How to Recover Delay Costs as a Subcontractor in Australia

If a head contractor delays you and you cannot recover the cost, your margin disappears. Most subbies absorb delay costs because they did not give notice in time, or they cannot prove the delay event.

This is what to do when a delay event happens, what an Extension of Time (EOT) claim requires, and how to calculate the cost.

What counts as a recoverable delay

Not every delay on a construction job is recoverable. To recover delay costs, the delay must be:

• Caused by the head contractor or someone they are responsible for (e.g. a different trade)
• On the critical path — meaning it pushes out your completion date, not just one task
• Documented at the time — verbal complaints do not survive a dispute
• Notified in writing within the contract notice period — usually 7 to 14 days

If any one of these fails, the cost is yours to absorb.

The notice requirement — the most important part

Almost every Australian commercial subcontract has a clause that says: "The subcontractor must give written notice of any delay event within X days, failing which the right to claim is waived."

Read your contract. Find the clause. Diary the period.

A typical notice clause requires:

• Within 7 days of the delay event — written notice that a delay has occurred
• Within 14 days — particulars of the cause and the impact
• Within 28 days — the cost claim, with substantiation

Miss the first 7-day notice and the rest is moot.

What to put in the first notice

Keep it short. The first notice is a flag, not the full claim:

Re: Notice of Delay — [Job Code] — [Short Description]

>

Dear [PM],

>

This notice records that on [date] our trade was delayed at [location] due to [cause].

>

The cause appears to be [predecessor trade not complete / access not provided / design information not issued / etc.].

>

The delay has impacted our works and we anticipate further impact. We will provide particulars and a cost claim in due course.

>

We expressly reserve all rights under the contract.

>

Regards,
[Name]

That is it. The detail comes in the second notice, the particulars.

Calculating delay costs

Delay costs typically have three components:

1. Idle labour — workers paid but not productive. Calculated at the daily labour rate × number of crew × days idle. 2. Demobilisation and remobilisation — the cost of pulling crew off site and bringing them back. Often a fixed amount per cycle, e.g. $1,500 per crew per cycle. 3. Prolongation costs — site overhead, supervision, equipment hire that keeps running while you wait.

A worked example: 4 crew at $850/day idle for 3 days plus a remob cycle of $1,500.

• Idle labour: 4 × $850 × 3 = $10,200
• Demob/remob: $1,500
• Total: $11,700

This is the figure you put in your particulars. Always state it as "estimated" until the delay closes — actuals can vary.

What records you need before making a delay claim

A delay claim that survives scrutiny needs:

• The original notice within the contract notice period
• Daily site reports showing crew on site and what they were doing
• Photographs with timestamps showing the cause of the delay (e.g. predecessor trade incomplete, access blocked)
• Email correspondence with the head contractor about the cause
• Toolbox talks mentioning the delay
• Crew sign-on records showing labour hours
• Equipment hire records showing prolonged hire
• Supplier delivery records showing materials sat idle
• The cost calculation with each line item itemised

Without these, the head contractor can disclaim the cost on the basis of "insufficient particulars".

When to escalate to an EOT claim

If the delay pushes out your completion date — not just one task — you also need to lodge an Extension of Time. EOT and delay cost are two different claims:

• EOT extends your contractual completion date so you do not get hit with liquidated damages.
• Delay cost recovers the cost you incurred during the extended period.

Most subcontracts allow you to lodge both at once. Always lodge the EOT — even if the cost claim is small. Without an EOT, the head contractor can claim liquidated damages against you for finishing late.

What this looks like inside TradeControl

TradeControl logs every delay event from the field with photo evidence and a timestamp. The bot drafts the formal notice in under a minute, references the right contract clause, and tracks the 7 / 14 / 28 day notice periods automatically. When you lodge the claim, every supporting record is one tap away.

Book a 20-minute demo

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TradeControl provides commercial support only. Not legal advice. Always seek specialist legal advice for material delay claims.