Construction Series - Sailing on the Hudson in Your Eichleay While Avoiding Liquidated Damage: Determining Delay Related Damages

Summary

This session outlines best practices in calculating delay damages. The two types of delay damages classifications are “Contractor assessed” and “Owner assessed,” based on the schedule delay analysis allocations. Contractor delay damages are typically classified into field overheads or general conditions, home office overheads, and the reasonable profit mark-ups based on contract provisions and industry standards. On the other hand, Owner delay damages are mainly classified as Liquidated Damages or Penalty for delay and Actual damages. This session will examine how to use generally-accepted accounting principles and the Eichleay and Hudson formulas to determine allowable costs. We’ll also explain how to calculate Liquidated Damages and Penalty based on specific contract provisions or resulting from late start-up of a facility or plant. While these can be difficult waters to navigate, we’ll cover the fundamentals to your team confidently address important issues involve in the assessment of delay damages.

Best practices employed in calculating delay damages related to the following:

Contractor Delay Damages
- Define affected costs
- Contract provisions
  - Prescribed mark-ups
Field Overhead
- What field overhead costs are affected?
- Sources of cost data
- Calculating a daily rate
  - Average daily rate versus actual period
Home Office Overhead
- Unabsorbed home office overhead concept
- Allowable costs
- G&A as a percentage of revenue versus Eichleay
- Calculating a daily rate
- Owner Delay Damages
  - Actual Damages
    - Increased Operational Expenses
    - Lost Revenue
    - Consequential Damages
Liquidated Damages

Dates and Topics

Construction Contracting
Best Practices for Delay Claims Preparation, Defense, and Avoidance

5-Part Webinar Series - for more information on the whole series, click here.

May 14: Keeping Time - Improving your Project Planning and Scheduling Practice
June 4: Sweat the Small Stuff - The Indispensable Advantage of Effective Project Documentation
June 25: Are we Late? Oh It's Already Over? What Delay Claim Methodology Should I Use?
July 16: More Effective Delay Claim Preparation and Analysis
August 6: Sailing the Hudson in your Eichleay while Avoiding Liquidated Damage - Determining Delay Related Damages