Calculating Construction Damages

How to Calculate Construction Damages in Georgia

by Mark A. Cobb

Wow, what a wonderful conference!  How often can you say that you have heard that?  Last week, I had the privilege of attending the American Bar Association (ABA) Forum on Construction Law Mid-Winter meeting in Naples, Florida.  The Forum meetings always exceed my expectations, the continuing legal education hours enrich my practice, and there are many opportunities to meet with construction attorneys from all 50 states.

This year’s conference was entitled “Making Dollars and Sense of Construction Damages”, and, needless to say, the seminars and panel discussions were largely disscussions and presentations about construction damages.  We explored current trends in drafting damage provisions in construction contracts, what construction professions can do to minimize their exposure after damages occur, how to calculate damages from the perspectives of the owner/project developer, the prime contractor, the subcontractor and the material suppliers.  In addition, there were presentations on how to present damages to arbitration and mediation panels, judges and juries as well as innovative technological aids that make these complex numbers more easily digestible.  Other topics which we tackled included the following:

  • When to use Total Cost Claims calculation
  • When to use Modified Total Cost Claims calculation
  • Cumulative Impact Claims
  • Change Orders and their impact
  • Liquidated Damages and whether or not they are enforceable
  • Diminished Bonding Capacity and whether or not these damages are recoverable
  • Home Office Expenses and whether or not they are recoverable
  • Field Office Expenses and whether or not they are recoverable
  • Leased construction equipment vs. owned construction equipment
  • Waivers and limitations of construction damages
  • Limitation of Liability
  • Direct Damages
  • Consequential Damages
  • No Damages for Delay provisions
  • Expert Witness testimony (for proving damages)
  • Demonstrative evidence, source data, input date, reliability of hardware, the process and reliability of the method used to calculate construction damages
  • Termination for Convenience contract terms (and how they vary between the AIA, EJCDC and ConsensusDOCS)
  • Damages resulting from Termination for Convenience
  • Demobilization costs
  • Insurance premiums rebates and surety bond rebates (after contract is terminated)

These topics (and many more!) help the Cobb Law Group to build an arsenal of knowledge that benefits all of our clients whether they are project owners, developers, general contractors, specialty trade subcontractors, or material suppliers.  In particular, our statewide practice of filing Georgia Materialmen’s Liens inevitably requires proving of damages whether they be based upon invoices, contract costs, changes orders, or something else.

In addition to the formal presentations, a Construction Law Forum luncheon included a talk on the Federal Miller Act and various states’ Little Miller Acts.  It is easy to forget that meeting the requirements to file a payment bond claim vary on federal projects and state projects, and this was an excellent reminder of some of the differences between the different types of public construction projects as well as an opportunity to learn from my colleagues how their states handle specific issues (differently than we do in Georgia!)  In Georgia, for example, state construction projects and muncipal construction projects are subject to different state statutes.

Despite a very busy schedule, we managed to mingle with construction industry consultants and colleagues during the breaks and during the organized social events.  One such event was a dinner hosted by a mediation group who shared with us stories about their successful mediation of construction disputes and how we can maximize our clients’ litigation dollar through mediation and arbitration.

For our clients, these ABA’s Forum on Construction Law provide us the a national network of experienced construction attorneys and consultants through out the country; for us, the seminars provide great education benefits and interaction among colleagues as well as a look into current construction law, lien law and surety bond law trends throughout the country.  In case you can’t tell, I look forward to our next meeting!

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