Pricing Contractor Delay Costs

Instructors: Jim Zack, Peter V Badala
Product ID: 704367
  • Duration: 90 Min

recorded version

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Read Frequently Asked Questions

After attending this training program, 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.

Why Should You Attend:

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 will discuss all eight methods – offering commentary on the strong and weak points of each. The training 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:

  • Recoverability of extended field office overhead costs in the event compensable delay arises on a project.
  • Various accepted methods of calculating this element of delay damages for general contractors.
  • Various methods of specifying this element of delay damages in contracts in order to avoid disputes later.
  • Costs that should be deducted from this element of delay damages prior to submittal of costs in a claim.
  • Insight into the issue of the contractor’s obligation to mitigate damages in the event of owner caused delay.

Areas Covered in the Webinar:

  • The recoverability of extended field office overhead costs, including what field office overhead is and the typical elements of this cost.
  • The basics of calculating extended field office overhead costs.
  • Various actual cost methods for calculating extended field office overhead.
  • The various total cost methods of calculating extended field office overhead costs.
  • How can the jury verdict method be used to make this delay damage calculation?
  • How can stipulated contract methods concerning field office overhead be employed?
  • Costs that must be deducted from the submission of field office overhead costs by the contractor.
  • The contractor’s obligation to mitigate damages.

Who Will Benefit:

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

Instructor Profile:

James G. Zack

James G. Zack, Jr., CCM, CFCC, FAACE, FFA, FRICS, PMP, is executive director of Navigant Construction Forum™. He was formerly executive director of Corporate Claims Management, Fluor Corporation; vice president, PinnacleOne; and senior construction claims consultant, CH2M HILL, Inc.

For more than 40 years Mr. Zack has worked on both private and public projects. In the construction claims arena, he is a recognized and published expert in mitigation, analysis and resolution or defense of construction claims and disputes. He has worked on claims and disputes throughout the United States and has presented and worked on claims in Canada, Egypt, The People’s Republic of China, Germany, Kazakhstan, Saudi Arabia, The Russian Federation, Chile, Peru, Guatemala, Mexico, Venezuela, Jamaica, Kuwait, South Africa, The United Kingdom, The Netherlands, Slovenia, Poland, Australia, The Philippines, India, and Trinidad & Tobago.

Mr. Zack has been involved in thousands of claims throughout his career and has been designated as an expert witness in mediation, arbitration and litigation. He is a Fellow of the Association for the Advancement of Cost Engineering, International (FAACE), the Royal Institution of Chartered Surveyors (FRICS) and a Fellow of Forensic Analysis (FFA) from the International Guild of Project Controls. He is also a member of the Construction Management Association of America (CMAA) and the Project Management Institute (PMI). He is a Certified Construction Manager (CCM); a Certified Forensic Claims Consultant (CFCC); and a Project Management Professional (PMP). Mr. Zack is a former President of the Association for the Advancement of Cost Engineering, International (AACE). He is a nationally known author, speaker and trainer concerning the management, mitigation and resolution of construction claims and disputes.

Peter V. Badala

Mr. Badala is a managing director and West Coast Practice Area Leader in Navigant Consulting’s Global Construction Practice in San Francisco. For the past 30 years, Mr. Badala has provided forensic accounting, auditing, and claims consulting services and expert testimony to clients on more than 200 construction projects around the world. His assignments have included the preparation, defense and resolution of claims for changed/extra work, delay, disruption, lost productivity and terminations (for convenience and default), evaluation of contractor/subcontractor accounting systems and internal controls, the review and analysis contractor billings for reasonableness and compliance with the contract terms and conditions (e.g. allowable and allocable) and the performance of interim and close out contract audits, funds tracing and analysis of mechanics lien claims.

Mr. Badala has also been retained by clients to conduct independent investigations into allegations of false claims, and to quantify the economic damages (e.g. diminution in asset value, lost profits, cost of repair/replacement and/or increased operating costs) that are the consequence of schedule delays, defective construction, product liability litigation or the alleged failure of the contractor to meet the contract’s performance specifications. Mr. Badala has also been retained by sureties to analyze a contractors’ financial condition and assess their financial exposure on unfinished projects.

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