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(CDR-2183) The CALDARERA FORMULA™ Calculating the Daily Rate of the Contractor

Primary Author: Joseph V. Caldarera, PSP
Audience Focus: Intermediate
Application Type: Practice
Venue: 2016 AACE International Annual Meeting, Toronto, ON, Canada

Abstract: It is not uncommon to face Owner opposition on a delayed or disrupted construction project when attempts to quantify a delay are presented. Even when schedule analyses that prove the number of entitled compensable delay days are offered, the argument regarding remuneration for economic loss becomes a point of contention. Existing formulas that purport to determine a Daily Rate consider the total work program of the Contractor. Such methods of establishing a Daily Rate are not project specific, and are imposing to the Contractor. The CALDARERA FORMULA™ is project specific, and simplifies the evaluation of the Daily Rate by using contractual mechanisms, such as the Baseline Schedule and Schedule of Values, which identify the original Contract Time and Contract Sum, respectively. Contractually, the Schedule of Values is to be used to establish all payments under the contract. Thus, a simple arithmetic calculation to quantify the Daily Rate of the Contractor is enabled. The CALDARERA FORMULA™ is simple, compliant with the Contract Documents, and easily explained.