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Contractor is Not Eligible for Prolongation Cost

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18 views5 pages

Contractor is Not Eligible for Prolongation Cost

Uploaded by

tarekZAD
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Home My Network Jobs Messaging Notifications

Contracts Management in EPC


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Contractor is Not Eligible for


Prolongation Cost Under These 10
Conditions
Ilamparithi BoologaSundaraVijayan
40K Followers | Expert International Contracts |
Construction Claims | Disputes | Forensic Delay…

January 26, 2024

1. Missed Project Milestones:

Delays in meeting critical project milestones attributable solely to


Contractor can lead to a ripple effect, disrupting the entire project
schedule. Contractors are typically responsible for adhering to specified
milestones, and failure to do so may result in the imposition of additional
costs and the denial of prolongation claims.

Illustration: Consider a construction project involving the development of a


commercial High rise Building. If the contractor fails to complete the
foundation work within the agreed-upon timeframe, subsequent phases
such as framing and finishing will experience delays, impacting the overall
project schedule.

2. Failure to Notify Delays Promptly:

Timely communication is vital in the construction industry. If a contractor


encounters challenges that may lead to delays but fails to promptly notify
the employer, it hampers the employer's ability to take proactive measures
to mitigate the impact (Time Bar Clauses). This lack of transparency can
affect the contractor's eligibility for prolongation costs.

Illustration: In the case of unexpected adverse weather conditions affecting


construction
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employer about the challenges may result in increased costs due to
unpreparedness and a potential denial of prolongation claims.

3. Inadequate Documentation of Delays:

Proper documentation is crucial for substantiating claims. The proof of


Burden always lies the Contractor. In the absence of comprehensive
evidence supporting delays, the contractor may face challenges in proving
the legitimacy of prolongation cost claims.

Illustration: Suppose a construction project experiences delays due to a


shortage of essential materials. If the contractor fails to document the
impact of the delay, including its duration and subsequent effects on the
project timeline, the employer may dispute the validity of the prolongation
cost claim.

4. Non-Compliance with Contractual Obligations:

Construction contracts come with specific terms and conditions that


contractors must adhere to. Failure or breach to comply with these
contractual obligations may result in additional costs being incurred by the
employer, and the contractor may be ineligible for prolongation costs.

Illustration: If a contract stipulates safety protocols, and the contractor


neglects to follow these guidelines, resulting in work stoppages or delays,
the employer may attribute the delays to non-compliance, impacting the
contractor's claim for prolongation costs.

5. Unapproved Changes or Variations:

Any changes or variations to the project scope must go through a formal


approval process. If a contractor initiates changes without obtaining
proper approvals, resulting in delays, they may be held responsible for the
additional time and costs incurred, rendering them ineligible for
prolongation costs.

Illustration: Consider a situation where a contractor introduces


modifications to the project scope without obtaining necessary approvals.
The resulting delays may lead to disputes, and the contractor might be
denied prolongation costs due to unauthorized variations.

6. Negligence or Mismanagement:

Contractors are expected to demonstrate professionalism and competence


in managing construction projects. Instances of negligence,
mismanagement, or poor planning that contribute to project delays may
result in the denial of prolongation cost claims.

Illustration: If a contractor oversees critical project aspects poorly, such as


scheduling subcontractor activities, leading to bottlenecks and delays, the
employer may attribute the delays to negligence or mismanagement,
impacting the contractor's eligibility for prolongation costs.

7. Force Majeure Events Beyond Contractual Protections:

While force majeure events are generally recognized as valid reasons for
claiming prolongation costs, certain events may be explicitly excluded
from contractual protection. Delays caused by excluded force majeure
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events may render the contractor ineligible for prolongation costs.
Illustration: Suppose a contract explicitly excludes strikes as a force
majeure event, and a labor strike causes delays. In such cases, the
contractor may not be eligible for prolongation costs related to the strike,
as it falls outside the contractual protection.

8. Failure to Mitigate Delays:

Contractors are obligated to take active steps to mitigate delays where


possible. Failure to demonstrate proactive efforts to minimize the impact
of delays may impact their eligibility for prolongation costs.

Illustration: If a contractor faces delays due to unforeseen site conditions,


their failure to promptly and effectively mitigate these delays—such as
adjusting the construction schedule or procuring alternative materials—
may jeopardize their entitlement to prolongation costs.

9. Non-Adherence to Project Schedule:

Adherence to the agreed-upon project schedule is fundamental for


maintaining project efficiency. Deviating from the baseline schedule or
sequence without valid reasons may disqualify the contractor from
claiming prolongation costs.

Illustration: In a scenario where the contractor extends the duration of


certain construction phases without proper justification, disrupting the
overall project schedule, the employer may challenge the legitimacy of
prolongation cost claims based on the contractor's non-adherence to the
agreed-upon timeline.

10. Disputes and Litigation:

Disputes and litigation can significantly impact project timelines. Delays


resulting from such conflicts may influence the eligibility of contractors for
prolongation costs, particularly based on the resolution process and
outcomes.

Illustration: If project delays arise from disputes or litigation involving the


contractor, the resolution process becomes critical. Timely resolution and a
commitment to collaboration are essential, as the contractor's perceived
role in prolonging disputes may influence the legitimacy of their
prolongation cost claims.

For Claims and Contracts management services contact


[email protected]
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𝑩𝒐𝒐𝒌𝒔 𝒃𝒚 𝑨𝒖𝒕𝒉𝒐𝒓:

𝗖𝗼𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁 𝗖𝗹𝗮𝗶𝗺𝘀:

https://lnkd.in/gPYTUZ6D

𝟭𝟬𝟬 𝗙𝗔𝗤𝘀 𝗶𝗻 𝗘𝗣𝗖 / 𝗖𝗼𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀:

Part#1: https://lnkd.in/dAtKF4XR

Part#2: https://amzn.to/3MZAlq9
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𝗣𝗿𝗼𝗰𝘂𝗿𝗲𝗺𝗲𝗻𝘁 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀:

https://lnkd.in/g_353Qp

#constructionclaims #delayanalysis #SCL #Constructioncontracts


#contractmanagement #claimsmanagement #Delayclaims
#variationclaims

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82 · 2 comments · 6 reposts

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Waqas Abdul Wahid • 2nd 9mo


Contracts and Claims

Excusable delays yet non compensable is another concept to deal with such
type of prolongation cost

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YADAVA GANGADHARA RAO, M.Tech, B.Tech, MBA, FIE… • 2… 9mo


Resident Engineer at Egis India Consulting Engineers Pvt Ltd.

well said

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