A prolongation cost claim seeks the time related cost of a project running longer than it should have, where the extension is attributable to a matter for which the client is responsible.
Two questions decide it, and only one of them is about money. Which period is compensable, and what did the contractor actually spend during it.
The period is the argument
Prolongation is assessed for the period of compensable delay, and identifying that period requires a delay analysis rather than an assumption.
The most common error is to claim the whole overrun. A project finishing sixteen weeks late may have four weeks of client caused delay, six weeks the contract treats as neutral, and six weeks the contractor caused. Only the first four are compensable.
The second most common error is to assess the loss during the overrun period at the end of the job, when in most cases the correct period is the one when the delaying event actually operated. Site costs during a delay in month four are what was lost; site costs in the final weeks are a different and usually smaller thing.
Actual cost, not the tender allowance
The measure is what the contractor actually incurred, not what they allowed in the tender. A contractor who priced preliminaries keenly does not recover at their tender rate, and one who priced generously does not have their claim reduced to it.
That means the evidence is the contractor's own accounting records: site staff on the payroll and their allocation to the project, plant on hire with dates, accommodation, welfare, security, insurance and the running cost of the site establishment.
Where those records do not exist in a usable form, the claim struggles, whatever the merits of the delay analysis. Cost records are as important as programme records and are more often absent.
What belongs and what does not
Time related site costs belong: supervision, site accommodation, plant on standing hire, temporary services, security and insurance for the period.
Fixed costs do not, because they were incurred once regardless of duration. Setting up and removing the site establishment costs the same whether the job runs forty weeks or fifty.
Costs that would have been incurred anyway do not belong. A contractor who kept a site manager on the project through a delay has a claim; one who redeployed them elsewhere does not, for that period.
Head office overhead and profit are a separate question with their own basis of entitlement, and mixing them into prolongation without saying so is a common way of inflating the number invisibly.
Concurrency
Where a compensable delay and a contractor caused delay operate over the same period, the entitlement question becomes considerably harder and the answer depends on the contract and on the facts.
As a commercial matter, a claim that ignores concurrency altogether is vulnerable, because the first thing a defending party will look for is a contractor caused event running alongside.
Addressing it openly, and explaining why the claim is nevertheless justified on the facts, produces a far more robust document than presenting the period as though nothing else was happening. Where the legal position on concurrency is in issue, that is a matter for solicitors.
Records decide it
A prolongation claim is proved from a programme that was updated during the job, records of the events as they occurred, notices served at the time, and cost records showing what was actually spent.
All four are made during the project and none can be created afterwards. That is the entire reason record keeping is a commercial function rather than an administrative one.
Where the records are thin, some part of the claim can usually still be established, but the recoverable proportion falls sharply. On phased and heavily disrupted projects, where events overlap most, that effect is strongest, as set out under complex phasing.
Assess it as it accrues
The forms contemplate ascertainment as the loss is incurred. A prolongation claim assessed in the month the delay occurs is a straightforward exercise; assessed two years later it is a reconstruction.
It is also better for the client, because a claim assessed early can be mitigated and because the discussion happens while both parties can still check the facts.
The wider mechanism is covered in loss and expense, what has to be proved, and the consequence of leaving it is described in variation claim exposure.
What this means for you
Start with the period, not the money. Most prolongation disputes are settled once the compensable period is established, because the cost per week is comparatively easy to agree.
Then ask for the cost records rather than the tender build up. A claim priced from tender preliminaries has not been proved, whatever its arithmetic. Our approach sits under final accounts and disputes.
Assessing a prolongation claim?
Send the programme, the delay analysis and the cost records. We will tell you what period and what costs the evidence supports.