Claiming Prolongation Costs when there is no Entitlement to an Extension of Time | Can it be done?
It is generally accepted that, in a situation where a contractor is entitled to an extension of time, they are also entitled to claim for time-related costs for the additional time they were obliged to remain on site. Such costs are usually referred to as prolongation costs.
Are there situations, however, where a contractor may legitimately claim for the payment of costs when an extension of time is not warranted? Well, yes, there are. Consider the following example:
The contractor is constructing a high-rise building and has a tower crane on site, which their programme shows is to be removed on a certain date. The contractor, however, receives a variation order to change the specification of the air-conditioning chiller, which is located on the roof of the building and needs to be hoisted into position by the tower crane. The change to the chiller requires modifications to be made at the factory where the chiller is being manufactured, and this will delay the delivery of the chiller to a date later than the date by which the contractor had planned to remove the crane.
The contractor will therefore incur additional costs for keeping the tower crane on site from the time that they should have been able to remove the crane, to the date that they were able to hoist the chiller into position.
Such costs would be claimable.
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How to Audit Prolongation Costs
On our Claims Class courses we explain that it is important to substantiate everything in a claim document. This also applies to the calculation of prolongation costs.Read more