29/09/2024
1. Extension of Time (EOT) Formula:
The formula for determining the extended completion date due to delays is:
Revised Completion Date = Original Completion Date + Excusable Delays
Where:
• Excusable Delays refer to delays caused by events outside the contractor’s control, such as force majeure or employer-caused delays, for which the contractor is entitled to an extension.
2. Prolongation Cost Calculation:
Prolongation costs are calculated for the additional time spent on the project due to delays caused by the employer. It includes costs like site overheads, salaries, equipment, etc.
Prolongation Cost = Daily Site Overhead × Number of Delay Days
Where:
• Daily Site Overhead includes fixed costs associated with running the project site (e.g., equipment, staff, administration).
3. Disruption Cost Calculation:
Disruption claims seek compensation for reduced efficiency in productivity. The cost is often calculated by comparing planned productivity versus actual productivity.
Disruption Cost = (Actual Productivity - Planned Productivity) × Unit Rate × Work Volume
Where:
• Unit Rate is the cost per unit of work (e.g., labor cost per hour or per unit produced).
4. Acceleration Cost Calculation:
If the contractor is asked to accelerate work to overcome delays, they can claim acceleration costs.
Acceleration Cost = Additional Resources Cost + Premium Payments
Where:
• Additional Resources Cost refers to the cost of extra labor, machinery, or other resources deployed.
• Premium Payments include any additional wages or costs incurred for working overtime or under tight deadlines.
5. Loss of Profit Calculation:
Sometimes, claims include loss of profit if a contractor has been unable to secure other contracts due to delays.
Loss of Profit = (Expected Profit % × Project Value) - Actual Profit
6. Cost of Idle Equipment:
If equipment is idle due to delays, the contractor may claim for the equipment downtime.
Idle Equipment Cost = Equipment Cost per Day × Idle Days
7. Head Office Overheads and Profit (HOOP) Calculation (Hudson Formula):
This is used to calculate compensation for overhead and profit due to delays:
HOOP = (Contractor’s Overhead % × Project Duration × Contract Value) / 100
Where:
• Contractor’s Overhead % is typically derived from the company’s financial records.
8. Interest on Late Payments:
In the case of delayed payments, the contractor may claim interest.
Interest = (Outstanding Payment × Interest Rate × Number of Days Late) / 365
Where:
• Interest Rate is the rate agreed in the contract or, if unspecified, the statutory rate.
These calculations are part of the broader preparation and evaluation process for FIDIC-based claims, which typically require proper documentation and substantiation.
