A claims review on a delayed public contract.
- Letter read
- Every
- Claims and exposure
- Both sides
- By strength and timing
- Ranked
- Letters to send
- Ready
The contract was late and no extension was in force.
Land and permissions had come late, and the client had changed parts of the design along the way. Meanwhile it was writing to the contractor about slow progress, and certified bills had gone unpaid.
The extensions granted so far had expired. Without another, the client could levy liquidated damages and, once they reached the security, rescind the contract.
| Item | Position |
|---|---|
| Contract | Public EPC, design and build with a period of operation after completion |
| Status | Well past its completion date, with the extensions granted so far expired |
| Payments | Bills certified by the client and left unpaid |
| Record | Years of letters both ways, minutes, bill abstracts and programmes |
- 01
Read the whole file
Every contract book, letter both ways, bill abstract, security statement and programme, in full. Figures were traced back to the bill abstracts.
- 02
Set out the contract terms
The clauses that decide the claims, for and against the contractor, including where the tender documents contradict each other and which one prevails.
- 03
Rebuilt the chronology
What delayed the work and who caused it, with each event tied to the letter that records it.
- 04
Valued each claim
Every claim given a value, a strength and the client's likely answer, and sorted by whether it can be claimed now or depends on orders still to come.
- 05
Valued the other side
What the client could claim back, from liquidated damages to set-offs and counter-claims, so the contractor would not raise points that cost more than they win.
- 06
Mapped the time limits
When each claim runs out of time, and what in writing would restart the clock.
- 07
Drafted the next steps
A dated action plan and draft letters ready to send, starting with the extension.
The extension came before the money.
The claims were real, but only a small part could be claimed straight away. The bigger risk was liquidated damages if no extension was in force.
So the first letter asked for the extension, for the whole works and with an updated programme. Some possible claims were dropped, each with the reason: out of time, barred by the contract, or likely to hand the client credits larger than the gain.
| Position | What | Handling |
|---|---|---|
| Claim now | Entitlements already established under the contract | Pursue now |
| Work done | Bills certified by the client but not paid | Agree the figure |
| Depends on orders | Items waiting on client decisions or work still to come | As they arise |
| Exposure | Liquidated damages if no extension is in force | Extension first |
| Exposure | Counter-claims the client could raise | Weigh first |
The report is a claims analysis, not legal advice. Points that needed a lawyer, such as the forum for any dispute, were marked as such. Every step it recommends is ordinary correspondence with the client while the work continues.
Anonymised so the project can't be identified, even by the parties to it. The sector, structures, location, dates, amounts and the events of the project are left out; what's described is the method, which holds for most delayed public contracts. The report was confidential to the contractor and its advice on tactics is not published.
