Cumulative Disruption from Multiple Change Orders
Definition
Numerous change orders in shipbuilding contracts lead to uncompensated labor inefficiencies and productivity losses beyond individual change order pricing. Shipyards claim inadequate compensation for cumulative effects, resulting in overall cost overruns. Delays in approving pending change orders exacerbate labor disruptions and inefficiencies.
Key Findings
- Financial Impact: Quantified via Factor Formula Method (labor hours x disruption factor)
- Frequency: Recurring across projects with multiple changes
- Root Cause: Inadequate pricing mechanisms for cumulative impacts of numerous changes and delays in approval processes
Why This Matters
This pain point represents a significant opportunity for B2B solutions targeting Shipbuilding.
Affected Stakeholders
shipyard managers, contract administrators, cost estimators
Deep Analysis (Premium)
Financial Impact
$1.0M - $2.5M per contract (Multi-party approval delays extend disruption; uncompensated labor accumulates; settlement delays) • $1.2M - $2.8M per contract (Delayed disruption claim verification; unresolved disputes over cost basis; extended claim settlement) • $1.2M - $2.8M per contract (Ferry operators slow to approve regulatory COs; extended approval windows create idle labor and rework)
Current Workarounds
CO tracking spreadsheet; email approval requests; manual labor disruption logging; post-contract Factor Formula calculation • Email and paper-based tracking of change order status; manual coordination between shipyard and government contracting officer; Word documents for disruption claims using Factor Formula Method • Excel spreadsheets tracking labor hours and disruption factors manually; email chains estimating cumulative impact; manual calculation of Factor Formula Method results
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Evidence Sources:
Related Business Risks
Unapproved or Underpriced Change Orders
Inaccurate Forward Pricing of Change Orders
DFARS Non-Compliance Leading to Contract Suspensions and Remediation Costs
Excessive Warranty Repair Costs from Post-Delivery Defects
Unsecured Warranty Liabilities Causing Cash Flow Bleeds
Lost Warranty Claims Due to Procedural Non-Compliance
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