Construction projects often experience schedule delays, acceleration, productivity loss, changed work, or construction defects which can lead to cost overruns. When a party incurs cost overruns due to another party’s actions and/or inactions, the cost overruns can be considered a damage. As a result, construction damages generally refer to a sum of money claimed or awarded as compensation for the increased costs resulting from another party’s acts or omissions.

Spire’s construction damages experts can help simplify the process of understanding and recovering damages. Spire’s experts diligently quantify, evaluate, and present damages associated with construction claims and cost overruns—a complex process since damages are often intertwined between various aspects of the project, such as cost estimating, scheduling, and project management. Working methodically through each issue, Spire’s construction damages experts identify liability, validate claims, quantify damages, and assist with resolving disputes. Typically, Spire’s experts evaluate the following types of damages:

  • Actual damages
  • Indirect and direct work
  • Changed work
  • Outstanding contract balance
  • Cost to repair and correct defective work
  • Increased cost to complete work
  • Consequential damages
  • Extended and/or increased general conditions
  • Home office overhead
  • Liquidated damages
  • Increased labor costs
  • Increased material costs
  • Idle equipment
  • Cost escalation
  • Labor productivity loss

Conducting a detailed damages analysis involves a review of contemporaneous documents to understand the issues. Spire’s damages experts analyze all relevant documentation, such as contracts, bid estimates, change orders, payment applications, job cost reports, vendor/subcontractor invoices, progress tracking sheets, and correspondence. Spire generally applies the following steps when evaluating construction damages:

  • Entitlement Review – Identifying what damages can be claimed based on contracts, laws, regulations, and/or industry practice.
  • Variance analysis – Quantifying the difference between earned value (budgeted cost of work performed) and actual cost of work performed. A negative cost variance typically indicates that an activity or scope of work is over budget or has experienced a cost overrun.
  • Causation Analysis – Establishing the facts and timeline to determine exactly what occurred, when, and with what outcomes or impacts. A causation analysis typically determines the cause and effect for which the contractor or owner claims entitlement to compensation.
  • Damages Calculation – Quantifying damages using standard industry means and methods, such as discrete analysis of events and pricing, industry studies, measured mile analysis, and modified total cost.

Whether you are an owner, program manager, contractor, architect, subcontractor, or attorney, Spire’s construction damages experts are equipped to provide the analytical support necessary to quantify and assist you in recovering damages.

Construction Damages Experts | Spire Consulting Group