In a recent article, I looked at the events that can give you grounds for an extension of time. This time, I want to look at what comes next: when an extension of time also gives you the right to claim additional payment, and what that payment can include.

When you’re kept on site longer than planned for a reason that entitles you to an extension of time, you’re also incurring extra time-related costs. You’re still running the site, still contributing to head office overheads, and still missing out on the profit you’d have made had those resources been free to work on another job. Depending on the type of event, you may be entitled to claim these extra costs back. These are prolongation costs.

Most contracts allow you to claim prolongation costs for delay events that the Employer has control over, but not always for neutral events. Some events will even let you add profit to the costs claimed; others only let you recover what you actually spent. The logic behind this is simple: if the Employer had no control over what happened, you shouldn’t profit from their misfortune. You should just be put back in the position you would have been in had the event not occurred.

As always, check your contract to see whether prolongation costs actually follow from your extension of time claim, and what kinds of costs you’re entitled to recover.

Prolongation costs typically include:

• Management and administration staff.
• Hourly paid, time-related personnel such as storekeepers, drivers, security and operators of machinery and plant.
• Site offices.
• Storage buildings.
• Workshops.
• Canteens and messing facilities.
• Sanitary facilities.
• Site hoardings and protection.
• Temporary works.
• Transport.
• Plant and machinery deployed on a time-related basis.
• Office equipment and furniture.
• Electricity, water and gas.
• Telephones and internet.
• Closed circuit TV.
• Security services.
• Insurances.
• Bonds and guarantees.
• Financing costs.
• Head office overheads and profit.

Not everything on this list will be claimable on every project, and there may be other costs not shown here. Each case needs to be looked at on its own facts. Keeping good records as you go is what makes it possible to prove which resources were actually deployed during the delay.

Knowing what you can claim is one thing but building a claim that an Employer will actually accept is another. Our Perfect Claim e-course teaches a step by step process for building an extension of time claim to ensure its success. If you are tasked with writing claims on your projects, this is the course for you. Explore and start learning today.