The IE approach for incurred Costs evaluation due to Events of Delays is through an objective method which followed the steps described below:

1. Definition of the Delays caused in the Project, based on the Official Time Schedule and the relevant Critical Path or Critical Activities. 
2. Consider the above defined period as the only contractually justified period on which relevant costs will be calculated, based on the Lump Sum values of each Group of Similar Works that is delayed. 
3. Since the Delays are defined and compensated as above, then the new Time Schedule can have any approach agreed amongst all parties involved in the CA taking into account Additional Works, Optimizations data, new Financial Model etc.

1. Appropriate presentation of Claim of Losses due Events of Delays

The only objective way to accept losses due to the Events of Delays would be under the condition that the Constructor will present their offer cost data and compare them with the actually incurred costs. However usually such data are not available, and the way of presenting the claims cannot be justified through an Engineering analysis.

2. Assessment of Claim due to Lack of Vacant Possession of Areas of the Project Site

It is usual that the Constructor considers two different sources of damages that they suffer due to the Project Vacant Possession missing:

• “Costs” costs incurred because of the various delays and in accordance with his obligation to, where possible, mitigate the effects of same. It is considered that the following additional costs are incurred as consequence of payments made to third parties to both facilitate the continuation of the Constructions and to mitigate the effect of delays; these costs include indicatecvelly (1) payment to private entities such as land owners to facilitate early access to elements of the Project Site which are tied up in legal bureaucracy (2) ditto in respect of Rights of Way, (3) payments to Public Utility Organizations for the diversion of statutory apparatus and (4) payments to archaeologists to facilitate expediting the archaeological investigations.
• ”Time Related Preliminaries” which form the most significant element of the total losses that are claimed, are those costs the Constructor incurred (1) in maintaining his site establishments such as the local site offices (2) the provision of its staff it had mobilized across the site to manage the construction process (3) providing finance for the works (4) providing insurances and the like and (5) providing a contribution to head-office overheads.

3. Assessment of Claim of Disruption of Executed Activities

This type of claim is usually directly related to the CA provisions regarding compensations due to Events of Delays. The additional cost sources to be compensated in this claim differ from those of the Claim for the Vacant Land Possession. 

The Loss of Productivity is reported as a percentage to the anticipated Production. The “Value of Productivity Loss” in terms of the Bid Offer works values are considered as the used Machinery Staff Type month cost applied to the above percentage of Loss of Productivity. 

The method of analysis is complying to International Practices – see for example “Delay and Disruption Claims in Construction, A practical approach” Ali Haidar and Peter Barnes – ICE publishing.

In the frame of the Disruption Claim Additional Costs Calculations and Determination by the IE analysis, it is also accepted that the Constructor had suffered costs for the transport and deposition of the sound materials which could not be used as planned in construction fill (drainage layers, embankments). 

Furthermore it is accepted that the Constructor incurred Mitigation Costs such as the Staff and Machinery overtime worked to achieve maximum production as well as the need to rehabilitate local roads which had to be used due to discontinuity of the Project Site. These costs are derived as a reasonable percentage of the above analytical calculations of the Production Costs.

It is emphasized that the Constructor’s Additional Cost due to the Disruption of Executed Activities was an indirect cost to him though being direct for the Nominated Subcontractors. As a result the IE is accepting that all the Claimed basic documented costs are either direct costs invoiced by the outsourcing subcontractors of the Nominated Subcontractors or the costs of the Nominated Subcontractor (NS) own resources (machinery and staff) in the case that the NS had mobilized its own.