54988952 38555168 Extension of Time Claim Procedure[1]
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Transcript of 54988952 38555168 Extension of Time Claim Procedure[1]
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1) General
a) In the absence of express Contractual power
to extend the time for completion, the
Architect could not do so.
b) Failure by the Architect to properly exercise
the power to extend time will relieve theContractor from his liability to pay liquidated
damages and the time for completion may
become ‘at large’.
A) Extension of Time Claim
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c) Assessed at the time when the Works
are actually carried out and not whenthey were programmed to be carried out.
A) Extension of Time Claim (Cont’d)
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A) Extension of Time Claim (Cont’d)
d) E.O.T. clause is put into the Contract tocater for the delay caused by:-
1) Employer or the Architect
Without E.O.T. Clause, the
completion of works delayed by the
Employer/Architect will also relieve
the Contractor from his liability to pay
liquidated damages and the time for
completion may become at large.
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2) Neither party of the Contract
i) As a fair sharing of the risk betweenthe parties.
ii) Under those events caused by neitherparty which are expressly provided in
the Contract, the Contractor is entitled
to E.O.T. only. No monetarycompensation will be paid to the
Contractor.
d) (Cont’d)
A) Extension of Time Claim (Cont’d)
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iii) Under those events caused by neither
party which are expressly excluded
from the Contract, the Contractor is
to take up the risk, no E.O.T. will be
granted.
A) Extension of Time Claim (Cont’d)
d) (Cont’d)
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e) Under no circumstances will theContractor be entitled to receive
financial compensation for the delay
caused by the Contractor himself.
A) Extension of Time Claim (Cont’d)
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2) Time at large
a) Where no time for completion is specified,
time is said to be ‘at large’ and a termfor completion within a reasonable time
will be implied.
b) Where the time fixed by the Contract for
completion has ceased to be applicable
and the Contractor is continuing to work
under the Contract.
A) Extension of Time Claim (Cont’d)
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c) If a Contractor is delayed by the
Employer where the conditions of
contract make no proper provision for
extending the completion date for this
type of delay.
A) Extension of Time Claim (Cont’d)
d) Where time is at large the Contractor/
subcontractor’s obligation is to finish
within a reasonable time.
e) LD will become inapplicable.
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3) Major obstacles to EOT claim
a) Late or lack of notice from the
Contractor.
b) Failure to recognise delay that results
in contemporary records not being
kept.
c) Failure to regularly update the
programme.
A) Extension of Time Claim (Cont’d)
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A) Extension of Time Claim (Cont’d)
e) Insistence on the part of the Employer’s
professional advisers, that unreasonably
detailed critical path programmes areessential in order to assess the effects
of the delay.
d) Poor presentation of the claim toshow how the progress of the work
has been delayed.
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4) Events Qualifying For Extension of Time
a) RICS (HK Branch) 1986 Edition
i) Clause 23(a) Force majeure.
(b) Inclement weather(rainfall in excess of 20
mm in a 24 hours period)
and typhoon signal No.
8 or above.
A) Extension of Time Claim (Cont’d)
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i) Clause 23 (Cont’d)
(d) Civil commotion, local combination ofworkmen, strike or lockout.
(e) Architect’s instructions issued :-i) discrepancies in contract
documents
(c) Fire, storm, tempest.
A) Extension of Time Claim (Cont’d)
iii) postponement of any works
ii) variations
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(f) Main Contractor not having
received in due time necessary
instructions, drawings, details orlevels from the Architect for which he
specifically applied in writing.
A) Extension of Time Claim (Cont’d)
i) Clause 23 (Cont’d)
(g) Delay on the part of nominatedsubcontractors or nominated
suppliers which the Main Contractor
has taken all practicable steps toavoid or reduce.
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(h) Delay on the part of artists,
tradesmen or others engaged by the
Employer.
(i) Opening up for inspection of any
work covered up or of the testing ofany of the work, materials or goods.
A) Extension of Time Claim (Cont’d)
i) Clause 23 (Cont’d)
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(j) Unforeseen shortage of labour.
(k) Unforeseen shortage of materials.
(l) Discovery of antiquities.
A) Extension of Time Claim (Cont’d)
i) Clause 23 (Cont’d)
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b) Hong Kong Government Form 1993 Edition
i) Clause 50(1)(b)
a. Inclement weather conditionsand/or its consequences
adversely affecting the progress
of the Works.
b. The hoisting of tropical cyclone
warning signal No. 8 or above.
A) Extension of Time Claim (Cont’d)
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A) Extension of Time Claim (Cont’d)
c. An instruction issued by the
Architect concerning discrepancies
in contract documents.
i) Clause 50(1)(b) (Cont’d)
d. Variations
e. A substantial increase in quantities
of any item of work not resulting
from any error in firm quantities or
from a variation ordered underClause 60.
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f. The Contractor not being given
possession of the Site or any
portion or part thereof inaccordance with the Contract.
g. A disturbance to the progress of
the Works for which the Employer
or the Architect or a Specialist
Contractor is responsible.
A) Extension of Time Claim (Cont’d)
i) Clause 50(1)(b) (Cont’d)
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h. Suspension of the Works, except
due to weather, Contractor’s
default or as provided for in theContract.
i. Any utility, undertaking or otherduly constituted authority failing to
commence or to carry out in due
time work directly affecting theexecution of the Works.
A) Extension of Time Claim (Cont’d)
i) Clause 50(1)(b) (Cont’d)
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A) Extension of Time Claim (Cont’d)
k. Any special circumstance of any kindwhatsoever.
j. Delay on the part of any nominated
sub-contractor, which would entitle
the Main Contractor to an
extension of time.
i) Clause 50(1)(b) (Cont’d)
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ii) Clause 50(1)(c)
The Contractor shall not be entitled to
an extension of time for the following :-
a) Shortage of Construction Plant or
labour.
b) Suspension of the Works
i) Provided for in the Contract.
A) Extension of Time Claim (Cont’d)
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ii) By reason of weather condition
affecting the safety or quality
of the Works.
A) Extension of Time Claim (Cont’d)
ii) Clause 50(1)(c) (Cont’d)
b) Suspension of the Works (Cont’d)
iii) By reason of some default
on the part of the Contractor.
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iv) For the proper execution of
the Works or for the safety of
the Works not arising from
any act or default of the
Architect/Employer.
A) Extension of Time Claim (Cont’d)
ii) Clause 50(1)(c) (Cont’d)
b) Suspension of the Works (Cont’d)
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5) Notice Requirements for EOT
Some notice requirements are condition
precedent to the Contractor’s entitlement
and therefore the Contractor loses his right
to claim if he fails to comply with such a
notice requirement.
A) Extension of Time Claim (Cont’d)
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a) RICS HK Branch 1986 Edition
i) Clause 23
Upon it becoming reasonably apparent
that the progress of the works is
delayed, the Main Contractor shallforthwith give written notice of the
cause of the delay to the Architect.
A) Extension of Time Claim (Cont’d)
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Any order or instruction issued by the
Architect is likely to cause a delay to
the progress of the works, the
Contractor shall forthwith give notice in
writing to the Architect and specify theprobable effect and extent of such delay.
A) Extension of Time Claim (Cont’d)
i) Clause 50(1)(a) (Cont’d)
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6) Presentation of EOT Claim
a) Description of the cause delay.
b) The contractual provision which is being
relied upon.
c) The date when the delay commencedand the period of delay.
d) The date of notice of delay.
A) Extension of Time Claim (Cont’d)
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g) A diagrammatic illustration showing the
status of the programme, progress and
current completion date prior to the
commencement of the delay.
f) A description of the event and effectson progress.
e) A summary of records and particularsrelied upon.
A) Extension of Time Claim (Cont’d)
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7) Programme
a. Effective and realistic programme
b. Delay has affected completion of
the Works
c. Flow time included in the programme
A) Extension of Time Claim (Cont’d)
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1) Events Giving Rise to a Monetary Claim
a) RICS (HK Branch) 1986 Edition
i) Clause 11(6)a) Direct loss and expense arising from
Architect’s variations and expenditure
of provisional sums for which theContractor would not be reimbursed
by payment in respect of valuation of
variation, both subject to writtennotice.
B) Loss and/or Expenses Claim
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ii) Clause 24(1)
Direct loss and expense arising from:
a) Not having received in due time
necessary instructions, drawings,
details or levels from the Architect forwhich the Contractor specifically
applied in writing;
B) Loss and/or Expenses Claim (Cont’d)
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ii) Clause 24(1) (Cont’d)
b) Opening up work for testing;
c) Discrepancy or divergence between
contract drawings or contract bills;
d) Delay by artists and tradesmen orother engaged by the Employer in
executing work not forming part of
this contract;
B) Loss and/or Expenses Claim (Cont’d)
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e) Architect’s instructions regarding
postponement
iii) Clause 34(3)
a) Direct loss and expense arising from
the discovery of antiquities
B) Loss and/or Expenses Claim (Cont’d)
ii) Clause 24(1) (Cont’d)
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b) Hong Kong Government Form 1993 Edition
i) Definition of ‘Cost’
Clause 1 : “….. expenditure reasonably
incurred including overheads whether on
or off the site and depreciation in value of
Construction Plant owned by the
Contractor but excluding profit.”
The following clauses provide an express
entitlement to the recovery of additionalcost.
B) Loss and/or Expenses Claim (Cont’d)
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ii) Clause 5(b)
Compliance with instructions concerning
discrepancies between documents
iii) Clause 34(2)
Provision of facilities for other Contractor
working adjacent to the site as the Surveyor
considers reasonable.
B) Loss and/or Expenses Claim (Cont’d)
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Due to progress of the Works being affected
by failure to give possession of site as are
necessary for the Contractor to carry outthe Works.
iv) Clause 48(2)
B) Loss and/or Expenses Claim (Cont’d)
v) Clause 54(2)Due to suspension of the Works under
Architect’s Instructions subject to certain
listed exceptions.
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vi) Clause 63
Due to progress being materially affected by:-
(a) Late information
(b) Variations issued in Clause 60
(c) Opening up for inspection etc (unless
provided for in contract or unless
inspection reveals a noncompliance).
B) Loss and/or Expenses Claim (Cont’d)
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(d) The work or supply of others (except
utilities) engaged by the Employerwhich are directly connected with the
Works though not forming a part of it.
(e) Late delivery of materials, plant or
equipment by the Employer.
B) Loss and/or Expenses Claim (Cont’d)
vi) Clause 63 (Cont’d)
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B) Loss and/or Expenses Claim (Cont’d)
It should be noted that the rules for
evaluating variations (Clause 61) contain
some flexibility in that rates may be
enhanced to cover the material affect on
progress. This should be considered as a
convenient alternative to a claim under
Clause 63(b), particularly when the effect is
disruption to progress, rather than a
prolongation of the Works as a whole.
vi) Clause 63 (Cont’d)
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vii) Clause 66
Additional expenditure incurred by theContractor as a result of being instructed
to engage a NSC on conditions other than
the standard form of sub-contract.
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont’d)
2) Notice Requirements for Loss & ExpenseClaim
i) General
a) Some notice requirements are
condition precedent to the
Contractor’s entitlement andtherefore the Contractor loses
his right to claim if he fails to
comply with such a notice
requirement.
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B) Loss and/or Expenses Claim (Cont’d)
b) Failure to give notice in accordance
with the contract may bar or severely
prejudice a claim for additional payment
c) Specific notice provisions are inserted
the Contractor must comply with theserequirements
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B) Loss and/or Expenses Claim (Cont’d)
d) Advance warning as possible of thepossibility of an increase in the contract
price
e) Under a duty of care to the Employer in
giving an estimate of the cost of an
intended building
f) Enable the Architect/Engineer/Surveyor
to make assessment
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B) Loss and/or Expenses Claim (Cont’d)
ii) RICS HK Branch 1986 Edition
a) Clause 11(6), Clause 24(1)
Upon written application being madeto the Architect, the Architect is of
the opinion that the Main Contractor
has incurred the loss and/or expensefor which he would not be reimbursed
by payment in respect of valuation of
variation / made under any otherprovision in the Contract.
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B) Loss and/or Expenses Claim (Cont’d)
iii) Government of the Hong Kong SAR (1993
Edition)
a) Clause 64(1)
Contractor shall give written notice of
his intention to claim a higher rate
within 28 days of Surveyor’snotification of the rate.
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B) Loss and/or Expenses Claim (Cont’d)
b) Clause 64(2)
Contractor shall give written notice of his
intention to claim any additional payment
within 28 days of the event giving rise tothe claim.
c) Clause 64(5)
If the Contractor fails to comply with the
notice provision contained in Clause 64(1)
and 64(2), such claim shall not beconsidered.
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B) Loss and/or Expenses Claim (Cont’d)
3) Prolongation Claims
Typical heads of claim arising out of
prolongation of the contract period are:
a) Site overheads or preliminaries
b) Head office overheads
c) Loss of profit
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B) Loss and/or Expenses Claim (Cont’d)
d) Cost escalations
e) Cost claims from subcontractors
f) Depreciation on assets
g) Financing charges
h) Delayed release of retention
i) Adjustment of levies
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B) Loss and/or Expenses Claim (Cont’d)
4) Site overheads
a) Actual Costs
The extra site overhead costs due toprolongation are those incurred after
the original contract completion date
and up to the extended (or actual)
completion date.
Some may prefer the costs incurred
during the actual period of delay.
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B) Loss and/or Expenses Claim (Cont’d)
Documents/information to substantiate the actualcosts incurred:-
i) Staff
- Organization chart/site diary records
showing the staff involved.
- Staff salaries payroll records or
contract of employment.
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B) Loss and/or Expenses Claim (Cont’d)
ii) Plant
- Site and plant records showing
the plant involved.
- Plant hire purchase agreement/contracts of plant purchase/plant
costs depreciation record.
iii) Insurance/Bond
- Premium receipts for the prolongation
period.
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B) Loss and/or Expenses Claim (Cont’d)
iv) Security/Safety Services
- Security staff payroll records.
- Payment receipt for contractedsecurity services.
v) Site Facilities e.g. site office, toilet, storeroom, etc
- Actual cost records as appropriate.
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B) Loss and/or Expenses Claim (Cont’d)
b) Preliminaries BQ
1. Time-related items
2. Non-time-related items
3. A price per day/week/month to
apply to the prolonged period
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B) Loss and/or Expenses Claim (Cont’d)
5. Not complying with the provisions of
most standard forms of contract which
require loss and expenses or costs to be
paid
4. Very simple means of establishing an
additional payment for site overheads
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B) Loss and/or Expenses Claim (Cont’d)
5) Head office overheads
Components of head office overheads
may be listed as follows:-
a. Rent and rates of offices, plant and
yards;
b. Maintenance and running costs;
c. Directors’ salaries and expenses;
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B) Loss and/or Expenses Claim (Cont’d)
d. Head office, technical salaries and ‘on
costs’ (surveyors, planners,
purchasers and the like);
e. Head office administrative staffsalaries and ’on costs’ (accountants,
typists, messengers, cleaners,
maintenance staff);
f. Administrative expenses, such as
postage, printing, stationery,
telephones;
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B) Loss and/or Expenses Claim (Cont’d)
g. Traveling expenses, including theprovision of motor cars for directors
and staff;
h. Legal and professional fees;
i. Depreciation.
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B) Loss and/or Expenses Claim (Cont’d)
i) The actual cost approach
1. Cost of the actual head office
overheads affected by the delay
2. The difficulty arises in identifying
the increased expenditure directly
and indirectly arising from the
delay on the project in question
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B) Loss and/or Expenses Claim (Cont’d)
3. Generate a timesheet, showing thetime which they have spent on the
project , compared with the time
spent on the project during the earlierperiod of construction
4. Other head office costs such as
accounts, secretarial and clerical staff,rent, services, stationery, etc,
effectively exist to support key staff
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B) Loss and/or Expenses Claim (Cont’d)
A global claim ie: where a Contractor claims histotal head office expenditure and deducts from
that total the amount included in its tender.
Documents/information shall be provided by the
Contractor to substantiate the actual costs
incurred:-
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B) Loss and/or Expenses Claim (Cont’d)
- Actual cost records, e.g. time sheet,
contract of employment, etc.
- Auditor’s account showing the detailed
breakdown of administrative expenses
covering the whole contract period.
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B) Loss and/or Expenses Claim (Cont’d)
ii) The lost opportunity approach
The lost opportunity approach uses a
formula for its calculation, which is simple,
cheap, quick and produces a reasonable sum
of money for very little effort.
There are three formulae commonly used forhead office overhead calculations: the
Hudson formula, the Emden formula and the
Eichleay formula.
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B) Loss and/or Expenses Claim (Cont’d)
a) Hudson’s formula
Contract
Period
100
Period of
Delayx
Contract
Sumx
Head Office Overhead
Percentage
Note: The Head Office Overhead
percentage in the Contract
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B) Loss and/or Expenses Claim (Cont’d)
The formula adopts the head office overhead
percentage from the contract as the factor
for calculating the costs. This may bear little
or no relation to the actual head office costs
of the Contractor and therefore Hudson’s
formula is often criticized as unrealistic.
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B) Loss and/or Expenses Claim (Cont’d)
b) Emden’s formula
Contract
Period
100
Period of
Delayx
ContractSum
x
Head Office OverheadPercentage
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B) Loss and/or Expenses Claim (Cont’d)
Note: The HO/Profit percentage is head office
percentage, arrived at by dividing thetotal overhead costs and profit of the
Contractor’s organization as a whole by
the total turnover.
This formula has the advantage of using
the Contractor’s actual head office/profit
percentage rather than the one
contained in the contract and has
received judicial support in a number of
cases.
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B) Loss and/or Expenses Claim (Cont’d)
c) Eichleay formula
Total value of work for the
company as a whole
during contract period
Total Head OfficeOverheads
During contract
period
x
Value of work during
contract period
ie:
= Head Office Overheads Allocated to
the Contract
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B) Loss and/or Expenses Claim (Cont’d)
Contract Period
Period of Delayx
Head Office Overheads
Allocated to the Contract
= Amount Claimed
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B) Loss and/or Expenses Claim (Cont’d)
1. Comparing the value of work carried
out in the contract period for theproject with the value of work carried
out by the contractor as a whole for
the contract period.
2. A share of head office overheads can
then be allocated in the same ratio andexpressed as a lump sum to the
particular contract.
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3. The amount of head office overheadallocated to the particular contract is
expressed as a weekly amount by dividing
it by the contract period.
B) Loss and/or Expenses Claim (Cont’d)
4. The period of delay can then be multiplied
by the weekly amount to give a total sum
claimed.
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B) Loss and/or Expenses Claim (Cont’d)
6) Loss of profit
a. Some contractual provisions only
provide for recovery of additional
cost or expense, a claim for loss of
profit is not permissible
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B) Loss and/or Expenses Claim (Cont’d)
b. The Contractor to show some evidence
that he was given the opportunity to
tender for other projects and that he
could not reasonably take advantage of
these opportunities because of the fact
that his resources were retained on the
delayed project
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B) Loss and/or Expenses Claim (Cont’d)
c. the Contractor would be advised to keep
a record of the following:-
i) All tenders submitted and
awarded so that a success ratiocan be established;
ii) All projects for which the Contractor
was invited to tender, but whichwere declined or a deliberately high
tender submitted.
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B) Loss and/or Expenses Claim (Cont’d)
If the Contractor can demonstrate that, on the
balance of probability, he would have been
able to obtain other contracts during the periodof overrun, that alone ought to be sufficient to
establish the claim in principle.
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B) Loss and/or Expenses Claim (Cont’d)
7) Cost escalations
If the contract is fixed price there is no
mechanism for adjusting the contract sumfor fluctuations in prices of labour and
materials
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B) Loss and/or Expenses Claim (Cont’d)
Published indices, eg: “Index Numbers of theCosts of Labour and Selected Materials used
in Government Contracts” by the Hong Kong
Government Census and StatisticsDepartment.
Invoices and trade agreements to show actualprice increases.
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B) Loss and/or Expenses Claim (Cont’d)
8) Cost claims from subcontractors
Where the Contractor incurs liabilities
under his subcontracts or supplycontracts as a result of a event for which
he is entitled to recover cost.
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B) Loss and/or Expenses Claim (Cont’d)
9) Depreciation on assets
Where a montary claim arises from a
substantial delay to the contract period,necessitating the Contractor’s plant and
equipment to be held on site for much
longer than planned, then the Contractorincurs a depreciation in the value of those
assets. This loss would be recoverable.
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B) Loss and/or Expenses Claim (Cont’d)
HK Government Form 1993 Edition clause 1(1)
defines “cost” as including “depreciation in value
of Construction Plant owned by the Contractor”.
The calculation may be based on actual market
values, if available, or representative values taken
from accounting practice.
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B) Loss and/or Expenses Claim (Cont’d)
10) Financing charges
a. A debt which is paid late does not
entitle the recipient to interest at
common law
b. The interest or finance charges are
an integral part of the cost or lossand expense
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B) Loss and/or Expenses Claim (Cont’d)
c. If the value of work increase, the
additional financing ought to berecovered in the rates for variations
Documents/information shall be provided tosubstantiate his claim:-
i) Documentary proof of overdraft facilitiesor money borrowing to finance the
expense.
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B) Loss and/or Expenses Claim (Cont’d)
ii) Evidence of draw down of the overdraft
facilities or money borrowing.
iii) Borrowing ratio of the company.
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B) Loss and/or Expenses Claim (Cont’d)
11) Delayed release of retention
A direct cost arising from the disruption
to progress which the Contractor would
usually be entitled to recover.
The period by which the release of
retention will be/has been delayed
multiplied by the finance charges incurred.
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B) Loss and/or Expenses Claim (Cont’d)
12) Adjustment of levies
The value of the contract increases as
a result of the payment of additional
sums against claims.
B) L d/ E Cl i (C ’d)
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B) Loss and/or Expenses Claim (Cont’d)
13) Disruption and loss of productivity claims
a. Works may be disrupted without a
delay to the contract completion
date.
b. Establish that a planned orderly timing
and sequence of events was affected
by causes within the Employer’scontrol to the extent that the
Contractor was prevented from
carrying out the work in that plannedorderly timing and sequence.
B) L d/ E Cl i (C ’d)
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B) Loss and/or Expenses Claim (Cont’d)
c. Many disruption claims fail becausethe Contractor is unable to show that
the additional costs were caused as a
result of matters for which theEmployer/other party was responsible.
B) L d/ E Cl i (C t’d)
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B) Loss and/or Expenses Claim (Cont’d)
d. To compare actual productivity duringa period of disruption with productivity
during a period when no disruption
was evident.
This method does not take into
account errors in the tender.
B) L d/ E Cl i (C t’d)
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B) Loss and/or Expenses Claim (Cont’d)
e. i) Daily disruption schedules may be
used: the record, for example.
ii) Access to a particular area was
not available to the specified time,or in the specified condition
iii) Labour and plant left idle as a
result for a recorded period of
time
B) Loss and/or E penses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont’d)
e. iv) Or a site instruction received at a
recorded time necessitated thetransfer of noted resources,
resulting in demobilization and
remobilization.
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
f. The site diary could be better completed
with relevant information.
g. All such records must then be verifiedand signed by the supervision consultant
as an accurate record.
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
14) Acceleration claims
a. An express term of the contract or a
separate agreement
b. The Contractor is not entitled to
unilaterally decide to accelerate and
expect the Employer to pay theacceleration cost.
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
c. The Contractor is required to
demonstrate the cost of resources
which would have been employed hadno acceleration measures been taken.
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
d. The acceleration costs might consist of:-
i) Deployment of additional plant,
formwork
ii) Deployment of additional workforce
iii) Working overtime
iv) Additional overhead and profit
thereon
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
15) Quantum meriut
a. “the amount the Contractor
deserves” or “what the job is worth”
b. Payment on a quantum meriut may
arise:-
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
i) Where there is no contract at all;
ii) Where changes are made under acontract to a degree which renders the
work carried out substantially different
from that contracted.
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
16) Ex-gratia claims
Claims which the Employer is under no
contractual obligation to pay.
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
17) Common law claims
Claims for damages for breach of
contract at common law.
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
18) Adjustment for overheads and profit invariations
Refer to wording of loss and expenseclauses eg:
B) Loss and/or Expenses Claim (Cont’d)
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B) Loss and/or Expenses Claim (Cont d)
“If … the Architect is of the opinion that the
Main Contractor has been involved in direct loss
and/or expense for which he would not be
reimbursed by a payment made under any other
provision in the Contract by reason of the
regular progress of the Works … having beenmaterially affect … then the Architect shall
ascertain … the amount of such direct loss and
expense.”
a. RICS (HK Branch) 1986 Edition clause 24:
B) Loss and/or Expenses Claim (Cont’d)
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) oss a d/o pe ses C a (Co t d)
b. HK Government Form 1993 Edition
clause 63:
“If … the Architect is of the opinion that the
Contractor has been or is likely to be involved in
expenditure for which the Contractor would not
be reimbursed by a payment made under any
other provision in the Contract by reason of theprogress of the Works … having been materially
affected … then the Architect shall ascertain the
Cost incurred …”
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B) Loss and/or Expenses Claim (Cont’d)
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p
e. Any variations which do not cause thedelay or which is not the subject of the
prolongation claim, should be ignored
B) Loss and/or Expenses Claim (Cont’d)
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p
19) Time limits on recovery
a. Within six years of the cause for
contracts under hand
b. Within 12 years for contract under
seal
B) Loss and/or Expenses Claim (Cont’d)
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20) The duty of mitigation
a. What steps the Contractor
takes to mitigate the effects ofthe delay.
b. What steps the Contractortakes to mitigate the losses.
The End
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Thank You
Mr Tse Sek Chuen
Widnell Ltd
www.widnell.com
The End
The End