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(CDR-1554) A Method of Improving Delay Costs Calculations

Primary Author: Mr. Barry Allan Tozer MEng

Audience Focus: Intermediate
Application Type: Application
Venue: 2014 AACE International Annual Meeting, New Orleans, LA, USA

Abstract: The paper provides an alternative method of calculation of field overhead delay costs where productive work is being undertaken concurrently with a critical path delay. The limiting case where no concurrent work is undertaken is non-controversial. In that case, the total delay cost is calculated from the delay period ascertained from the critical path and the average daily actual time-related field overhead cost. Where work is continuing on unaffected parts of the site or unconnected activities, this approach invariably overstates the actual delay cost. The alternative methodology calculates an expected time-related field overhead cost as a percentage of the direct cost of the work being undertaken concurrently for each time period. That amount is deducted from the actual time-related field overhead for that period to determine the delay cost component. This cost per time period is accumulated over the delay period to determine the likely actual delay cost. The alternative methodology may be presented graphically so that the impact of the delay on field overhead costs in each time period is better understood.