Payne Hackenbracht & Sullivan

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 (1981); Owen L. Schwam Constr. Co., ASBCA No. 22407, 79-2 BCA 13,919 (1979); Proserv, Inc.. ASBCA No. 20768, 78-1 BCA 13, 066 (1978); 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 (1982); R.C. Hedreen Co., ASBCA No. 20599, 77-1 BCA 12,328 (1977).