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CONSTRUCTION DAMAGES EXPERT | COSTS ANALYSIS

An overview of some of the terms, components and techniques used in contemporary construction damages analysis by the Holloway Consulting Group and other construction damages experts includes:

CONSTRUCTION DAMAGES EXPERT | COSTS ANALYSIS

COST VARIANCE ANALYSIS

One of the steps often performed in contemporary construction damages analyses is the cost variance analysis, or CVA, which is comprised of three major elements:

Project Work Activities are synonymous with CSI Divisions.

Damages Analysis Components are comprised of contract, non-compensable and compensable costs.

Cost Categories are comprised of labor, material, equipment and subcontract costs.

SPECIFIC COST METHOD

This method quantifies the specific costs associated with a particular causal event(s) or claim. By way of example, if the contractor identifies a changed condition associated with a particular scope of work in the field, he/she might open a new cost account code and charge all related costs to that account. When the changed work is completed, and if costs have been accumulated properly, such costs should represent the claim amount.

SHOULD HAVE COST METHOD

With this method, either estimated or incurred costs can be compared to budgeted costs to form the damages claim.

MODIFIED TOTAL COST METHOD

The measure of construction damages calculated by subtracting total revenues from total cost incurred minus non-compensable costs.

TOTAL COST METHOD

The measure of construction damages calculated by subtracting total revenues from total cost incurred.

JURY VERDICT METHOD

The “reasonable” damages incurred by the plaintiff calculated by subtracting the contract amount, bid errors and non-compensable costs from total incurred costs.

QUANTUM MERUIT METHOD

The measure of damages where an express contract is mutually modified by the implied agreement of the parties, or not completed. While there is often confusion between the concept of quantum meruit and that of “unjust enrichment” of one party at the expense of another, the two concepts are distinct.

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