The method requires that the nature of the losses makes precise proof impossible, that the bid was reasonable, that actual costs were reasonable, and that the contractor was not responsible for the added expense.
Courts disfavor the method.
Alternative Names:
Total Cost Approach|Total Cost Claim
Why it Matters?
The four-element test is demanding and the fourth element defeats most claims, since a contractor rarely bears no responsibility for any portion of the overrun. Bid reasonableness is separately attacked through evidence of underbidding to win the work. Courts accept the method only where no alternative exists, which makes cost segregation during the project the better path even when it requires additional accounting effort.
Frequently Confused with
Related terms
Frequently asked questions
Which element defeats most claims?
What is the better path?
