Pricing Contractor Delay: Dealing with Contractor Site Delay Costs

When contractors encounter owner caused (excusable/compensable) delay they are typically entitled under the contract to recover both the time resulting from the delay as well as delay damages. Idled equipment/labor and material escalation costs are fairly easily calculated in such situations. Typically, contractors also seek to recover their delay costs (extended field office overhead or general conditions costs) also.  Calculating this cost is more complex than dealing with delayed direct costs. There are, at least, eight methods of calculating extended field office overhead costs.  None of the calculations arrive at the same daily delay cost. This webinar discusses all eight methods – offering commentary on the strong and weak points of each. The paper also offers recommendations on how project owners can resolve this dilemma in advance of delays, thus making the issue less contentious should a contractor encounter an owner-caused delay.

Learning Objectives:

• In this program attendees will learn about the recoverability of extended field office overhead costs, including what field office overhead is and the typical elements of this cost.
• Attendees will be exposed to the basics of calculating extended field office overhead costs.
• The program will discuss the various actual cost methods for calculating extended field office overhead.
• The program will explore the various total cost methods of calculating extended field office overhead costs.
• The program will discuss how the jury verdict method may be used to make this delay damage calculation.
• Attendees will learn how stipulated contract methods concerning field office overhead may be employed.
• The program will identify what costs must be deducted from the submission of field office overhead costs by the contractor.
• The contractor’s obligation to mitigate damages will also be discussed.

Benefits of the Webinar:

• Learn about the recoverability of extended field office overhead costs in the event compensable delay arises on a project.
• General Contractors will gain information on the various accepted methods of calculating this element of delay damages.
• Owners will be exposed to various methods of specifying this element of delay damages in contracts in order to avoid disputes later on should compensable delay occur.
• Owners and contractors will receive information on what costs should be deducted from this element of delay damages prior to submittal of costs in a claim.
• Owners will gain insight into the issue of the contractor’s obligation to mitigate damages in the event of owner caused delay.

After attending this webinar attendees will have a better understanding of the issues concerning the pricing of contractor delay damages.  Contractors will gain knowledge about the various methods of calculating extended field office overhead costs.  Owners will learn some contractual methods for predetermining this element of delay costs in order to prevent the need for end of the job audits or disputes over such costs.

Unlike other webinars that deal with forensic analysis (delay analysis) this webinar started where the delay claims webinars leave off and focuses directly on ways to calculate the cost of a “day of delay”.

Who Should Attend:

• General Contractors
• Owners and their representatives
• Design professionals
• Construction managers
• Attorneys

James G. Zack Jr.

Mr. Zack is the Executive Director of Navigant Construction Forum™ —the construction industry’s global resource for thought leadership and best practices on avoidance and resolution of construction project disputes globally. Formerly, he was the Executive Director, Corporate Claims Management, Fluor Corporation; Vice President, PinnacleOne; and Senior Construction Claims Consultant, CH2M HILL, Inc.

With more than 40 years’ experience,Mr. Zack is a recognized expert in mitigation, analysis and resolution or defense of construction claims. A Fellow of AACE and RICS, he is a Certified Forensic Claims Consultant, a Certified Construction Manager and a Project Management Professional as well as a nationally known author and speaker on construction claims.