Blog No 11 - Delay and Disruption

Fed up with adverts from software companies and consultancies that are going to change the world of Planning and solve all your project problems? This series of occasional articles promises nothing but thought provoking questions on how well we understand the basics of our profession from the perspective of a retired planner with 50 years’ experience in the industry whose worked in a variety of UK EPC roles for Clients and Contractors with no axe to grind. We are going to look at PEOPLE, PROCESSES, and PROCEDURES (the old 3P’s – not 4P’s, 5P’s, 6P’s or 7 P’s)that we all have been educated and trained to use in our everyday work (5W’s + 1H) and POKE THEM IN THE EYE / LOOK UNDER THE STONE  (the Inverse Universe) and get into trouble with the planning profession because for loads of reasons were not doing so well. If you want to contribute to this soul searching drop me a line with either POSITIVE or NEGATIVE comments (yes, we are PLANNERS that can hold both views at the same time!)

So having looked at some problems with applying CPN and EVM processes in blog 8 and 9 we now move on to written progress reports. 

PROCESSES  No 11 –  Delay and Disruption – Anything new to add?

After discussions on concurrency and float ownership, probably Delay and Disruption is the most discussed PC scheduling topic. Well, I am not joining the vast body of work on Delays and Extension of Time, produced by our esteemed professional bodies and the claims and legal industry, but I have invited veteran Mike Testro to give his introductory overview on Disruption from a main contractor / subcontractor perspective. This is barely mentioned but can affect every aspect of our project work. It is only recently that the 2 terms have been intertwined having been kept separate in most contract forms. Perhaps the SCL Delay and Disruption Protocol should have been issued as two documents!

Mike advises - 

Understanding Disruption

  1. Definition
    1. Nothing to do with Delay
    2. Although Delay Analysts talk of ‘Delay and Disruption’ as if it were a single topic, but they are wrong
    3. Disruption is when you have tendered for work under a defined set of circumstances in an agreed timescale and you are required to carry out the same work under different and unexpected circumstances
       
  2. Who can claim
    1. Not Main Contractors
    2. Since most forms of contract allow a main contractor to claim for loss and  expense he will have suffered neither since he has paid on unit rates and it is the subcontractor who is paying out wages and possibly facing disruption costs.
    3. An exception is when working under the NEC form of contract the main contractor can include the value of the disruption, but he should pass the benefit to his subcontractor (if only!). (I did prepare a disruption claim for a contractor building a harbour extension in the Port of Algiers, but he was using his own plant and labour)
       
  3. Subcontractors
    1. How to calculate disruption
      1. The “accepted” method is the measured mile but this is riddled with assumptions that the situations actually existed on site and circumstances were comparable.
      2. I prefer to ascertain
        1. What were the change in circumstances?
        2. Did it affect the output rate of measured hours per unit?
        3. Ascertain the difference in money terms
        4. Apply the difference.
      3. This rarely happens on site as most changes involve different weather seasons or unforeseen ground conditions which may allow time but not money.
      4. If a variation allows a change in materials, then the new rate will include different labour and plant costs BUT
      5. Disruption over a different time period can be calculated and claimed
    2. Delay and Disruption
      1. You have tendered for an agreed amount of work to be carried out over a fixed time period
      2. You are required to be on site for a longer period
      3. You are entitled to an EoT and probably prolongation costs BUT
      4. Those plant and labour costs have been stretched over a longer period and that is disruption which can be calculated
      5. I use a simple formula when I am commissioned to provide a report on EoT + Prolongation Costs + Disruption calculation and my clients use it to negotiate an agreeable final account settlement 

 

Mike Testro

 

So, to be clear

  1. Just comparing general tender productivity assumptions to achieved ones does not prove CAUSATION
  2. The measured mile relies on demonstrating that the assumed tender productivity was (could have been) achieved in UNDISRUPTED conditions in a COMPARABLE situation.
  3. You must separate the alleged disruption from other CAUSES OF INEFFICIENCY
  4. Distinguish between assumed and actual SITE CONDITIONS
  5. Be specific about which ACTIVITIES were affected
  6. Disruption EFFECTS Engineering and Procurement just as much as site works
  7. Do you include disruption when you price those CHANGES?
  8. Nothing can be proved without RECORDS, RECORDS, RECORDS
  9. Please contact Mike if you have any queries!

Reference response  -  Peter Holroyd – via LinkedIn or Planning Planet Blog

Question to you all – 

  • Do you calculate disruption in your EPC projects?
  • Are you keeping the records to prove your arguments?

For my next blog (No 12)  in PROCESSES I am taking a look at how we should be MENTORING our young project control staff in the GCC / KSA.

(It was going to be about KPI’s – retrospective and prospective indices that are universal in every company and project but after looking at the book – 17,000 KPI’s I couldn’t really say anything new, so I won’t.)