L&E - DONE

Question 1

What is loss and expense claim?

Answer 1

Reimburses the contractor for direct loss and/or expense incurred in carrying out additional work or from an employers breach of contract (Relevant matter)

Question 2

What are the procedures for claiming loss and expense?

Answer 2

• The contractor notifies the Contract Administrator as soon as they become aware of any matter that would cause them to incur L&E (Relevant matter)
• The contractor submits any info as requested by the CA to enable the amount of loss and expense to be ascertained

Key Points:
- Contractor cannot claim for cost of preparing claim
- No automatic right of recovery solely because an extension of time (relevant event) has been granted
- L&E can occur without EOT
- Its duty of CA to ascertain amounts due

Question 3

What is the key thing to remember when assessing L&E claims?

Answer 3

It should be the ACTUAL loss incurred by the contractor

Question 4

Do you need an EOT for L&E claims?

Answer 4

No, L&E can be due without an EOT

Question 5

What are the common items of claim in L&E applications?

Answer 5

• Prolongation (extra site overheads i.e. prelims)
• Thickening of prelims (e.g. extra supervision required due to variation)
• Disruption (causing plant / labour to be underemployed - hard to prove)
• Increases in labour / material costs during the period of delay
• Head office overheads
• Loss of profit (commonly combined with head office overheads)
• Finance charges (i.e. interest)
• Acceleration costs

Question 6

Can the cost of preparation for the claim be included in the claim?

Answer 6

The cost of preparing a claim is a not a legitimate head of claim and must be covered by the contractors overheads

Question 7

Once L&E is ascertained how is it added to the contract sum?

Answer 7

• It should be added to the contract sum immediately and paid in the next interim certificate
• It is not subject to retention