Owner caused delay: Field overhead damages

This article is written to assist in the quick and efficient calculation of the appropriate compensation due a contractor for an owner-caused increase in the project duration. This article explains the basic calculation of a daily delay rate and relevant factors. The courts have clearly established the requirements to use a total cost claim damage methodology for direct costs. However, field office indirect or field overhead costs are often not treated with the same scrutiny, despite the fact that the same concepts are evident. The total actual indirect cost to date is often used to calculate delay damages, despite inclusion of bid errors or omissions and lack of complete owner causation. The result is that additional project duration is obtained at an inappropriate premium. The owner should be able to obtain additional time at the as-bid rate unless the added scope is materially different than the original contract. This article presumes that the contract does not already establish a daily rate nor makes specific mention of its calculation. This article does not address the allocation of delay responsibility.