Can I recover price rises caused by the main contractor's delay?
Often yes, if your subcontract pays for the delay and you can show it pushed your work into dearer months.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
Under a JCT subcontract the route is usually a claim for direct loss and expense, for a matter your main contractor is responsible for. Under an NEC subcontract it is usually a compensation event, assessed on Defined Cost, the NEC's defined measure of your costs. Either way you have to show three things. First, that the delay was your main contractor's responsibility under the subcontract. Second, that it pushed particular purchases or labour into a later, dearer period. Third, what the difference cost, usually the invoiced price against the price you would have paid when the work was programmed. The delay itself, how long and whose, comes from the programme records. The money comes from the tender prices, the supplier increase notices and the invoices. If your subcontract also has a fluctuations clause, take care not to claim the same rise twice, once under each.
Example
Illustrative example. The scenario and figures are invented.
The facts
An M&E subcontractor's first fix is pushed back 14 weeks because the main contractor's structure is late. Its cable supplier puts prices up twice in that time. The cable bought in the new period costs £16,800 more than at the programmed dates.
What happens
- The delay period is taken from the main contractor's own revised programme, which moved the first fix start by 14 weeks.
- The cable bought in the delayed period is set against the supplier's prices at the programmed dates, invoice by invoice.
- The subcontract has no fluctuations clause, so there is no risk of claiming the same rise twice.
- The main contractor's quantity surveyor accepts the method and removes £1,900 of cable that would have been bought late anyway under the original programme.
The rise in figures
| Item | Amount |
|---|---|
| Rise on cable bought in the delayed period | £16,800 |
| Cable that would have been bought late anyway | £1,900 |
| Agreed as loss and expense | £14,900 |
The outcome
£14,900 is agreed as loss and expense. The claim showed which purchases moved, when and by how much, not a percentage on the whole package.
Building the money side of a rise caused by delay is part of our Price Rise Claim service.