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Delay Allowances

4 replies [Last post]
Mon, 2005-10-31 06:30
Brennan Westworth
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I would like to hear how others in the industry deal with delay allowances in their project schedules.

With inclement weather and other delay allowances called for by contracts I usually insert allowances as activities after the "gross" practical completion milestone and linked sequentially to the "Nett" practical completion milestone. As delays occur I blank these days out as non working days in the relevant calendar and decrease the allowance by the delay incurred.

The main problems i have with this method are that resource profiles do not reflect the project duration, and the likely effect on activities and intermittent milestones is not shown. Also rainfall is usually seasonal.

If instead of using an allowance at the end of the project I blank out days in the calendar as non working after looking at when rainfall is most likely to occur then work cannot be scheduled to occur on these days. This method gets really messy as the project progresses.

How do you guys handle delay allowances?
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Wed, 2005-11-30 18:12
#1
Rajeev Nelliyodan
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Brennan,

As you mentioned Delay allowances & claims for incliment weather is tricky.In the past i assume it in the duration of the activity.When we feel that weather is bad comparing previous years,we put a claim.

For the claim we use average rain or snow for the season or year (4-5 years) and then compare to actual.For example if the average was 30 in a year and actual was 40 you get an entitlement for 10 days.This is represented by non-working days in calendar for actual days when it occured.There are several ways you can do.do month by month window or for the whole season or contract period.

All the days (actual) has to be backed up by letter which states that we cannot work on so & so date and the following activities are impacted.Also the modified calendar is only assigned to impacted ativities.

The drawback you have with days at the tail end of schedule it you cannot justify the impact on effected activities.For example push of 10 days might extend my conreteing activities in winter for which i could claim extra money for effeciency loss and more $ for admixtures etc..

Thanks,

Rajeev
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Wed, 2005-11-30 13:02
#2
Adil Gibreel
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Brennan,

An other way to do this is to use the Critical Chain Concept (CCC)rather than the Critical Path Method CPM) then add the Delay allowances to the estimated float to cater for risk at the acticvity level plus the overall project risk allowance. the next step is to insert these as float as the practice is in CCC i.e at the end of the project Critical Chain and at the end of the feeding activities and mange the float rather than manage the start and finish of the activities.

I hope somebody more experienced with the CCC can elaborate on this

Regards to all
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Sun, 2005-11-06 19:28
#3
Alex Wong
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Hi Brennan

There is two issue you have to manage to build in your schedule

1. Contingence known risk / unknown risk ...
2. Float

My normal practic to build a schedule is to included the known risk into the activity level where it is already allowed some level of contingence in duration and resource to coupe with the known risk - Bad weather, accidents, construction risk etc... Then at the overall schedule I will have a contigency float for the project for the unknow risk. Then my schedule should have a reasonable float - approx 2 months in a 2 year contract.

Then I log all the (Delays, disruptions ...etc) events happened and update the schedule. Once all the float is got and affecting my completion date. Then negoitate with the client for EOT or claims. Of course you have to notify all the events to the clients when it happened.

In your method, it seems that what you try is to obtain all the float at the end of the schedule and manage it at the contractor level. And claim all condition that is outside of the contract for a EOT or acceleration. It have to subject to the contract and the ownership of float ... (It was a big debet until now) who own the float??? In you case it seem you own it but if the client is clever enough they may have a case against it.

Cheers

Alex
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Wed, 2005-11-02 06:12
#4
Stuart Ness
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Brennan,

I often think that ‘Contract-designated’ time allowances are a bit of a red herring. Although they appear to provide a definitive allowance for an event (such as bad weather), they are in effect no better (or worse) than the allowances that a prudent planner would incorporate into his schedule in the first place.

Many people think that because such a time allowance is provide by the Contract that it is inviolable. I don’t think that this is necessarily true.
It is, after all, simply an ‘allowance’, the only difference being that it is set out in the Contract.

If a Contract for Works was being carried out in southern Louisiana a few weeks ago, in which the ‘Contract-designated’ allowance for bad weather days was say, 7 days during the hurricane season, based on historical records, do you think that the Contractor would be bound to this ‘allowance’ after Katrina and Rita had impacted the region?

I think that ‘Contract-designated’ allowances should be looked at as nothing other than a substitute for what the planner would allow in given circumstances. And of course, within his own schedule, the planner is always free to increase or reduce the ‘Contract-designated’ allowance to a level that he thinks is reasonable and realistic.

As for sticking all the allowance (i.e. float!) after the end of the due completion date, I am unsure as to the advantage of this. Why not treat the allowance as float and tie it into the relevant activities?

Cheers,

Stuart

www.rosmartin.com

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