Active Delay Analysis for Owner

You should pay the contractor for his costs incurred, but not pay him regardless.



If he mitigates at no extra cost (which he is obliged to do), then he should not be paid extra.



If mitigation requires additional expenditure, he will surely claim. that claim should be dealt with fairly and within a reasonable time frame.



BTW, am interested in Utopia, where large contractors all work at optimum performance already. Where is that ?



I wonder if we answered the original posted question, or Ronalds question in the 4 Jan 03 post - Is the contractor late ? My two cents on the latter is you work to the last approved schedule and the current extended date for completion. If hes late against those, hes late, take action !

Just because the Contractor is required by law to mitigate any delays possible does not mean that the Owner is not required to compensate the Contractor for any delays to project completion that are the responsibility of the Owner. Equal and fair compensation is first. Mitigation of the delay comes second.



Do not forget, mitigation is not overtime. Mitigation is only those ‘work smart’ issues that can be performed at no extra cost or risk to the Contractor. In our world of scientific work planning, not many large Contractors perform work at less than optimum performance that mitigation would improve.



The real reason for requiring mitigation wherever it may be possible is to prohibit the Contractor from taking advantage of a delay situation and making a small delay into a bigger one. The Contractor is required to ‘work around’ the delay as much as possible instead of directing all work through the delay issue, thereby being less efficient than they could have been.

I am interested in the thread regarding mitigation –v- acceleration. In the UK on the most popular of the standard forms of contract the wording is (JCT 1980 cl 25.3.4.1):



The Contractor shall use constantly his best endeavours to prevent delay in the progress of the Works, howsoever caused, and to prevent the completion of the Works being delayed or further delayed beyond the Completion Date.



You should note that this is an obligation on behalf of the Contractor and covers delays ‘howsoever caused’ and that could include those caused by the owner. Also that there appears to be no mention of cost or limit. The English courts, in my opinion, do not seem to have come to definitive answer on this one, perhaps because there have been few cases that refer to it (the majority being relatively old cases referring to railways and shipping). The Society of Construction Law (often mentioned in this forum Planning Planet ) and it says (cl 1.5.1):



The Contractor has a general duty to mitigate the effect on its works of Employer Risk Events. Subject to express contract wording or agreement to the contrary, the duty to mitigate does not extend to requiring the Contractor to add extra resources or to work outside its planned working hours.



Best Regards



David

dbordoli@burofour.co.uk

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If the owner is responsible for any events that is likely to affect the date for completion then he should at the time revise the date for completion as works proceed and not wait and see at the end of the project. The problem here is that the owner would have to rely upon a forecast of what might happen in the future (a Programme/Schedule). But we all know that there lies the problem !

Mark makes a good point about delay mitigation. In the States, the contractor has a legal requirement to mitigate any delay as much as possible without incurring any additional costs or loses. While this is only enforced in delay court settlements as a mitigating factor in the larger dispute, it is still a requirement.



The point here is that the contractor is not required to do anything that would cost him or her additional funds. The contractor may decide to rearrange the timing of events to be more efficient (if such exists.) More typically, the most obvious method of accelerating the completion of a project is to work overtime or to hire more laborers. This is costly and is not a requirement of the law.



Mitigating a delay is not always possible and is different form acceleration.

My point was that a contractor may construe a request for "acceleration" into something he should be paid extra for, even though he is in fact mitigating delay.

Mark,



I see the difference in the wording but do not understand your intent.



Don’t mistake the work “acceleration.” It doesn’t indicate who was at fault. The Contractor should always be ready to supply an acceleration schedule to the owner if requested. Just because he or she submits such a possibility doesn’t mean that the Contractor is required to pay for any additional costs. If the Owner wants to accelerate the completion of the project, the Owner can pay the cost.

Sorry to take you up on one point:



Your construction manager should be demanding a "delay mitigation" schedule as he ought not to mention the term "acceleration".



I think all our forum users agree on the benfits of delay analysis / EoT granting as work proceeds. Its then up to us to educate the non-believers (isnt this how Billy Graham got started ?)

I see that Peter’s project owner prefers to not negotiate time impact adjustments as they go but wait for project completion. This is all too common and as a Scheduler, I hate this procedure.



What ends-up happening as the project progresses? We all know that the schedule says that we are behind. We also know that the contractor is due a certain amount of unspecified time adjustment. We just don’t know how much. So the $10,000 question is: “IS THE CONTRACTOR LATE?”



The contractor assumes that the negative float will all be taken care of once the Owner decides to address the issue. The Construction Manager insists that the contractor is late and is demanding an acceleration schedule. I am caught in the middle and everyone look to me to ‘solve’ the question. Meanwhile, time is passing, no corrective action is being taken, and everyone’s memory is becoming fuzzy (or just plain wrong) as the exact facts in each particular case.



You cannot run an on-time project of any reasonable duration without addressing delays as they occur. All the rest is just shouting and posturing.

David,



Thanx a lot. Your explanations were more than satisfying. Ive always though wondered how arbitrators dealt with the different methods of EOT analysis. To me I believe that anything that makes sense and logic regardless of the exact method should be considered.

Mohamed



I hope you don’t mind if I reply. Terms can, of course, mean different things to different people but I hope the following descriptions may help.



Windows Techniques



This is a generic term wherein the time frame around a delaying event is studied in detail, a window of time. By focussing on this small period of time one is able to see more clearly the effect of the delaying events. When carried out using CPM (critical path methods) any number of techniques can be used but normally a small section of the network is taken and the delaying event simulated and changes to the end date of the ‘window’ noted. This is then taken as a the result of the delaying event. Whilst looking in detail at a particular area is vital this technique tends to have been superseded by time impact analysis.



An early reference is in Galloway P D and Nielsen K R, Concurrent schedule delay in international contracts. International Construction Law Review. Lloyds of London Press, 7 October 1990.



If you wish I can write a lengthier exposition on the technique.



But for Schedules



In this technique an as-built network is constructed and then the delaying events are removed and the resulting network shows the ‘but-for’ results. So, it is possible to say, take away all the contractor responsible delays and say this is what would have happened to the project but for the delays of the contractor. Similarly if the employer or ‘neutral’ delaying events are subtracted the result is what the contractor could have achieved but for those delaying events for which he is not responsible.





Although I hate to do it I would recommend that anyone interested in Delay analysis gets hold of Kieth Picavance’s book Delay and Disruption in Construction Contracts, I think it is in its third edition now( details of the book ) it gives detailed descriptions of most methods of analysis.



Regards and seasons greetings



David

dbordoli@burofour.co.uk



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Hi Peter,



I am pretty familiar with methods 1 and 2, but never heard of methods 3 and 4. Id appreciate if you simply light a shed on each.

Further to the query raised, I would personally undertake an analysis of the as-built programme compared to the as-planned on a much more regular basis than every six months.



This allows you to identify several things:

1. Was the as-planned programme reasonable at the outset?

2. What is the effect of employer changes?

3. What delays have occured for which the contractor would be culpable?

4. What delays have occured due to events outside the control of both parties?



By then reprogramming the remaining project at the end of each analysis period, you can incorporate all known future changes and variations, as well as assessing the effect of further information which may have come to light since the programme was first prepared.



At this point, mitigation measures can be concidered and negotiated to investigate how the effect of any delays can be recovered as far as possible.



Here in the UK the Society of Construction Law has published a "Delay and disruption protocol" which may give some useful guidance. It can be accessed at their web site eot protocol site.