Estimating the Cost of Time When Ain’t Nobody Told Ya!

Hi, Mike. I replied to your comment on my blog, but I'm not sure others here will see it, so I'll re-post it here:

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Hi, Mike. Good question — thanks!

Liquidated and ascertained damages (usually called “LDs” in the US) are certainly a large part of the cost to the contractor of being later than the contractual date. But LDs are rarely the only cost — there are often additional legal and administrative fees (schedule forensic experts?), loss of future business with that customer or others, etc.

Also, LDs often only allow the customer to recoup a part of the damage — the actual cost of late completion is often greater, at least in the US. And LDs (or lack thereof) don’t indicate the potential value to the customer of earlier completion of the contractual date. (Even contractual bonuses for earlier completion often don’t fully reflect that value to the contractor, as the good reputation gained thereby also can have great value.)

And, of course, there are almost never LDs at issue on the implementation of a software system for a corporation.

Fraternally in project management,

Steve the Bajan

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Again, sincere thanks for your comments.

Fraternally in project management,

Steve the Bajan