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Claim Case Study

Submitted By:

Hossein Abaeian 7119852

Waad Alghazi 6697658

INTRODUCTION

The project includes the erection of mechanical equipment and installs piping included in

the SAG MILL MECHANICAL contract. The history of the project is summarized as the

following:

Project Management _ BLDG 6571

1

Summary of Contract:

Name of the contract: SAG MILL MECHANICAL contract

Project start date: 30 April, 1990

Actual Project start date: 3 May, 1990

Project planned finishing date: 31 August, 1990

Actual Project finishing date: 14 December, 1990

Type of the contract: Lump Sum

Total amount of contract: $2,549,130

On January 31st 1990, owner invites the contractor for bidders list for SAG mill

mechanical contract. Contractor qualifies for the project at the plant. Proposal request for

SAG mill mechanical contract was issued by the owner on the 19th of March 1990.

Contractor submitted the proposal on the 17th of April 1990. Between 17th of April 1990

and May 3rd, 1990 owner and contractor exchanged correspondence relative to the

proposal and participated in bid clarification meeting. On May 3rd 1990 the owner granted

the contractor the SAG mill mechanical contract for $2,549,130. The contract duration

time March 1990 to August 1990 (20 weeks). Upon the award of the contract the

contractor mobilized its forces to the project site immediately. However the contractor

was prevented to execute the work as settled with the contract. The claim is conducted

because of several reasons. One the contractor was not able to access the work areas as

planned date. Second, late delivery of equipment and some of the equipment were

delivered damaged or with deficiencies. Third, construction drawings, vendor drawings

and revisions of drawings were submitted late. These changes were imposed upon

Contractor without the prior issue of a Change Order. These problems impacted the time,

productivity and cost of construction. The engineer advised the contractor to complete the

contract without deficiencies by 13th of December 1990. Refer to the history and key

communication summary between the owner/engineer and contractor.

Picture bellow shows the work breakdown structure of the project:


2

SCOPE ANALYSIS :

The mechanical equipment erection work in the contract was divided into six main physical areas of the site excluding the piping. The piping work was spread out over all


3

the areas and is considered as the 7th area. The six areas with the relative volume of labour content are described briefly.

CHANGES TO THE CONTRACT :

The changes made to the contract are divided into 5 main categories as described below:

1. Changes in information regarding delivery of equipment (shell delivery changed

from June to July, then to the end of August), changes of equipment delivery

dates varied between one and six months later than the specified delivery dates

(most of which the contractor was not notified of)

2. Changes of the erection work caused by change in delivery of equipment

3. Changes in access for unloading equipment and erection work due to late

completion of work to be performed by owner’s forces or other contractors

4. Changes to the methods specified (to ease the effects of lack of access and late

deliveries and to correct defects on equipment supplied by owner)

5. Changes in the scope of work to be performed (including changes and revisions in

the designs done after the contract was awarded and correctional work)

MAN-HOUR :


4

In the case of actual man-hours spent on site, they have been divided to two main

sections:

1. Man-hours spent on the works assigned in the original contract

2. Man-hours spent on the extra work added to the original contract afterwards The two

man-hour sections are further divided into three subsections that include the premium

hours, regular hours and shift differential hours. In order to calculate the total man-hour

value of the project, the labour cost was assumed to be $40/hour for the regular hours and

$50/hour for the shift differential and extra-work hours.By subtracting the amount of

earned man-hours in the billing file from the amount of actual man-hours, the claim

balance for the man-hour section is found.

CHANGE ORDERS :

The original contract was signed based on the given drawings at the time, and the

contract price that was used for bidding was found through studying the drawings and

determining the required scope for the project. Afterwards, some changes to the project

schedule were made due to changes in the scope of the work and the occurrence of

several delays. These changes caused major loss in productivity, which needs to be added

to the claim. Based on the communication between the owner/engineer and the contractor

some of the drawings had to be redrawn or revised, adding more value to the claim

requested. Also, several change orders were issued due to delays and changes made,

which had been calculated and provided to the engineer. The total loss in productivity

due to the points mentioned above is estimated based on the Charles Leonard method by

using the Charles Leonard charts. To find the effect of changes on the productivity, the

costs of change orders and reissuing of drawings were added and divided by the contract

price. From the charts, using the line with two major causes for drawings and change

orders, the amount due to loss in productivity is determined.

Area # 0 – General


5

Unpaid Man-hours:

Item # Item Description Detail Estimated Man-hours

Earned Man-hours

Unpaid Man-hours

1 Mobilization Mobilization -LABOUR

80 80 0

72 Demobilization Demobilization - LABOUR

40 40 0

Total Unpaid Man-hours 0

Extra Man-hours:

Item # Item Description Regular Man-hours Premium Man-hours1 Mobilization 1,211 84.75

72 Demobilization 0 0TOTAL 1,211 84.75


6

Delay Analysis:

As-Planned Dates

Item # Item Description

Detail Planned Start Date

Planned Finish Date

1 Mobilization Mobilization – LABOUR

30 APR 1990 04 MAY 1990


31 DEC 1990 31 AUG 1990

As-Built Dates


Detail Actual Start Date

Actual Finish Date

1 Mobilization Mobilization – LABOUR

07 MAY 1990 16 MAY 1990


14 DEC 1990 14 DEC 1990

As-Planned vs As-Built Schedule (Area_0)

Delay: 3.50 M


7

Change Orders:

Number of Change orders: 19 Total Number of Orders: 62

Area # 1 – Crusher Building

This area includes an existing building housing the storage bin for the CLARABELLE MILL that receives the ore directly from the mine. By means of apron feeders the ore is extracted from the base of the bin which is fed to the conveyors. The conveyors then transport the ore to a series of cone crushers in the building, where it is reduced in size and is then fed elsewhere in the mill for further processing. There are 6 apron feeders at the base of the bin; where each apron feeder feeds its own conveyor belt. The purpose of the work in this area is to redirect some of the ore of this bin to the new SAG mill using only 2 of the apron feeders. This is done by taking 2 apron feeders out of service, removing the conveyor and installing new ones and hence modifying the apron feeders to ensemble the direction and capacity of the new conveyors.

Scope Of Work:

1. Remove the existing belt conveyors 1 and 2 (which take the ore from

apron feeder1)

2. Remove the existing belt conveyor 9 (which takes the ore from apron

feeder 6)

3. Remove the existing drive (gear box and couplings), motor and base plate

for apron feeders 1 and 6

4. Break out the existing concrete bases for the drive, motor and base plate

for apron feeders 1 and 6

5. Form and pour new concrete bases for the drives and motors for apron

feeders 1 and 6

6. Install, align and couple the new drives and motors

7. Modify existing chute work for apron feeders 1 and 6.

Unpaid Man-hours:


8


Detail Estimated Man-hours

Earned Man-hours

Unpaid Man-hours

2Remove existing

conveyors

Remove existing

conveyor847 847 0

11

Modify existing

feeders plate work &

concrete pads

Pour crusher pads

112 112 0

Modify existing feeders

343 326 17

Modify existing plate work

87 83 4


Extra Man-hours:

Item # Item Description Regular Man-hours

Premium Man-hours

2 Remove existing conveyors 0 011 Modify existing feeders plate work &

concrete pads296 97.50

Total 296 97.50

Late Equipment Delivery Dates:


9


Equipment # Contract Date

Actual Delivery Date

Delay Time

2Remove existing

conveyors

N/A N/A N/A N/A

11Modify existing feeders plate

work & concrete pads

24-FDR-001 15 JUN 1990 18 SEP 1990 3M +3DAYS

24-FDR-006 15 JUN 1990 18 SEP 1990 3M +3DAYS

Delay Analysis:

As-Planned Dates



Planned Finish Date

2 Remove existing

conveyors

Remove existing conveyor

09 JUL 1990 31 JUL 1990

11Modify existing feeders plate



30 JUL 1990 13 AUG 1990


09 JUL 1990 20 JUL 1990

As-Built Dates


Detail Actual Start Date Actual Finish Date

2 Remove existing conveyors

Remove existing conveyor

04 SEP 199005 NOV 190

28 SEP 199030 NOV 1990

11 Modify existing feeders plate



10 SEP 199007 NOV 1990

28 SEP 199030 NOV 1990


10 SEP 1990 30 NOV 1990



10

Delay: 3.71

Changes and causes & Effects Relationship:

Cause Effect Relationship

Late delivery of equipment (chute, motors, drives)

Modification of feeders is

delayed

Feeders cannot be modified without

the equipment

Requirement to salvage conveyors

Removal of the existing

conveyor is delayed

Conveyors salvaged instead of scrapped

Access problems to conveyors

Late access to work area Lack of access during extra work on

feeder #6 by others

Extra work due to modifications

Delay to feeder #1 pending structural steel work by

others

Extra work on structural steel supports

to feeder #6 & #1

Impact Analysis: (Refer to Daily Site Report)

Late Delivery of Equipment: Row code number: 197Requirement to Salvage Conveyors: Row code number: 192 to 196, 198 to 201

Access Problem to Conveyors: Row code number: 190 to 191

Extra Work due to Modifications: Row code number: 192 to 196, 198 t0 201


11

Change Orders:


Area # 2 – Conveyors

The new SAG mill is housed in the mill building. The ore is transported from the

Crusher Building to the mill building through the Coarse Ore Silo. Ore transportation

is done by 2 exterior conveyors: the ore silo feed conveyor and the SAG mill feed

conveyor.

First is the ore silo feed conveyor that has a total length of 560 feet. This conveyor

starts at the upper level of the crusher building. About 124 feet long of the conveyor

section is included in the crusher building. At around 41 feet above the ground, the

conveyor leaves the building with length of approximately 436 feet. Then continues

upwards to an elevation of about 118 feet above ground elevation where it ties in at

the top of a second ore storage bin. This second bin is referred to as the "Coarse Ore

Silo".

The second conveyor, the SAG mill feed conveyor, originates at the base of the

Coarse ore silo (85 feet) and continues into the new mill building (45 feet) where it

discharges into the SAG mill. About 95 feet of this conveyor is outside and is fully

enclosed in a steel structure.

Scope Of Work:

1. Off-load the conveyors, drives and accessories from railcars at the

designated rail delivery point about 6 miles from the site;

2. Transport to site;

3. Assemble the bents;

4. Erect the bents;


12

5. Erect the conveyor galleries;

6. Complete assembly of conveyors;

7. Install drives, motors and chutes;

8. Install conveyor belts.

Unpaid Man-hours:

Item #

Item Description


Earned Man-hours

Unpaid Man-hours

7 & 20

Install ore silo feed conveyor / Install conveyor

belting

Install ore silo feed conveyor & associated equipment

1,615 1,534 81

18Install pebble

conveyor – sagInstall pebble conveyor –

sag503 503 0

19 Install sag mill feed conveyor

Install sag mill feed conveyor

935 935 0


Extra Man-hours:

Item # Item Description Regular Man-hours

Premium Man-hours

7 Install ore silo feed conveyor 1167 262.518 Install pebble conveyor – sag 132 1319 Install sag mill feed conveyor 259 3920 Install conveyor belting 0 0

Total 1558 314.5


13



Equipment # Contract Date Actual Delivery Date

Delay Time

7Install ore silo feed conveyor

24-BC-101 1 MAY 1990 24 AUG 1990 115 Days

24-BC-101BLT 1 JUL 1990 22 AUG 1990 52 Days

24-BC-101M 28 MAY 1990 17 JUL 1990 50 Days

18

Install pebble conveyor –

sag

33-BC-102 1 JUN 1990 18 OCT 1990 139 Days

33-BC-102BLT 1 JUL 1990 22 AUG 1990 52 Days

33-BC-102M 15 JUN 1990 17 JUL 1990 32 Days

33-CH-109 15 MAY 1990 10 JUL 1990 56 Days

19

Install sag mill feed conveyor

33-BC-101 1 MAY 1990 8 NOV 1990 191 Days

33-BC-101M 30 JUN 1990 17 JUL 1990 17 Days

33-CH-105 1 MAY 1990 10 JUL 1990 70 Days

800-BC-101BLT 1 JUL 1990 24 JUL 1990 23 Days

20 Install conveyor belting

33-BC-101BLT 1 JUL 1990 22 AUG 1990 1 M + 23 Days

Delay Analysis:

As-Planned Dates

Item # Item Description Detail Planned Start Date Planned Finish Date7 Install ore silo

feed conveyorLine 1 to 5Line 2 to 25

7 MAY 199023 JUL 1990

01 JUN 199010 AUG 1990

18 Install pebble conveyor – sag

Install pebble conveyor –

sag

25 JUN 1990 20 JUL 1990

19 Install sag mill feed conveyor

Install sag mill feed

30 APR 1990 20 JUN 1990


14

conveyor

As-Built Dates

Item # Item Description Detail Actual Start Date Actual Finish Date

7Install ore silo feed

conveyorLine 1 to 5

Line 2 to 2516 MAY 199020 JUN 1990

18 JUN 199020 JUL 1990

18 Install pebble conveyor – sag

Install pebble conveyor – sag

08 AUG 1990 28 AUG 1990

19Install sag mill feed

conveyorInstall sag mill feed conveyor 30 MAY 1990 10 OCT1990

As Planned vs As Built Schedule (Area_2)


15

Delay: 1.37 M

Changes and Causes & Effects Relationship:


Crusher Building – Access Problem

Ore Silo Feeder’s Installation

Is Delayed

Lack Of Access During Work By

Others On Feeder #6

Late Delivery Of Equipment


Is Delayed

Late Supply Of And Deficiencies

In Head Section & In Conveyor

Gear Box

Extra Work On Galleries

Ore Silo Feeder & Sag Feed

Conveyor’s Installation Is

Delayed

Cribbing And Re-Cribbing Of

Conveyor Galleries & Faulty

Welds In Conveyor Galleries

Extra Work On Foundation


Is Delayed

Conveyor Bent Foundations Off

Line & Modifications To Bents To

Suit Foundations


Crusher Building- access problem: Row code number: 447,452, 459, 477

Late Delivery of Equipment: Row code number: 439, 446

Extra Work on Galleries: Row code number: 440 to 445, 453 to 489, 461 to 464, 466 to 476, 478 to 494, 499 to 507, 509 to 517

Extra Work on Foundation: Row code number: 465, 495, 508


16

Change Orders:


Area # 3 – Coarse Ore Silo

The point of the Coarse Ore Silo is to supply a flow capacity between the SAG mill

and the existing crusher building. The Coarse Ore Silo is a cylinder made of concrete

having a diameter of 64 feet and a height of 118 feet. The interior surface of the silo

is lined with steel rail track. On top of the silo is a structural steel penthouse with

about 38 feet long by 22 feet wide and 18 feet in height. The ore enters via the Coarse

Ore Silo feed conveyor at the top of the silo inside the penthouse structure and is

discharged into the silo. The ore falls through a series of chutes; in the lower part of


17

the silo; then passes onto one of the 2 apron feeders. At the base of the Coarse Ore

Silo the feeders release the ore onto the SAG mill.

Scope Of Work:

1. Erect the penthouse steel, roofing and siding;

2. Install the apron feeders including drives and associated plate work, and

3. Erect the silo crane hoist in the penthouse.

Unpaid Man-hours:



Earned Man-hours

Unpaid Man-hours

4 Penthouse steel erection

Erect penthouse steel

663 663 0

5Install plate

work feeders & motors

Install ore silo feeders

775 775 0

Install plate work ore

519 519 0

12 Erect silo Install sag mill 87 87 0


18

crane hoists feed conveyor15 Install pumps

– ore storageInstall conveyor

belting24 24 0


Extra Man-hours:

Item # Item Description Regular Man-hours Premium Man-hours

4 Penthouse steel erection 24 19

5 Install plate work feeders & motors 218 1412 Erect silo crane hoists 16 015 Install pumps – ore storage 0 0

Total 258 33


Item # Item Description Equipment # Contract Date Actual Delivery Date

Delay Time

4 Penthouse Steel Erection

N/A N/A N/A N/A

5

Install Plate work Feeders & Motors

33-Ch-101 5 Jun 1990 20 Aug 1990 2M +16 Days

33-Ch-102 5 Jun 1990 20 Aug 1990 2M +16 Days

33-Ch-103 5 Jun 1990 26 Jul 1990 2M +16 Days

33-Ch-104 5 Jun 1990 26 Jul 1990 2M +16 Days

33-Fdr-101 20 Apr 1990 15 Jun 1990 1 M +25 days

33-Fdr-102 20 Apr 1990 15 Jun 1990 1 M +25 days

12 24-Cn-101 20 May 1990 3 Aug 1990 2M +14 DAYS


19

Erect Silo Crane Hoists

24-Cn-101m 20 Jun 1990 9 Aug 1990 1M +20 Days

24-Cn-101m1 20 Jun 1990 9 Aug 1990 1M +20 Days

24-Cn-101m2 20 Jun 1990 9 Aug 1990 1M +20 Days

24-Cn-104 30 Jun 1990 3 Aug 1990 34 Days

33-Cn-102 30 Jun 1990 3 Aug 1990 34 Days

33-Cn-102m1 20 Jun 1990 9 Aug 1990 1M +20 Days

33-Cn-102m2 20 Jun 1990 9 Aug 1990 1M +20 Days

15 Install Pumps – Ore Storage

33-P-112 30 Jun 1990 11 Jul 1990 11 Days

Delay Analysis:

As-Planned Dates

Item # Item Description Detail Planned Start Date

Planned Finish Date


Erect penthouse steel 07 MAY 1990 01 JUN 1990

5Install plate work feeders & motors

Install ore silo feeders 30 APR 199030 MAY 199002 JUL 1990

23 MAY 1990 04 JUL 1990 04 JUL 1990

Install plate work- ore storage

Install pump ore storage


20

15 Install pumps – ore storage

Install conveyor belting 23 JUL 1990 27 JUL 1990

As-Built Dates

Item # Item Description Detail Actual Start Date

Actual Finish Date


Erect penthouse steel 04 JUL 1990 15 AUG 1990

5 Install plate work feeders & motors

Install ore silo feeders 13 JUN 199004 SEP 1990

20 JUN 1990 14 SEP 1990Install plate work- ore

storageInstall pump ore

storage

15 Install pumps – ore storage

Install conveyor belting

04 SEP 1990 14 SEP 1990


Delay: 2.80 M


21

Causes & Effects Relationship:


Penthouse Steel – Access Problems

Erection Of Penthouse Steel Is

Delayed

Late Delivery Of Penthouse Steel,

Pouring Of Concrete Bin, Supply Of

Steel Decks

Feeders – Access Problems

Feeders & Motors Installation

Are Delayed

Late Delivery Of Liners & Motors

Late Delivery Of Silo Crane Hoists

Erection Of Crane Hoist Is

Delayed

Late Delivery Of Crane Host &

Modifications To Crane Trolley


Penthouse Steel- Access Problems: Row code number: 606 to 607

Feeders – Access Problems: Row code number: 608 to 621

Late Delivery of Soil Crane Hoists: Row code number: 622

Change Orders:



22

Area # 4 – Sag MillThis area includes the largest item of work, the installation of the SAG mill. The SAG

mill consists of a center shell and 2 heads, one at each end: the feed head and the

discharge head. The shell and the 2 heads consist of three sections. At the centre of the

head section a trunnion is bolted. The trunnion supports the mill and the mill rotates on

the trunnion. The trunnion rests on pedestals.Coarse ore from the Coarse Ore Silo is fed

into the SAG mill via the SAG feed conveyor. The SAG mill rotates and breaks this

coarse ore down into smaller pieces.

Scope Of Work:

1. Install the 32 foot diameter SAG mill including sole plates, turn-on bearings,

head and shell sections, discharge trammel, drive gear and pinions, pinion

shaft bearings and sole plates and plate work;

2. Align the SAG mill as per the manufacturer's requirements;

3. Sandblast the SAG mill shell interior and install rubber lining;

4. Install the SAG mill lube system;

5. Install SAG mill lining, grates, lifters and turn-on liners;

6. Install and commission liner handling machine and mill jacking cradles;

7. Install SAG mill main driver motors, cooling fans with drives, motors and

cooling coils, and

8. Supply and install connecting ducts between cooling fans and mill motors.

Unpaid Man-hours:



Earned Man-hours

Unpaid Man-hours

30 Sag mill Receive/assemble 3,445 2,756 689


23

installation sag millErect liner handler 48 48 0


Extra Man-hours:


30 Sag mill installation 2,554.5 927.5

Total 2,554.5 927.5




Delay Time

30

Sag Mill Installation

33-CC-101 15 JUN 1990 15 AUG 1990 61 Days33-CN-101 15 MAR 1990 20 MAY 1990 66 Days33-CH-106 15 MAY 1990 13 JUN 1990 29 Days33-SM-101 31 MAY 1990 11 DEC 1990 194 Days

33-SM-101MA 30 MAY 1990 12 NOV 1990 5M +13 days33-SM-101MB 15 JUN 1990 12 NOV 1990 150 Days33-SM-101C 30 MAR 1990 13 JUN 1990 75 Days33-TS-101 30 APR 1990 13 JUN 1990 44 Days

Discharge Head Section D, E, F

31 MAY 1990 31 AUG 1990 1M +14 days


24

Delay Analysis:

As-Planned Dates



Planned Finish Date

30 Sag mill installation

Install Sole plates 30 APR 1990 18 MAY 1990Assemble

Components09 MAY 1990 08 MAY 1990

Install Ring Gear 30 MAY 1990 15 JUN 1990Install Motors 11JUN 1990 26 JUN 1990Install Pinions 18 JUN 1990 22 JUN 1990Install Liner

Handler18 JUN 1990 22 JUN 1990

Erect Mill Crane Hoist

20 JUN 1990 27 JUN 1990

Install Clutch 27 JUN 1990 4 JULY 1990Install Guards 02 JUL 1990 13 JULY 1990Install Liners 11 JUL 1990 14 AUG 1990

Install Trommel 06 AUG 1990 15 AUG 1990Commission 20 AUG 1990 31 AUG 1990

As-Built Dates



30 Sag mill installation

Install Sole plates 30 MAY1990 15 JUN 1990Assemble

Components20 JUN 1990 27 JULY 1990

Install Ring Gear 08 OCT 1990 17 OCT 1990Install Motors 04 SEP 1990 21 SEP 1990Install Pinions 08 OCT1990 24 OCT 1990Install Liner

Handler26 SEP 1990 05 OCT 1990

Erect Mill Crane Hoist

01 DEC 1990 11 DEC 1990

Install Clutch 15 NOV 1990 09 NOV 1990Install Guards 10 SEP 1990 14 SEP 1990Install Liners 17 OCT 1990 21 NOV 1990


25

Install Trommel 07 NOV 1990 16 NOV 1990Commission 21 NOV 1990 28 NOV 1990

As Planned vs As Built Schedule (Area_4)

Delay: 3.00M



Sole Plates Cannot Be Installed

Sole Plate Installation Is

Delayed

Foundation Work For Sole Plate Is

Incomplete

Late Delivery Of Discharge Head Sections

Sag Mill Assembly Is

Delayed

Discharge Head Sections Are Needed

For Mill Assembly

Overcasting Of Discharge Head Sections


Delayed

Treatment Of Overcasting Needs Extra

Time

Discharge Trunnion Misalignment


Delayed

Treatment Of Misalignment Needs Extra

Time


26

Bull Gear – Extra Alignment/Conflict In Installation Method


Delayed

Change In Design & In Method Of

Construction Needs Extra Time

Late Delivery Of Motors Sag Mill Assembly Is

Delayed

Motors Are Needed For Completing The

Work


Problem #1: Sole Plates

Problem #2: Late delivery of discharge head sections

Problem #3: Overcasting of discharge head sections

Problem #4: Discharge trunnion misalignment

Problem #5: Bull gear- extra alignment/conflict in installation method

Problem #6: Late delivery of motors

Change Orders:


Area # 5 – Sag Mill – Other

This area includes components other than the SAG mill itself that are related to the

operation of the SAG mill.

Scope Of Work:

1. Install plate work;

2. Install magnets;

3. Install cone crusher and lube system;

4. Install pumps

5. Install vibrating screens.


27

Unpaid Man-hours:

Item # Item Description Detail Estimated Man-hours

Earned Man-hours

Unpaid Man-hours

17 Install plate work –sag

Install plate work –sag

1,151 1,151 0

Erect crane hoist sag

40 40 0

24 & 49

Install lube system & cone crusher

Receive/assemble crusher/lube

system

958 958 0

28 Install magnets/associated

Install magnets/associate

d

271 81 190

43 Install pump – sag Install pump – sag 487 487 044 Install vibrating

screensReceive/assemble vibrating screens

335 335 0


Extra Man-hours:

Item # Item Description Regular Man-hours Premium Man-hours17 Install plate work –sag 502 44

24 & 49 Install lube system & cone crusher 515.50 7128 Install magnets/associated 32 243 Install pump – sag 30 444 Install vibrating screens 166 14

Total 1,245.5 135



28

Item #

Item Description Equipment # Contract Date Actual Delivery Date

Delay Time


33-CH-107 30 MAY 1990 27 JUN 1990 27 days33-CH-108 30 MAY 1990 6 JUL 1990 1M + 7 days33-CH-110 15 JUN 1990 01 AUG 1990 1M + 15 Days33-CH-113 15 JUN 1990 22 JUN 1990 7 Days

33-CH-117? 30 MAY 1990 27 JUN 1990 33 Days33-CH-123? 30 MAY 1990 22 JUN 1990 28 days33-DI-101 20 JUN 1990 08 AUG 1990 1M + 18 Days33-DI-103 20 JUN 1990 12 JUL 1990 22 Days33-DI-105 20 JUN 1990 27 JUN 1990 7 days33-LR-106 30 JUN 1990 26 JUL 1990 25Days33-LR-110 30 APR 1990 09 JUL 1990 2M + 16 days33-PB-101 15 MAY 1990 09 JUL 1990 1M + 24 days

24 & 49


33-LU-101 01 APR 1990 14 SEP 1990 5 M +13 days33-LU-102 01 APR 1990 13 JUN 1990 2M + 11 days33-LU-103 15 MAR 1990 12 JUN 1990 2 M +27 days33-LU-104 15 APR 1990 15 JUN 1990 2 M +27 days


33-CH-115 30 MAY 1990 31 JUL 1990 2M + 1 day33-CH-116 30 MAY 1990 31 JUL 1990 2M + 1 day

43Install pump – sag

33-P-101 31 MAY 1990 24 AUG 1990 2 M+ 23 days33-P-102 31 MAY 1990 24 AUG 1990 2 M+ 23 days33-P-103 31 MAY 1990 24 OCT 1990 2 M + 23 days33-P-104 31 MAY 1990 24 OCT 1990 2 M+ 23 days33-P-105 30 JUN 1990 11 JUL 1990 11 days33-P-106 30 JUN 1990 11 JUL 1990 11 days33-P-107 30 JUN 1990 12 OCT 1990 3M+ 13 days33-P-108 30 JUN 1990 12 OCT 1990 3M+ 13 days33-P-109 31 MAY 1990 24 AUG 1990 2 M + 23 days33-P-110 31 MAY 1990 24 AUG 1990 2 M + 23 days33-P-111 30 JUN 1990 11 JUL 1990 11 days

44 Install vibrating screens

33-CH-114 30 MAY 1990 09 AUG 1990 2M + 10 days33-CH-125 30 MAY 1990 09 AUG 1990 2M + 10 days

33-LU-104-H 15 APR 1990 15 JUN 1990 2M33-LU-104-H2 15 APR 1990 15 JUN 1990 2M

33-LU-105 15 APR 1990 15 JUN 1990 2M33-LU-105-H 15 APR 1990 15 JUN 1990 2M

33-LU-105-H2 15 APR 1990 15 JUN 1990 2M33-VS-101 30 APR 1990 15 JUN 1990 1M+ 16 days33-VS-102 30 APR 1990 15 JUN 1990 1M + 16 days

Delay Analysis:


29

As-Planned Dates

Item #

Item Description


Planned Finish Date


Erect crane hoist sag Install plate work –sag

20 JUN 199011 JUL 1990

27 JUN 199008 AUG 1990

24 & 49


Receive/assemble crusher/lube system

04 JUN 1990 19 JUL 1990

28 Install magnets/associate

d

Install magnets/associated 02 JUL 1990 11 JUL 1990

43 Install pump – sag Install pump – sag 06 JUN 1990 06 AUG 199044 Install vibrating

screensReceive/assemble vibrating

screens18 JUN 1990 13 JUL 1990

As-Built Dates

Item #

Item Description Detail Actual Start Date Actual Finish Date


Install plate work –sag

20 AUG 1990 29 AUG 1990

24 & 49


Receive/assemble crusher/lube system

13 AUG 1990 17 AUG 1990


Install magnets/associated

13 AUG 1990 29 AUG 1990

43 Install pump – sag Install pump – sag 19 JUL 199004 SEP 1990

15 AUG 199014 SEP 1990

44 Install vibrating screens

Receive/assemble vibrating screens

25 JUL 1990 22 AUG 1990


Delay: 3.43M


30



Delayed Access To Magnets Magnets Installation Is

Delayed

Late Delivery Of Magnets Delayed The

Installation

Delayed Access & Availability Of Cone Crusher

Plate work Installation Is

Delayed

Crusher Feed Chutes Is Needed To

Install The Plate work

Hold Placed By WelOn-Cone Crusher Assemble &

Installation

Cone Crusher

Installation Is Delayed

Change In Design & In Method Of

Construction Needs Extra Time

Non-Availability Of Cone Crusher Components

Cone Crusher


Difficulty In Obtaining Parts For Cone

Crusher Delayed The Installation

Availability Of Lube Unit Lube System


Lube Unit Is Needed To Install The

Lube System


Delayed Access to Magnets: Row code number: 1331 to 1332

Delayed Access and Availability of Cone Crusher: Row code number: 1348 to 1355

Hold Placed by Wel on Cone Crusher Assemble and Installation: Row code number: 1348 to 1355

Non-Availability of Cone Crusher Components: Row code number: 1356 to 1358, 1363

Availability of Lube Unit: Row code number: 1325 to 1330


31

Change Orders:


Area # 6 – Secondary Grinding

This is an existing area where Contractor was required to carry out modifications to

existing equipment, removal of existing equipment, and installation of new

equipment. Ore, in the form of a slurry, originating from the SAG mill is fed into the

cyclone clusters and then into the ball mills. There is one ball mill for each cyclone

cluster. The ball buckets feed steel balls into the ball mills. The ball mills rotate and

break the slurry down into finer material for further processing.

Scope Of Work:

1. Remove one existing cyclone cluster;


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2. Receive and install 3 new cyclone clusters (each consists of a combination of

steel cones, bowls and basins and is about 13 feet in diameter, is about 14

feet high and weighs about 3 tons);

3. Remove the existing pinion and bearings and replace these with new

assembly components on ball mills 4 and 5;

4. Remove the discharge trommel from ball mill 4;

5. Carry out piping work on ball mill 3, 4 and 5;

6. Install a reservoir and a series of chutes to feed balls into ball mills 3, 4 and 5.

Unpaid Man-hours:



Earned Man-hours

Unpaid Man-hours

16 Install ball bucket

Install ball bucket

271 271 0

22 Install cyclone clusters

Install cyclone clusters

519 519 0

23 & 26 Ball mill # 5/ Modify existing

mills 3 & 4

Modify existing mills 3,4, & 5

383 214 169


Extra Man-hours:


16 Install ball bucket 0 022 Install cyclone clusters 0 023 Ball mill # 5 0 026 Modify existing mills 3 & 4 227 7

Total 227 7



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Delay Time

16 Install ball bucket

33-CH-119 30 MAY 1990 22 JUN 1990 23 DAYS33-CH-120 30 MAY 1990 22 JUN 1990 23 DAYS33-CH-121 30 MAY 1990 22 JUN 1990 23 DAYS33-CH-122 30 MAY 1990 22 JUN 1990 23 DAYS

22 Install cyclone clusters

N/A N/A N/A N/A

23 Ball mill # 5 N/A N/A N/A N/A

26 Modify existing mills 3 & 4

N/A N/A N/A N/A

Delay Analysis:

As-Planned Dates

Item # Item Description Detail Planned Start Date Planned Finish Date22 Install cyclone

clustersInstall cyclone

clusters04 JUN 1990 22 JUN 1990

23 Ball mill # 5 Modify existing mill # 5

09 JUL 1990 23 JUL 1990

Install ball mill equipment

09 JUL 1990 23 JUL 1990


Modify existing mills 3

04 JUN 1990 20 JUN 1990


15 AUG 1990 17 AUG 1990

As-Built Dates

Item # Item Description Detail Actual Start Date Actual Finish Date22 Install cyclone

clustersInstall cyclone

clusters23 JUL 1990 17 AUG 1990

23 Ball mill # 5 Modify existing mill # 5

23 JUL 1990 29 AUG 1990

Install ball mill equipment

23 JUL 1990 29 AUG 1990



06 SEP 1990 26 SEP 1990


14 NOV 1990 18 DEC 1990


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As-Planned vs As-Built Schedule (Area _6)

Delay: 3.90 M


Cause Effect RelationshipAccess Problems To Install

CycloneCyclone Cluster


Late Completion Of Structural Steel & The

Cyclones Were Delivered In A Broken State

Access Problems To Install Ball Mill # 5

Ball Mill # 5 Installation Is

Delayed

Late And Changing Delivery Of New Pinion

For Ball Mill #5 & Difficulties With The

Alignment Of The Mill

Extra Work Done By INCO Ball Mill # 5 & Cyclone

Clusters Installation Is

Delayed

Hold While Inco Flipped Bull Gear,

Unavailability Of Inco Overhead Crane, &

Incorrect Bolts Supplied

Late Delivery Of Pinion Ball Mill # 5 Installation Is Pinions Are Needed To Complete Installation


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Assembles Delayed

Additional Work: Repositioning Of Ball Mill # 5

Ball Mill # 5 Installation Is

Delayed

Additional Work Needs Additional Time


Access Problems to Install Cyclone: Row code number: 1410

Access Problems to Install Ball Mill #5: Row code number: 1412 to 1414

Extra Work Done By INCO: Row code number: 1411, 1415

Late Delivery of Pinion Assembles: Row code number: 1416 to 1417

Additional Work: Repositioning of Ball Mill #5 :Row code number: 1418

Change Orders:


Area # 7 – Piping

Unpaid Man-hours:



Earned Man-hours

Unpaid Man-hours

14 Fab/erect utility piping

Fab/erect utility piping – ore storage

1,255 1,255 0

Fab/erect utility piping – sag

493 346 147


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25 Install hydraulics

Receive/assemble hydraulics

14,439 14,006 433

41 Process piping Fab/erect process piping - sag

775 775 0


Extra Man-hours:

Item # Item Description Regular Man-hours Premium Man-hours14 Fab/erect utility piping 108 425 Install hydraulics 38 1341 Process piping 932.5 44

Total 1,078.5 61


Item # Item Description Equipment # Contract Date Actual Delivery Date

Delay Time

14 Fab/Erect Utility Piping

N/A N/A N/A N/A

25 Install Hydraulics

33-HU-102 01 JUN 1990 07 DEC 1990 3M +17DAYS33-HU-102M 01 JUN 1990 17 OCT 1990 4M +16DAYS33-HU-103 01 JUN 1990 7 DEC 1990 3M +17DAYS

33-HU-103M 01 JUN 1990 17 OCT 1990 4M +16DAYS33-ZN-101 30 JUN 1990 17 OCT 1990 3M +17days33-ZN-102 30 JUN 1990 17 OCT 1990 3M +17days33-ZN-103 30 JUN 1990 17 OCT 1990 3M +17days33-ZN-104 30 JUN 1990 17 OCT 1990 3M +17days


37

33-ZN-105 30 JUN 1990 17 OCT 1990 3M +17days33-ZN-106 30 JUN 1990 17 OCT 1990 3M +17days33-ZN-107 30 JUN 1990 17 OCT 1990 3M +17days

41 Process Piping N/A N/A N/A N/A

Delay Analysis:

As-Planned Dates


Detail Planned Start Date Planned Finish Date


Fab/erect utility piping – ore

storage

04 JUN 1990 16 AUG 1990


25 JUN 1990 08 AUG 1990



04 JUN 1990 13 JUL 1990


30 APR 1990 24 AUG 1990

As-Built Dates




Fab/erect utility piping – ore

storage

23 JUL 1990 14 SEP 1990


17 SEP 1990 21 DEC 1990



06 AUG 1990 15 AUG 1990


16 JUL 1990 21 DEC 1990

As-Planned vs As-Built Schedule (Area _7)


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Delay: 3.90



Late Delivery Of Hydraulic

Units

Hydraulic Unit


Units Are Needed For Complete

Installation & Lack Of Drawings For

Routings

Process Piping Access Process Piping Is

Delayed

Lack Of Support Steel

Utility Piping Access Utility Piping Is Delayed Difficulty In Obtaining Routing & Lack Of

Drawings For Routings

Change Orders:


Summary of overall project:

Area # UnpaidMan-hours

ExtraRegular

Man-hours

ExtraPremium

Man-hours

Number OfChangeOrders

Total Number OfOrders

0 0 1,226 84.75 19 62

1 21 296 97.5 12 90

2 81 1,558 314.5 79 316

3 0 258 33 19 105

4 689 2,554.5 927.5 146 557

5 190 1,245.5 135 64 190


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6 169 227 7 11 51

7 580 1,078.5 61 53 170

TOTAL 1,730 8,444.5 1,659.25 403 1,541

Total Delay:

Contract Start Date: 30 APR 1990 Actual Start Date: 03 MAY 1990

Contract Finish Date: 31 AUG 1990 Actual Finish Date: 14 DEC 1990

Contract Total Duration = 4 months (124 days)

Actual Total Duration = 7.5 months (229 days)

Total Delay = 229 – 124 = 105 days

Contractor’s Delay = 7 days (According to the labor strike on November for one week)

Owner’s Delay = 98 days

Charged Delay In DAYS Charged Delay In WEEKS Charged Delay In MONTHS

98 14 3.27


40

As-Planned vs As-Built Schedule (Overall project)


41

Delay: 3.50 M

Qualification of the Claim:


42

Man-hours:

Description Man-hours Rate ($ / HR.) Cost ($)

Unpaid 1730 40 69,200

Extra Regular 8,444.5 40 337,780

Extra Premium 1,659.25 40 x 1.5 99,555

Total 506,535

OVERHEAD COSTS :

The several delays that occurred in this project caused the overhead costs of the

contractor’s site and headquarter offices to increase dramatically. The amount of the

overhead claim is equal to the fixed cost of the site office plus the portion of the fixed

cost of the head office for this specific project.

The fixed cost of the site includes the telephone billing, transportation, equipment, site

office cost, salary of the general foreman as well as the salary of the project manager for

the delay period.The headquarter cost regarding this specific project is equal to the

portion of the headquarter work on this project times the total billing for this specific

project. Portion of the work regarding the project is simply equal to the total head office

overhead divided by the total company billing.

Site Overheads:

Site overhead Rate Per Period ($ / Period) Charged Delay Period COST ($)

General Foreman 4,500 / month 3.27 months 14,715

Phone/Utilities on Site 400 / month 3.27 months 1,308

Site Office Trailer & Support

500 / week14 weeks 7,000

Crane/Tools 250 / day 98 days 24,500

Total 47,523


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Office Overheads:

Head Office Overhead = $ 600,000 / year

Contract Amount = $ 2,500,000

Total Company Billings = $ 8,000,000 / year

Allocable Overhead = (2,500,000 / 8,000,000) x 600,000 = $ 187,500

Daily Allocable Overhead Rate = 187,500 / 229 = $ 818.8/ day

Office Overhead Rate Per Period ($ / Period) Charged Delay Period Cost ($)

Project Manager 6,250 / month 3.27 months 20,437.55

Head Office 818.8 / day 98 days 80,242.45

Total 100,680

Change Orders:

From Summary Of Communications.

Change Order # Date Cost ($)

1 21 NOV 1990 24,173

2 21 NOV 1990 139,979.04

3 6 DEC 1990 43,061.98

4 21 DEC 1990 455,342.92

Total 662,557


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Drawing Revisions:

From Summary Of Communications.

Drawing Revision # Date Cost ($)

1 22 AUG 1990 449,459

2 17 OCT 1990 4,049

3 26 NOV 1990 155,342

4 11 DEC 1990 568,407

Total 1,177,257

Loss of Productivity:

There are different methods to calculate the efficiency of the crews working on each

project. The total loss in productivity due to the points mentioned before is estimated

based on the Charles Leonard method by using the Charles Leonard charts. To find the

effect of changes on the productivity, the costs of change orders and reissuing of

drawings were added and divided by the contract price. From the charts, using the line

with two major causes for drawings and change orders, the amount due to loss in

productivity is determined

Total Number of Change Orders: 403

Total Number of Orders: 1,541

% Of Change Orders: (403 / 1,541) x 100 = 26.15 %

% Of Loss of Productivity: 20%


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Qualification of the Claim

Man-hours $506,535

Site Overheads $47,523

Office Overheads $100,680

Change Order $662,557

Drawing Revision $1,177,257

Total cost $ 2,494,552

Loss of Productivity Cost = % loss of productivity x Total Costs

= 0.20 x 2,494,552 = $ 498, 910

Interest (2%):

Total Costs from = $2,494,552 +$498, 910= $2,993,462

Total Interest Cost = % of interest x Total Cost = 0.02 x 2,993,462= $59, 869

Total Claim Cost:

Total Claim Cost = $2,993,462+$59, 869=$3,053,331


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Conclusion:

Item Description Amount ($)

1 Change Orders 662,557

2 Drawing Revision 1,177,257

3 Man-hours 506,535

4 Site Overheads 47,523

5 Office Overheads 100,680

6 Loss of Productivity 498,910

7 Interest (2%) 59,869

TOTAL AMOUNT: 3,053,331

Two Legal parties signed a Lump Sum contract. The job consists of erecting a erect mechanical equipment and install piping included in the SAG MILL MECHANICAL contract. As every construction job, both entities encountered several obstacles during construction, which led to problems, delays and claims. The amount claimed by the contractor from the owner is mainly for the reason that the progress of work was affected throughout the whole project by the following:

Changes in information regarding delivery of equipment, Changes in access for unloading equipment, changes in access for the

erection work, Changes in the methods specified. Changes to the scope of work to be performed.

These changes decrease the effectiveness of the work force, which had been mobilized. The lack of advance information regarding the changes prevented Contractor from optimizing changes in their planning, such as postponing part of their mobilization, and optimizing the use of its resources, which resulted in additional costs.


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