AN OVERVIEW OF CONSTRUCTION CLAIMS: - Clark Wilson LLP

p. 6
(b)
Time related costs – the amount of time required for completing the work is
extended and hence resulting in time sensitive costs.
Delay damages are generally broken down into the following categories 9 :
HEAD OF
DAMAGES
ON-SITE
OVERHEAD
INFLATIONARY
OR OTHER
INCREASE IN
COST OF
MATERIALS
AND LABOUR
COSTS OF
FINANCING
AND
INSURANCE
HEAD OFFICE
OVERHEADS
DESCRIPTION OF HEAD
• Extended field office overheads including
supervision, costs of the site office and
equipment and labour costs for the extended
period.
• These are usually proved by reference to the
contractor’s accounting records and the on-site
costs including daily logs, foreman’s reports,
rental invoices, etc.
• These costs will arise directly as a result of the
increased costs of the contractor in working an
extended period.
• They are usually proven by reference to
collective bargaining agreements and invoices
with respect to the increase of costs and
materials.
• These are also time sensitive costs.
The contractor is delayed in receiving its revenue
where the contract time is extended, in addition, the
contractor will experience an increase in insurance
costs.
• Recovery of head office overheads has been
approved as an item of recovery.
• A number of formulas have been developed to
prove the amount of the cost. Generally
speaking, the theory is that an extended contract
will create additional head office costs and will
result in a lower revenue base for the contractor
as it will be unable to assume additional work
during the extended period.
9
Construction Delay Claims, Christopher O’Connor, Borden Ladner Gervais (formerly Ladner Downs),
May 15, 1997.
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