Pricing Contractor Jobsite Overhead Delay Costs
Megan S. Wells
Ms. Wells is a Director in Navigant’s Global Construction practice in Navigant’s Seattle Office. Ms. Wells has more than 20 years of consulting experience on issues related to construction accounting, contract cost auditing, and the analysis and pricing of claims for increased costs and economic damages due to delay, disruption, lost productivity, change orders and extra work, increased cost studies and economic damages. Ms. Wells has worked on complex construction projects throughout the United States and Canada. Ms. Wells has been involved in analyzing construction claims and auditing construction costs for public and private owners and preparing construction claims for general contractors on projects to include all types of civil, commercial, and specialty structures. Ms. Wells is a Certified Management Accountant (CMA) and has provided affidavits, depositions, and oral testimony in arbitration and state court in Washington State and oral testimony in Federal District Court in Oregon. She has also participated in numerous mediation, Dispute Resolution Boards, and other dispute resolution proceedings.
James G. Zack, Jr.
James Zack is the Senior Advisor and former Executive Director, 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, Executive Director, Corporate Claims Management, Fluor Corporation; Vice President, PinnacleOne; and Senior Construction Claims Consultant, CH2M HILL, Inc. With 45 years’ experience, he is a recognized expert in mitigation, analysis and resolution or defense of construction claims. A Fellow of AACE and RICS and a Fellow of Forensic Analysis from the International Guild of Project Controls, Mr. Zack 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.
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.
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
Who Should Attend
- General Contractors
- Owners and their representatives
- Design professionals
- Construction managers