Float belong to the owner

Andrew



You are a very interesting person. You add the phrase



"amount of critical delay cause"



of which the most influential word is "CRITICAL"



This means a process to identify critical



What critical, critical as if a man is dying that why he is in critical condition or



Critical as in critical path, meaning activities with total float equal to zero (take note Mr. Ronald Winter prefers longest path since activities with total float equal to zero can be manupulated by setting constrainst "zero total float")



I’ll come back, i have lots of work to do,



but this is intersting because I will move on to



the impact of your idea as applied to delay analysis as built as plan wherein the contractor can just say "I plan to start but i can not start so i was able to start after 60 calendar days, therefor,



as per delay analysis as built as plan: I’m entitled for 60 calendar days

Charlie,



You be rude, never known that before: Actually going through your example as per SCL Protocol:



Excavation has 90 days float



Start of excavation delayed by 60 days by Employer, (reasonable mobilisation period should be allowed following employer delay).



Excavation still has 30 days float - therefore can not be critical to completion and would not entitle the contractor to any extension of time.



If the numbers were reversed, (90 and 60), then the contractor would normally be entitled to 30 days eot.



Under the Protocol ,(and most contracts), you are only entitled to an eot for the amount of critical delay caused.

Anoon,



This is why I proposed the owner will own the float.



The cpm schedule is usually prepared by the contractor. The owner representative will review the cpm schedule, but, the contractor will always assert that this is his program, this is the way he tender the project, this is the way he intend to built the project, etc. etc. blah blah blah.



So nobody can stop the contractor from manipulating the float.



Scenario 1, activity excavation have float of 90 calendar days, day one the contractor cannot start due to owner responsibility (maybe no access given) after 45 calendar days, site access is available, but contractor cannot start work because the equipment to start excavation was sent to another project, finally after 60 calendar days, contractor was abel to start digging.



as per eotprotocal by scl???????, contractor claim 60 calendar days delays including associated cost.



MY RESPONSE!!!!!!!!!!



BULLSHIT



EOT protocol by scl is not part of contract document.



Since i am rude and unethical, i will be sent to another project, 4m X 4m doghouse.



Then, I will resigned.



Anobody want to hire me.

Just for clarification – when I say ongoing delay, I mean that critical delay caused when the event is over.



Say the employer instructs a variation and it’s going to take 20 days to do it and the contractor is entitled to an eot for this variation. The contractor plugs this new activity into the programme and it causes 20 days of critical delay. The contractor does have an obligation to try and reduce this 20 days if he can, maybe by reprogramming the work sequence, possibly by increasing resources on the variation work, etc, etc.



The contractor does what he can and at the end of doing the variation work he has managed to reduce the critical delay to 15 days. The contractor is entitled to 15 days eot for this variation.



There is no further ongoing obligation on the contractor during the rest of the project to try and reduce the 15 days. His obligation is only to mitigate the affect of the event itself as and when it occurs.



Once it’s finished, there is no further obligation on the contractor BUT there is an obligation on the contract administrator now to award an eot in a fair and impartial manner, (subject to notice provisions etc).



And if this process was properly followed on every contract - there would be a lot less disputes.

the starting point is, there is no (always!) approved Program/Schedule that shows the float, so nobody ever cares what the float is all about! the problem arise once the contractor invented the program with the fabricated floats! or no float at all!

There are always some simple things contract drafters could do to make this area of project management simpler - like expressly state who owns the float, but for some reason it never seems to happen. The NEC has taken the trouble to sort out terminal float though.



I don’t know of a standard form that states, (impliedly or expressly), that the contractor is obliged to mitigate a delay that he is entitled to an extension of time for once that entitlement has accrued - other than an obligation to make the delay as short as possible in the first place by using reasonable or best endeavours.



If the contractor was under an ongoing obligation to reduce a delay then how could you ever ever work out what the eot should be during the project?



For example - the actual critical delay was 10 days but as the Contract Administrator I think the contractor should be able to reduce that to 5 days by the end of the project so I’m going to give him a 5 day eot - this would make a nonsense of any eot provisions and risk lots of arguments over the prevention principle if the contractor failed to reduce the delay to 5 days by the end of the project let alone a lot of arguments from the contractor that he is entitled to the full 10 days.



If the delay is 10 days and the entitlement to an eot is 10 days there is no further obligation on the contractor to mitgate that 10 days. I know eot’s are rarely that simple or clear cut but this is at least the starting position.



Float, personally I think if the contract is silent then the starting point should be the project owns it, it’s the fairest starting point and afterall, if the parties had thought about it at the time of contract and wanted it to be different wouldn’t they have said so in their contract? Answers on a postcard to that please!!!!!!!!!

Hi All



It is difficult to distinuish between a contractor going faster than planned and too much time in the programme to start with.



It is common practice for planners to pad out durations to use up float and it all comes unstuck when the work is progressed.



As I said - it is better to put in some time contingency bars to absorb the float.



Best regards



Mike T.

Andrew,



Interesting and bright idea.



This makes project management complicated. I think PMI should take your idea seriuosly and start revamp the whole project management though.



I still believe in the traditional project management though: on schedule, within budget and within specified quality.



Who own the float?????? Let this be stated in the contract to avoid misunderstanding and I would prefer: the owner own the float, in this way the contractor will prepare a cpm schedule with minimal float.





Constructive acceleration may help save the day for best project management practive, maybe, but then what will become of our peers from forensic claims specialist??



Cheers

Hi Everyone



As usual I have joined in at the tail end of the debate.



Firstly with regard to mitigation if a client delay occurs then in most circumstances the Contractor is obliged to mitigate the effect of the delay PROVIDED it doesn’t cost any money to do so.

This is usually set down in such contractual phrases as "reasonable measures" or "reasonable endeavours". Beware the phrase "best endeavours" as this may mean spending money.



Secondly regarding Who Owns the Float. The SCL protocolskips around this wuestion but indicates that the float may belong to the party that claims it first. This 1st Come 1st Served basis is a useful starting point.



The protocol also indicates that it is good planning practice to put in a "Contractors Time Risk Contingency" bar thus taking up the float at the very outset.



Best regards



Mike Testro

I think we’ve gone off the purpose of this thread a bit but float, mitigation and acceleration are pretty intertwined.



But it is true, where the contractor then goes faster, (or appears to catch up time), of his own accord, it gets an even more interesting debate.



There is a very very commonly held but mistaken view that the contractor has some ongoing obligation to mitgate employer delays throughout the contract - not true, although the contractor does has an ongoing obligation to mitgate his own delays. If the contractor is entitled to an eot then it is the event itself and not the ongoing delay effect of the event that the contractor is obliged to mitigate, (normally).

A lot of people think the reference to mitigate the delay in a contract is to the project delay but it normally isn’t.



Very simple case - take a 100 day project – obviously the contractor has 100 days to do the original scope of work. On day 20 there is a 10 day employer critical delay. Assuming the contractor has an entitlement to an eot, the new project duration should now become 110 days – which still gives the contractor 100 clear days to do the original scope of work, ie the original contract period is preserved with regard the original scope of work and therefore there is no reason why the contractor should have to do anything faster than originally planned.



But if the Employer doesn’t grant the eot or wants the contractor to still finish earlier than 110 days, then the contract period for the originally planned work is now only 90 days – shorter than the original period and hence the contractor has to accelerate.



The contractor’s obligation is to mitigate the actual delay event, ie in the above example, try and make the actual 10 day delay as short as possible if it is within the contractor’s power to do so. The contractor is contractually entitled to 110 days to complete the project, he has no obligation to do it in any shorter period of time. With the eot he still has the original 100 days to do the original 100 days of work in.



Once the 10 day delay is over and assuming the contractor is entitled to an eot for the delay, (and the full 10 days), then the contractor has no further obligation to mitigate. Asking him too go faster after the event and reduce the 10 day over run from the original completion date amounts to acceleration.

Well I guess this is where the difference is. Interestingly, contracts that I have encountered specifically stated the obligation of the contractor to mitigate not only the delay event but the project delay. Which contract are you referring to? I would certainly not recommend it if I’m working for the client/owner.



Again as I said earlier, it boils down to what the contract document is saying.

Mark,



Acceleration is usually a good source of debate and legal fun.



Actually, the costs of accelerating are often less than the costs of granting an eot so it is an option an employer should bear in mind.



The fun really begins when the Employer opts to agree and pay for acceleration and the contractor doesn’t perform.

Seems clear enough to me what you meant:



"If I’m working for the client, I would insist that the contractor has the obligation to mitigate delay which is finishing the 60 day task to only 30 days. Take note I used the word mitigate not accelerate.”





The contractor has no obligation to mitgate activites following the delay, his obligation is to mitgate the delay event, not its subsequent effect. His entitlement to an eot has arisen and should be honoured.

With all due respect, there’s nothing mentioned in my posts about instructing the contractor to accelerate. What I underscored is the obligation of the contractor to mitigate delay. If you go back to post #8 item #3 of armando moriles, he clearly stated that their actual duration for activity B is 30 days not 60 days without them being told by the client to accelerate. This seems to me a mitigation measure by the contractor or the duration is too long.



I would certainly appreciate it if we post our comment not only on the context of the replies to the query but to the query itself.

Oh what a topical subject, I think Ronald has summed it up. One point that I did notice was from Se de Leon:



“If I’m working for the client, I would insist that the contractor has the obligation to mitigate delay which is finishing the 60 day task to only 30 days. Take note I used the word mitigate not accelerate.”



The contractor’s obligation is normally to mitigate the actual delay event which does not mean that he has to accelerate subsequent activities to overcome the effect of a previous delay, (unless of course the delay is the contractor’s liability). Instructing a contractor to shorten the duration of a subsequent activity is asking him to accelerate whatever term you wish to use.



In the example below, it would normally be the contractor’s obligation to try and mitigate the Employer caused 30 day delay. Assuming he has done this, (if it within his power to do so), then the contractor gets a 30 day eot.



With the eot the contractor still has 60 days available to complete task B – hence asking the contractor “to mitigate delay which is finishing the 60 day task to only 30 days” is acceleration, not mitigation, as you are effectively reducing the contractor’s contract period by 30 days - I assume by not properly giving the contractor the eot he is entitled too. Constructive acceleration in the USA.

Ronald,



You may have missed last part of my comment #9.



Regards,

Sigfredo

I cannot believe that I have read 2 pages of response on this matter and not one of the contributors included a reference to the contract documents. First and foremost, what does the contract documents say about float and float ownership?



If the documents say, “the Owner” then the Owner owns the float. If the documents say, “the Contractor” then the Contractor owns it. If it calls for the project to own it, then whoever uses it reasonably first gets it. If the document is silent on this issue but mentions, “project float”, then the project most likely owns it.



If the contract is totally silent on this issue, then you are betting a lot of money on opinions. I am not sure of your legal environment where you live, but in the USA if you run around loudly insisting on redefining the contract your way without consideration of the other party’s viewpoint, then you are a trial layer’s best friend and you will probably be responsible for helping him buy a brand new luxury car, pay for his kids’ braces, and a tummy-tuck for his wife. Good luck!

Why would you be charged with LD?



I know where you’re coming from now. That’s the very essence of float is owned by the project. Any party can use it but not abuse it. If the client were able to use it first, bad for you. If what happened was, you were the first one to use it, good for you. Unfortunately, you are on the receiving end in this case.



If you think all float has been exhausted at this point, then the only remedy is to manage your project well, document any delay event. Never give the client any reason, even small ones, to claim delay against you. In other words, cover your ass always.



Se

Se,



Thanks for your comments and yes I do agree that the float belongs to the project as a shared commodity and not to the owner. However, just for argument purposes, in our case the critical path responsibility matrix clearly identifies the owner’s responsibility. Being the EPC contractor directly dealing with the owner, we accepted owner’s claim of the positive float we generated to cover up their delay in terms of flexibility and proactivity. But then, we specified that in accordance with the provisions of the contract we reserve our right of ownership of the float we generated. Because what will happen now is that although we were advance on our first activity of the critical path by 30 days, we will still be charged with LD should we fail to attain contract finish date.





Regards,



Arman

... unless what is written in the contract documents is nonsense.

Hi Armando,



This is where float becomes a huge issue in projects. If I’m working for the client, I would insist that the contractor has the obligation to mitigate delay which is finishing the 60 day task to only 30 days. Take note I used the word mitigate not accelerate. If I’m working for the contractor, what I would do is to demonstrate to the client the "real cost" you incurred because of the delay attributed to the client not as a global delay event. From the opinion of many in this thread even myself, float is owned by the project, I don’t think the contractor can reserve the right to owning positive float. This is just my opinion, the best basis still is what’s written in your contract documents.



Se

Guys,



In one of our current projects, activities in critical path are as follows:



Activity A (By client) = 90 days

Activity B (By contractor) = 60 days (predecessor A fs)

Activity C (By contractor) = 60 days (predecessor B fs)

Activity D (By contractor) = 240 days (predecessor C fs)



Total = 450 days



1. Completion of activity A (By client) was delayed by 30 days;

2. Contractor submits EOT for the 30 days;

3. Contractor actual duration for activity B was on only 30 days against 60 days in the programme;

4. Client rejected EOT claim in lieu of activity B;

5. Contractor notified the client for the record that although the claim was rejected in lieu of activity B, contractor reserved right of ownership of its positive float generated as major activities are still about to start.



note: Contractor already started activities in parallel with activities A & B but were not part of the contract critical path.





Any comment(s) or suggestion(s) regarding float ownership regarding our case would be highly apprecaited.



Regards,



Arman

I refer you all to an article written by Anthony Morgan Director & Expert in Construction Disputes in Forensic Services for Price Waterhouse Cooper "Who owns the float?".

A common occurrence is for an owner to force the completion of construction/pre-commissioning to a contractual date that gives him ’float’ on his operational commissioning/ramp-up phase duration but still retains a product revenue time-line which satisfies investors/banks and other bean-counters. This usually results in multiple critical paths for the EPC/EPCM manager and a nightmare for the project planner(s). Thus it can be said that, in these instances (quite common in my experience), the owner ’owns’ the project float.

The float belongs to the Project

Why don’t you ask the client what he means by this, with an example?



Just because he keeps repeating "float belongs to owner" doesn’t mean he knows what he is talking about, or can explain what he means, or that it means anything.



The float belongs to the Tasks, and whoever is doing the construction management owns the Tasks.

Is you client volunteering to take over the construction management?

Hi Mohd.,



Just look for FLOAT OWNERSHIP in search



Same has been discussed many times on this forum. But, for me it is First Come - First Serve Basis.



If your program is approved, then whatever the float is available, is all available for project team. This is all verbal fight, whose float is or who owns it?



As far as program is concerned, it is very difficult for a particular person to claim for FLOAT. Untill and unless, the end dates are not moving forward, it reall doesn’t matter. Let the client scream and make him feel happy, that he owns the float.



U can refer the following link to download some good stuff for EOT. It may help u bit more.



http://www.eotprotocol.com/



As far as verbal fight is concerned, CLIENT will always keep his hand up and for Claims and reports, the Contractor will.



Cheers,



Ravi

Gentlemen



I think that most people have missed the point on who owns float.

According to the AACE International Standard on Forensic Schedule analysis Practice 29R-03

Which states that "In the absence of of contrary contractual language, network float , as opposed to project float is a shared commodity between the owner and the contractor"



There is that clear, no disputing in that.



It is time to move on



Raf