Calculation of Damages

There are many times when a contractor spends so much time persuading the government that it is entitled to additional costs or time that it neglects the proof of its additional costs. This can be a fatal shortcoming because the inability to establish the quantum aspects of a claim will undoubtedly lead a government auditor to conclude that the claimed costs are unsupported or questionable. 

In putting together the costs in support of a contract modification, or claim, the contractor should maintain cost records to support all of the categories of additional costs which it is claiming. To the extent that it is possible, these costs should be segregated so that they can be tied to the work, and contract, in question. Costs should normally not be estimated but should be the costs actually incurred which are reasonable, allowable, and allocable to the contract. The cost principles in FAR, Part 31, should be followed. 

Updated: July 21, 2018