Claim For Idle Time

[Beornet]

I was task to present my own approach or proposal for the Claim on the cost of idle time of cranes & of the lifting crew due to significant delay in delivery of owner supplied electrical equipment.

As i was going through the records provided to me & exchange of correspondence for both Contractor & Owner's representative. I found out that the items are part of the critical network, the largest slippage is -173 days for one equipment. In addition the postponement of delivery of equipments happened numerous times before it was finally delivered & installed. And in all this times Contractor had consistently notified the Owner of the implication of delay & the possible compensation of cost of idled machine & manpower.

In one of the letter of the owner they vehemently rejected the cost claim saying "irrespective of the delay in delivery of equipments" by the owner, the contractor

1. could have done or utilize the machines & manpower to other activity that may need it 2. And, that the site was not ready or the lifting preparation was not yet completed prior to day the equipment was supposedly delivered

I would like to know your view on this claim, and

What would be the best approach in presenting this cost claim?

Thank you in advance for answering

[Riordan]

Hi Frank,

Good morning and thanks for your question.

It is very important to demonstrate the cause and effect in making your claims. If there's a delay to an activity or activities on the critical path, the cause should be first not caused by the claimant and should impact the critical path.

It is really quite difficult for me at this point to give you a definitive assessment of your claim and the corresponding reply of the owner, however I have below comments you may want to consider.

1. Preparing a claim for idled equipment and crew should be properly substantiated by means of providing records and records I suggest should be validated also by the Engineer.

2. The owner may be correct on his statement no.1, unless the crane and the crew was intended only to be utilized exclusively by a particular activity/work.

3. For the delay claim or idled equipment claim, you must also demonstrate that you have incurred additional cost and/or time. Let say, you have subcontracted to SUBCON A the rental of crane including operator for 10 days for the Lifting of Equipment A,B and C from Ground Level to Technical Level 3 and commencement shall be DAY 1. SUBCON A mobilized his crew and the crane on time and ready to execute the works on DAY 1. However, DAY 1 arrived and no equipment(to be procured the owner) arrived on site(not even one), Equipment A, B and C only arrived on site on DAY 10. Therefore, you have a case of idled equipment and can submit your claim to the owner, provided SUBCON A claimed to you(this really depends on what is written on the subcontract between you and SUBCON A regarding idling/stand by etc.) In addition, if an activity is on the critical path and have impacted due to the delay in delivery and lifting of the Equipment A,B and C on Technical Level 3, then you must prepare a delay analysis and compute the number of days of the delay to Completion of the Works due to this event. 4. The owner may also be correct on his statement 2. Going back to our example above(no.3), if Technical Level 3 is not yet ready or completed on DAY 1, then it is clear that there's a delay to Technical Level 3. The Contractor should have then adjusted the schedule of arrival of the crane and his crew on site to prevent idling and/or delay.

I must add that it is very important to have all the records, notices and updated schedule in preparing a claim.

I hope the above helps and Good Luck!

Kind regard, Jon