A project has liquidated damages of $1,500 per day and is completed 12 days late. The contractor incurred $8,000 in additional costs to accelerate the work. What is the contractor's total delay-related cost?
Correct Answer
D) $26,000
Total cost includes both the liquidated damages ($1,500 × 12 days = $18,000) and the acceleration costs ($8,000), totaling $26,000.
Why This Is the Correct Answer
The contractor's total delay-related cost includes both the liquidated damages penalty and the additional costs incurred to accelerate the work. Liquidated damages are calculated as $1,500 per day × 12 days = $18,000. The acceleration costs of $8,000 are added to this amount. Therefore, the total delay-related cost is $18,000 + $8,000 = $26,000.
Why the Other Options Are Wrong
Option B: $18,000
This only accounts for the acceleration costs ($8,000) but ignores the liquidated damages penalty of $18,000 that the contractor must pay for being 12 days late.
Option C: $10,500
This appears to be an arbitrary calculation that doesn't properly account for either the full liquidated damages amount or the acceleration costs.
Memory Technique
Remember 'TOTAL = LD + AC' (Liquidated Damages + Acceleration Costs) - both penalties hit the contractor's bottom line
Reference Hint
Look up contract administration and liquidated damages clauses in construction law references or project management chapters
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