Masonry Magazine February 2003 Page. 34
Industry TRENDS
TRACKING LABOR FOR PRO-ACTIVE CLAIMS MANAGEMENT
By Douglas D. Harding
Capital Project Solutions
Inevitably, mason contractors will run into a problem project sometime in their career. It might be a public works project or a design-driven private works project. And it doesn't matter how big or small your business is, these projects seem to be just waiting to pounce on the unsuspecting contractor. Many a contractor's company has been seriously harmed or put out of business because of events that start with a single problem project.
While each trade responds to project delays and disruptions differently, mason contractors have an unusually high burden of proof when it comes to damages. It is this burden that you carry on every project, good and bad. When it comes to recovering losses associated with delays, disruptions, changes in schedule, acceleration, excessive change orders, (to name just a few), every contractor must meet a minimum standard of proof.
There are two categories of damages associated with a claim for additional compensation. On the one side is a Total Cost Claim. After you prove that the other party breached your contract, your damages are the difference between your actual costs and your revised budget (bid plus approved change orders).
Naturally, the courts do not like to see this type of claim come at them. It assumes your bid is correct and it also assumes that the other party is 100 percent at fault. So, don't expect any help from the courts if the best you can do is a Total Cost Claim-especially if you're a mason contractor.
In most locations, to successfully prosecute a Total Cost Claim you will have to meet minimum standards. Those standards include a showing that the other party breached the contract and that it resulted in damages. To apply a total cost calculation to the damages, the following standards are required to be met:
* You could not prove the losses directly (i.e. by event, disruption or delay);
* Your bid was reasonable;
* Your actual costs were reasonable; and
* You were not the cause of your own losses.
If you can't prove these elements, then no damages will be awarded. You could have the best entitlement and deserve the money, but unless you can prove your damages, it's all a waste of time.
The problem for mason contractors is that they are naturally presumed to know how many block are being installed every day. The defense to a total cost claim from a mason contractor is to point out how simple it would have been to track the