EOT Claim
In the Open Standard
Oliver MellingMember for 19 years 5 months
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I have a programme that is in delay, partially due to our engineers rate of output and partly due to a change in the scope of the design works by the client.
This variation work to the design has now been completed and we are attempting to rectify the delivery milestones for manufactured components.
We have captured the cost of the extra design and estimated the impact of the cange on manufacture costs.
Against the baseline I have also worked out the EOT associated with the extra design and manufacture durations, which has been used as a basis for working out potential extra project management costs we will incur.
The client has agreed with the actual costs and estimate for the design and manufacture but says that it is wrong to expect them to pay for forecasted extra PM costs associated with EOT. (They believe if we recover they could lose out by paying us upfront for extra PM costs associated with the EOT)
Is it normal to only receive actual costs incurred for PM costs associated with an EOT?
(Im guessing everyone is going to tell me that is depends on what the contract say :D)
This variation work to the design has now been completed and we are attempting to rectify the delivery milestones for manufactured components.
We have captured the cost of the extra design and estimated the impact of the cange on manufacture costs.
Against the baseline I have also worked out the EOT associated with the extra design and manufacture durations, which has been used as a basis for working out potential extra project management costs we will incur.
The client has agreed with the actual costs and estimate for the design and manufacture but says that it is wrong to expect them to pay for forecasted extra PM costs associated with EOT. (They believe if we recover they could lose out by paying us upfront for extra PM costs associated with the EOT)
Is it normal to only receive actual costs incurred for PM costs associated with an EOT?
(Im guessing everyone is going to tell me that is depends on what the contract say :D)
3 replies
Oldest first- 0Samer Zawaydeh ·Dear Oliver,
Usually the Claims are settled after the event is over. Forecasts are good, but they are not real until it takes place.
It seems that you have a good situation and the client is paying.
Yes the claims are settled for actual cost incurred only. If you don’t have proof, then the Engineer’s estimates are used. And if the Contractor objects, then they go for settlement of the dispute.
With kind regards,
Samer - 0Mike Testro ·Hi Oliver
As you say - it does depend on what the contract says.
Samer is quite right but his advice seems to stem from the FIDIC route.
Normally you would be entitled to recover the extra costs incurred during the EoT period with some contribution to overheads but no profit.
This would normally be added to the interim payments.
I trust this helps
Best regards
Mike Testro - 0Mai Tawfeq ·hi:
Sure dear Oliver the contract is the vital document use to determine any party rights / entitlements.
I have assessed design claims , basically final endorsement must be based on the actual start and finish dates ,the variance between the planned bars and actual will be used in analysis the claim ,now in light of your case and since u have continuous event the interim payments will be the best thing u go for it and once u get actual finish final determination should be , now to protect ur right at the end of the day keep sending notifications , proper correspondence and record will be so useful.
thanks.
mai
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