Using a “Weighted Factor Tool” for Resolving Delay and Disruption claims
Contractors asserting claims for loss of productivity and delays often have difficulty proving damage causation. The impact damages sought by the contractor may result from the cumulative effect of multiple events some of which are compensable and some of which are not. Segregating the compensable impacts from the non compensable impacts on the contractor is often difficult to do. This difficulty often hampers the parties ability to negotiate a fair outcome.
A new tool to address this problem--the “weighted factor tool” (WFT)– was presented at the recent Denver leadership conference held by the Construction Owners Association of America(COAA). The creators, Patrick McGeehin of Rubino & McGeehin and Richard Martone of PMA Consultants, L.L.C. are nationally known and have played leading roles in negotiating settlements of contractor impact claims involving the controversial Big Dig project in Boston.
McGeehin and Martone use the WFT as a supplement, not as a substitute, for traditional claim tools such as the measured mile, the total or modified cost method and CPM scheduling analysis. The WFT begins where the other tools stop. The goal is to give the parties a principled way to narrow their differences beyond what can be done with the traditional tools of the trade.
The first step in using the WTF is identifying each of the factors arguably causing impacts to the contractor’s productivity. The contractor and the owner then separately estimate (i) what percentage of the total impact was caused by each factor and (ii) what percentage of each factor is the owner’s responsibility. The percentages are then multiplied yielding what each party estimates is the owner’s weighted responsibility for each factor. These percentages can then be added to estimate the percentage of responsibility the owner has for the impact claimed by the contractor. Neat illustrations are in the authors’ paper, which the authors have graciously permitted me to make available to you. Download file
I can readily see how the WTF might assist parties in a mediation get to “yes”, but the authors also believe it can be used at trial as well:
"[T]he WTF, at its most fundamental level, is the result of estimates made by individuals familiar with the project based on their experience and project exposure. A fundamental legal principle concerning damages is that damages can be estimated if they are the type of costs that are not readily segregble. As such, the evidence relating to the WFT, since its based on estimates, would normally be considered by a court or Board of Contracts Appeals."
The WFT may be better than the traditional split the difference approach often used in dispute negotiations. But would use of the WTF offend evidentiary rules requiring general acceptance of the relaibility of method being used by an expert witness?