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

2 weeks ago

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?

Additional info about this contractor
Project Role: General Contractor
Project Type: State/County
Senior Legal Associate Levelset
355 reviews

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.

Disclaimer: The information presented here is not legal advice and should not be construed as such. Rather, this content is provided for informational purposes. Do not act on this information as if it is advice. Further, this post does not create any attorney-client relationship. If you do need legal advice, seek the help of a local attorney.
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