually make compliance with mitigation provisions a condition precedent
to recovering loss. A contractor does not have a duty to reduce the natural effect of an event
of concern that is the employers responsibility. On the other hand a contractor may not
recover compensation if losses could have been avoided.
Ç,L6,Lrl ¿- L'',*- 1
? '¿t
24
4 Procedures or Processes of Glaims

Claims are often subject to a formal process spelled out in the contract. Unresolved claims
become disputes which may be adjudicated by arbitration or other alternative dispute
resolution methods which are described in the contract. Claims considerations are divided
into four broad categories, including:
l. Request for restitution of what is rightfully due
ll. Provision and recognition within contract
lll. Removing emotion and following procedures
lV. Observe rules and time constraints
Typically in this situation the contractor and the employer might agree to a settlement unless
a dispute arises. lf such disputes cannot be settled amicably, the decision on alternate
dispute resolution process will review some of the ways in which such claims can be
adjudicated in less costly and a more professional manner and utilising industry expertise in
the adjudication process.
4.1 Development of Glaims

ïhe origin of claims can be divided into three main categories, including
Employer or engineer rejection (or instruction) with cost and/or time

consequences
ll. Unforeseen events and/or circumstances (employer's risks and consequences)
lll. Action or inaction or impediment by employer, engineer or third party
Labour and associated costs, contractual and temporary materials, construction equipment,
supervisory and staff time that can be clearly attributed to work associated with a change or
delay constitute direct costs. lf these direct costs are well documented, it is not difficult to
justify them in a claim. The other one is impact cost such as acceleration cost.1 lf a change
can be shown to delay the completion date of a project, all parties to the contract are likely to
incur additional overhead expenses associated with support staff and facilities due to the
extra time.
Constructive changes result from the failure of the employer, or engineer, to recognise
contractual entitlement to a change order or other changed conditions in a timely manner. A
claim occurs when the parties cannot reach a mutually agreeable solution leading to a
change order. The following actions should happen under proper change management as
part of the claims process:
l. Give timely notice of the intention to claim

I
Acceleration or speeding up the project is a deliberate response when delays in project completion
including methods are shift work, overtime and increased resources.
25
ll. Collect the evidence
lll. Establish the right and validity
IV Analysis the data including schedules, correspondence, submissions and

documents etc.
V. Determine entitlement and/or remedies
Vl. Evaluate and quantify
Vll. Assemble by type of claim, contract clauses and supporting justification
Vlll. Define objectives and realistic expectations
lX. Develop strategy and timing (leverage and balance of power)
X. Submit, support, negotiate and resolve
Xl. lf unsuccessful, then select method for resolving the dispute
For successful claims, the contractor must put forward evidence that substantiates the claim
and makes a direct link between the delaying event and its consequence with regard to time.
This should have enough detail to allow the impact to be quantified in terms of money.
There are simple guidelines for the contractor to follow in making a successful claim:
t. State the facts which have given rise to the entitlement.

il. State the contract term(s) under which the entitlement arises.
ilt. State and show that any conditions precedent have been complied with
tv. Provide all necessary substantiating evidence to justify the entitlement.
Make the claim as concise, clearly linked to the contract and grounded in facts and evidence
as possible. lt is advisable that when drafting your claim that it is best not to use emotional
language. The contractor should bear in mind the fact that legal entitlement needs to be
shown but you also need to persuade the employer of the merits of your case.
lf a contractor wishes to make a claim for a direct loss or expense arising from a variation,
then they should seek to prove the following:
l. That a variation (change instruction) was validly given under the contract and that
variation has been complied with.
ll. The date when variation was issued and when the contractor complied with the
variation.
lll. What work was carried out.
lV. When in the progress of the work was it necessary to carry out the variation.
26
V. That in carrying out the variation, the regular progress of the work was affected.
Vl. What was the actual effect on the progress of the work.
Vll. Full details of the costs incurred as a direct result of the variation.
Vlll. That contractually required notices (if applicable) were given in respect of the effects
of the variation.
Many fail to link the cause of the delay with the effect of it, or to provide evidence that there
is a direct cost consequence that can clearly be shown in cost records. Records are the
prime source of evidence.
A claims specialist would undoubtedly ask to see following items:
t. Tender documents:
lt. Contract documents:
ilt. Programme of work (plans).
tv. Resources (plans a profiles)
V. Contractual background
2. Progress Records
Site diaries maintained by site supervisory staff are vitally important source documents used
to develop a daily, specific, as-built programme. As we have seen above accurate records
are a great help when raising claims, resolving disputes and building a database of historical
data that assist with future planning.
The site diaries should record the following information on a daily basis:
L weather
ll. manpower by number, trade and subcontractor
lll. the specific work performed, with reference to the corresponding programme activity
number
lV. details of any delays, interruptions and issues encountered plus what action was
taken
V. work stoppages
Vl. variation, or change in the order work performed
Vll. repair or rework performed
Vlll. RFls (requests for information) submitted
lX. CVls (confirmation of verbal instructions) received
Site diaries of good quality can be used to create an as-built programme. The as-built data
can be maintained in a database and can be collected using handheld at site.
Photographs are also a very helpful way of documenting site progress. They must be
labelled with the date of the photo and specific description of the subject.
27
Records in a claim situation
Getting the right time extension and recovering time-related costs is about with the strength
of your case, and whether or not it can be proved with factual records. lt is a truism to say
that there is no substitute for good record keeping.
For example, how can a contractor prove that an entitlement to an extension of time resulted
from information being received late? The key element in most cases will be the project
records that have been maintained on a day-to-day basis. Success in a claim is all about
keeping them accurately and up-to-date. They can then be used to demonstrate cause and
effect and therefore, entitlement.
Frequently, these records are just a list of percentages complete for programme activities
(shown in the project plan) at the date of the site meeting. As a minimum, for each activity
the following progress information should also be maintained on a fortnightly or monthly
basis:
l. ln addition to recording the percentage of work achieved, record the actual start and
end dates, together with any periods of inactivity or stoppag.
ll. ldeally break the programme down into smaller elements, brickwork and blockwork,
for example, could divide into elevations; for suspended ceilings subdivide into floor
areas or groups of rooms.
lll. Maintain good records of who did what, where and when.
lV. Note weather conditions.
V. Detail the problems encountered and the steps taken (and needed) to resolve them,
including the resources used.
ln addition all operational supervisory staff should keep meaningful site diaries,
supplemented with photographs as these often prove very useful later if a dispute arises.
Photographs must be properly identified and the following information should be recorded
with them:
L The date and time taken
ll. The position from where the photograph was taken
lll. Descriptive details of the subject matter
lV. A reference number for the photograph
V. The name of the photographer
Note that modern cameras, and smartphones, will automatically capture some of this.
Disruption and loss of productivity are difficult to prove as generally very little up-to-date data
is available from site that shows the levels of productivity attained before and after the
disruptive event. Any data kept that can establish disruption and productivity loss,
particularly with respect to subcontractors who carry out the majority of the work, will be
invaluable.
28
3. Cost Records
This primarily means time and allocation sheets. The more detailed and accurate these are
(particularly in the case of supervisory staff) the better your claim will be. The point you
should bear in mind is that cost records should be clearly referenced so that they can be
clearly linked to a particular delay event or consequence arising and which will be claimed
for. Allocation sheets which show who was doing what, and where, are preferred.
4. Records/Minutes of Meeting
These can be useful supporting evidence if accurate and agreed by all parties who attended.
It is good practice to check the minutes on receipt and challenge any inaccuracies at the
time of correspondence. lf you do not, it does become more difficult to challenge the minutes
later. lndeed, failure to challenge inaccuracies until making a claim might be considered by
an arbiter as a means to add undeserved justification to a claim and thereby harming the
contractors' case. Remember also that most minutes of meetings will have good progress
reports.
Records of actuals and supporting information are necessary when establishing costs
incurred as a result of the events leading to a claim. The following records are required:
L Programme (schedule/plan) setting out what the contractor had intended for the
order, sequence and timing of the various activities at the time of tender.
ll. An estimate of resources and expenditure, which are required to deliver the project.
lll. Updated and revised schedules of work in accordance with events which occur as
the works progress. lnclude all change orders as these are crucial.
lV. Progress programmes setting out the progress of the various activities against the
programme.
V. Records of actual resources and actual expenditure based on progress.

Vl. Records of any resources which were standing or uneconomically employed.
Vll. Records of overtime worked and their cost.
Vlll. Progress photographs and/or videos.
lX. Drawings register (with details of amendments and updates, if any).
X. Site diaries.
Xl. Approved minutes of meetings.
Xll. Labour allocation sheets.
Xlll. Plant allocation sheets.
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5. Site diaries
Site diaries are extremely useful (but occasionally embarrassing) records of progress
requiring discipline if they are to be relied upon. The evidence in the diary can be of great
importance, especially if there is no other evidence available.
4.2 Procedure Steps in accordance w¡th FIDIC

The following steps are required:
1. Give a notice of your intention to claim within 28 days of the event leading to the
claim occurring. The notice does not need to include any details of the claim itself
2. Keep contemporary records (contractor)
3. lnspection of records (engineer)
4. Provide authority and instruct contractors to keep further on-going records (engineer)
5. Within 28 days of the notice or an agreed period, submit particulars of the claim in
respect of the amount and grounds upon which it is based (contractor)
6. lnterim plus accumulated accounts are submitted for any ongoing effects (contractor)
7. Final accounts are to be submitted (contractor)
B. A copy of accounts to be sent to the employer, by the contractor, if required by the
engineer.
30
1 Purpose:
The purpose of this procedure is to guarantee the efficient and professional submittal of claims notices
and claim submissions throughout the life of the project, to protect the Contractor's position, both in
respect of possible liquidated damages and in respect of financial status on the project in terms of cash
flow and profit and loss.
The long term Contractor's philosophy for the submission and settlement of claims for extension of
Time foiCompletion (EOT) and claims for related Additional Payment is "Claims Avoidance".
2" Scope:
This procedure will apply to Notices and Claims for extension of time and additional payment in respect
of Agreements made between the Contractor and Employers.
3. Abbreviation and Definitions:

3.1.Aþþrevialle¡s:
CAD: Claims Administration Director
CM: Contracts Manager On-Site
EM: Engineering Manager On-Site
CnM: Construction Manager On-Site
PCM: Project Controls Manager
PM: Project Manager
EOT: Extension of Time
3.2.Definific[si
Contract: The contract between the Contractor and the Employer
Main Claims: All Claims related to EOT completion or any related Additional Payments
Project Team: Members are appointed by Project Director.
4. Key Roles and Responsibilities
Job Title Responsibilities

Prepares documents to facilitate management of the submittal of
claims on the project.
Enters the lnternal Delay Notification on the lnternal Notification of
Delay- Tracking Schedule.
Opens folder on shared drive for storing correspondence and
records.
CM Circulates the lnternal Notification of Delay- Tracking Schedule
reference number to the ProjectTeam.
Drafts and issues the necessary Notice of Delay and enters it on
the Notices of Delay - Tracking Schedule.
Ensures that Claim Submissions are made in accordance with the
time scales stated in the contract.
Carries out the Claim on
Prepares the lnternal Notification of Delay.
Maintains necessary records in the shared folder for inclusion in
EM claims
Prepares a detailed report for design issues in the "Delay Notice
rt- DNR
Prepares the lnternal Notification of Delay,
Maintains necessary records in the shared folder for inclusion in
PM/ CnM claims.
Prepares a detailed report for construction issues in the Delay
Notice "DNR"
Monitors program and reports where delay would affectoverall
program date.
PCM Maintains necessary records in the shared folder for inclusion in
claims.
P m del for inclusion in claims
cAt) Fully involved in Claims Negotiations
5. Frocedure:
5.1 EstablishingClaimsProcedures
5. 1 .1 At the commencement of the Project the CM shall:
a. Prepare documents to facilitate management of the submittal of claims on the project
including:
. "Schedule of Notice Perlod'-COR_CTS-Ft\/l06-01.
. Standard Notices as "Samp/e Standard Notice" - Annex A.
" Schedule of the contract conditions which are related to design, Variation Order
(VO), EOT, financial claims and penalties as "Samp/e Schedule of the Contract
Conditions" - Anr¡ex B.
. Flow chart(s) to demonstrate the contract requiremenls as " Sample of the
Contract Requirements" - Annex C.
" ldentification of the contractual recipient for notices and claims as required by
: Contract.
5.2 lnternal Delay Notification

ln the event that delays occur during the design or Construction Phase of the Project.
5.2.1 The EM/ CnM shall:
a. Prepare the "lnternal Notification of Delay"-CAR-CTS-FM06-02.
b. Submit the form to CM.
5.2.2 The CM shall:
a. Enter the lnternal Delay Notification on the "lnternal Notification of Delay- Tracking
Schedule"- COR_CTS_FM06-03 which where possible will have hyper-links to all
supporting data and correspondence.
b. Open folder on shared drive for storing correspondences and records as described in
5.4.
c. Circulate the lnternal Notification of Delay and- Tracking Schedule reference number
to the Project Team.
d. Draft and issue the necessary "Sample Standard Notice"- Ann¡ex A. See5.3
5.2.3 The PM, CnM, PCM and EM shall keep records including labor and equipment resources,
photographs, site diaries etc. in the folder on the shared drive as defined in5.4
5"3 hlotice of Delay
5.3.1 Upon receipt of an lnternal Notification of Delay the CM shall draft the Standard Notice
(where applicable) and enter the Notice of Delay on the 'Nofices of Delay - Tracking
Sched ule"- COR_CTS_FM06-04.
Notel: The Notice of Delay will be based upon a set of standard notices.
Nlote2: The Notices of Delay - Tracking Schedule will take into account the Notice
Deadlines contained in the Contract.
5.4 Delay Notice Report (DNR)
5.4.1 When delays occur, the EM shall prepare a detailed report for design issues in the "Delay
N otice Re port- D N R"- COR_CTS_FM06-05.
5.4.2 When delays occur, the PM/ CnM shall prepare a detailed report for construction issuesin
lhe "De\ay Notice Report- DNR"- COR__CTS_FM06-05.
5.5 Records
Records will be required to support the Claim submissions.
5.5.1 The CM shall;
a. Establish a location on the server where Records can be stored.
b. lnform all concerned about the location of the established location.
l,rlote: The Records and the persons responsible for their preparation and uploading to the
server are as follows:
Records Responsible
Submittals EM-DM
Technical Queries EM-DM
Daily Diaries CnM - CnM
Time Sheets/Labor Allocation Project Controls - PCM
Plant Equípment Allocation Project Controls - PCM
Photographs Construction - CnM
Method Statement Conslruction - CnM
Programme Project Controls - PCM
5.6 Claims Submissions

Claim Submissions will be made in accordance with the Standard Formats included as per "Claim
For Extension of Time And Additional Payment"- AnneN Ð.
5.6.1 The CM shall:
a. Ensure that Claim Submissions are made in accordance with the time scales set out
in the completed "Schedu/e of Notice Periods"
- COR_CTS_FM06-01.
b. Ensure that Claim Submissions take account where applicable the records referred to
in paragraph 5.4.
c. Ensure that the CAD reviews the Claim Submission.
d. Ensure that the "Client Claims - Commitment Authorization"- GOR_CTS_FM06-06 is
completed, signed and approved as per the "Project Authority Matrix- Construction
D ivision"- GON-AuthorityMatrix-O1 .
5.6.2 The PCM shall prepare program delay analysis for inclusion in the claim.
5.7 Claim Negotiation
5.7.1 The CM shall carry out the Claim Negotíation with the full involvement of the CAD within
the fully approved Client Claims Commitment Authorization amount.
5.8 Dispute Resolution
5.8.1 The Dispute Resolution process will take into account the process and time scales set out
in the Schedule of Notice Periods.
5.8.2 Reference to Dispute Resolution can only be made with the approval of CDM and
P&COO.
The Following map defined the main claims processflow

L I
Contract Requirement* C{JN *?$,,ûP4ê-Áil*€xt
CLAUSE 8.4 EXTENSION OF TIME - ACCESS, USE OF SITE, WORKINGSPAGE
2.L The Employer shêll g¡ve the

Contractor right of access w¡thÌn
the t¡mes stated in the Part¡cular
Co n d it¡ons
20.1 (a) Contractor to subm¡t

a fully deta¡led claim within
2.1 lf no such tìme ¡s stated inthe Curued l¡nes are alternatives 20 days of the event
Particular Cond¡t¡ons the
Employer shall g¡ve the Contractor
right of access to the Site w¡th
effect from the Commencement
Date 20.1 Contractor to give not¡c€ 3.5 The Employer shall consult 3.5 The Employer shall g¡ve not¡ce
to the Employer not later with the Contractor in an Agreement
YES
to the Contractor with support¡ng
than 15 days afterthe reached
endeavour to reach agreement pa rticu la rs
1.1.6.8 Variat¡ons ¡nclude:
Contractor became aware of
(i) access to the Site the everft
NO
(i) use of a ny specific parts of the site
20.1 (a) Contractor to subm¡t

{ii} limitations of working space 3.5 The Part¡es to comply EXCEPT
a first interim cla¡m w¡th¡n 20 3.5 Employer to issue
days of the event 3.5 The Employer shall make ¡fthe Contractor g¡ves not¡ce of
Time/Cost Records for
a fair determ¡nat¡on d¡ssatisfact¡on within 10 days
signature by the Contractor
8.4 Contractor considers himself
ent¡tled to an extens¡on oftime
20.1 (a) Contractor to submit

further ¡nterim claims atthe 3.5 E¡ther Party may then referto
end ofèach month d¡spute for resolution pursuantto

Sub-Clause 20.2.
20.1 (a) Contractor to submit

a final claim withìn 10 days of
the end ofthe event
i-irii.ti:,orÌ Ptirúrt i-t:çitgsiÍiù;ì:

t:¿re 1 t¡ 1
$anvt ptm $Ëær¡daç"d N *tice CQR,_tT$_ QPS$ - An*ex Å
To Date
Ref
Attention:
Cc:
Project:
Subject: Notice No.000-AA-AA
Reference: Access to the Site
Dear Sir,
ln accordance with clause 20.1 of the General Conditions of Contract we hereby give you notice
that we consider we are entitled to:
(i) An extension of the Time for Completion; and
(ii) Reimbursement of the Additional Costs incurred
as a result of the event or circumstance described below.
We advise you that we are keeping such contemporary records as may be necessary to
substantiate our claim.
Best Regards,
A.N.OTHER
Project Director
Saudi Oger
Enclosures
ii..',li,L t¡ , "i,i;ii ¡, :t,í;t, . , i,1 ìill,, i,il
On Site Engineering Project Controls Claims Administration

Construction Manager Contracts Manager
Manager Manager Director
Prepares Internal Prepares lnternal

Not¡fication of Delay Not¡fication of Delay
coR_cTs_FM06-02 coR_cTs_FM06-02
Enter lnternal Not¡ce of

Delay onlo Tracking Mâ¡ñtáins lãbour
Schedule resource records and
coR_cTS_FM06-03 l¡mesheets
Maintain records of Ma¡nta¡ns Da¡ly
Subm¡ttals D¡ar¡es
Open Folder on shared

d.¡ve lo slore Mainta¡n Plant &
correspondence and Equipment Records
records
Maintain record of C¡rculele internâl

Techn¡cal Quer¡es Mainlains photographic Not¡ce of De¡ay and
records Tracking schedule
i reference number
Draft Notice of Delay

Ma¡ntains
us¡ng standard format -
Annex A pro9rammes
Enter Not¡ce of Delay

onto track¡ng schedule
coR_cTs_FM06-04
Prepare detailed Delay Prepare delailed Delay Prepare Program

Not¡ce Report r Notice Report Analysis for ¡nclus¡on ¡n
coR_cTS-FM06-05 I coR_cTS_FM06-05 the Claim
Enter Not¡ce of Delay

onto tracking schedule
coR_cTs_FM06-04
Prepare Claim
submiss¡on in
accordance w¡th
standard format -
Annex D
Ensure that the CAD

rev¡ews the Claim
Submission
Complete Client C¡aims

- Comm¡tment
Authorizat¡on
coR_cTS_FM06-06.
Arange signature &
approval
if i¿,,;1,,,'i... iÌiì "lj
.,1,i; ir. i' ì ! r' ;',, I
6. Related Documents:
Document lD Description
C Clr Nl -Ar¡thorityM atrix-0 1 ject Authority Matrix- Construction Division
7 " Document Approval and Gontnol Matrix:
Document Code: COR_CTS_QPO6
DocumEnt Version: 1.0
Document Date: Dec 16,2012
Document Owner: Contracts Division Manager
Author: Contracts Division
Revlewed By: HSEQ Division Manager/ ManagementRepresentative
Approved By: President & COO
Document Status: Published

The Master Controlled Copy of the document is filed in PPP and the copy of
Document Control: the latest version is published in HOBINTRA. The document contains
intellectual and shall be used for internal
L Related Records:
The following records shall be retained as per COR_QFO2
Code Title Retained by/ Perlod

Contracts Manager/ Until File
Annex A Sample Standard Notice
Closure
Sample Schedule of the Contract
Annex B N/A
Conditions
Annex C Sample of the Contract Requirements N/A
Claim For Extension of Time And
Ar¡nex D N/A
Additional Payment
coR_cTS_FM06-01 Schedule of Notice Periods
Closure
coR cTs FM06-02 lnternal Notification of Delay
Closure
lnternal Notification of Delay- Tracking Contracts Manager/ Until File
coR_cTS_FM06-03 Closure
Schedule
COR_CTS-FMO6-04 Notices of Delay - Tracking Schedule
Closure
cCIR_crs_FM06-05 Delay Notice Report- DNR
Closure
Client Claims - Commitment Contracts Manager/ Until File
cÕR cTs Fnn06-06
Authorization Closure
REVüËW OF CONqDITBONS OF CONITRAGT
idt
j ¡t"¿
i
itffi
Provides for Bond in
1 1.1.1 .14 Retention Bond Provide Reteniion Bond accordance 14.9 but wrong
clause
List of clauses requiring the Employers approval
2 3.1 (d) Employers Authority Ensure site team fully aware
including approval of subcontractors
The Works shall include . . . ... for all works which

New clause - Fit for
4-
(although not meniioned ¡n the Contract) are necessary
3 t PurposeiSafe Operation of ted Flow to subcontractors
for stability, for completion, fit for purpose, or safe and
the Works
proper operation of the works.
The Contractor shall, whenever required by the

Engineer, submit details of the arrangements and
methods, and to include for all necessary method
New clause - method statements and support¡ng calculations which the
^ statements and supporting Contractor proposes lo adopt for the execution of the Engineering to be aware
calculations Works. No significant alteration to these arrangements
and methods shall be made without this having
previously been notified to and approved by the
Engineer.
The Contractor shall within ninety (90) days of the

Commencement Date or Contract Agreement. whichever
occurs earlier, provide to the Engineer all
Contract submittals for approval, including for lnter alia:
(a) Shop drawings and Co-ordinated Shop Drawings,
5 New clause - Submittals b) Materials Submittals, Engineering to be aware
(c) Mock-Ups,
(d) Calculalations
(e) Data Sheets.
(l) Samples
)AD CO^! FORM xx-zv 1.A )ale 't oi 4

Htl i
Xed
.. . .be fit for such purposes .. . Contractoishãll oã sõiõly

responsible for the Specifications. the Contractor,s
6 Documents. thedesign of the Works and for any other
New clause - Design
specifications applicable to the Works. Flow lo subcontractors
ïhe Contractor shall provide documentary evidence that

ïhe Contractor shall provide for the Employer,s
7 Personnel. such facilities,accommodation, equipment
New clause - facilities
as descr¡bed within the Schedules and/or the General lnclude in Costs
Requ¡rements (Preliminaries).
B New clauses requirements at Taking Over Prepare schedule
I 4.3 Requirement to provide Direct Agreement to Best Foods
Direct Agreements
by Contractor and Subcontractors Flow down to subcontractors
New clauses - Additional detailed requirements regarding the placing

10 4.4
subcontractors and termination of subcontracts Procurement to be aware Ensure ¡ncludes ¡n subcontracts
The Contractor shall be entirely responsible for the

correctness, sufüciency, accuracy and applicability of all
available building Drawings and Specifications and
Schedule of Rates. The Contractor must inspect the
aforementioned documents and shall satisfy himself
11 4.12 New clause - Drawings etc. before submitting his tender as to the¡r correctness,
sufficiency, accuracy and applicability. No claim from the
Contractor shall be considered for extra payment should
there be any omiss¡on, inaccuracy or amb¡guity. ln
sign¡ng the Contract Agreement the Contractor
specifically agrees to accept such responsibility.
12 4.22 (i)
New clause - Financial Detailed additional requirements on financial reporting PC to be aware
Reports Flow io subcontractors
13 4.22
New clause - Progress Weekly summary required PC to be aware
Reports Flow to subcontractors
New clauses - Contractors Detailed requirements for the Contractors operations on

14 4.23 (a)to (k) Operations to be aware
Operations on Site site tred Flow to subcontractors
'15 4.26 New clause Hazard Substances

16 +.27 New clause Parent Company Guarântee Ied Can we obtain?
Collateral Warranty Contractor and subcontractor to provide as necessary to

17 4.28 Check wording
Agreements Employer, financiers, purchasers and Tenants. Flow to subcontractors
OAD_CON-FORM_xx-z V 1.A
?age 2 of 4
Ied
18 Obligations out Design Obligations also requirements for refers to

Training, As Built documents, OM manuals H
19 1
Detailed requirements to be advised to subcontractors
20 6.5
hours - new
Detailed requirements HR to be advised Flow to subcontractors
OAD _CON*FORM*xx-z V 1.0

Page 3 of a
-Ltüi
r
lled
zl b
Staff and Labour - new Deta¡led requ¡rements (including no fìrearms or
HR to be advised
clauses ammunitionl!!) Flow to subcontractors
Detailed requirements that Contractor has to satisfy

Quality and Fitness for
22 7.1
himself as to the suitability of all materials and
Purpose - Addit¡on to
equipment. No claims if materials and equ¡pment not This is a wide obligat¡on ted
clauses
suitable.
23 8.2 ïme for Completion lncludes achieving the Tests on completion Tests are extensive with this
type of installation
llod
24 8.3
Detailed additional requirements for porogramme
Programme PC to be advised
preparation
l5 8.1 3
Contractor to give notice with¡n 7 days of any matter
Early Warning System
likely to affect performance
26 9.1
Tests on Completion - new Detailed additional requirements for Tests on Completion Operations to be aware
clauses Flow to subcontractors
27 11.12 Decennial Liability Contractor responsible for 1 0 years Covers all design failures not
iust those leading to collapse
lled lnsurers to check
Measurement and Contractor responsible for quantities and works not re-
¿o 12.1 Mistakes in BQ
Evaluation measurable. lúed Risk ltem
29 13.3 Variation Procedure Detailed Variation Procedure with time l¡mits Contracts to be aware
?n 13.4 Provisional Sums Percentage mark up as Appendix NO percentages shown
3'1 I J-3 Prime Cost Sums No percentages envisaged lled
32 13.8 Adjustments in Cost All Contractor's liability lled Allowances in price
.1.1 14.15 Open Book lnspection All records available for inspection
34 17.3 Employers Risks

Contract om¡ts sub-clause I for forces of nature which
are Contractors risk
Contractor responsible for warranties and any
35 17.7 Warranty and Liability maintenance obl¡gat¡ons even after Performance
Certificate.
36 17.8 Contractor responsible for checking and taking

Liability Appendix to Tender where ted ïo be clarified
respons¡bility for design of others
Êant¡a¡tnr ¡n¡r¡ F^^ñ^hâihl^
37 18.5 Pl lnsurance Required 10 years from Performance Certfificate Normally 10 years from Taking
Over Certificate
Ied Advise insurers
),\D C'J^l FORM þ:-z v i.l ?a,Je !1, uí !)

¡;i¡.:ci¡.ii: o!' iii r'.i.-:'. !'aiÌ¡, i ::,
,l¡i.l r::1S F¡1"16-0'i
Engineers Response OAD Response due

Client Response due (Number of Days)
Clause Not¡ce due
(Number of Days)
{Number of Days}
Retained by: Contracts Manager Retent¡on Per¡od/D¡sposit¡on: Until File c¡osure

'J,6 Dec 2O12 Page 1 of 1 Ver:1.0
ilir'¡¡l¡r;i'¡i.¿:ìli lit,,i ,,,:tì .i.;:, 11ì'itr,;, , ii' :;.i..:,,...r , i:r.,ri i i; ¡:r : it'rrl.i ¡.,,ì
Project: Contract No
Title of NoD: Date:
Sub-Contractors
Level
NoD No Loc 1 Loc 4 Level
Loc 2 Loc 5 Loc 7
Loc 3 Loc 6 Loc I
A - lnitiated / Requested By Person Name
References
(Dwgs, Spec's, Corresp.,
E-mail, RFls, RFAS, etc.)
Reasons for Design Delay NoD
Fleasons for Main Contract NoD
Reasons for Subcontract NoD
Detailed Description of Delay:
B - Contemporary Records Description

Photographs
Resource Records
D rawi ngs/SketchesiDai ry/Correspond ence/
C - Subcontractors Affected Comments

Subcontractor - 1
Subcontractor - 2
Subcontractor - 3
Ð - Contracts Department New lssue Not to be Sent
Continuation of Previous lssue Pending
' Additional Comments Delay Notice Sent

Internal NotiÍication of Delay - ¡ rack¡ng Schedule
MO
D¡tå
fiHoli '.;-' . . W
Lb¡* L** toD FOrn loD lttler
RaÈcd' Sidöäâr 'l Goml¡lcñt¡
Retained by: Côntiacß Man¿get R€tenùon Period/ DisÞosilìon: Until Fìle C osu¡e
16Dec2012 PaBe 1 ot 1
Delay Notice Report - DNR í.1 iìF". û'¡ S.- i: tr,it)ô-G t
Project Contract No
Title of NoD Date:
NOD Reference
Level Level
DNR No Loc 1 Loc 4 Level
Loc 2 Loc 5 Loc 7
Loc 3 Loc 6 Loc B
Position
A - lnitiated / Requested By Person Name
References
(Dwgs, Spec's, Corresp.,
E-ma¡l, RFls, RFAS, etc.)
Reasons for Design Ðelay
Reasons for Construction Delay
Detailed Description of Delay:
B - Contemporary Records Description
Photographs
Resource Records
Drawi ngs/Sketches/Dairy/Correspond ence/Mtgs
C - Subcontractors Affected (lf any) Comments

Subcontractor - 1
Subcontractor - 2
Subcontractor - 3
Claim not to be Sent

D - Gontracts Departrnent New lssue
Continuation of Previous lssue Pending
Delay Notice Sent

Additional Comments
Saa n'l plle Sta maf an,¡.n Norii¡c,".: i ;í-þ;:i.,.c ì ¡:ì
.iìi 0ô - 1ì¡-¡¡rex Ä.
ïo: Date:
Ref:
Attention:
Gc:
Project:
Subject: Notice No.000-AA-AA
Reference: Access to the Site
Dear Sir,
(i) An extension of the Time for Completion; and
(ii) Reimbursement of the Additional Costs incurred
as a result of the event or circumstance described below
We advise you that we are keeping such contemporary records as may be necessary to
substantiate our claim.
Best Regards,
A.N.OTHER
Project Director
J Enclosures:

Day 2 (Claims Preparation and Dispute Management)

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Claims Preparation Day 2

1 Claims relating to Time

1.1 Extension of Time

1. Gontractor's Basic Entitlement in accordance with FIDIC

Grounds for Extensions of Time

The possible grounds for an extension of time are:

A cause of delay referred to in the conditions

L Clause 1.9 - late information

Unforeseeable Physical Gonditions

Full Supporting Particulars: Basic Requirements

Full Supporting Particulars: Presentation

The Engineer's Obligations

1.2 Liquidated damages

Equally if payment of liquidated damages is subject to an architect's or engineer's certificate

lf a contractor delay to completion occurs concurrently with a delay to completion caused by

The key elements of the generic extension of time are

The contractor is required to notify the engineer when it is reasonably apparent

For example, suppose a building is to be clad in marble and to be completed in 50 weeks.

It is considered that this approach is in error for the following reasons:

The objective of the architect or engineer in assessing an extension of time is to

Approval of extension of time claims

2 Glaims relating to Money

Prolongation is found in most construction contracts, which describe it as a reimbursement

When should delay costs be evaluated?

Arguments commonly arise as to the time when recoverable prolongation

It is recommended that this sensible solution is followed.

The 'heads' of a prolongation, or loss and expense, claim

(i) Prolongation to the contract period

Goncurrent Delay Events

Delays can first be classified as either'excusable' or'non-excusable'. Excusable delays are

2.2 Damages and Compensation

I the breach actually causes loss

One of the biggest misunderstandings in construction is the idea that if a contractor is

2.3 Glaims for Payment in accordance With FIDIC

Notices and Supporting Particulars

Engineer's Obligations in Regard to Claims

Gontractor's Bas ic Entitlement

3 Common Heads of Loss

The heads of claim would normally be, as follows:

Disruption is incorrectly referred to in the industry as if it is the same as delay. lt is not.

I Premature moves between activities

Higher labour costs per hour

(b) Proof of damages

Loss of productivity (i nefficiency)

il Loss of productivity due to stacking of trades and congestion in work areas.

V Necessity of retaining less productive workers to have enough manpower.

vil. Loss of momentum due to shifting, retraining and under-utilisation of crews.

tx. Unexpected amount of work performed under unfavourable conditions following

xt. More work than planned during periods of adverse weather

XIV. Piecemeal workers

(ll) Proof of damages - alternatives

Head Office Overheads

It is convenient to divide head office overheads into

l. Dedicated overhead costs which can be attributed to the specific delay

'Unabsorbed overhead costs such as rent, lighting, heating, salaries, office

ln so doing the contractor has to be able to show that it has

HO/Profit percentage x Contract Sum X Period of delay (weeks)

100 Contract Period

Labour & Plant

Contract Requirement* C{JN ?$,,ûP4ê-Áil€xt