The substance of a prolongation claim is the cost of keeping the site open for longer: supervision, site accommodation, plant, welfare, the standing costs of being there. Building that up correctly is most of the work in loss and expense claim preparation on a delayed project.
The common approach is to divide the tender preliminaries by the tender period and multiply by the extension. That produces a figure and not a claim.
Why the tender allowance is the wrong basis
Loss and expense is for cost incurred, not for the allowance made at tender.
Where the tender was low, the claim understates the loss. Where it was generous, the claim overstates it and gets reduced.
Either way the assessor will ask for actual cost, and a claim that cannot produce it looks like an estimate.
Separating time related from fixed
Preliminaries include items that vary with time and items that do not: a tower crane standing costs money each week, a set up cost does not recur.
Only the time related items belong in a prolongation calculation.
Fixed items that had to be repeated, where the delay caused a demobilisation and return, are a separate matter and claimed separately.
Building up from actual resource
Identify the resources present during the extended period: staff, plant, accommodation, services, by week.
Take the cost of each from the accounts rather than from the build up.
The result is a schedule that shows what was there and what it cost, which is what an assessor can check.
The period to apply
The extended period, which follows from the extension of time position rather than from the overall overrun.
Where some of the overrun was the contractor’s own, that part is not claimable and should be excluded openly.
A claim that quietly includes it invites the whole period to be reconsidered.
Which period, not just how long
The cost of a week at the end of a project differs from the cost of a week in the middle, sometimes substantially.
Where the delay pushed the project into a period of reduced activity, the time related cost in that period is what was actually incurred.
Claiming an average weekly rate when the extended weeks were quieter overstates the loss and is easy to check.
Staff and supervision
Site staff present during the extended period, at actual cost including the oncosts the business really carries.
Where staff were shared with other projects, only the attributable proportion belongs in the claim.
Allocation records settle this and their absence is the commonest weakness in this head.
Plant and accommodation
Hire invoices for the extended period, which are usually the easiest part of the claim to evidence.
Owned plant at an internal rate, which needs explaining, since an internal rate is not a cost until it is justified.
Accommodation, services and consumables, which are small individually and material in total.
Subcontract prolongation
Where subcontractors incurred prolongation cost and claimed it, that becomes the contractor’s cost and is claimable in turn.
It needs the same treatment: time related items, actual period, evidence of the sums paid or payable.
A subcontract claim passed through without assessment is a weakness, because the assessor will assess it even if the contractor did not.
What to exclude
Anything already recovered through variation valuations, which commonly include preliminaries additions.
Anything attributable to the contractor’s own delay, as above.
And anything that would have been incurred anyway, which is the test the whole head has to meet.
Presenting it
A schedule by week and by resource, with the source of each cost identified.
A short statement of the period claimed and why, and of what has been excluded.
That structure is checkable, which is the only quality that matters in a quantum submission.
Subcontract preliminaries and standing time
Subcontractors carry their own time related cost: supervision, small plant, welfare, and the standing cost of gangs held on site with nothing to do. Where they have claimed it, the contractor’s exposure is real and the claim upstream has to carry it.
Standing time is particularly worth separating, because it is usually well evidenced from timesheets and is easy for an assessor to follow. A gang on site unable to work, recorded at the time, is close to self proving.
What it needs is the same treatment as any other element: the period, the resource, the actual cost, and the link to the matter relied on rather than to the subcontractor’s own difficulties.
Checking the build up before it goes in
Compare the weekly figure against the tender preliminaries for the same resources. Where the claim is much higher, there is a reason and it has to be explained before the other side asks. Where it is much lower, something has been missed.
Check that no item appears both here and in a variation valuation, which is the commonest duplication in a final account, and that nothing attributable to the contractor’s own delay has been carried in with the rest.
Then read the schedule as the assessor will: resource by resource, asking what proves that this was here and cost this. Anything that cannot answer that question is better removed than defended.
A schedule that has been through that check once is also much faster to defend in a meeting, because every line already has an answer attached to it.
Where it fits
Preliminaries build up is quantum work and it follows the time position rather than establishing it.
The period comes from the extension of time position, which is prepared alongside it.
The resource and cost records it depends on come from ordinary cost control, which is why well run projects produce this head quickly.
Costs incurred that nobody has agreed to pay?
Loss and expense claim preparation sets out the contractual provisions relied on, the costs actually incurred and the link between each matter and each head of cost, in a form that can be tested.