👉 Engineering penalties are financial charges imposed by clients or contractual agreements to compensate engineering firms for costs incurred due to unforeseen circumstances, delays, or additional work beyond the original scope of a project. These penalties typically apply when the delay exceeds a specified threshold, often 50% or more of the original project timeline, and are intended to reflect the extra expenses, such as overtime labor, expedited services, or increased material costs, that arise from issues like equipment failure, supply chain disruptions, or regulatory changes. Unlike standard change orders, which cover approved modifications, engineering penalties address unforeseen problems that were not anticipated during the initial planning phase, ensuring clients are fairly compensated for the extra work and risks involved.
