An Extension of Time claim in construction is an extra time added to the initial contract duration. The contractor generally presents an Extension of Time claim to request additional time due to modifications made by clients.
An Extension of Time claim is also submitted when there is a delay that can’t be reasonably foreseen at the time of signing the project’s contract. The granting of an Extension of Time relieves the contractor from liability of damages such as liquidated damages from the original completion date for the period of the claim.
What is an Extension of Time Claim in Construction?
An extension of time clause is an express contractual term that allows for the adjustment of the contract completion date in specific circumstances, such as when the progress of the work has been impacted due to an excusable delaying event.
An extension of time provision allows the contractor to finish work after the contractual completion date without having to pay liquidated damages to the client (or, where no provision exists for liquidated damages, general damages for delay).
When should you submit an EOT Claim?
Time extension claim requests are usually claimed due to the following circumstances.
Following are the top reasons of when to claim an extension of time:
1. Client change order requests for New/Additional Work not included in the original contract for additional work.
2. Latent Conditions – Unknown conditions at the time of signing the contract that affect the time for the contract works to be delivered.
3. Force Majeure like revolution or an earthquake.
The contractor must show that the delays have happened and have affected the schedule of works, affecting the date of completion of the project. That is the delay or impact on the Critical Path of the project.
How to prepare an EOT claim?
In order to ensure that the Extension of Time claim report is approved, certain measures must be followed when requesting an Extension of Time. The contractor must first notify the project manager in a typical process that a problem may influence the project’s schedule.
The contract manager then reviews the EOT claim letter for claim assessment and gives approval or dismissal to the project manager. If the time limit is specified, a written notice must be given to the project manager, and a change order must be set. Some agreements indicate that applications for time extensions must be finished within a particular time frame in order to prevent automatic rejection.
Documents Needed for an Extension of Time Claim Assessment
Properly presented EOT claim report must contain specific supporting information:
- Notice of specific issues causing delays.
- Request for Information, Material Submittal Log, Shop drawing log, Inspection Request.
- List of project activities that are impacted by the delay.
- The exact amount of time required, the working days, or calendar days specified.
- Sketches, photographs, or other images illustrating the delay issues.
- Recommendations that were given to the contract administrator.
- Description of the actions taken by the contractor to prevent or minimize further delays.
- Alternative solutions presented to the contract administrator.
- Communications among the construction team relating to possible delays and problems related to the specific situation.
- Baseline Schedule.
- Method Statement of Construction Works.
- Schedules Updates.
Additional Items to Consider During the Extension of Time Request
A time extension request letter should be concise. It should refer to the contract clause allowing the application and providing evidence of the reasons for the delay and a suggested retrieval plan. It should also include the damages (if any), the amount of calendar or working days requested, and the activities affected by the changes.
Additional factors may be included when making the EOT claim request:
- Calendar days should be different from the working days.
- Insurances and bonds will need to be re-issued to cover extended periods.
- Winter days are shorter and typically less productive than summer days.
- Time extensions requested should be adequate to cover all delays, including extra items that may be impacted.
- Additional time will not be granted for the same item once it has been approved.
- In the event of a continued delay, only one claim is required.
What are the typical delay analysis methods in construction EOT claims?
· Time Slice Window Analysis.
· Time Impact Analysis.
· Collapsed As-Built/As-Built But-For Analysis.
· Impacted As Planned Analysis.
· As-Built Vs. As-Planned Analysis.
How to Prepare the Extension of Time Claim Analysis Report?
There are several ways for the EOT claim preparation because there are many different ways and techniques to prepare an Extension of Time claim assessment in construction. Here below, you can read a brief explanation of the main concepts that must be included in the project claim assessment report:
This section has key project backgrounds, such as the name of the project, original duration, contract amount, currency, a brief description of the scope, name of the client, name of the contractor, and other topics of interest.
According to the recommended practices for the submission of a claim: (1) Summary, (2) body of the claim, and (3) supporting technical arguments and data.
2.Table of Contents:
Table of Contents provides the reader with an index of the topics included in the report.
The Introduction section must have a broad picture of the problems that affect the execution of the project only in general terms; this is the first step to prepare the reader of the contractual framework and the main technical concepts included in our report.
This section is critical; as a general rule, we explain the contractual relationship between the parties from the conception of the contract and provide a detailed list of all the documents that form part of the contract and their precedence. In addition, we are preparing the reader to show him the relevant highlighted clauses and the different mechanisms for their application and resolution.
5.Body of Claim:
This is the main section of the report. We will be very clear in our explanation by using an appropriate narrative that will be very accurate in terms of facts, documents, evidence, pictures, drawings, letters, minutes of meetings, and other supporting information. We usually work on the claim in three sections as follows:
This section will explain the contractor’s construction plan in detail, which means the sequence of construction, technical methods, scheduling, resources, equipment and machinery, weather conditions, transfer of areas, and other essential things.
The main purpose of this section is to explain the basis for the contractor’s baseline. If the contractor’s program has had poor development, it is very difficult to demonstrate the impact of the client on the project baseline. As a result, it will be challenging to obtain time or money for the claim dispute.
This section demonstrates to the reader the change in the original conditions, including a detailed narrative with each change and supported by multiple pieces of evidence, where it is necessary to include all the details of the evidence in the various annexes.
Impact of the Actual Conditions:
This section aims to show the reader that the actual conditions had an impact on costs and time during the execution of the project. It describes the effects on the various events that have taken place during the construction, as well as the incorporation of changes made by the client.
The purpose of this section is to convince the reader of the legal right under the contract framework or the law to obtain additional compensation on the basis of the actual conditions of the project. In this section, we will emphasize the differences between the contract guidelines and the actual project conditions.
7.Quantification of Claim:
The Quantification of the Claim shall inform the reader of the cost and time requested for this section of my recommendation to prepare the cost accumulation, with all the details and supporting information in order to obtain a short period of revision.
To obtain the necessary arguments for a successful presentation, the calculation of time also requires adequate analysis techniques in the same way.
8.Annexes or Supporting Technical Arguments:
This section contains the details of all the information included in our presentation: schedule baseline, current time schedule, CPM Analysis, EOT/TIA, cost estimate, correspondence, field reports, daily report, expert report, a legal brief, client handover, and any other information that is required to be included
How to claim an EOT under a construction contract?
Below, we will explain how to claim an EOT and address some areas where errors are frequently made.
1. Check the contract carefully to understand what notices are required, and when
Most construction contracts require the contractor to send two notices in connection with the delay:
- Notice of delay, simply to inform the principal and/or superintendent of a probable delay;
- An EOT claim.
Many contracts will also require you to provide an updated notice where there is a long or continuous delay.
It is crucial to ensure that you send these notices within the timeframes required. If you do not, a time bar may apply (depending on the terms of the contract), and you may lose your right to claim. The contract will specify when notices need to be sent.
2. Read the contract agreement to determine when EOTs will be available
Not all delays will result in an EOT. You need to carefully review the contract to determine the causes of the delay. (A search for the words ‘delay,’ ‘extension,’ ‘EOT,’ or ‘time’ will usually lead you to the relevant clauses.)
EOTs are commonly available for delays caused by the principal (sometimes referred to as ‘prevention actions’). Depending on the form of the contract, EOTs are generally available for latent conditions, delays by other contractors, industrial conditions, delays caused by changes in the law, and inclement weather. You may need to look at more than one location to determine all the possible causes of delays.
3. Identify the reason for the delay precisely and determine if you can claim on it.
It sounds like an easy step. It is nevertheless surprising that contractors regularly misidentify the cause of the delay and then prevent their complaints.
For example, the principal considers a potential variation, and the superintendent directs you not to do a particular task during the finalization of the details. Then the superintendent gives you a direction to proceed with the variation.
In that case, there are two separate causes of delay. The first is the direction of the superintendent not to carry out the work. The second is the direction in which to proceed with the variation. You may be required under your contract to notify (and claim) these events separately.
4. Read the contract to find out what you need to prove to determine your entitlement.
Usually, the EOT clause in your contract identifies what you need to prove in order to establish entitlement to an EOT.
For example, consider whether you need to prove:
- an actual delay or a future delay;
- a delay to work under the contract or a delay to practical completion;
- a delay to the critical path; if so, consider how that delay needs to be shown.
Your approach to proving the delay will have to reflect these requirements. Many EOT claims fail simply because they do not provide proof of a delay in the terms of the contract.
Many contracts also require you to prove that you have done everything possible to mitigate and/or prevent a delay from occurring. Again, you need to make sure that you meet these requirements when you make a claim.
5. Consider whether, following the same procedure described above, you can claim delay costs.
Often the contractor will have the right to claim for the costs of delay due to certain events. A delay caused by a breach of contract by the principal, such as the failure to provide sufficient access or information, is a good example.
To determine whether you can claim the costs of delay, you will need to follow the same steps as above. In other words, you will have to read the contract to determine:
- What notices need to be sent?
- When delay costs can be claimed?
- Which types of cost can be claimed?
- What you need to do to establish your entitlement?
You will need to ensure that your claim for delay costs complies with the relevant requirements.
6. Determine whether you need to re-submit your claim for long or continuous delays
As mentioned above, for extended or continuous delays, you may need to submit multiple notifications for the same delay. Failure to submit a notice could potentially result in some or all of your claims being barred, depending on the terms of the contract.
Extension of Time Approval Letter Sample in Construction Contracts
A letter of extension of time is also an important and formal document, so the format you use should be concise and objective.
You must include specific dates and information in the letter that can be understood and referred to later on.
Look at the following Extension of Time Claim letter that may be readily utilized and adapted for your organization and projects.
Subject: Extension of Time – [Project Name]
I am referring to your time claim extension dated [enter claim date]. The Principal shall grant extensions of time, pursuant to the provisions [insert contract clause] of the General Conditions of Contract:
[Insert the number of days requested as well as the reasons for the time extension.]
The Contractual Completion Date (as previously extended) was [insert contract completion date including previously approved time extensions]. This [number of days] day extension results in [insert new completion date] becoming the Contractual Completion Date.
Extension of Time Claim Template Example
Extension of Time claim requests may be considered valid under different situations, but not all reasons for delays can be approved for an extension. In any event, all documents, modifications, emails, and schedules that can justify your application for an EOT claim must be kept records.
Get Extension of Time Claim Template from HERE