Pricing Contractor Jobsite Overhead Delay Costs
James G. Zack, Jr., CCM, CFCC, FAACE, FGPC, FRICS, PMP
James Zack is the Senior Advisor, Ankura Construction Forum™ – the construction industry’s global resource for thought leadership and best practices on avoidance and resolution of construction project disputes globally. Jim was a founder and former Executive Director of the Navigant Construction Forum™. Previously, Executive Director, Corporate Claims Management, Fluor Corporation; Vice President, PinnacleOne and Executive Director, PinnacleOne Institute; and Senior Construction Claims Consultant, CH2M HILL, Inc. With 47 years’ experience, he is a recognized expert in mitigation, analysis and resolution or defense of construction claims. A Fellow of AACE International. The Royal Institution of Chartered Surveyors, and the Guild of Project Controls, Mr. Zack is a Certified Forensic Claims Consultant, a Certified Construction Manager, and a Project Management Professional as well as an internationally known author and speaker on construction claims.
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.
- 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 a 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 the owner caused delay
This webinar is designed to help both owners and contractors understand typical field office overhead costs that may be impacted by a project delay. Additionally, the webinar illustrates several different methods of calculating this delay costs.
- 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
Course Level - Intermediate to Advanced
Who Should Attend
- General Contractors
- Owners and their representatives
- Design professionals
- Construction managers
Why Should Attend
After attending this webinar attendee 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 the end of the job audits or disputes over such costs.