When a contractor experiences owner-caused compensable delay, the contractor may seek reimbursement for extended field office overhead and unabsorbed home office overhead. It is not always clear, however, how costs should be allocated and how these contract damages should be calculated.
A contractor on a federal project recently recovered extended field office overhead. The contractor documented its job site expenses and calculated them as a fixed price per day. But the contractor was denied recovery of unabsorbed home office overhead. The contractor had not been forced into a standby position where it was unable to deploy its forces to other paying work.
The second case reported in this issue involves the interplay between the AIA General Conditions of the Contract for Construction—incorporated by reference into the AIA subcontract form—and the subcontract itself. A Maryland court was asked to determine the governing dispute resolution process for a subcontractor claim against the prime contractor.
