Increased Labor Costs

Where a contractor’s work or part of its work is delayed by the government, the direct increased labor costs are a compensable element of the contractor’s delay claim. Excavation-Construction Inc., ENGBCA No. 3858, 82-1 BCA ¶ 15,770 (1982); United States Steel Corp. v. Missouri Pacific R.R. Co., 668 F.2d 435 (8th Cir. 1982). Such increased labor costs include increases in wage rates. See, e.g., J.D. Hedin Constr. Co. v. United States, 347 F.2d 235 (Ct. C1. 1965) (when project shifted into a period of higher wage rates as a result of owner-caused delays, contractor has not accepted risk and owner held liable for risk); Garcia Concrete, Inc., AGBCA No. 78-105-4, 82-2 BCA ¶ 16,046 (1982) (55-cent wage rate increase awarded on work that would have been done before the effective date of the increase but for owner’s delay). The Board in Sydney Constr. Co., ASBCA No. 21377, 77-2 BCA ¶ 12,719 awarded such damages, stating:

We do agree that the work ultimately performed in-June through August 1975 would have been performed from March through June 1975 at which time performance would have been completed but for the government delay. Accordingly, for the 75-day delay which we have found previously, we find appellant entitled to recover the increase in wage rates paid during the period of extended performance.

Updated: August 2, 2018