An Extension of Time and a prolongation claim are related, but they answer different questions.
An EOT addresses the contractual completion date.
A prolongation claim seeks recovery of additional time-related cost caused by compensable delay.
The distinction is fundamental. A Contractor can be entitled to additional time for an excusable event without being entitled to every cost incurred during the extended project period.
The strongest prolongation submissions therefore do more than multiply a monthly site-overhead figure by the number of delayed months.
Weakness 1: assuming EOT automatically proves cost entitlement
Start with the contract.
For each period of delay, determine:
- whether the event is excusable;
- whether it is compensable;
- whether the relevant clause provides Cost, Cost plus profit, or time only;
- whether Particular Conditions alter recovery;
- whether a settlement/amendment has already dealt with the period; and
- whether notice and claim procedures were followed.
Time entitlement is not a universal gateway to money.
Weakness 2: claiming the entire extended project period
The revised completion date may be six months later, but that does not necessarily mean six months of recoverable prolongation.
Identify the compensable critical delay period.
The project may contain:
- Employer-risk delay;
- Contractor delay;
- neutral events;
- mitigation periods;
- acceleration;
- concurrent delay;
- non-critical disruption; and
- periods already compensated.
A credible claim maps cost to the periods for which contractual and causal recovery is established.
Weakness 3: weak connection between delay event and cost
The claim needs a causal bridge.
For each cost category, ask:
Would this cost have been incurred in the same amount and at the same time if the compensable delay had not occurred?
A site manager retained for three additional months may be time-related.
Replacement of defective work during the same period may not be.
Additional equipment brought in to mitigate delay may require separate analysis.
The claim should classify costs by reason for incurrence, not merely by accounting code.
Weakness 4: relying only on tender rates or a monthly average
Tender preliminaries and contract rates can provide useful context, but actual prolongation is often fundamentally an actual-cost exercise, subject to the contract.
A generic monthly average can hide major variations:
- staff demobilised during part of the period;
- equipment idle only intermittently;
- camp costs fixed regardless of delay;
- one-off costs incorrectly spread over time;
- later-project staffing different from the tender plan.
Where actual records exist, use them.
Weakness 5: mixing direct cost, disruption and prolongation
These are different cost mechanisms.
Direct change cost may arise from additional quantities or changed work.
Prolongation cost arises because the project or affected work remains on site longer due to compensable delay.
Disruption cost concerns loss of productivity or efficiency.
A claim that places everything under “prolongation” makes causation and duplication difficult to test.
Separate the heads of claim and explain interactions.
Weakness 6: double recovery
Common overlap risks include:
- site overhead already included in Variation rates;
- staff cost recovered through another claim;
- escalation claimed both through a price-adjustment clause and as delay cost;
- equipment claimed as both direct change cost and time-related standing cost;
- head-office overhead included in mark-ups and claimed again separately;
- acceleration cost overlapping with prolongation.
A reconciliation schedule should show where each cost is claimed and confirm that it is not recovered elsewhere.
Weakness 7: ignoring concurrency and Contractor delay
The effect of concurrent delay on monetary recovery can be legally and contractually complex.
Do not solve the problem by omitting unfavourable periods.
Instead:
- identify Contractor-risk delays;
- compare critical paths;
- define overlap;
- explain the legal/contractual approach adopted;
- segregate costs where possible; and
- state assumptions clearly.
The SCL Delay and Disruption Protocol provides industry guidance on addressing delay and disruption transparently. The applicable contract and governing law still control entitlement.
Weakness 8: insufficient actual cost records
A prolongation claim is difficult to verify when it relies on reconstructed spreadsheets without underlying evidence.
Useful records include:
- payroll;
- timesheets;
- employment records;
- site staff allocation;
- equipment ownership/rental;
- invoices;
- fuel;
- accommodation;
- utilities;
- insurance;
- bonds;
- site-office cost;
- transport;
- security;
- IT/communications;
- cost ledgers; and
- proof of payment where relevant.
Maintain an audit trail from summary schedule to ledger to source document.
Weakness 9: no treatment of fixed versus time-related cost
Not every indirect cost increases with time.
A mobilisation cost incurred once is different from accommodation paid monthly.
Classify indirect costs into:
- one-off/fixed;
- time-related;
- event-specific; and
- potentially mixed.
If a cost would have been incurred even without the delay, explain why it is nevertheless claimed—or remove it.
Weakness 10: head-office overhead presented as a formula without proof
Formula approaches to head-office overhead are sometimes used in delay claims, but entitlement and acceptable methodology depend on contract, law and evidence.
A formula does not automatically prove actual loss.
Where head-office overhead is claimed, consider:
- actual overhead records;
- capacity during the delay;
- causal connection;
- alternative work;
- contract mark-ups;
- applicable legal tests; and
- whether the chosen method is accepted in the relevant forum.
This is an area where specialist legal and quantum advice may be necessary.
Weakness 11: mitigation is not reflected in the cost model
If resources were demobilised, redeployed or reduced, the claim should show it.
A credible cost curve often changes over the delay period.
The cost model should reflect what the project actually did, including:
- partial demobilisation;
- staff reductions;
- plant release;
- alternative work fronts;
- resequencing;
- acceleration;
- remobilisation.
Ignoring mitigation can overstate the claim and undermine confidence in the rest of the quantum.
Weakness 12: the quantum period does not reconcile with the delay analysis
This is an avoidable but common problem.
The delay report may identify a compensable critical period from May to August, while the cost claim starts in March and runs through October.
The two expert disciplines must reconcile.
Create a period matrix:
| Period | Critical delay finding | Entitlement | Cost treatment |
|---|---|---|---|
| P1 | Employer critical delay | Compensable | Claim time-related cost |
| P2 | Concurrent / disputed | Subject to legal position | Segregate / reserve |
| P3 | Contractor delay | Non-compensable | Exclude |
| P4 | Mitigation / acceleration | Separate basis | Analyse separately |
A stronger prolongation claim structure
A clear submission normally contains:
- contractual basis for monetary recovery;
- notices and procedural compliance;
- EOT/delay finding relevant to the cost period;
- definition of compensable period;
- cost methodology;
- cost-category analysis;
- actual source records;
- concurrency and mitigation treatment;
- duplication/recovery reconciliation; and
- summary calculation with audit trail.
The key principle
The amount of prolongation cost should emerge from what the compensable delay caused the Contractor to incur, not from what can conveniently be multiplied by time.
When entitlement, critical period, actual records and cost causation are aligned, the quantum becomes much easier to defend.
REFERENCES & FURTHER READING