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    Government Contracting Database

    Increased Insurance and Bond Costs

    Increased Insurance and Bond Costs

    Where a contractor is required to perform additional work and experiences delays to its performance, there are increased insurance and bond costs because the premiums are a direct function of contract value. It is well recognized that increased insurance and bond costs are recoverable elements of an equitable adjustment. Fidelity Constr. Co., DOTCAB No. 1113, 81 – 2 BCA ¶ 15,345; Owen L. Schwam Constr. Co., ASBCA No. 22407, 79 – 2 BCA ¶ 13,919; Proserv, Inc., ASBCA No. 20768, 78 – 1 BCA ¶13, 066; J.D. Hedin Constr. v. United States, 456 F.2d 1315 (Ct. C1. 1965).

    These increased costs may be awarded and calculated by multiplying contractor’s established percentage – of – value rate to the amount of the additional contract value as a result of changes and delays. Owen L. Schwam Constr. Inc., 79 – 2 BCA ¶ 13,919 at 68,332; Excavation Constr., ENGBCA No. 3858, 82 – 1 BCA ¶ 15,770; R.C. Hedreen Co., ASBCA N o. 20599, 77 – 1 BCA ¶ 12,328.

    Updated: August 2, 2018

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