1. A familiar scenario

"Let's get an extension of time and then we can recover all our time-related costs. We can adopt our tender rates for preliminaries items and multiply the rates by the period of over-run."

If this sounds familiar, alarm bells should be ringing. Despite a wealth of available guidance, prolongation cost claims are all too often calculated on this flawed basis — and frequently rejected as a result.

2. What is a prolongation cost claim?

A prolongation cost claim is the contractual mechanism for recovering additional time-related costs properly incurred due to compensable delays to completion. Each case turns on its own facts, evidence, complexity and circumstances — assessed under the contract and governing law. The burden of proof rests with the claimant: he who asserts must prove.

3. Three questions before you claim

Does time equal money? Not every delay generates a financial entitlement.
What method? Tender rates are usually too simplistic — base the claim on actual cost and loss incurred.
What do the contract rules say? Check for prescribed valuation rules, or whether this is a damages claim for actual loss and expense.

4. Three types of delay

TypeEOT?Money?
Compensable — employer-caused (e.g. late access, late approvals)YesYes
Excusable — e.g. force majeureYes (relief from LAD)Not necessarily
Disruption — productivity loss on non-critical workNoNo (separate claim)

5. When is delay compensable?

The delay must be compensable, affect the critical path, and delay completion. Typical compensable events: employer instructions and variations, denied access, late design approvals, late employer documentation or free-issue plant, and acts of prevention or breach affecting regular progress.

6. What gets rejected

  • Contractor culpable delays — caused by the contractor's own actions.
  • Concurrent delays — culpable delay overlapping compensable delay.
  • Neutral events — force majeure or contractor-risk events where each party bears its own costs.

7. The valuation rule: actual cost, not tender rates

Compensation for prolongation should not be paid for anything other than work actually done, time actually taken up, or loss and expense actually suffered — based on the actual additional cost incurred.
— Society of Construction Law, Delay and Disruption Protocol

Claims built solely on the over-run period between original and actual completion are incorrect — they do not represent actual loss suffered when the project was delayed.

8. When did the delay actually occur?

Identify the root cause, when it occurred, and its effect. Example: a project due 1 August finishes 29 August (4 weeks late) because of a critical delay in March — quantify the loss suffered in March, not the costs sitting in the August over-run.

9. Concurrent delay — the key issue

Two or more delay events in the same period, each independently affecting completion. The rule:

  • Culpable delay longer than compensable delay → no entitlement to prolongation costs.
  • Compensable delay longer → recovery for the non-concurrent period only.

A contractor cannot be reimbursed for losses it caused itself during concurrent delay.

10. Worked example: entitlement summary (calendar days)

PeriodCritical delayFloatCulpableConcurrentEOTL&E
Period 110100000
Period 210010000
Period 342012124230
Period 4320003232
Total941022127462

11. How to value: the 4-step method

  1. Identify the cost pool — analyse accounts, cost reports, payroll, invoices.
  2. Strip out direct costs — remove fixed, volume-related and one-off costs (e.g. mobilisation).
  3. Identify indirect time-related costs — including unabsorbed head-office costs linked to duration.
  4. Apply adjustments — abate costs already recovered in dayworks or variations (no double dipping).

No profit mark-up: profit is not a "cost" of delay — recovery of cost-only vs cost-plus-profit depends on the contract. Demonstrate mitigation (off-hiring plant, redeploying resources). Evidence is everything — records, records, records.

12. Worked example: the calculation

PeriodL&E daysTotal actual costAvg / dayRecovery
Period 10£20,150£1,439.29—
Period 20£30,225£1,439.29—
Period 330£72,250£1,720.24£51,607.20
Period 432£96,175£1,373.93£43,965.76
Sub-total (62 days)£95,572.86
Abatement (dayworks/variations)−£24,580.00
Grand total£70,992.86
84
Days delayed
74
Days EOT
62
Days L&E
£70,992
Net recovery

Despite a 74-day EOT, prolongation costs recover only 62 days — time does not automatically equal money.

13. Key takeaways

  • Compensable delay only — must affect the critical path and completion.
  • Actual cost, not tender rates — evidence from records, not preliminaries BQ.
  • Timing matters — quantify when the delay occurred, not the over-run tail.
  • Concurrency reduces entitlement — overlapping culpable delay cuts or kills recovery.

Each case turns on its own facts. Demonstrate cause, effect and entitlement with robust evidence — he who asserts must prove. This Short presents general guidance for educational purposes and does not constitute professional advice.

Frequently asked questions

Does an extension of time automatically give prolongation costs?
No. Only compensable delays affecting the critical path and completion give costs — here 74 days of EOT yielded only 62 days of recovery.
Can I use tender preliminaries rates?
No. Use actual additional cost incurred, evidenced from records — not tender rates times the over-run.
How does concurrent delay affect my claim?
Overlapping contractor-caused delay reduces or eliminates recovery for that period.
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