Prolongation, specific Procedures and key

Specific Producers and Key
Requirements for
Prolongation &
Loss and Expense Claims
Justin Wilbert, MRICS, MCIOB, MCInstCES, ACIArb, PQS.

Introduction
In construction contracts, an extension of time is often given before submitting a
prolongation or loss and expense claim (both terms mean the same thing). The purpose of
these claims is to compensate the Contractor for delays that prevent them from completing
the work on time. Most contracts state that the Client or their representatives should not
hinder or prevent the Contractor from fulfilling their obligations. Any actions by the Client
that cause delays may force the Contractor to maintain resources for a longer period.
Prolongation or loss and expense claims essentially involve reimbursing the costs or rates
incurred due to these delays. These costs are typically related to time, such as expenses for
supervisory staff and support needed to maintain that supervision. Prolongation is a
standard provision in construction contracts and covers reimbursement for delays. It's
important to note that prolongation costs are different from disruption costs and include on-
site and off-site overheads related to time.

Prolongation Claim:
A prolongation claim arises when there are delays to the original
construction schedule, and the contractor or subcontractor seeks
compensation for the additional time spent on the project. These delays can
be caused by various factors, such as changes in scope, design revisions,
adverse weather conditions, labor disputes, or other unforeseen events. Here
are the typical steps in the prolongation claim process:

Prolongation Claim: (Continue…)
 Notice of Delay: The contractor or subcontractor must provide written
notice to the project owner or main contractor as soon as they become
aware of the delay. This notice should include details of the delay, its
impact on the project schedule, and the cause of the delay.
 Documentation: The party making the claim needs to gather and
maintain all relevant documentation related to the delay. This includes
project schedules, daily logs, correspondence, meeting minutes, and any
other evidence that supports the claim.

Impact Analysis: The contractor or subcontractor will need to
demonstrate how the delay affected the project schedule and the
additional time required to complete the work. This may involve a
detailed analysis of the project's critical path and the activities impacted
by the delay.
Cost Calculation: The party making the claim must quantify the
additional costs incurred due to the delay. This could include labor costs,
equipment rental expenses, extended site overheads, and any other direct
or indirect costs related to the extended duration.

 Submission of Claim: Once all the necessary documentation and
analysis are prepared, the contractor or subcontractor submits the
prolongation claim to the project owner or main contractor for review
and consideration.
 Negotiation and Resolution: The project owner or main contractor
reviews the claim and may engage in negotiations with the claimant to
resolve the matter. This can involve discussions about the legitimacy of
the claim, the extent of the delay, and the appropriate compensation.

Loss and Expense
A loss and expense claim is typically made by a contractor or subcontractor
when they incur additional costs as a result of specific events that are not
directly related to delays. These events may include changes in the scope of
work, variations to the contract, or disruptions caused by the actions of the
project owner or other parties involved in the project. Here's the general
procedure for a loss and expense claim:

Loss and Expense (Continue…)
 Notice of Loss and Expense: Similar to the prolongation claim, the
contractor or subcontractor must provide written notice of the incurred
loss and expense as soon as they become aware of the event causing the
additional costs.
 Documentation: The party making the claim needs to gather and
maintain all relevant documentation supporting the claim. This includes
receipts, invoices, records of additional labor and materials used, and any
other evidence of the extra costs incurred.

 Cost Calculation: The claimant must quantify the specific costs that
have been incurred due to the event in question. This involves a detailed
breakdown of the additional expenses and a clear explanation of how
they relate to the specific event.
 Submission of Claim: Once all the documentation and cost analysis are
completed, the contractor or subcontractor submits the loss and expense
claim to the project owner or main contractor for review and
consideration.

Negotiation and Resolution: The project owner or main contractor
reviews the claim and may engage in negotiations with the claimant to
resolve any disputes or disagreements regarding the claim's legitimacy
and the appropriate compensation.

Conclusion
In conclusion, the procedures and requirements for prolongation and loss
and expense claims can differ based on the contract terms and local
regulations. However, regardless of the specific circumstances, maintaining
thorough records, giving timely notice, and adhering to the contract's claim
procedures are essential for increasing the likelihood of a favorable
outcome. If parties cannot reach an agreement, resolution avenues such as
mediation, arbitration, or legal proceedings may be pursued to settle the
dispute effectively.

Conclusion (Continue…)
By following these guidelines and resorting to appropriate dispute
resolution methods when necessary, construction projects can proceed more
smoothly and fairly, fostering a better working relationship between all
involved parties. The overall emphasis is on maintaining clear
communication, documentation, and adherence to contractual procedures to
facilitate a smoother resolution process in construction projects.

Prolongation, specific Procedures and key

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