Delay and Extra Work: This class of claims is typically associated with the new construction of commercial properties. Typically, as in the title, they are often linked to the scheduling of a particular project. The multiple components of losses that result in scheduling missed due to another’s actions (or failure to act) can have far-reaching consequences in the overall success of a project.
In addition, the extra work component of this category of claim can be a reason for the delay when there is extra work not contemplated in an original scope. In a perfect new construction scenario everything goes right, from planning, to funding, to site acquisition and development, through the trades and all the way to occupancy.
In delay claims, somewhere “the train left the tracks” in this closely defined process. At any point along the chain that makes up the critical path necessary for successful development, a failure can occur that can affect the overall project. These include challenges in the financing, the acquisition, the planning, or the hard construction.
In addition to the time value of money, there are economic factors that can increase or decrease the costs of construction. In addition to these costs, building law and ordinances can change the requirements in place for new construction, and in some cases have very significant associated costs. These can include anything from density allowances to floodplain management requirements to the codes associated with specific building materials and methods.
Careful consideration of the contracts and schedules in place at the time of agreement and any delay or extra work challenges that affect these costs and schedules is measured in dollars for the purpose of resolution of these types of losses.
