Construction delays chapter four types of construction delays

Construction delays chapter four types of construction delays Construction delays chapter four types of construction delays Construction delays chapter four types of construction delays Construction delays chapter four types of construction delays Construction delays chapter four types of construction delays Construction delays chapter four types of construction delays Construction delays chapter four types of construction delays

CHAPTER FOUR Types of Construction Delays WHAT IS A DELAY? There are a number of definitions for delay: Something that happens later than expected Something that is performed later than planned An action that is not timely Each of these definitions can describe a delay to an activity of work in a schedule On construction projects, it is not uncommon for delays to occur It is what is being delayed that determines if a project or some other deadline, such as a milestone, will be completed late Before any discussion of delay analysis can begin, a clear understanding of the general types of delays is necessary There are four basic ways to categorize delays: • Critical or noncritical • Excusable or nonexcusable • Compensable or noncompensable • Concurrent or nonconcurrent The chart shown in Fig 4.1 presents a general overview of how the excusable and nonexcusable categories of delay can be viewed Note that this figure represents the interpretation of a typical construction contract However, the circumstances that may be characterized as excusable or compensable can vary significantly, depending upon the contract The discussion that follows elaborates on this simple summary chart When determining the effect of a delay on a project, the analyst must determine whether the delay is critical or noncritical The analyst must also determine if delays are concurrent All delays that are identified in the analysis will be either excusable or nonexcusable Excusable delays can be further divided into compensable or noncompensable delays This chapter provides basic definitions of these types of delays Concurrent delays will be addressed in a later chapter • • • Construction Delays DOI: http://dx.doi.org/10.1016/B978-0-12-811244-1.00004-5 Copyright © 2018 Trauner Consulting Services, Inc Published by Elsevier Inc All rights reserved 73 Construction Delays 74 Figure 4.1 Descriptions of excusable, nonexcusable, compensable, and nonexcusable delays CRITICAL VERSUS NONCRITICAL DELAYS In any analysis of delays to a project, the primary focus is on delays that are critical to some element of the work, those are delays that will affect the completion of that work element In most cases, the completion of the project is the focus of the analysis For simplicity, we use the project completion as the reference point for our delay analysis discussions in this book In some cases, the completion of a particular event, often referred to as a milestone, will be the focus of an analysis But, the same concepts that apply to the analysis of delays to the project completion will apply to the analysis of delays to a milestone Critical delays are those activity delays that affect the progress of the project in such a way that result in a predicted delay to the project completion date However, many delays occur that not delay the project completion date Delays that affect the project completion are considered critical delays, and delays that not affect the project completion are considered noncritical delays The concept of “critical” delays emanates from Critical Path Method (CPM) scheduling While the determination of the critical path and the identification of critical activities is a major Types of Construction Delays 75 feature of CPM scheduling, all projects, regardless of the type of schedule, have “critical” activities A key concept of CPM scheduling is that only delays to the critical path result in a delay to the scheduled project completion date This is because the critical path is the longest path through the schedule network and, as such, is the path that determines the length of the project and the date upon which the project is predicted to be complete Thus, the delay to the completion date is a predicted delay based on the then-current project plan A change in that plan may either mitigate or exacerbate that delay Determining which activities truly control the project completion date depends on the following: • The project itself • The contractor’s plan and schedule (particularly the critical path) • The requirements of the contract for sequence and phasing • The physical constraints of the project—how to build the job from a practical perspective Regardless of how one analyzes a project and the schedule to find the delays, there is one overriding criterion: The analysis must accurately consider the contemporaneous information when the delays were occurring “Contemporaneous information” refers to the daily reports, the schedule in effect, and any other job data available that show the circumstances at the time of the delays Proper research and documentation eliminates the “but-fors” and any other hypotheses contrived to advance predisposed conclusions or desired results EXCUSABLE VERSUS NONEXCUSABLE DELAYS Excusable delays All delays are either excusable or nonexcusable These categories are typically defined by the contract Generally, an excusable delay is a delay that is due to an unforeseeable event beyond the contractor’s control Normally, based on common general provisions in public agency specifications, delays resulting from the following events would be considered excusable: • General labor strikes • Fires 76 Construction Delays • • • • • • • • • Floods Acts of God Owner-directed changes Errors and omissions in the plans and specifications Differing site conditions or concealed conditions Unusually severe weather Intervention by outside agencies (such as the EPA) Lack of action by government bodies, such as building inspection Constructive changes These conditions may be reasonably unforeseeable, not within the contractor’s control, and not the contractor’s fault or responsibility When a delay is determined to be excusable, the contractor will be entitled to an extension of the time to complete the project work The characterization of a delay as excusable must be made within the context of the specific contract The contract should clearly define the factors that might justify entitlement to a time extension to the contract completion date For example, some contracts may not allow for time extensions caused by weather conditions, regardless of how unusual, unexpected, or severe, even though such delays would be beyond the control of the contractor Nonexcusable delays Nonexcusable delays are events that are within the contractor’s control, are the contractor’s responsibility, or that are foreseeable These are some examples of nonexcusable delays: • Late performance of subcontractors • Untimely performance by suppliers • Faulty workmanship by the contractor or subcontractors • A project-specific labor strike caused by either the contractor’s unwillingness to meet with labor representatives or by unfair labor practices Again, the contract is the controlling document that determines if a delay would be considered nonexcusable For example, some contracts consider supplier delays to be excusable if the contractor can prove that the materials were requisitioned or ordered in a timely manner, but the material could not be delivered due to circumstances beyond the contractor’s control, such as national or worldwide material shortage Other contracts may not consider such delays to be excusable Therefore, both owners and contractors should recognize the importance of clear and Types of Construction Delays 77 unambiguous contract documents when defining excusable and nonexcusable delays Compensable versus noncompensable delays A compensable delay is a delay for which the contractor is entitled to both a time extension and additional delay-related compensation Relating back to excusable and nonexcusable delays, only excusable delays can be compensable A noncompensable delay means that the contractor is not entitled to additional delay-related compensation resulting from the delay Some excusable delays may be compensable All nonexcusable delays are noncompensable Whether or not a delay is compensable depends primarily on the terms of the contract In many cases, the contract specifically defines the kinds of delays that are excusable, noncompensable, for which the contractor does not receive any additional money but may be allowed a time extension Contracts distinguish between compensable and noncompensable delays in many ways, some of which are described in the following paragraphs Federal contracts Federal government contracts normally define strikes, floods, fires, acts of God, and unusually severe weather as excusable but noncompensable delays These are delays that are outside the control of both the contractor and the owner Other forms of excusable delays may be compensable, such as differing site conditions or owner-directed changes ACTIVITY DELAY VERSUS PROJECT DELAY A common mistake as it pertains to measuring project delay is to calculate project delay by merely comparing an activity’s planned and actual dates, regardless of whether the activity was on the critical path when the delay occurred For example, if the start of the building’s excavation operation was planned to begin on Friday, September 15, but it actually started on Wednesday, September 20, one might be tempted to conclude that the contractor is entitled to a time extension of workdays 78 Construction Delays Figure 4.2 Example before late start of Activity A Figure 4.3 Example after late start of Activity A However, a project can only be delayed when the critical path is delayed So, the first thing that an analyst must when attempting to measure project delay is to identify the critical path; remember, only delays to the critical path will cause project delay Figs 4.2 and 4.3 illustrate how activity delay produces project delay and how project delay should be measured on a calendar day basis The schedule example depicted in Fig 4.2 consists of three activities connected in sequence The data date of the schedule is May 1, 2017, and the project’s forecast completion date is May 26, 2017 In Fig 4.2, the initial critical activity is Activity A, which is planned to start on May 1, 2017, and the shaded portions of the bar chart indicate nonworking days Fig 4.3 depicts the same schedule, but it demonstrates the consequence of the late start of Activity A, which is the initial activity on the critical path The start of this activity is delayed from May 1, 2017, to May 3, 2017, which is a 2-workday delay and the project schedule’s data date is May 4, 2017 If the delay experienced by Activity A was used as the only basis for identifying and measuring the project delay, then a comparison of the May 1, 2017, planned start date to the May 3, 2017, actual start of Activity A would result in project delay of workdays However, project Types of Construction Delays 79 delay is not calculated by simply comparing the planned and actual performance of a critical activity It is calculated by measuring the effect that the actual performance of a critical activity has on the scheduled project completion date When Figs 4.2 and 4.3 are compared on this basis, it should be clear that the 2-day delay (May and 2) to the start of Activity A resulted in a 5-calendar-day delay to the scheduled completion date of the project from May 26, 2017, to May 31, 2017 Said another way, if Activity A had actually started on May 1, 2017, and if all three activities had progressed as expected, then the project would have finished on Friday, May 26, 2017 However, Activity A started workdays late on May 3, 2017, and, as a result, this 2-workday delay delayed the completion of the project calendar days from Friday, May 26, 2017, to Wednesday, May 31, 2017 The difference between the 2-workday late start of Activity A and the 5-calendar-day delay to the project was due to the fact that the next available workdays after the planned completion date of Friday, May 26, 2017, were Tuesday, May 30, 2017, and Wednesday, May 31, 2017 This was because Saturday, May 27, 2017, through Monday, May 29, 2017, were nonworkdays due to the weekend and the observance of the Memorial Day holiday Therefore, when evaluating the magnitude of a delay, the analysis should consider not only the delay itself, but resulting delay to the scheduled project completion date NO-DAMAGE-FOR-DELAY CLAUSES Some contracts are more restrictive in defining compensable delays It is also not uncommon for a contract to use exculpatory language concerning delays Exculpatory language is language that exculpates, or excuses, a party from some liability One approach that might be used to limit compensation for delay is a broad no-damage-for-delay clause The wording in this clause can take many forms, but in general the clause states that for any excusable delay the contractor may be granted a time extension, but no additional compensation will be paid The time extension is the sole remedy for the contractor for any type of excusable delay An example of such a clause is presented in Fig 4.4 80 Construction Delays Figure 4.4 Example no-damage-for-delay clause Figure 4.5 Example no-damage-for-delay clause It should be noted that enforcement of these types of clauses has been questioned in the courts Some courts have been reluctant to strictly enforce these clauses and, in cases where such exculpatory language may be enforced, it is often strictly construed According to legal views researched, courts have often ruled narrowly on no-damage-for-delay clauses, thus limiting enforceability Contractors, though, should not assume that these provisions will not be enforced There are many variations in contract clauses that address the compensability of delays However, the broader the clause, the less likely it is to be enforceable More specific clauses are more readily upheld by the courts Public contracts at the state and municipal level often contain specific no-damage-for-delay clauses An example of a no-damage-for-delay clause pertaining to work by utilities is shown in Fig 4.5 Similarly, the paragraph in Fig 4.6 shows a no-cost-for-delay clause covering work by other contractors A no-damage-for-delay clause that specifically covers the review and return of shop drawings is shown in Fig 4.7 All parties to a project should clearly understand the clauses of the contract concerning delays and time extensions If a contractor is Types of Construction Delays 81 Figure 4.6 Example no-damage-for-delay clause Figure 4.7 Example no-damage-for-delay clause considering signing a contract with such language, it should consult qualified counsel familiar with construction litigation and the laws of the jurisdiction in which the clause will be enforced or adjudicated When a contract identifies specific items in a contract as being noncompensable, it should clearly define each one For example, if unusually severe weather is a noncompensable delay, the contract should clearly state the restriction The contract may define unusually severe weather as weather not ordinarily expected for the specific time of year and region The definition in the contract may further clarify unusual weather as that which exceeds the historical weather conditions recorded by the National Oceanic and Atmospheric Administration at a specific location The Corps of Engineers has taken this one step further by specifying in their contracts the exact number of days of rain greater than 0.01 in that the contractor can expect during each month of the project While the extent of detail provided by the Corps of Engineers may not be absolutely necessary, the owner should be sure that the contract does not have ambiguous wording Some contracts will list “inclement weather” as an excusable, noncompensable delay, but “inclement” can have many definitions It is also possible that inclement weather may occur but may not delay the project Therefore, all parties to the contract Construction Delays 82 must carefully read and clearly understand the compensable and noncompensable delays recognized by the contract CONCURRENT DELAYS The concept of concurrent delay is a very important aspect of delay analysis Concurrency is relevant, not just to the determination of critical delays, but also to the assignment of responsibility for delay-related costs Owners may cite concurrent delays by the contractor as a reason for issuing a time extension without additional compensation Contractors may cite concurrent delays by the owner as a reason why liquidated damages should not be assessed for its delays Unfortunately, few contract specifications include a definition of “concurrent delay” or define how concurrent delays affect a contractor’s entitlement to additional compensation for time extensions or responsibility for liquidated damages To complicate matters further, there is a lack of consistent understanding in the industry concerning the concept of concurrent delay So as not to diverge at this point, concurrent delays are discussed in detail in Chapter 7, Delay Analysis Using Critical Path Method Schedules  ... clauses of the contract concerning delays and time extensions If a contractor is Types of Construction Delays 81 Figure 4.6 Example no-damage-for-delay clause Figure 4.7 Example no-damage-for-delay... any type of excusable delay An example of such a clause is presented in Fig 4.4 80 Construction Delays Figure 4.4 Example no-damage-for-delay clause Figure 4.5 Example no-damage-for-delay clause... major Types of Construction Delays 75 feature of CPM scheduling, all projects, regardless of the type of schedule, have “critical” activities A key concept of CPM scheduling is that only delays