The Contractor raises a CE which also results in a change in the Completion Date. The prolongation costs for the time extension has been assessed by the PM using the Contractor’s Preliminaries breakdown which is identified in the Shorter Schedule of Cost Components. However, the Contractor has assessed their Prolongation Costs as being 80% greater than what is stated in their Prelims breakdown.
So instead of accepting say £100k per month (contract prelims), they now want £180k per month. Their reason for claiming this is that they had underestimated their preliminary costs at Contract formation and so have had to increase their site management resource. This was undertaken without any notification to the PM or the Employer. Within their contract preliminaries breakdown, there is no indication of what they had originally envisaged so it is difficult to understand by how much (in personnel) their management has increased by.
The Employer feels as though they have been ambushed somewhat by this. So, the question arises, what is the Contractor entitled to in regard to prolongation costs, and why?