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minus time from Baseline programme to prolongation

10 replies [Last post]
Mon, 2008-06-30 04:44
Gayantha Abeywardena
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In my project We have agreed to orginal target programme which we treated as base line programme. and prepared the prolongation cost from orginal scheduled finish date. but there are three revision has done to target programme granting time extensions as client has done lot of design changes civil works got delayed as a result of that our MEP works got deleyed due to delay of possesion. more over partly possesion of site was given not according to the programme. Hence we could not give them a revised programme as the working areas and possesion date was not pre defined.
after 7 months from the Orginal finishing date Main contractor issued a target to finish programme and the remaining time is 3 months. Now we are doing with accelaration cost to finish the project in three months.

I have following questions.

1) As there is 3 revisions can they deduct our prolongation period as we are climing for the Original base line programme. (Project has a lot of deviations from this original programme.)

2). Since we have not submitted the revised programme will it effect to our prolongation cost claim I mean imposing penalties for not submitting revised programmes.

3) Since it is difficult to do time analysis can we prepare our claim base on the amount which we have submitted as possible EOT claims this has been submitted each month. My derived Cost is 70% from the informed possible EOT claims.

4)During the prolongation period Our wages has incresed by 15% of all staff. Can we consider the increased wage amount for the claim. as our Claim is prepared based on work input days and daily cost for the relevant staff.

5) Since our labours has not been idle as we have recived some part of the site to engage those people for work . I am ot going to claim the Labour cost for the prolongation period. Only the Prelimanary cost is considered Please correct me if I am wrong

GA
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Replies

Wed, 2008-07-02 09:50
#1
Gayantha Abeywardena
User offline. Last seen 11 years 40 weeks ago. Offline
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Hi,

1) officialy approved the EOT time only
2)MC is Working on it but he has send us letter he is not taking any responsibility as we did not submit notice or claim

3) we also got the EOT mentioning this granted EOT will not be a evidence for Prolongation cost.

regards
GA
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Wed, 2008-07-02 05:20
#2
Hashim Muhammud
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Hi,

I am also interested to know about the following.

1) did the main contractor(MC) got an EOT officially approved by the Client?
2) was the MC able to to get cost for the EOT?
3)did you get an EOT officially? are you trying to get the prolongation cost for a (already) granted EOT? otherwise you may be trying to get an EOT along with prolongation cost.

Now, point no: 3, If you already get the EOT, just make the calcuation for cost and submit it. MC can only play with the calculation, but not with the duration. Means, if it is agreed that 100Dhs/day, then MC has to give you 1000 Dhs for 10 days EOT. MC cannot say that only 800Dhs will be given. I hope no contract will have a cluase like that. But they may be able to play with the calculation or rate/day to reach the amount they desire (which you may or may not agree).

If you dont have an EOT granted, i will advise you to fix it first and then move on with the cost.

Now, regarding increased rate due to extended time: If the contract doesnt prevent you, or a clause preventing you from claiming it is missing, my advise will be to give it a shot. ;-)

cheers
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Wed, 2008-07-02 04:48
#3
Gayantha Abeywardena
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Joined: 27 Feb 2008
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Hi Hashim,
Thanks very much for your explanation it helps me lot. since our PM has submitted the cost brekdown (which I mailed to you) I thought I have to stick on that basis. and even in the main contract it has not specified the percentage states to do variation value after submission for the cost and approval of the project manger.

please clear folowing things
what do you think about climing the increased wages during the prolongation period. Since the cost break down has submitted middle in the project based on the wages at that time. But just after one month from the Prolongation starts our company has increased the wages its a company culture they revised the salries on each yeras octomber analysing the performance of employee. the differnce from two wage system is nearly 20%.

Since we have not submit revised programme the main contractor telling us we are not entitle for full extended period to prolongation cost there should be minus time for prolongation period which will be decide by them. Is there a basis to us for asking for whole extended period.

thanks and regards
GA


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Wed, 2008-07-02 00:53
#4
Hashim Muhammud
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Dear Gayantha,

I have the following points to make.

1. Prilims amount
a. Option 1: In the variation clause of contracts, there should be a certain % mentioned for profit and overhead. If this clause is not there in your contract, then you can ask the main contractor for the same clause. It should clearly mention a certain % for variations done by sub-contractor. You can use this % as a base of calculations.
b. Option 2: if you can get actual % of prelims in the main contractors BOQ for the entire project, you may be able to use the same.
c. Option 3: a % (10 as you stated) agreed by the engineer / client / main contractor and you.
2. Notice Period (even though I have no details of clause 18.1)
a. I think you can make a stand; the progress report submitted on a periodic basis showed the delay and hence all the parties involved (or at least the main contractor to whom you submitted the reports) are informed about the delay.
b. If you can find a letter sent from your side regarding long held possession of site by main contractor preventing your work (as mentioned in your first post), you can state that it can be considered as a notice.
c. You can also check the minutes of meetings, daily reports etc. I am sure you will be able to find something which you can consider as a notice.

Now regarding the calculation of amount, it fully depend on how you do it and how the client consider as prolongation cost. In my opinion, as stated by one of our friend above, you should also go for the labors. And on a seperate claim, i think you can also go for loss of productivity if your labors were inactive during the period.

hope this will help.
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Tue, 2008-07-01 22:01
#5
Larry Rino
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Joined: 25 Oct 2007
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GA,

I think you need to treat your claim extremely considering your project’s early history, the people involved, records(e.g. site diary), your project’s price structure (from bid estimate), schedule analysis (plan vs. actual), etc.

May we know the approx. cost scale does this claim involved in order to determine the necessity of professional services like what is Mike offering?

Regards
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Tue, 2008-07-01 10:18
#6
Gayantha Abeywardena
User offline. Last seen 11 years 40 weeks ago. Offline
Joined: 27 Feb 2008
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Hi Hashim,

Here are the answers for your queries,

2) can you be specific with for what you are claiming for? Prolongation Cost (over head / site running cost for the extednded period) or acceleration cost?
3) what does the clauses in the conditions of contract states? Both your contract with the main contractor as well as contract between main contractor and client.
4) when you say prilims in BOQ, it means your BOQ with main contractor or the project BOQ.

2)We are claiming only for the prolongation cost.

3)Notice period is 14 days

There is one clause,

Failure to give notices:
"If by reason of any failure by the Subcontractor to comply with the provisions of clause18.1(Notices) the contractor is prevented from recovering any sum from the Employer under the Main Contract in respect of the Main works, then without prejudice to any other remedy of the contractor for such failure,the contractor may deduct such sum from any monies due or which may become due to the Subcontractor under the Subcontract or recover the same as a debt due from the Subcontractor."

I have joined to the company recently these required notices has not submitted. only mention the delay of works in the weekly and monthly progress report.

No base line programme I mean only one we have done was agreed to the orginal target programme which issued in the very beginning of the project. Since the target programme is not realistic can I use it as a base line programme???

4)I am refering to the BOQ win Sub Contract There is no seperation for the prelims the Preliminary cost has included in the Items so when are getting paid for work our prelims also paid but the margin is not enough as the project extended by 10 months.

I dont have the Clear idea to break down the Total cost to Item + Prelims thats why i have suggested to 10% from the project cost has proposed for the prelims cost for the original project period. Please correct me for this...

thanks and regards

GA
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Tue, 2008-07-01 09:13
#7
Mike Testro
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Joined: 14 Dec 2005
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Hi Gayantha

As a forensic claims specialist you know very well that you cannot just make assumptions - such as 10% prelims in the S/C price - and expect your claim to be treated seriously.

My advice is do the thing properly or not at all.

1. Establish your EOT entitlement from the baseline programme - as a sub-contractor the As Built v As Planned should work well.
2. From this basis calculate your extra prelims period.
3. Go back to the tender pricing and establish exactly the allowance for prelims.
4. Don’t abandon disrupted labour costs - compare the priced value with the actual isrupted value and put it in as a claim head.

I am sorry but I do not have time to for any deeper involvement unless your company want’s to hire me professionally.

Best regards

Mike T.
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Tue, 2008-07-01 08:17
#8
Hashim Muhammud
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Hi Gayantha,

I am sorry, but i cannot clearly identify the point or points in your question.

1) you states that its a lumpsum contract (normal in UAE) and you are doing the subcontractor works.
2) can you be specific with for what you are claiming for? Prolongation Cost (over head / site running cost for the extednded period) or acceleration cost?
3) what does the clauses in the conditions of contract states? Both your contract with the main contractor as well as contract between main contractor and client.
4) when you say prilims in BOQ, it means your BOQ with main contractor or the project BOQ.

my id is hashimtm@hotmail.com
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Tue, 2008-07-01 07:57
#9
Gayantha Abeywardena
User offline. Last seen 11 years 40 weeks ago. Offline
Joined: 27 Feb 2008
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Hi Mr. Testro,

This is lumpsump NSC contract we are doing the Subcontracting work and in the BOQ Prelims is not shown separately. we are assuming it has 10 % of the project value (Please correct me If I am Wrong) based on that figure we derived the in put man days for the staff and office items during the original contract period and take the maximmum input day for the relevant persons and assign it for the prolongation months. PLease send me your mail add then i will email the Cost Impact sheet and Time Impact sheet (2 Xl Sheets only)


Thanks and regards
GA
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Tue, 2008-07-01 06:43
#10
Mike Testro
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Hi Gayanthe

What type of contract are you under - every thing depends on what the contract says.

Best regards

Mike T.
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