Discrete Damages Cost Variance Analysis Method

This document is a technical report detailing the discrete damages/cost variance analysis method for quantifying damages in construction claims. It outlines a comprehensive approach that involves the distribution of all incurred costs on a project, rather than focusing on select components. The method establishes credibility by separating cost growth from bid errors and compensable issues. It categorizes costs into various variance analysis categories, including original bids, approved changes, and specific claims. The report describes a seven-step process for implementing this method, which includes analyzing detailed cost records, evaluating contractor bid estimates, and assessing noncompensable costs. Additionally, it emphasizes the importance of establishing a cause-and-effect relationship for claimed damages, ensuring that all components of cost records are evaluated, and providing a clear basis for cost recovery. The document also discusses the development of cost analysis databases necessary for effective implementation of the methodology.