In the complex world of construction and infrastructure development, delays are common and often unavoidable. These delays can lead to significant financial implications, particularly when a contractor or subcontractor incurs additional costs due to extended project durations. This is where prolongation claims become critically important. A prolongation claim is a request for compensation for the extended time spent on a project due to delays that are not the contractor’s fault. These claims are not merely about time extensions; they revolve around recovering the financial impact of such delays.
What Are Prolongation Claims?
Prolongation claims refer to claims made by contractors for the recovery of additional costs incurred when a project is delayed due to reasons beyond their control. These costs may include site overheads, labor, equipment, administration, and even financing charges. The delays could result from late access to the site, design changes, late approvals, or client-caused disruptions. Unlike extension of time claims, which simply seek more time to complete the work, prolongation claims seek financial compensation for the extra time spent.
The key to a successful prolongation claim is the contractor’s ability to demonstrate that the delay was caused by the employer or other external factors and that the contractor took reasonable steps to mitigate the delay’s impact.
Legal Foundation of Prolongation Claims
The entitlement to prolongation claims is usually grounded in the terms of the contract. Most standard construction contracts, such as those based on FIDIC, NEC, or JCT, have provisions that allow the contractor to claim costs if the delay is due to the employer’s actions or omissions. The contractor must provide proper notices and substantiate the claim with evidence such as site records, delay analysis, cost reports, and correspondence.
The legal framework also requires causation to be established. This means the contractor must prove that the delay directly resulted in additional costs and that those costs are reasonable and related to the delayed activities.
Common Causes of Prolongation Claims
There are several common causes that give rise to prolongation claims in construction projects. One of the most frequent is the late issuance of drawings or instructions from the employer, which hampers progress. Changes in scope or design variations, especially those introduced late in the project, often lead to delays that warrant compensation.
Another common cause is delayed site access or failure by the employer to fulfill obligations such as providing utilities or approvals. Additionally, external events like political interference, unexpected legal constraints, or force majeure events can also lead to valid prolongation claims, provided they are covered under the contract.
Documenting a Prolongation Claim
A contractor must maintain accurate and detailed records to support prolongation claims. This includes daily site logs, resource allocation records, cost breakdowns, delay notifications, and correspondence with the employer. Delay analysis methods such as Time Impact Analysis or Window Analysis are often used to demonstrate how specific events contributed to the project delay.
Cost substantiation is equally important. Contractors must demonstrate that the additional costs incurred were directly related to the delay event. This may include extended site office costs, additional labor, rented equipment, or extended use of third-party services.
Assessing the Value of Prolongation Claims
Quantifying a prolongation claim can be complex and requires expertise. Typically, the assessment includes direct costs such as labor and equipment, and indirect costs like head office overheads or loss of productivity. The Hudson Formula or Emden Formula may be used to calculate unabsorbed overheads, although actual cost data is generally preferred by courts and tribunals.
A critical aspect is the principle of reasonableness. The claimant must show that the claimed costs are reasonable and were actually incurred. Inflated or poorly supported claims are likely to be rejected, which makes professional presentation and expert analysis essential.
Role of Experts in Prolongation Claims
The complexity of prolongation claims often necessitates the involvement of delay analysts and quantum experts. A delay expert can establish the causation and impact of the delay on the project timeline, while a quantum expert can assess the financial value of the claim. These professionals present independent opinions that help parties understand the issues and assist arbitrators or judges in reaching fair conclusions.
Expert reports must be detailed, logical, and supported by factual evidence. Their role is not to advocate for one party but to provide an objective assessment that clarifies technical and financial issues.
Avoiding Disputes over Prolongation Claims
While prolongation claims are a legitimate contractual right, they are often contested and can lead to disputes. To avoid this, clear communication and early engagement between the parties are essential. Claims should be submitted in a timely manner and backed by transparent documentation.
Employers can minimize exposure by ensuring proper project planning, timely decision-making, and efficient administration. Contractors, on the other hand, should maintain accurate records, monitor project schedules closely, and raise early warnings when delays occur.
Dispute avoidance techniques such as regular progress meetings, mediation, and standing dispute boards can also help resolve issues before they escalate into formal disputes.
Conclusion
Prolongation claims are a vital tool for contractors to recover losses due to delays that extend project duration beyond the original schedule. These claims require a deep understanding of contractual rights, delay analysis, and cost substantiation. They also demand precise documentation and professional presentation.
As construction projects grow in scale and complexity, the importance of managing time and cost risks becomes paramount. Both contractors and employers must recognize the value of proactive planning, transparent communication, and fair resolution practices to handle prolongation claims effectively. When managed properly, these claims ensure that financial burdens are shared equitably and that projects remain financially sustainable despite unforeseen delays.
