Every priced preliminaries package holds at least three weekly rates, a quarter or more apart, and the one in the contract total is the one that should never be used.
Price the weeks of compensable delay at the time-related resources that were actually on site in the period the delay bit, not at the contract's average preliminaries rate. On an illustrative 3,000,000 preliminaries package over 100 weeks, eight weeks of delay felt in the finishing period are worth 142,400, not the 240,000 that total preliminaries divided by the programme produces: the quick method overstates the claim by 68.5 per cent.
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Prolongation is the cost of the contractor staying on site longer because of an event the client carries. The arithmetic looks trivial, a weekly rate times a number of weeks, and that is why it goes wrong. There are at least three weekly rates sitting in any priced preliminaries, and they differ by a quarter or more. Which one applies decides the claim before anyone argues about the weeks.
| Input | Value |
|---|---|
| Measured and external works | 20,000,000 |
| Preliminaries, as a share of works | 15.0% |
| Preliminaries | 3,000,000 |
| of which fixed: set-up, mobilisation, removal (25.0%) | 750,000 |
| of which time-related | 2,250,000 |
| Contract period, weeks | 100 |
| Compensable extension of time, weeks | 8 |
| Time-related resources on site, substructure, per week | 19,600 |
| Time-related resources on site, frame and envelope, per week | 27,400 |
| Time-related resources on site, finishes, per week | 17,800 |
The three resource rates come from the contractor's own preliminaries build-up: site management, welfare, hoarding hire, cranes, hoists, scaffold and temporary services, each priced for the weeks it is on site. The tower crane and most of the scaffold have gone by the finishing period, which is why that rate is the lowest of the three even though the site is busy.
Method A: total preliminaries ÷ contract weeks × delay weeks
Method B: time-related preliminaries ÷ contract weeks × delay weeks
Method C: time-related resources in the period of delay × delay weeks
In Excel, with the preliminaries build-up laid out one resource per row and one column per week, the method C rate is =SUM(INDEX(Build,0,DelayWeek)) over the resource rows, or =SUMPRODUCT((Week>=Start)*(Week<=End)*Build)/(End-Start+1) to average across the weeks the delay was felt.
| Method | Per week | Eight weeks |
|---|---|---|
| A: total preliminaries over the programme | 30,000 | 240,000 |
| B: time-related preliminaries over the programme | 22,500 | 180,000 |
| C: resources on site in the period of delay | 17,800 | 142,400 |
Method A is wrong on its face. It spreads the 750,000 of fixed preliminaries across the programme, so every week of delay carries 7,500 of set-up and removal costs that were incurred once and will not be incurred again because the job ran long. A site is not mobilised twice because it finishes late.
Method B removes the fixed items and is still wrong, more quietly. It assumes the site costs the same in week 90 as in week 40. It does not. The finishing rate here is 79.1 per cent of the average time-related rate, and method B overstates the claim by 37,600, or 26.4 per cent.
Method C is the one the Society of Construction Law's Delay and Disruption Protocol points to: prolongation is assessed on the resources in the period when the effect of the delaying event was felt, not on an average and not on the extra weeks tacked on at the end. The difference between the last two ideas matters. The extended weeks at the end of a job are often the cheapest weeks on it, while the delay itself may have been felt at the peak.
| Weekly rate used | 4 weeks | 8 weeks | 12 weeks |
|---|---|---|---|
| Substructure resources, 19,600 | 78,400 | 156,800 | 235,200 |
| Frame and envelope resources, 27,400 | 109,600 | 219,200 | 328,800 |
| Finishing resources, 17,800 | 71,200 | 142,400 | 213,600 |
| Average time-related, 22,500 | 90,000 | 180,000 | 270,000 |
| Total preliminaries average, 30,000 | 120,000 | 240,000 | 360,000 |
The same eight weeks cost 219,200 if they were felt while the frame was going up and 142,400 if they were felt during finishes: 76,800 apart, or 9,600 for every week, with no change in the length of the extension. That is why the first question on any prolongation claim is not "how many weeks" but "which weeks". A claim that answers only the first question has not been assessed.
The period of delay is a matter of record, not of argument, if the programme was updated monthly and the delay analysis was done on it. Where the programme was not maintained, both sides end up arguing about averages, and an average rarely matches the resources actually on site in the weeks affected.
Site preliminaries are not the whole claim. A contractor kept on a site for eight extra weeks may also argue that its head office overheads and profit were tied up and could not be earned elsewhere. Those are usually claimed by formula. On the Emden approach, the head office percentage times the contract sum divided by the contract period gives a weekly figure. The contract sum here is the 23,000,000 of works and preliminaries plus the 6.0 per cent, or 24,380,000:
Weekly overheads = 6.0% × 24,380,000 ÷ 100 = 14,628
Eight weeks: 117,024. Taken with method C, the claim is 259,424.
Two cautions. The percentage in an Emden calculation is meant to come from the contractor's audited accounts, not from the tender, and here 6.0 per cent is an illustrative figure. And tribunals generally expect evidence that work was actually turned away during the delay before allowing a formula claim at all. The site preliminaries are cost; the head office line is an argument about lost opportunity, and it should be presented as a separate line so it can be tested on its own.
The common mistake is to use the tender preliminaries total as a weekly rate because it is the only number in the contract. It carries fixed costs that do not recur and it averages a resource profile that is anything but flat. On this case it adds 97,600 to an eight-week claim. The client's quantity surveyor who accepts it is not being generous; he is paying for a crane that left the site months before the delay started.
The reverse mistake is also seen: a client who prices the extended weeks at the end of the job, when the site is down to a handful of finishing trades, for a delay that was actually felt at the frame. That under-recovers by the same arithmetic in the other direction.
The client's side of the same week is a different calculation: what a week of late completion costs the developer, and whether the liquidated damages rate covers it, is worked in do liquidated damages cover a late week. The weekly time-related preliminaries for your own scheme fall out of the free workbooks for this book, which rebuild the contract sum layer by layer.
No. Set-up, mobilisation and removal are incurred once whatever the length of the job, so they do not recur when it runs long. On an illustrative 3,000,000 package with 750,000 of fixed items over 100 weeks, leaving them in adds 7,500 to every week claimed, or 60,000 on an eight-week extension.
The period in which the effect of the delaying event was felt, not the extra weeks added at the end of the job. On an illustrative contract, eight weeks felt during the frame cost 219,200 at 27,400 a week, against 142,400 if felt during finishes at 17,800, a difference of 76,800 for the same extension.
Usually by formula. The Emden approach multiplies the contractor's head office and profit percentage from its accounts by the contract sum divided by the contract period. At an illustrative 6.0 per cent on 24,380,000 over 100 weeks, that is 14,628 a week, and it normally needs evidence that other work was lost.
Chapter 15 and Appendix B of Construction Cost Control set out the instrument that publishes time-related preliminaries per week before signature; the free Before Signature workbook computes the figure for your own scheme. The book takes the same case from first principles to the decision, chapter by chapter, and every figure it prints is a live formula in the free companion workbooks.
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