Assessment of loss and expense for extension of time

Abstract

Delays are fairly common place during the construction process. Contract delays are classified as excusable, inexcusable or compensable. Excusable delays are those which are determined to be unforeseeable and uncontrollable by the contractor, inexcusable delays are not compensable for time or money since they are due to the contractors own negligence and not the responsibility of the owner and the compensable delays are those which are caused by the actions or inaction of the owner. In construction contracts will generally provide for the contractor to claim direct loss and/or expense as a result of the progress of the works being materially affected by relevant matters for which the clients responsible. These delay or extension of time can be very costly to the final expenditure of the construction projects. They can also cause problems in the administration of the projects and become sources for disputes and claims. The objectives of this research are to determine what can be claimed under loss and expense for extension of time and how they are evaluate the loss and expense for preliminaries item. The scope of the research is only limited to government construction projects. The methodology is based on the selected case studies of the government projects that used the PWD203/203A (10/83) Standard Form of Contract. For the first objective is items can be claims cause of delays is loss of profit, finance charges, overheads and loss of productivity or uneconomic working. As the second objective is to determine the methods has been used by clients in evaluate the loss and expense. In common practice there have three methods in evaluate the loss and expense; base on amendment contract basis, formula basis and negotiation basis, it depends to the contract and clients in evaluate the loss. However, it is contractor burden to proof the loss to the client with submission of evidence documents.