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How to calculate an extension of time
You need to make sure you don’t get hit with delay damages.
We were at a weekly progress meeting and the client told us they were going to instruct additional works. They wanted us to install an additional 40 piles.
We told them that this would delay completion of our works. For every day that we were late completing out works, the contract stated that the client could deduct damages. This meant that we had to demonstrate that we were entitled to an extension of time. This would protect us against damages.
To do this, we prepared a programme showing the anticipated effect of the additional works.
The steps we took were as follows:
Step 1:
The programme was brought fully up to date to the point immediately before the event. We had constructed the works using a different methodology to that stated in our tender. This meant we had to update our programme in accordance with the actual progress we had made.
Step 2:
We then corrected unrealistic constraints or durations. As an example, we had tendered based on an output of installing 10 piles per day. In reality, we were only achieving an output of 8 piles per day. Therefore, we adjusted the baseline programme to include for realistic durations based on actual progress.
Step 3:
We then added the additional works into the programme. We intended to use the piling rig and gang we had on site. We used the 8 piles per day output that we had achieved. This meant our works would be delayed by 5 working days. We only needed to include reasonable, realistic and achievable plans to recover delays. We didn't need to bring in any additional resource to mitigate delays.
Step 4:
We claimed an extension of time of 1 week, using the programme to substantiate our position.
Our strategy on the project was to deal with the time impact of events as the work proceeds. We didn't operate a ‘wait and see’ approach. This is because an agreed extension of time provided everyone with clarity around the contract completion date. We understood the revised risks and obligations and were able to act accordingly.
The agreed extension of time protected us from delay damages. But we also needed to recover additional cost for preliminaries. These are known as prolongation costs. There are also occasions where we may need to claim disruption costs. This is when we need additional resources because of the variations.
But the first step is always ensuring that your programme will protect you from damages.
That's all for today.
See you next week.
Helping contractors deliver profits on construction projects
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