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Senior Engineer Contracts, HCC, Tehri PSP Project, India.

Hi! Sometimes there might be a delay due to the client not fulfilling the contractual obligation. eg. Providing Quarry and operation of Crusher Plant. However, the client is reimbursing you the additional cost incurred due to procurement of aggregate from open market. But this comes with uncertainty about availability with supplier, quality, cost, etc. In this case the time is not being compensated by client. How can we approach such subjective delays where quantification is not possible?

1 reply

Jun 2, 2020

An owner paying the difference in the procurement cost might not be a perfect solution, but it's a pretty good approximation. However, as you mentioned above, time delays should be taken into account as well. So, if the client has caused a delay that otherwise wouldn't have taken place, making a delay claim or requesting an extension of time equal to the delay should provide some relief in addition to the increased price of materials. And, if the delay had ripple effects, noting those effects and including them in your delay or extension calculations could work toward a fair result. Obviously, though - your options might be limited by the terms of the contract that was signed. So, it'd be wise to review the contract (potentially with your attorney) and to consult with industry experts you know (like project managers, other GCs, developers, etc.) to see what's allowed in your position and to see how others handle similar situations.

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