ABSTRACT
When Contractor submits EOT claim to Owner, he reflects therein the time impact and cost impact. Cost impact has two distinct components: (1) prolongation cost and (2) disruption cost.
If Contractor faces disruption in the work process due to unexpected delayed actions of Owner, the productivity loss arising thereof is captured under disruption cost. In disruption cost, the cost related to direct manpower is included, while the cost related to indirect manpower is moved into prolongation cost. Contractor is required to maintain a daily record of standby caused, indicating the designation of engineer, his standby time, and description of standby or productivity loss. Computation is done by applying man-hour rate provided in the Contract.
If the project delay occurs, Contractor includes in his claim the time extension request for the period so delayed cost and prolongation cost for continuance of his operation are related to indirect manpower and temporary facilities. He applies Hudson formula for computing the prolongation cost.
