Question

Review the following and then analyze the conditions listed below and present how these conditions should be dealt with as claims to an Owner, that is what types of money cost/delay, etc., should be submitted as requests for change orders or claims:

• Base contact- $77,000,000 to build a twenty story building
• Contract schedule: complete in 300 days
• Liquidated damages = $7000/day
• Owner issued notice to proceed and contractor started work on September 9, 2013
• Contractor could not access site due to property rights issues until November 20, 2013
• Excessive rain and storms prevented work from proceeding for one week in November, 2013
• Excavation contractor did not begin work until December 12, 2013, two weeks after being asked to start work
• Excavation contractor started work and encountered soil containing cyanide and stopped work.
• Contractor notified owner of cyanide soil and indicated a change order for time and material costs were required to remove the cyanide soil
• Owner stopped the work to analyze the cyanide condition
• Owner issued a change order pricing request after two months of time
• Contractor responded to the pricing request indicating 3 months of extra time and $2,000,000 of cost was required
• Owner accepted cost request but denied extra time request

Answer 1

Hi,

Solution as follows:

Since the cost request was accepted by the owner, contractor needs to claim again for the extra time request. This can be requested in the form of a request letter by listing chronological events as below:

To,

Name of Owner__________

Address________________

Project_________________

Subject –Approval of Extra time for the project

Sir,

Reference to the above subject, we have following submissions with respect to above said project:

1. We have been awarded to construct twenty story building with an stipulated time of completion of 300 days started Sep 09, 2013
2. Liquidated damages as specified in the contract for delayed completion was $7000/day
3. Access to the site was restricted due to property rights issues until November 20, 2013 (i.e. more than two months)
4. After clearance of property we forced to stop work for another week due to Excessive rain and storms
5. After starting excavation work we found soil containing cyanide for which we notified for a change order for time and material costs
6. Change order pricing request received after 2 months of time

From above point number 3, 4 and 6 it is extracted that more than 4.5 months of precious time has been already elapsed due to the reasons beyond control of contractor.

Due to this delay, timely completion of project may also be extended. However we have estimated the revised project duration by planning additional efforts during execution and it is found to be at least three months.

In view of above it is requested to approve the time extension of three months.