Alternative for Quantifying Field-Overhead Damages

Abstract

The context of delays significantly affects delay responsibility. Among other things, recoverable damages for a delay should be related to the timing of the corresponding delay and its effect on indirect costs. This paper presents an alternative and integrated approach for quantifying and apportioning delay responsibility. It considers the context of a delay in terms of its timing and the degree of suspension during the course of a project. The proposed approach allocates project-site overhead costs onto schedule activities. It then helps track site overhead damages in a “real-time” manner while schedule-window analysis is employed to analyze the delay. A case study is used to illustrate its application. Results infer that the conventional daily overhead rate-based method can cause double payments because conventional recovery possibly covers parts of field overhead already paid from the original contract. This new approach also enables the application of the comparative negligence doctrine when concurrent delays occur by fairly sharing delay damages between the project parties. Practitioners can employ the proposed approach for reasonably quantifying and apportioning delay damages while researchers may further explore its applications in the industry.