Pricing Construction Claims:
Putting the Dollars on the Damages
Don Harrington, Brent McSwain and Rex Snyder
Learn best practices for preparation, support and pricing of any given claim or change order.
The purpose of pricing a claim is to give the owner a substantive description and detail of the extra costs incurred or to be incurred due to a contract change. The owner or his representative must have this detailed cost description in order to understand, negotiate, and justify extra contract costs.
Pricing of claims is divided into two types: forward pricing — where the price is negotiated before the work is done; and postpricing — pricing during or after performance of the work (e.g., actual costs). In either case, the pricing elements of the claim itself are the same, and include direct cost of performing the changed work, impact and/or delayed performance costs, and markups. There are no magic approaches or secret formulas for the successful pricing of claims. What is important is that the various pricing elements be carefully calculated and substantiated.
In any change order or claim, there are numerous elements of direct costs of doing the extra work, the indirect and overhead costs of the work, and possibly delay and impact costs related to the changes or delays that were incurred.
The consultant team of Don Harrington, Brent McSwain and Rex Snyder of Sage Consulting Group discuss in great detail the various types of costs that may be allowable for any given claim or change order, and what’s involved in the proper preparation, pricing and support of a request for equitable adjustment (REA). This program will review a large range of pricing issues, including:
- Forward pricing and post pricing
- Delay and disruption costs – “measured mile,” “total cost” and other methods
- Acceleration costs – overtime, inefficiency
- Field overhead, home office overhead and Eichleay
- Experts and attorney fees
- And much, much more!
Once entitlement is settled, the amount of the equitable adjustment is essentially a matter of proof of costs. Good records and a thorough understanding of the items of work are more than half the effort in pricing a claim. Assembly of the information, organization of the data, and performance of necessary calculations then follow easily. Since this supporting data are essential for successful negotiations and are subject to audit on larger claims, the contractor is well advised to prepare accurate and complete price proposals.
Listen to this informative session to learn various types of costs for any given claim for your project!
Who Will Benefit?
This presentation is a must if you’re a public or private owner, construction manager, contractor, subcontractor, consultant, architect, engineer or attorney.
This event features key insights from our knowledgeable construction experts:
Don Harrington has over 35 years of experience in the construction industry, including 20-plus years of experience preparing and analyzing construction claims. He has provided expert analysis in hundreds of cases. Don specializes in construction defect and cost estimating/damage analysis related to residential, commercial and civil projects.
Brent McSwain has worked as an owner representative, responsible for developing multi-million dollar acute-care hospital facilities, offices, warehouses, correctional and probation facilities, as well as administering disaster recovery services. He has extensive experience in preparing and defending claims as well as in litigation support, deposition and trial testimony.
Rex Snyder has more than 30 years of construction-related experience, including field/project engineering, project scheduling, project management and project executive work. He has managed projects valued at up to $90 million. Drawing on his experience in construction management, cost control and scheduling, Rex provides cost analysis and CPM scheduling analysis and implementation.