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The Dynamics of Float, Logic, Resource Allocation, and Delay Timing in

Forensic Schedule Analysis and Construction Delay Claims

By

Long Duy Nguyen

KY SU (Ho Chi Minh City University of Technology, Vietnam) 1999


M.ENG. (Asian Institute of Technology, Thailand) 2003
M.S. (University of California, Berkeley) 2005

A dissertation submitted in partial satisfaction of the

requirements for the degree of

Doctor of Philosophy

in

Engineering-Civil and Environmental Engineering

in the

Graduate Division

of the

University of California, Berkeley

Committee in charge:

Professor C. William Ibbs, Chair


Professor Glenn Ballard
Professor Frederick Collignon
Professor Arpad Horvath

Fall 2007
The dissertation of Long Duy Nguyen is approved:

Chair __________________________________________ Date _________________

__________________________________________ Date _________________

__________________________________________ Date _________________

__________________________________________ Date _________________

University of California, Berkeley

Fall 2007
The Dynamics of Float, Logic, Resource Allocation, and Delay Timing in

Forensic Schedule Analysis and Construction Delay Claims

Copyright 2007

by

Long Duy Nguyen


Abstract

The Dynamics of Float, Logic, Resource Allocation, and Delay Timing in

Forensic Schedule Analysis and Construction Delay Claims

By

Long Duy Nguyen

Doctor of Philosophy in Engineering-Civil and Environmental Engineering

University of California, Berkeley

Professor C. William Ibbs, Chair

Delay claims in construction projects present various tough and controversial issues.

How to prove the three elements, namely entitlement, causation, and quantum in the

“triad of proof” is an onerous task. The analyses of schedule delays and their associated

damages especially concern claims analysts, project parties, courts, Boards of Contract

Appeals, and so forth. On the one hand, the industry has employed various forensic

schedule analysis techniques to support delay claims. Paradoxically, schedule-related

factors such as float, logic, and resource allocation are frequently ignored even though

they can affect project completion time and delay responsibility, too. On the other hand,

the current “one-size-fits-all” methods for calculating financial consequences undermine

the relative importance of delayed activities and the fluctuating nature of overhead levels.

The effects of the context of a delay in terms of the timing of the delay and degree of

suspension should be therefore paid attention in quantifying delay damages.

Accordingly, this research develops novel techniques for analyzing causation and

calculating damages in construction delay claims. They address the dynamics of float,

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logic, resource allocation and the delay context in forensic schedule analysis and delay

claims. Several published and hypothesized case studies are used to illustrate their

applications.

Among other things, this research proposes: (1) an enhanced window analysis

technique considering resource allocation; (2) an activity-specific overhead allocation

process (ASAP) for quantifying field-overhead damages; (3) FLORA as a novel forensic

schedule analysis technique that can capture the dynamics of float, logic, and resource

allocation; and (4) a framework which integrates FLORA and ASAP for analyzing

schedule delays and their field overhead damages in a real-time and interactive manner.

Through the applications, comparisons, and evaluations in case studies, these

developments really overcome various limitations of the available techniques and

practices currently used in forensic scheduling and delay claims.

This research recommends that the schedule-related factors should be captured in

forensic schedule analysis. In addition, the quantification of delay damages should

emphasize the context of a delay. This also enables equitable apportionments when

concurrent delays occur. ASAP and FLORA developed in this research are able to tackle

these issues.

__________________________________________

Professor C. William Ibbs

Dissertation Committee Chair

2
To my Mom and Dad

guyen Thi goc Lan and guyen Van Quy

Kính Tặng Ba Mẹ

guyễn Văn Quy và guyễn Thị gọc Lan

i
Table of Content

Table of Content ................................................................................................................. ii

List of Figures .................................................................................................................... ix

List of Tables ..................................................................................................................... xi

Acknowledgements ........................................................................................................... xii

Abbreviations ................................................................................................................... xiv

Symbols............................................................................................................................ xvi

Chapter 1 ............................................................................................................................. 1

Introduction ......................................................................................................................... 1

1.1 Background ............................................................................................................... 1

1.2 The Need for Research.............................................................................................. 2

1.3 Problem Statement .................................................................................................... 6

1.4 Research Objectives .................................................................................................. 7

1.5 Scope of Work .......................................................................................................... 8

1.6 The Structure of the Dissertation .............................................................................. 9

Chapter 2 ........................................................................................................................... 11

Literature Review.............................................................................................................. 11

2.1 Scheduling Practices in Delay Claims .................................................................... 11

2.1.1 Types of Schedules .......................................................................................... 12

2.1.2 The Use of the Critical Path Method ............................................................... 13

2.2. Roles of Project Change in Delays and Disruptions .............................................. 14

2.2.1 The Concept of Project Change ....................................................................... 14

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2.2.2 The Extent of Project Change .......................................................................... 15

2.3 Delay, Disruption, Acceleration, and Delay Concurrency ..................................... 16

2.3.1 Delay, Disruption, and Acceleration ................................................................ 16

2.3.1.1 Delays ....................................................................................................... 16

2.3.1.2 Delay versus Disruption............................................................................ 17

2.3.1.3 Delay versus Acceleration ........................................................................ 19

2.3.2 Causes and Costs of Delays ............................................................................. 22

2.3.3 The Types of Delays ........................................................................................ 23

2.3.4 Concurrent Delays ........................................................................................... 25

2.3.4.1 The Concept of Concurrent Delays........................................................... 26

2.3.4.2 Conditions for Occurrence of Concurrency .............................................. 27

2.3.4.3 Apportionment of Concurrent Delays ....................................................... 28

2.4 Float and Criticality in Project Schedules ............................................................... 32

2.4.1 Float ................................................................................................................. 32

2.4.2 Float versus Criticality ..................................................................................... 33

2.4.3 Float Ownership ............................................................................................... 34

2.4.4 Alternatives to Float Distribution and Management ........................................ 35

2.5 Process of Forensic Schedule Analysis................................................................... 37

2.6 Forensic Schedule Analysis Techniques ................................................................. 39

2.6.1 Global Impact Method ..................................................................................... 41

2.6.2 As-Planned vs. As-Built Method ..................................................................... 41

2.6.3 Impacted As-Planned Method.......................................................................... 42

2.6.4 Collapsed As-Built Method ............................................................................. 43

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2.6.5 Schedule Window Analysis ............................................................................. 44

2.6.6 Time Impact Analysis ...................................................................................... 45

2.6.7 Other Schedule Analysis Techniques .............................................................. 46

2.6.8 Criticism of Available Schedule Analysis Techniques .................................... 48

2.7 Delay Damages and Commonly Applied Methodologies ...................................... 49

2.7.1 Overview of Delay Damages ........................................................................... 49

2.7.2 Owner’s Delay Damages ................................................................................. 50

2.7.3 Contractor’s Delay Damages ........................................................................... 51

2.7.3.1 Types of Recoverable Damages................................................................ 51

2.7.3.2 Equitable Adjustments .............................................................................. 52

2.7.3.3 Field Overhead Damages .......................................................................... 52

2.7.3.4 Extended HOOH versus Unabsorbed HOOH ........................................... 54

2.7.3.5 Methodologies for Calculating HOOH Damages ..................................... 55

2.8 Summary of the Literature Review ......................................................................... 62

Chapter 3 ........................................................................................................................... 63

Research Methodology ..................................................................................................... 63

3.1 Research Framework .............................................................................................. 63

3.2 Bases, Tools, and Techniques ................................................................................. 66

3.2.1 Current Forensic Schedule Analysis Techniques ............................................ 66

3.2.2 CPM, Linked Bar Charts, and Resource-Constrained Scheduling .................. 67

3.2.3 Scheduling Software Packages ........................................................................ 67

3.2.4 Project Overhead Allocation ............................................................................ 67

3.2.5 Research Evaluation......................................................................................... 70

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3.3 Data Sources ........................................................................................................... 71

Chapter 4 ........................................................................................................................... 72

Impacts of Resource Allocation on Forensic Schedule Analysis ..................................... 72

4.1 Introduction ............................................................................................................. 72

4.2 Motivating Case ...................................................................................................... 73

4.3 Window Analysis under the Effect of Resource Allocation ................................... 75

4.4 Case Study .............................................................................................................. 78

4.4.1 Case Overview ................................................................................................. 78

4.4.2 Analysis of Delays ........................................................................................... 79

4.5 Discussion ............................................................................................................... 84

4.5.1 Possible Extended Effect of Delays ................................................................. 84

4.5.2 Positive/Negative Effect of Resource Allocation on Delay Responsibility..... 85

4.5.3 Legal Acceptability .......................................................................................... 85

4.5.4 Implications of Applying the Enhanced Window Analysis ............................. 86

Chapter 5 ........................................................................................................................... 89

Delay Damages and Schedule Window Analysis ............................................................. 89

5.1 Introduction ............................................................................................................. 89

5.1.1 Delay Context versus Delay Responsibility .................................................... 90

5.1.2 Field Overhead Damages ................................................................................. 94

5.2 An Integrated Approach .......................................................................................... 95

5.3 Hypothetical Case Study ......................................................................................... 98

5.4 Discussion ............................................................................................................. 104

5.4.1 Estimated FOH versus Actual FOH ............................................................... 104

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5.4.2 Degree of Suspension .................................................................................... 104

5.4.3 Apportionment for Concurrent Delays .......................................................... 105

5.4.4 Float Ownership ............................................................................................. 106

5.4.5 Statistical Implications ................................................................................... 107

5.4.6 Difficulties in Using the Proposed Method ................................................... 108

5.5 Summary ............................................................................................................... 109

Chapter 6 ......................................................................................................................... 111

Novel Forensic Schedule Analysis Technique ............................................................... 111

6.1 Introduction ........................................................................................................... 111

6.2 Issues in Forensic Schedule Analysis ................................................................... 113

6.2.1 Float and Float Ownership ............................................................................. 113

6.2.2 Hard Logic vs. Soft Logic .............................................................................. 117

6.2.3 Resource Allocation ....................................................................................... 118

6.2.4 The Dynamics of Float, Logic, and Resource Allocation .............................. 119

6.3 Novel Forensic Schedule Analysis Technique ..................................................... 120

6.4 Case Study ............................................................................................................ 124

6.4.1 Day 2: One-Day Contractor-Caused Delay on Activity A ........................... 125

6.4.2 Day 4: One-Day Owner-Caused Delay on Activity B .................................. 127

6.4.3 Day 5: One-Day Concurrent Delays, Contractor- and Owner-Caused, on

Activities B and C ................................................................................................... 128

6.4.4 Day 6: One-Day Concurrent Delays, Owner- and Contractor-Caused, on

Activities C and D................................................................................................... 130

6.4.5 Days 7 and 8: Two-Day Third Party-Caused Delay on Activity D .............. 131

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6.4.6 Days 10 and 11: Two-Day Owner-Caused Delays on Activities E and G ... 132

6.5 Discussion ............................................................................................................. 134

6.6 Summary ............................................................................................................... 137

Chapter 7 ......................................................................................................................... 139

Integrated Framework of Schedule and Damage Analyses ............................................ 139

7.1 Introduction ........................................................................................................... 139

7.2 Framework Description ........................................................................................ 140

7.3 Case Study ............................................................................................................ 142

7.3.1. Applications of the New Framework to a Case Study .................................. 142

7.3.2 Discussion ...................................................................................................... 145

7.4 Summary ............................................................................................................... 145

Chapter 8 ......................................................................................................................... 146

Conclusions and Recommendations ............................................................................... 146

8.1 Conclusions and Contributions ............................................................................. 146

8.1.1 The Effect of Resource Allocation on Forensic Schedule Analysis .............. 146

8.1.2 The Enhanced Schedule Window Analysis Technique ................................. 147

8.1.3 ASAP as a New Approach for Quantifying Field Overhead Damages ......... 147

8.1.4 FLORA as a Novel Forensic Schedule Analysis Technique ......................... 148

8.1.5 New Integrated Framework for Analyzing Schedule Delays and Damages.. 149

8.2 Recommendations ................................................................................................. 150

8.2.1 Schedule Analysis Considering Resource Allocation.................................... 150

8.2.2 Schedule Analysis Capturing the Dynamics of Float, Logic, and Resource

Allocation ................................................................................................................ 150

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8.2.3 The Context of a Delay Addressed in Calculating Delay Damages .............. 151

8.2.4 Apportionment for Concurrent Delays .......................................................... 151

8.2.5 Applications of ASAP and FLORA in the Industry ...................................... 152

8.3 Limitations and Future Research .......................................................................... 152

References ....................................................................................................................... 155

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List of Figures

Figure 1.1 Extended “triad of proof” in delay claims ......................................................... 6

Figure 2.1 Delay versus acceleration ................................................................................ 20

Figure 2.2 Delays: responsibility, liability and recoverability .......................................... 24

Figure 2.3 Delay concurrency scenarios ........................................................................... 27

Figure 2.4 Generic methodology for analyzing delay claims ........................................... 38

Figure 2.5 Mapping of forensic schedule analysis techniques ......................................... 40

Figure 2.6 As-planned vs. as-built method ....................................................................... 42

Figure 2.7 Contractor’s cost breakdown structure ............................................................ 52

Figure 2.8 Application areas of percentage markup versus Eichleay formula ................. 61

Figure 3.1 Research framework ........................................................................................ 64

Figure 3.2 Types of effort and overhead costs .................................................................. 69

Figure 3.3 Contactor’s overhead costs .............................................................................. 70

Figure 4.1. Schedules of the motivating example ............................................................. 74

Figure 4.2. As-planned resource-constrained schedule .................................................... 79

Figure 4.3. Hypothesized as-built schedule ...................................................................... 80

Figure 4.4. Traditional window analysis: window #1....................................................... 81

Figure 4.5. Enhanced window analysis: window #1......................................................... 82

Figure 4.6. Traditional window analysis: window #2....................................................... 83

Figure 5.1. The context of delays versus delay responsibility .......................................... 92

Figure 5.2. As-planned schedule ....................................................................................... 99

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Figure 5.3. As-built schedule .......................................................................................... 100

Figure 5.4. Time plot for time-related field overhead versus week ................................ 103

Figure 5.5. Histogram of per-week time-related field overhead ..................................... 108

Figure 6.1. The dynamics of float, logic, and resource allocation .................................. 115

Figure 6.2. FLORA process flowchart for “real-time” analysis ..................................... 123

Figure 6.3. As-planned schedule ..................................................................................... 124

Figure 6.4. Analyses for the contractor-caused delay on activity A at day 2 ................. 126

Figure 6.5. Analysis for the owner-caused delay on activity B at day 4 ........................ 128

Figure 6.6. Analysis for concurrent delays on B and C at day 5 .................................... 129

Figure 6.7. Analysis for concurrent delays on C and D at day 6 .................................... 130

Figure 6.8. Analysis for the third party-caused delay on D at days 7 and 8 ................... 131

Figure 6.9. Analyses for the owner-caused delays on E and G at days 10 and 11 ......... 132

Figure 7.1. Integrated framework for schedule and damages analyses .......................... 141

x
List of Tables

Table 2.1 Divergent and inconsistent perspectives on concurrent delays ........................ 29

Table 2.2 Comparative results of schedule analysis methods........................................... 48

Table 2.3 Formulas for calculating home office overhead ............................................... 56

Table 2.4 Allowed markup for home office overhead ...................................................... 59

Table 3.1 Criteria for evaluating forensic schedule analysis techniques .......................... 70

Table 4.1. Step-by-step schedule window analysis .......................................................... 76

Table 4.2. Schedule analysis summary ............................................................................. 84

Table 5.1. ASAP’s steps for quantifying field overhead damages ................................... 97

Table 5.2. Project cost estimate (in dollars) ...................................................................... 99

Table 5.3. Distributed activity-specific field overhead (in dollars) ................................ 102

Table 5.4. Field overhead delay damages (in dollars) .................................................... 103

Table 6.1. FLORA’s rules for time impact analysis ....................................................... 121

Table 6.2. Delay events and their secondary effects ....................................................... 125

Table 6.3. Summary of forensic schedule analysis ......................................................... 134

Table 7.1. Activity-specific allocation of field overhead (in dollars) ............................. 143

Table 7.2. Field overhead delay damages (in dollars) under different methods ............. 144

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Acknowledgements

I would like to thank many people for helping me during my graduate study and doctoral

research at Cal. I would particularly like to thank my research advisor, Professor William

Ibbs, for his invaluable guidance. He has advised me to research practical and interesting

areas. He also took a lead in securing my graduate assistantship in the last few years. I

am truly appreciative for the constructive comments of the other dissertation committee

members, Professors Glenn Ballard, Frederick Collignon, and Arpad Horvath. I would

also like to thank Professors Sara Beckman and Iris Tommelein for their exceptional

critiques and suggestions before and during my qualifying exam.

I extend many thanks to my sponsor, officers, friends, and colleagues. I owe a

special note of gratitude to VEF for financially supporting me in the first two years in the

United States. I would like to express appreciation to E&PM students at Cal for our

valuable discussion and interaction. Among them, I especially thank Kofi Inkabi, Martin

Chandrawinata, Sebastien Humbert, Tai-Lin Huang, Ying-Yi Chih, and Zofia

Rybkowski. I am very grateful for the generous support of the CEE Department staff,

especially Ms. Shelley Okimoto. I would also like to thank my Vietnamese seniors and

friends in Berkeley and the United States I have had opportunities to chat, play, and share

with my personal and professional hobbies, feelings, failures, and successes.

I would like to express my thanks to my former professors, teachers, and friends,

especially Professor Stephen Ogunlana, Do Thi Xuan Lan, Luu Truong Van, and Nguyen

Thi Dung. They continually stimulate my self-confidence even when I left them. I

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would like to thank Dung for her lovely patience and sharing for many ups and downs of

our love over the past seven years. Though I do not have her anymore, I hope she is

always happy.

Finally, I would like to thank my family. I am especially grateful to my parents

for their eternal sacrifice. I always miss and love you, Mom. Even you no longer live in

this world to see your son growing up, I wish you and Anh Quyen are happy in the

heaven. We never forget your smiles, Anh Quyen. Special thanks to Anh Quang for his

endless support to our home and family. I wish you all have happy and wonderful lives.

xiii
Abbreviations

AACEI : The Association for the Advancement of Cost Engineering

ASAP : Activity-specific overhead allocation process

ASBCA : The Armed Services Board of Contract Appeals

BCA : Board of Contract Appeals

CDM : Continuous delay measurement

CPAT : Contemporaneous period analysis technique

CPM : Critical path method

C/SCSC : Cost/Schedule Control Systems Criteria

DDV : Daily delay values

DOD : The U.S Department of Defense

DOT : The Departments of Transportation

EBCA : The Department of Energy Board of Contract Appeals

EFC : Early finish cost

ENG BCA : The Army Corps of Engineers Board of Contract Appeals

EVA : Earned Value Analysis

EVMS : The earned value management system

FLORA : A new forensic schedule analysis technique

FOH : Field office overhead

FS : Finish-Start

G&A : General and administrative expense

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GSBCA : The General Services Board of Contract Appeals

HOOH : Home office overhead

IDT : Isolated delay type

JLARC : The Joint Legislative Audit and Review Commission

LFC : Late finish cost

LOE : Level of effort

NCHRP : National Cooperative Highway Research Program

P3 : Primavera Project Planner

SS : Start-Start

TIA : Time impact analysis

TRB : Transportation Research Board

VABCA : The Veterans Affairs Board of Contract Appeals

xv
Symbols

ATF : Allowable total float

Ba : Total billings for actual contract period

Bc : Contract billings

Be : Contract billings for extended period

Bo : Total billings for original contract period

CD : Cost driver value for the whole contract

CDi : Cost driver value for activity i

Di : Duration of activity i

Da : Actual days of contract performance

De : Days of owner-caused delay

Do : Original days of contract performance

DDj : The delay day(s) for the jth analysis

DP : Delay period identified by a window analysis

(DP)Wj : Delay period of window Wj

∆TF : Difference in total float that an activity has after and before the

occurrence of the corresponding event and analysis

FOH : Field overhead

FOHn : Non-time-related field overhead

FOHni : Non-time-related field overhead for activity i

FOHt : Time-related field overhead

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FOHti : Time-related field overhead for activity i

FOHC : Total compensable field overhead damages

(FOHC)Wj : Compensable field overhead damages in window Wj

HOOH : Home office overhead

i : ith activity or activity i

iD : Critically delayed activity i

iDo : Owner-caused critically delayed activity i

La : Total labor costs: actual period

Ld : Labor costs: delay period

Ma : Actual HOOH: entire period (%)

Me : Actual HOOH: delay period (%)

Mn : Normal HOOH (%)

Mp : Planned HOOH and profits at time of bid

OH : Overhead

Oa : Total overhead during actual contract period

Oc : Overhead allocable to contract

Oo : Total overhead during original contract period

PDD : The number of days that the party delays on the affected activity path

Rd : Daily overhead allocable to contract

RDD : The number of delayed days that a party is held responsible

TDD : The total delayed days of the entire project

TF : Total float

TFC : Contractor’s total float

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TFO : Owner’s total float

uFOHni : Non-time-related field overhead for activity i per time unit

uFOHti : Time-related field overhead for activity i per time unit

uFOHtiD : Time-related field overhead for critically delayed activity i per time unit

uFOHtiDo : Time-related field overhead for owner-caused critically delayed activity i

per time unit

Vo : Original contract value

Wj : jth window period or window j

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Chapter 1
Introduction

“Time is of the essence.1”

1.1 Background

Project schedules are invariably dynamic and uncertain. Various controllable and

uncontrollable factors can adversely affect the project schedule and cause delays. These

delays undoubtedly create negative impacts on project performance. They are also the

major cause of construction claims2 (Hester et al., 1991; Abdul-Rahman et al., 2006).

Together with the money associated with increased costs and expenses for delays on a

project, delay claims are possibly the most problematic type of construction dispute case

to handle (Hughes, 2003a). As a result, forensic schedule analysis3 or the identification

and analysis of delays become essential (Finke, 1999). They are however onerous tasks.

Contractors are prone to view most delays as the responsibility of the owner while

owners frequently attempt to tag delays as contractor-caused, third party-caused or

concurrent (Zack, 2001). Consequently, delays may lead to some form of dispute

resolution alternatives, from negotiation to litigation, which may be expensive and a

1
A proverbial expression
2
Claims in this context are defined as the seeking of consideration or change, or both, by one of the parties
to a contract based upon an implied or expressed contract provision (Diekmann and Nelson, 1985).
3
“Forensic scheduling analysis refers to the study and investigation of events using CPM or other
recognized schedule calculation methods for potential use in a legal proceeding” (AACEI, 2007).

1
crapshoot. There is a recent increase in both the number and size of construction claims

(Schone, 1985; Pinnell, 1998).

In addition to evaluating and apportioning responsibility for schedule delays, the

quantification of the damages caused by delays is also an extremely challenging job.

Most professionals agree that measuring and demonstrating evidence on the damages are

the most arduous part of many delay claims and construction cases (Overcash and Harris,

2005). All parties more consider the cost of delay and impact, are more sophisticated in

their scheduling techniques and tools, have tighter budgets that cannot afford delay or

impact, and are more contentious (Pinnell, 1992). As such, more appropriate approaches

for the analysis and determination of schedule delays and associated financial

consequences are imperative in today’s “claims-oriented” construction business.

1.2 The #eed for Research

The fact that the construction industry is unable to properly address scheduling and delay

problems has led to a “chronically sick building industry” (Sweet and Schneier, 2004). In

addition, “most public and private construction contract disputes touch on the issue of

delay” (Calkins, 2006). Responding to such a challenge, practitioners and researchers

have created and employed many schedule analysis techniques. The level of

acceptability of each technique depends on its credibility and the court or board ruling the

corresponding delay claims. However, schedule-related issues such as float, float

ownership, soft logic, and resource allocation can cause delays yet their effects are

typically neglected in those techniques. For instance although a number of studies have

2
focused on scheduling with resource allocation (e.g., Wiest, 1967; Davis, 1974; Willis,

1985; Fondahl, 1991; Bowers, 1995; Hegazy, 1999; Kim and de la Garza, 2003; 2005;

Chua and Shen, 2005), none of them addressed resource allocation in forensic

scheduling. Recent studies have tried to consider float ownership in delay analysis but

they only deal with this issue or provide unrealistic alternatives. No research holistically

captures the dynamics of float, logic, and resource allocation in forensic schedule

analysis.

Analysis of delays is more complicated if concurrent delays occur. There are two major

problems encountered in scrutinizing delay concurrency4. They include (i) how to

properly separate competing causes of delay and (ii) how to equitably apportion damages

incurred by concurrent delays between the parties. Though success varies, researchers

have tried to tackle the first problem (i.e., Kraiem and Diekmann, 1987; Arditi and

Robinson, 1995; Reynolds and Revay, 2001; Kim et al., 2005). There has been little

research on the second problem.

The context of a delay in terms of the timing of delay and degree of suspension

potentially affects delay responsibility. This dissertation defines degree of suspension as

the proportion of work under a contract that is delayed, suspended, or interrupted in a

certain period of time; i.e. partial or total suspension. Project expenses, both direct and

indirect costs, change over time. The argument therefore concerns whether it is the level

of overheads during the extended period that should be paid or whether it should be the

4
Delay concurrency is when two or more events are concurrent in their causation of the project delay.

3
level of overheads at the time of the delaying event (Scott and Harris, 2004). This

implies that the time a delay arises matters in apportioning delays and damages. In

addition, damages caused by concurrent delays on different critical activities may not be

the same. For instance, if two critical activities, “roofing” and “landscaping,” are

simultaneously delayed by the contractor and the owner, respectively, it is difficult to

accept that their effects on the project costs are similar. These issues have not been

considered properly in the current practice.

Although courts, boards, practitioners, and researchers have various perspectives on the

determination of monetary damages, project parties normally bear their own costs when

concurrent delays exist. That is, the industry tends to follow the doctrine of contributory

negligence and is simply loath to accept the doctrine of comparative negligence in

solving consequences of concurrent delays. In view of the modern tendency toward

comparative negligence, the grounds for such continued acceptance of contributory

negligence are rather perplexing (Hughes and Ulwelling, 1992). Some courts (i.e.,

William F. Klingensmith, Inc. v. United States, 1984; cited in Kutil and Ness, 1997) have

required the contractor, as the party claiming delay damages, to provide a logical

rationale for apportioning the effects of the concurrent delays between the owner and the

contractor. A systemic approach that supports comparative negligence analysis in

concurrent delay scenarios is necessary. This research aims at developing such an

approach.

4
Figure 1.1 illustrates the extended “triad of proof” in delay claims, including entitlement,

causation, and resultant damages (quantum5). Like proving who is responsible for a

delay (causation), the process of proving the amount of damages is challenging. The

quantum is controversial and a major source of construction disputes. The fact that

project delay should continue to create controversy is “strong evidence that there is a

flaw in the concept of quantifying the damages to the contractor regarding its capacity

utilization disrupted by delay of work” (Kenyon, 1996). Zack (2001) claimed that there is

no standard accepted method of calculating home office overhead (HOOH) incurred by

delays. The author added that “most contractors want to use formulas to calculate their

damage. Most owners, on the other hand, want to see ‘real damage’ based on some sort

of audit – ‘prove that your overhead increased as a result of my delay!’” Unfortunately,

the process of measuring the actual costs of construction delays is a mess (Overcash and

Harris, 2005).

The National Cooperative Highway Research Program (NCHRP, 2003) in the

Transportation Research Board (TRB) of the National Academies revealed that one of the

more controversial issues influencing the development of transportation infrastructure

projects is that of delay claims. The above issues should inspire more extensive research

in quantifying monetary consequences in delay claims.

5
The amount of compensation in delay claims

5
Figure 1.1 Extended “triad of proof” in delay claims

1.3 Problem Statement

The industry has employed various schedule delay analysis techniques to support delay

claims. Paradoxically, schedule-related factors are frequently ignored even though they

can affect project completion time, too. A part of this dissertation addresses the

dynamics of float, logic, and resource allocation in forensic schedule analysis. That is,

these factors and others such as acceleration, pacing delays6, concurrent delays, and real-

time analysis are captured in forensic scheduling analysis.

6
Pacing delays relieve the owner (contractor) of some of delay damages it otherwise may have owed to the
contractor (owner) since they can cause concurrent delays and/or float consumption (Zack, 2000).

6
Entitlement, causation, and resultant damages are the three elements in the “triad of

proof” in delays claims (Figure 1.1). Parties find it difficult to agree on issues related to

causation and resultant damages of schedule delay. The logic measure of damages on

construction contracts is frequently more complicated to approach than entitlement

(Overcash and Harris, 2005). In addition, the existing techniques seem to neglect or at

least underestimate the effect of the context of a delay on delay responsibility. The new

method for quantifying delay damages approaches this issue. Though the Eichleay

formula7 and similar methods of calculating HOOH remain a controversial issue for the

project parties, the courts, and the Boards of Contract Appeals (BCAs) (Love, 2000),

HOOH may less depend on the context of a delay which is project- and activity-specific.

Field office overhead (FOH) however is significantly time-varying thus its damages can

be impacted by the delay context. This research attempts to explore this impact.

1.4 Research Objectives

This research proposes to improve the methodologies for analyzing schedule delays and

quantifying associated damages in construction delay claims. The specific objectives of

this research are:

1. To identify the effect of resource allocation on forensic schedule analysis and to

enhance the window analysis technique by embedding necessary steps that deal

with the practice of resource allocation in its analyses;

7
This formula was drawn in a case – Eichleay Corp., ASBCA No.5183, 60-2 BCA ¶ 2688 (1960) – held by
the Armed Services Board of Contract Appeals (ASBCA).

7
2. To propose a new approach for quantifying and apportioning delay damages

under the impacts of the context of a delay in terms of the timing of delay and the

degree of suspension during the course of a project;

3. To develop a new forensic schedule analysis technique that addresses the

dynamics of float, logic, and resource allocation;

4. To propose an integrated framework for analyzing delays and damages in delay

claims under the dynamic impacts of float, logic and resource allocation and the

context of a delay; and

5. To evaluate the proposed approaches compared to the current forensic schedule

analysis techniques and damages-quantification methodologies using hypothetical

and available published case studies. This objective is achieved by evaluation of

the individual proposed approaches.

1.5 Scope of Work

Schedule delays and delay claims occur in a variety of industries such as defense,

construction, and software engineering. This research concentrates on delay claims in the

construction industry. In addition, only delay claims between contractors and owners are

in the scope of this research. As the research objectives suggested, this dissertation only

addresses two elements, namely causation and resultant damages of the “triad of proof”

in delay claims (Figure 1.1). In the “causation” element, forensic schedule analysis is

focused to improve its credibility. In the “resultant damages” element, problems in

quantifying FOH damages are solved since they potentially depend on the schedule-

related factors. Finally, this research primarily considers forensic schedule analysis for

8
construction projects employing the critical path method (CPM) scheduling. CPM is the

most dominant application in project scheduling and forensic scheduling for other

scheduling techniques (i.e., line of balance) can be quite different.

1.6 The Structure of the Dissertation

This dissertation contains eight chapters. The first three chapters present the background,

literature, and methodology of the research. The next four chapters demonstrate how the

research objectives are achieved and present findings. The last chapter summarizes

major research findings, discusses research limitations, and recommends future research.

The detail of the dissertation structure is as follows:

Chapter 1 is Introduction. It presents the background, the need for research, the problems,

objectives, and scope of this research and dissertation.

Chapter 2 reviews literature related to this current research. They include schedule

delays, forensic schedule analysis, the calculation of delay damages, and so forth.

Chapter 3 formulates research methodology which is research framework, bases, tools,

and techniques for which this research stands, and data sources used for this research.

Chapter 4 presents the initial investigation of the impacts of resource allocation on

forensic schedule analysis. An enhanced schedule window analysis is also proposed in

this chapter.

9
Chapter 5 proposes an activity-specific overhead allocation process called ASAP for

quantifying field overhead damages when a delay occurs.

Chapter 6 develops a novel forensic schedule analysis technique called FLORA that

captures the dynamics of float, logic, and resource allocation (FLORA) in its analysis.

Chapter 7 integrates ASAP and FLORA to form a new framework for analyzing schedule

delays and their financial consequences in delay claims.

Chapter 8 discusses conclusions and recommendations drawn from this research.

10
Chapter 2
Literature Review

This chapter presents literature relevant to the research. The aim is to describe current

paradigms and reveal unsolved issues that motivate this research. The major topics

include:

a. Scheduling practices in delay claims;

b. Roles of project change in delays and disruptions;

c. Concepts of delay, disruption, acceleration, and delay concurrency;

d. The state-of-the-practice management of float and criticality in CPM project

schedules;

e. Process of forensic schedule analysis in delay claims;

f. Forensic schedule delay analysis techniques used in delay claims; and

g. Delay damages and methodologies for quantifying them.

2.1 Scheduling Practices in Delay Claims

Project scheduling is a very broad topic. An understanding of scheduling concepts and

acquaintance with tools and techniques for analyzing and explaining scheduling problems

and their cost impact is helpful in any kind of construction schedule dispute (Pinnell,

1992). The interface between scheduling and delays creates the conditions for all delay

claims (Wigal, 1990). Extensive review of project scheduling concepts and techniques is

beyond the scope of the present research. This section therefore focuses only on

11
pertinent scheduling issues that are normally and currently used in forensic schedule

analysis and construction delay claims.

2.1.1 Types of Schedules

Project schedules are an effective means for planning, monitoring, and controlling project

time performance. There are various types of schedules. In the project time management

perspective, schedules are classified as master schedules, detailed schedules, and so forth.

In the delay claims context, Finke (1999) categorizes project schedules into three major

types as follows:

a. As-Planned Schedule: defines a contractor’s original plan for performing the

entire scope of work at the onset of a project. It shows how and when the work

would have been undertaken had there been no changes or delays.

b. As-Built Schedule: defines how a contractor actually performed the work. It

embraces the impacts or effects of all changes and delays that occurred during the

course of the project.

c. Entitlement Schedule: illustrates when the project would have been completed

had certain types of delays not occurred. Entitlement schedules can be either

extended or impacted as-planned schedules (e.g., the as-planned schedule with

certain types of delays added) or but-for or collapsed as-built schedules (e.g. the

as-built schedule with certain types of delays removed). A schedule analysis will

eventually compare an entitlement schedule to the pertinent baseline schedule

(some version of either the as-planned or as-built schedule) to find out the extent

of delay and apportion delay responsibility.

12
2.1.2 The Use of the Critical Path Method

The critical path method (CPM) is a technique for scheduling a project. It produces

valuable information about the project such as the shortest duration, the critical path(s),

and the float (Kim and de la Garza, 2003). The application of CPM has been more

widespread with the aids of scheduling software such as Microsoft Project, Primavera

Project Planner, and SureTrak. CPM scheduling has obtained prominence in the

construction industry as the method for scheduling projects of all sizes (McCullough,

1999). Also, the U.S. government has required CPM for major projects since the mid-

1960s. The California Department of Transportation has required its construction

contractors to use CPM for progress schedules since 1992 (Rouen and Mitchell, 2005).

Extensive introduction to CPM can be found in any project management-related text.

In the construction claims world, CPM is the best available option for schedule delay

analysis. Owners increasingly require CPM schedule impact analysis on change orders

and time extension to provide evidence that the contractor is entitled to an extension of

time and corresponding cost impact (McCullough, 1999). Contractors should also

consider the relationship between their cost elements and the activities in their CPM

schedules since this can be crucial, especially for evaluating the impact of delays on the

work (Overcash and Harris, 2005). Boards and courts have also recognized the

importance of CPM to assess the impact of delays and disruptions (Wickwire and

Ockman, 1999). The Department of Energy Board of Contract Appeals (EBCA) in Lamb

Engineering and Construction Company (1997) noted that bar charts can provide an

understandable illustration of main project tasks, but they do not provide the best

13
mechanism for analyzing delays on sizable projects, without additional supports such as

models or expert testimony. However, the use of CPM schedule analysis in resolving

delay claims has raised various issues (Wickwire and Smith, 1974; Wickwire et al., 1989;

Wickwire and Ockman, 1999):

a. Which project party owns extra time or float?

b. When and how should delay be analyzed and measured?

c. How is the need to award time extensions on a real-time basis (update-to-update)

settled with the need to know and prove those delays that in fact delayed

completion of the project?

d. What role do resources play in assessing and granting time extension requests and

determining owner-caused delay?

e. Who owns the additional float generated by delays to other tasks?

f. What is the importance of approval by the owner of the project schedule?

g. How and when can a contractor recover for the incapability to finish the project

early?

2.2. Roles of Project Change in Delays and Disruptions

2.2.1 The Concept of Project Change

Change is normally defined as any event that results in a modification of the original

scope, execution time, cost and/or quality of work (Ibbs and Allen, 1995; Revay, 2003).

There are generally five types of changes: change in scope; differing site conditions;

delays; suspensions; and acceleration. The types of changes have been discussed by

researchers such as Orczyk (2002).

14
Change may not only directly add to, subtract from, or change the type of work being

performed in a particular area but also affect other areas of the work for which the change

order has not accounted (Jones, 2001). The Armed Services Board of Contract Appeals

(ASBCA) once stated that the costs of performing changed work consist of both (i) those

costs directly related to the accomplishment of the changed work and (ii) those costs

arising from the interaction between the changed work and unchanged work (Triple “A”

South). This was also used by the other Boards of Contract Appeals such as the Veterans

Affairs Board of Contract Appeals (VABCA) in Coates Industrial Piping (Coates

Industrial Piping, Inc., 1999).

2.2.2 The Extent of Project Change

The degree of project change is frequently significant. An overall additive change rate

for 22 federally funded and administered projects during the 1979-1983 period was six

percent on the dollar due to design errors, owner initiated changes, differing site

conditions, etc. (Diekmann and Nelson, 1985). Among 24 construction projects in

Western Canada, project costs increased by at least 30 percent and 60 percent for more

than half and a third of projects, respectively (Semple et al., 1994). Several projects

suffered delays over 100 percent. A study of the Joint Legislative Audit and Review

Commission (JLARC, 2001) on approximately 300 road construction projects in Virginia

revealed that average project change in dollars was more than 11 percent.

The amount and timing of change are also significant factors affecting productivity.

From 90 construction disputes in 57 independent projects, Leonard (1987) demonstrates a

15
significant correlation between percentage of change order hours to contract hours and

percentage of lost productivity. Ibbs (1997 and 2005) found that: (i) the greater the

amount of change, the less the efficiency; and (ii) late project change more adversely

affects labor productivity than early change. This finding was also confirmed by later

studies (e.g., Hanna et al., 1999).

2.3 Delay, Disruption, Acceleration, and Delay Concurrency

This section reviews the literature on key issues related to delays in construction projects,

namely delay, disruption, and acceleration, differences between delays and disruptions,

causes and types of delays, and delay concurrency..

2.3.1 Delay, Disruption, and Acceleration

Delay, disruption, and acceleration are components of changed work that are difficult to

pin down (Rishe, 1973). Although this research focuses on delay-related issues, clear

differentiations among these three concepts in the contractual context are therefore

necessary.

2.3.1.1 Delays

The Oxford Advanced Learner’s Dictionary (Oxford, 2007) defines a delay as “a period

of time when somebody or something has to wait because of a problem that makes

something slow or late, as a situation in which something does not happen when it

should, and as the act of delaying.” Four definitions are found for the term delay in the

Merriam-Webster Online Dictionary (Merriam-Webster, 2007). They are: (i) the act of

16
delaying, (ii) the state of being delayed; (iii) an instance of being delayed; and (iv) the

time during which something is delayed.

In the project management context, a delay is about the time during which the project

cannot proceed as scheduled (Lovejoy, 2004). It is defined as an effect to the completion

date of the project or effect to the project’s critical path(s) (Zack, 2000). It is an act or

event that extends the time necessary to finish activities under a contract (Stumpf, 2000).

In the legal sense of the term, “delay” can involve several different circumstances that

present different legal claims and defenses (Hughes, 2003a). Unless otherwise stated

differently, the term delay in this dissertation means a cause that extends the duration of

contract work.

2.3.1.2 Delay versus Disruption

Delays and disruptions and their corresponding claims, namely delay claims and

disruptions claims, are different concepts. Disruption is “the act of rending asunder, or

the state of being rent asunder or broken in pieces” (Answers, 2007). In terms of

contract claims, disruption is an activity-specific loss of productivity caused by changes

in the working conditions under which that activity was carried out (Fink, 2000). Gavin

(2001) stated that delay damages are caused only by delays to overall project completion;

disruption damages are caused by changes in working conditions that can occur

regardless of whether the project end date changes.

17
In Coastal Dry Dock & Repair Corporation, disruption is noted as the “cost effect upon,

or the increased cost of performing, the unchanged work due to a change in contract”

(Coastal Dry Dock & Repair Corporation, 1990). In some studies (Thomas and

Napolitan, 1995; Thomas and Raynar, 1997), disruptions are defined as the occurrence of

events that are acknowledged to negatively impact labor productivity. More broadly, a

Recommended Practice standard (AACEI, 2004) defines “disruptions as an action or

event which hinders a party from proceeding with the work or some portion of the work

as planned or as scheduled.”

Disruptions can be caused by project change. They can reduce labor productivity and

extend the project duration (Hanna et al., 2002). Change-caused disruptions can be both

foreseeable and unforeseeable. The foreseeable or local disruptions can occur at the same

time and either the same place or within the same resource as the changed work while

unforeseeable or cumulative disruptions can also occur at a time or place, or within

resources, different from changed work (Finke, 1998). The words “cumulative

disruption” and “cumulative impact” can be used interchangeably. The Veterans Affairs

Board of Contract Appeals recently described cumulative impact as “the unforeseeable

disruption of productivity resulting from the ‘synergistic’ effect of an undifferentiated

group of changes. Cumulative impact is referred to as the ‘ripple effect’ of changes on

unchanged work that causes a decrease in productivity and is not analyzed in terms of

spatial or temporal relationships” (Centex Bateson Construction Company, 1998). Jones

(2001) argues that when the Board states that cumulative impact cannot be analyzed in

18
terms of spatial or temporal relationships, it means that cumulative impact costs cannot

be secured in individual contract changes.

Pricing of the direct impact due to local disruptions and cumulative impacts due to

cumulative disruptions is different. The direct impact costs are prepared on a forward

pricing basis. The cumulative impact costs, on the other hand, are more often priced on a

backward-pricing basis since a contractor cannot foresee or readily quantify the impact, if

can foresee,. In other words, a cumulative impact claim addresses the changed work’s

effect on working conditions that influence the unchanged work while a direct impact

claim covers the impact of changed work on unchanged work (Jones, 2001).

2.3.1.3 Delay versus Acceleration

Schedule delay and acceleration are contrary concepts but can co-exist (Figure 2.1).

They often have a cause and effect relationship. For instance, acceleration of the

remaining work of a project is typically ordered to compensate for the delays that

occurred in the completed work of the project (Arditi and Patel, 1989). Schedule

acceleration is defined as having more work to carry out in the same period of time or

having a shorter period of time to carry out the same amount of work (Thomas, 2000).

The contractor normally has to add additional efforts (money, manpower, equipment, and

materials), either through overtime or additional shifts (Evans, 2004). Extra costs

associated with acceleration efforts are qualitatively different from delay damages (Kutil

and Martin, 1995).

19
Schedule acceleration generally incurs additional costs. The party responsible for the

cost of the acceleration is the party responsible for the underlying delay and/or the party

deciding to accelerate (Evans, 2004). The cost includes overtime, additional labor,

stacking of trades, loss of labor efficiency, additional equipment, additional supervision,

increased material delivery, and increased overhead costs (Livengood and Bryant, 2004).

Among others, the financial consequences to the contractor relative to labor productivity

are rather severe, with losses of labor efficiency easily within the range of 20 to 45%

(Thomas, 2000).

ID Task Name Duration -1 1 2 3 4 5 6 7 8 9 10 11 12


1 As-planned duration 7 wks
Projected Delay

2 As-projected duration 12 wks

3 As-built duration 10 wks


Acceleration

Figure 2.1 Delay versus acceleration

There are three types of acceleration: directed; constructive; and voluntary. A detailed

discussion of each type can be found elsewhere (e.g., Jensen et al., 1997). Directed

acceleration occurs when a contractor (or a subcontractor) is required by an owner (or a

contractor) to perform the initial scope of work in a shorter amount of time than

originally planned (Evans, 2004). As its name implies, voluntary acceleration occurs

when a contractor unilaterally chooses to accelerate the work (Evans, 2004). Thus, no

monetary compensation is granted to the contractor for voluntary acceleration.

20
Constructive acceleration is the most complicated one among the three. It occurs when a

contractor experiences an excusable delay, but the owner requires performance in

accordance with the contract schedule (Keco Industries, Inc., 1963). Constructive

acceleration is considered a constructive change within the scope of the Changes clause

(Rishe, 1973). The parties use the contract documents to specify whether a proper claim

for constructive acceleration can be made in the face of an inexcusable delay by

clarifying which delays gets accelerated first, the inexcusable delay, the excusable delay,

or a combination of both (Peters, 2004).

One of the critical elements necessary to establish a claim for constructive acceleration is

a showing that the owner or owner’s representatives actually did something in order to

promote the acceleration (Bateson Construction Company, 1960). An owner’s order to

accelerate can be apparent in several forms: (i) direct orders; (ii) requests to accelerate;

(iii) threats to terminate for default; (iv) pressure to complete on schedule; (v) refusal to

grant time extensions plus liquidated damages; (vi) delays in granting extensions; and

(vii) denial of a request for time extension (Cibinic and Nash, 1995).

The Board of Contract Appeals once crafted the five-element test required to institute a

claim for constructive acceleration in Fermont Division, Dynamics Corporation of

America (1978). Wray (2000) summarizes these five elements as follows:

a. An excusable delay must exist;

b. Timely notice of the delay and a proper request for a time extension must have

been given;

21
c. The time extension must have been postponed or refused;

d. The owner must have ordered (either by coercion, direction or some other

manner) the project completed within its original performance period; and

e. The contractor must actually accelerate its performance, thereby incurring excess

costs.

2.3.2 Causes and Costs of Delays

There are various factors affecting schedule delays. Delays typically occur when

problems inherent in the actual construction are encountered and have a negative impact

on the project schedule (Wigal, 1990). Assaf et al. (1995) identified 56 causes of delays

from previous studies. Majid and McCaffer (1998) summarized 12 major causes of

inexcusable delays and 25 factors contributing to them. Generally, the cause of a delay

can be attributed either to (i) a specific party, (ii) a combination of parties, or (iii)

unforeseeable and unalterable circumstances (Lovejoy, 2004).

Costs of delays are also severe. When a project suffers a critical delay while substantial

work is in progress, construction job site support costs such as trailers, supervision costs,

maintenance, utilities, equipment and plants will continue to accumulate unless it is

practical to mobilize these resources to another job site (Love, 2000). Similarly,

manufacturing resources idled by delay can cause continuing unforeseen costs (Love,

2000). Koehn et al. (1978) investigated the percentage of construction cost spent for

delays by all consultants appearing on “The ENR 500” Consultants Compilation due to

governmental regulations. This study indicated that 30.3% of the overall yearly

22
construction cost of projects in which “The ENR 500” consultants are involved is spent

for construction delays. In addition, the associated schedule delay due to governmental

regulations was 29.9 months (Koehn et al., 1978).

2.3.3 The Types of Delays

Schedule delays are classified in several ways. The classification can be based on origin,

compensability, and timing of these delays (Kartam, 1999). However, these

classifications are interrelated as shown in Figure 2.2. In terms of responsibility, delays

can be owner caused, contractor caused, or third party caused delays. As their names

suggest, an owner-caused (contractor-caused) delay is within the control of, is the fault

of, or is due to the negligence of the owner (contractor) (Sweet and Schneier, 2004). The

third party caused delay is attributable to neither the owner nor contractor (Kraiem and

Diekmann, 1987).

Liability for a certain delay is normally stipulated by contractual terms. In general,

compensable, inexcusable and excusable delays are corresponding to owner-, contractor-,

and third party-caused delays, respectively (Figure 2.2). However, there are some

exceptions imposed by contract clauses; e.g. “no-damage-for-delay” clauses. This leads

to the fact that several excusable delays may be caused by the owner (Bartholomew,

1987). Also, some inexcusable delays may be not attributable to the contractor.

Bartholomew (1987) claims that the event may have been unforeseen, or due to no fault

or negligence of the contractor, will not necessarily qualify an excusable delay. Figure

2.2 presents these exceptions as dotted lines.

23
Figure 2.2 Delays: responsibility, liability and recoverability

Inexcusable delays are typically within the control of the contractor, its subcontractors, or

suppliers (Stumpf, 2000; Zack, 2000). The contractor (i) is not entitled to receive any

time extension, and (ii) can be liable for delay damages to its owner. The owner’s delay

damages are calculated by either contractual terms (e.g., liquidated damages) or actual

delay damages incurred (Figure 2.2). The underlying concept of inexcusable delays is

that a party to a contract should not benefit from its own fault or negligence, nor should it

be free from liability when mistakes are caused by some party for which it is liable (Zack,

2000). Late mobilization, late equipment deliveries, or insufficient manpower are

examples of inexcusable delays (Stumpf, 2000).

Excusable delays are not attributable to either the owner or contractor (Kraiem and

Diekmann, 1987). The determination of excusable delays generally rests on whether the

delay event was foreseeable at the time of bidding and was beyond the control of both the

owner and contractor (Zack, 2000). As such, they are those for which the contractor is

24
promised an extension of time only (Bartholomew, 1987). Examples are Force Majeure

and unforeseen inclement weather. In some studies (Arditi and Robinson, 1995; Alkass

et al., 1996; Kartam, 1999; and Stumpf, 2000), excusable delays include excusable and

compensable delays as classified herein. They subdivide excusable delays into excusable

compensable and excusable noncompensable delays. Analogously, excusable

compensable and excusable noncompensable delays are compensable and excusable

delays, respectively, in Figure 2.2.

Compensable delays are caused by the owner or its representatives. They are from (i)

acts of the owner in its contractual capacity and (ii) acts of another contractor in

performance of a contract with the owner (Ponce de Leon, 1987). The contractor is

typically entitled to both a time extension and monetary damages due to these delays.

Changes and different site conditions are examples of compensable delays. However, the

determination of compensable delays can be seriously challenged if there is a “no-

damage-for-delay” clause in the contract. An identification of which delays are the

responsibility of the owner relies significantly upon the language of the contract itself

(Hughes and Ulwelling, 1992). Discussion of “no-damage-for-delay” clauses can be

found elsewhere (e.g., Lesser and Wallach, 2003; Thomas and Messner, 2003).

2.3.4 Concurrent Delays

Concurrent delays occur frequently, particularly at the peak of a project when multiple-

responsibility activities are being performed at the same time (Baram, 2000). Delay

claims are much more complicated when concurrent delays possibly exist. Analysis of

25
schedule delays takes a major leap in complexity when there are multiple sources of

delay with interrelated impacts (Galloway and Nielsen, 1990; Kutil and Ness, 1997;

Ness, 2000). This section reviews the concept of delay concurrency, conditions of its

occurrence, and the current practice in evaluation and apportionment of concurrent

delays.

2.3.4.1 The Concept of Concurrent Delays

Schedule delay analysis is among the most challenging tasks in claims-related issues.

This analysis will be more complicated when concurrent delays have occurred in the

project. Navigating the seas of concurrent delays is possibly the most challenging task

faced by a construction lawyer (Hughes and Ulwelling, 1992).

Concurrent delay is customarily described as two or more delays that occur at the same

time, either of which would cause a delay but if either of them had not occurred, the

project schedule would have been delayed by the other (Rubin, 1983; Cushman et al.,

1990; Stumpf, 2000). However, there is no consistent agreement on what concurrent

delay actually means (Peters, 2003). Another definition is that delay concurrency occurs

when two or more separate causes of events delay the project within a specific time

period (Baram, 2000). Simultaneous delays, commingled delays, and intertwined delays

are other terms used to interchange for concurrent delays.

In terms of their timing relationship, delays can be also classified into independent

delays, serial delays and concurrent delays (Figure 2.3). An independent delay is a

26
particular delay which occurs in isolation or does not result from a previous delay and

which effects can be readily calculated (Arditi and Robinson, 1995). A delay which

occurs solely as a consequence of an earlier, unrelated delay in the contract is called a

serial delay (Ponce de Leon, 1987). Serial delays are sequences of successive non-

overlapping delays on a certain network path (Arditi and Robinson, 1995). In addition, a

serial delay may be caused by an independent delay (Stumpf, 2000).

Figure 2.3 Delay concurrency scenarios

2.3.4.2 Conditions for Occurrence of Concurrency

Hughes and Ulwelling (1992) reveal that the word “concurrent” describes either temporal

concurrence or causal concurrence. They also claim that: (i) while the word “concurrent”

may appropriately apply to temporally concurrent events, temporal concurrence is

irrelevant for the purpose of attempting to assess liability for project delay; and (ii) the

27
actual issue in construction is whether two events are concurrent in their causation of the

project delay.

Differentiation between concurrent delays and those which simply absorb float requires a

thorough knowledge of the facts, an understanding of the basis of CPM analysis, and a

determination of whether three key factors exist: (i) the delays are critical; (ii) the delays

are independent; and (3) the delays occur during the same time period (Boe, 2004). More

broadly, Ponce de Leon (1987) points out the occurrence of concurrency in construction

as follows:

a. Two unrelated delays taking place in an overlapping timeframe are truly

concurrent only if both delays fall on parallel critical paths.

b. Two unrelated delays arising at quite different timeframes are ultimately

concurrent if they fall on two as-built critical paths.

2.3.4.3 Apportionment of Concurrent Delays

Analysis of concurrent delays raises various issues. This is because both owners and

contractors employ concurrent delays as a strong defense tool against each other (Baram,

2000). For instance, owners use them to protect their interest in obtaining liquidated

damages, while contractors use them to neutralize or waive their inexcusable delays and

hence avoid damage entitlement (Baram, 2000).

Courts, boards, practitioners, researchers are generally inconsistent in terms of both

definition, as mentioned earlier, and apportionment of concurrent delays. The recent

28
empirical study (Scott and Harris, 2004) shows that all kinds of practitioners, namely

contractors, contract administrators, and claims consultants had divergence of opinions

on issues related to concurrent delays. Table 2.1 summarizes the divergent perspectives

on concurrent delays from previous studies nine of which are adapted from Peters (2003).

A summary of law cases that treated concurrent delays differently can be found in James

(1991).

Table 2.1 Divergent and inconsistent perspectives on concurrent delays


No Literature Concurrent Delays
Excusable & Excusable & Compensable
Inexcusable Compensable & Inexcusable
1 Ponce de Leon (1987)1 Excusable Compensable Excusable
1
2 Reams (1989) ; Battikha and Excusable Excusable Not available
Alkass (1994) 1
3 Arditi and Robinson (1995) 1; Al- Inexcusable Excusable Not available
Saggaf (1998) 1
4 Rubin (1983); Galloway and Excusable Excusable Excusable
Nielsen, (1990); Wiezel (1992);
Alkass et al. (1995); Schumacher
(1995); Galloway et al. (1997);
Kartam (1999); Stumpf (2000);
Reynolds and Revay (2001) 1;
Niesse (2004)
5 Construction (1993) 1; Baram Inexcusable Excusable Inexcusable
(2000) 1; Construction (2002) 1
6 Kraiem and Diekmann, (1987); Excusable Excusable Excusable or
James (1991); Kutil and Ness Apportioning
(1997); Finke (1999); Ness
(2000); Bubshait and
Cunningham (2004)
7 Hughes and Ulwelling (1992); Excusable Excusable Apportioning
Wickwire et al. (2003)
Note: 1Based on Peters (2003)

29
As shown in Table 2.1, general views consider concurrent delays as being similar to

excusable delays. That is, contractors are entitled time extension only. Figure 2.2

reflects this fact. When a compensable delay is concurrent with an inexcusable delay,

this scenario follows an “easy rule” or “contributory negligence” (Figure 2.3). However,

a recent trend advocates an equitable apportionment when compensable and inexcusable

concurrent delays occur. Figure 2.3 illustrates this trend as “fair rule” (Kraiem and

Diekmann, 1987) or “comparative negligence” (Hughes and Ulwelling, 1992). The fair

apportionment means apportionment of days and/or dollars. These different rules can be

derived from two different doctrines: the doctrine of contributory negligence and the

doctrine of comparative negligence. The California Appellate Court in Li v. Yellow Cab

(1975) explains (cited in Hughes and Ulwelling, 1992):

“The rule that contributory fault bars completely is a curious departure from

the central principle of 19th century Anglo-American tort laws – that

wrongdoers should bear the losses they cause. Comparative negligence more

faithfully serves that central principal by causing the wrongdoers to share the

burden of resulting losses in reasonable relation to their wrongdoing, rather

than allocating the heavier burden to the ones who, as luck would have it,

happened to be more seriously injured.”

Hughes and Ulwelling (1992) confirm that a comparative negligence analysis in

concurrent delay situations would undoubtedly produce results which are substantially

more fair and equitable. Among other things, the authors recommend the following:

30
a. The courts should reject the rule that “damages are not apportioned” in concurrent

delay situations.

b. The courts should reject the federal “shield” rule, which grants the contractor time

but no money (and the owner no liquidated damages) in the event of concurrent

delay.

c. The courts should resolve the issue of apportioning damages for delay in

accordance with the doctrine of comparative negligence.

Although most cases ruled that no damages are recoverable when effects are concurrent

and their costs cannot be segregated, there are some cases adopting the doctrine of

comparative negligence. A few cases held that despite the inability of the parties to

segregate damages or costs attributable to each cause, forfeiture of damages is

excessively harsh (James, 1991). In addition, these courts usually used a jury verdict

method to apportion damages to each party (James, 1991).

Undoubtedly, it is more equitable and reasonable to apportion damages in concurrent

delay circumstances. The current practice reveals that courts and boards can adopt the

doctrine of comparative negligence for solving concurrent delays. However, a jury

verdict method is very subjective and places the project parties in a passive position. The

project parties should therefore proactively apportion damages in concurrent delays by

employing a more logical and systematic approach. This research aims at developing

such an approach.

31
2.4 Float and Criticality in Project Schedules

Float plays a decisive role in determining whether an event causes project delays. The

question “who owns float?” has conflicting answers in previous law cases as well as

practitioners. Several studies have attempted to allocate float to the project parties in a

more reasonable manner. Details of the concept “float” can be found in any network

scheduling text (e.g., Antill and Woodhead, 1990; O’Brien and Plotnick, 2006). This

section presents float-related issues that are relevant for schedule delay analysis only.

Also, float in network-based techniques and specifically in CPM will be discussed. The

reason is that CPM is widely used in schedule delay analysis. Discussion of float in other

scheduling techniques, in linear scheduling or line of balance (Harmelink, 2001) for

example, is beyond the scope of this research.

2.4.1 Float

In network scheduling like CPM, float or slack represents the amount of time that an

activity can be delayed without delaying the project duration. Total float and free float

are the other commonly-used terms. Total float is the time difference between the

earliest finish and the latest finish of an activity (Ponce de Leon, 1986). All activities on

the same path co-share the total float in that path (Callahan et al., 1992). It is a by-

product of the CPM analysis (de la Garza et al., 1991). Free float presents the amount of

time that an activity can be delayed without delaying the earliest start of its following

activities. Normally, free float is not very meaningful in schedule management. As such,

the term float discussed below also means total float. Raz and Marshall (1996) mention

two other types of float, namely interfering float and independent float. The first refers to

32
the difference between total float and free float while the second refers to the difference

between the interval of time from the latest finish of an activity’s predecessors to the

earliest start of its successors, and the activity duration. Float is an important measure of

schedule flexibility associated with activities and an indicator of the amount to which the

schedule can absorb delays without affecting the project duration (Raz and Marshall,

1996).

2.4.2 Float versus Criticality

Float and criticality of an activity or a network path have an underlying relationship. A

network path is called a critical path when its float equals zero. All activities on the

critical path are called critical activities. A project has at least one critical path. The

concept that some activities are critical (zero float) while other activities have float is not

only beneficial as a management tool but also is useful in properly evaluating the impacts

of delaying events (Householder and Rutland, 1990).

Nevertheless, some practical considerations substantially challenge the “float” and

“criticality” concepts in both scheduling and forensic schedule analysis. In resource-

constrained scheduling, Fondahl (1991) claimed that an activity having positive float can

still be “resource critical.” He added that if this “resource-critical” activity fails to

release the resource units needed by a critical activity, it delays that activity and hence the

project. Kim and de la Garza (2003; 2005) use the term “phantom float” to reflect this

fact in resource-constrained CPM. Many contract change-order clauses do not tackle

33
“resource critical” extensions (Zollinger and Calvey, 2004). In delay analysis, Peters

(2003) raises some interesting issues:

“Which longest path governs? Is it the longest path on the baseline schedule?

Is it the longest path on the schedule update? Is it the as built critical path? If

it is the as built critical path, how will it be calculated? The use of total float

as a measure for assigning activities to their representative paths can become

problematic when analyzing as built schedules. CPM is unable to calculate

total float on an as built schedule in which estimated dates have been replaced

by actual dates.”

The concepts of float and criticality in networking scheduling are therefore not

straightforward as they superficially appear. When all project facts are justified, it

can be said that schedule analysis in delay claims mostly deals with float and

criticality under the impacts of delaying events. Kraiem and Diekmann (1987) state

that any change in the critical path can cause errors in delay analysis.

2.4.3 Float Ownership

Float is a valuable commodity in project scheduling (Kraiem and Diekmann, 1987;

Bubshait and Cunningham, 2004). Thus, both owner and contractor want to own float.

On the one hand, owners tend to use total float time to accommodate changes in the

original project scope to reduce the time impact of those changes by the amount of the

total float consumed (de la Garza et al., 1991). On the other hand, contractors have

reacted to these practices by using total-float removing techniques, such as artificial

34
lead/lags, unprecedentedly long activity durations, preferential logic, and other methods

(Ponce de Leon, 1984; cited in de la Garza et al., 1991). Various studies (Peterman,

1979; Ponce de Leon, 1986; Householder and Rutland, 1990; Zack, 1993) have tried to

find an appropriate answer to the question “who owns float?” Courts sometimes granted

ownership of total float to contractors, at other times to owners, and lately to the project

under the first-come-first-served basis on very similar facts (de la Garza et al., 1991;

Prateapusanond; 2003).

The legal precedent established that float belongs to the contractor as one of his resources

unless there is a contract clause to the contrary (Wickwire and Smith, 1974). To avoid

similar decisions, owners have introduced “float ownership” clauses in contracts. For

instance, a joint-ownership-of-float clause specifies that project float (or that time

between the contractor’s scheduled completion date and the contract completion date)

belongs to neither the contractor nor the owner but is for their mutual benefit and will be

used on a first come, first served basis (Zack, 1986).

2.4.4 Alternatives to Float Distribution and Management

Appropriate total float distribution and management ensure proper delay analysis and

equitable apportionment of delays. The confusion of float ownership incurs ambiguous

designated responsibilities since parties try to assert their right to use floats to maximize

the productivity and to minimize direct cost (Pasiphol and Popescu, 1994). Practitioners

and researchers have introduced different alternatives as to float distribution and

management. They include: (i) allocating float to individual activities along a path of

35
activities; (ii) trading total float as commodity; (iii) calculating and using safe float; and (iv)

using float clauses in contracts (Prateapusanond; 2003). The summary of the last four

alternatives can be found in Prateapusanond (2003). The following are some discussions

about the first two alternatives.

Allocating float to individual activities and/or parties along a path is a float distribution

alternative introduced by some studies. The allocation process can be either simple

(Wickwire et al., 1991) or more sophisticated by using various qualitative criteria

(Pasiphol and Popescu, 1994; Pasiphol and Popescu, 1995). In general, these studies try

to objectively distribute total float to each activity. Nevertheless, this alternative does not

easily recognize float ownership since the major objects for the distribution are activities

themselves and not project parties. Prateapusanond (2003) seeks a mechanism which

pre-allocates a set amount of total float on the same non-critical path of activities to the

two contractual parties, the owner and the contractor. The author recommends the 50-50

pre-allocation of total float. According to the author, this policy gives the owner and the

contractor equal rights to the total float. In other words, the owner and the contractor

each owns one-half of the total float available on any non-critical path of the project

(Prateapusanond, 2003). However, this 50-50 pre-allocation is rather arbitrary and does

not consider relative importance of activities in the corresponding critical path.

The second alternative views float as a commodity which can be traded between parties.

Under this perspective, contractors are entitled to administer total float, imposed the

obligation to disclose its value and trade it on demand (de la Garza et al., 1991). de la

36
Garza et al. (1991) introduce a method for calculating the daily trade-in value of total

float for a given activity involving the determination of an early finish cost (EFC) and a

late finish cost (LFC). The daily trade-in value of total float is the product of the

difference of LFC and EFC and total float. Finke (2000) recommends weighted schedule

density as a tool for pricing compensable float consumption. It should be noted that this

author uses free float instead of total float by reasoning that total float is shared by all

activities along a given path and does not necessarily represent the float available to a

specific activity.

2.5 Process of Forensic Schedule Analysis

Schedule analysis is an inexact science (Oles, 1997). It is the analytical process through

which a professional employs the critical path method (CPM), together with a forensic

review of project documentation and other pertinent data, to evaluate and apportion the

effects of delays and other impacts on the project schedule (Holloway, 2002). The

process of schedule delay analysis differs from one project to another because each

construction project is unique in nature. However, this process has to answer the

following questions (Al-Saggaf, 1998; Zack, 2003):

a. What happened on the project?

b. When and where did event(s) occur?

c. Why did the event(s) occur?

d. How did the event(s) happen?

e. When and how did the event(s) impact the schedule?

f. Who caused the event(s)? Or who is responsible?

37
g. What relief is provided in the contract for these event(s)?

h. Is time or money owed? If so, by whom and to whom?

There are some typical steps for schedule analysis. Al-Saggaf (1998) describes a formal

schedule analysis procedure with the following five steps: (i) data gathering; (ii) data

analysis; (iii) identification of the root cause; (iv) classification of the type of delay; and

(v) assigning responsibility. Selecting an expert witness can be another earlier step

described by Pinnell (1992). Baki (1999) presents a five-phased approach for claims

prevention, claims preparation, and claims defense. Kartam (1990) proposes a generic

methodology for analyzing delay claims (Figure 2.4). Window analysis or

contemporaneous period analysis technique (CPAT) is the only delay analysis method

recommended in that methodology since the data are assumed or perceived to be

sufficient.

Maintain Effective Analyze the Original Develop the As-Built


Documentation Schedule (OCPM) Schedule (ABS)

- Daily Inspection
Identify &
Reports (DIR)
Analyze
- Schedule Updates
Concurrent
- Submittal Logs
Delays
Request for Info Conduct
- Summarize
(RFI) - The Level of Effective
Analyze the DIR Analyze Apply the Analyze & Summarize,
- Contract Document Analyze Detail Meetings to
Project - Plot the DIR the Impact of Contemporaneous Evaluate Analyze &
- Clarification (CDC) Project - The Logic Present,
Resources - Develop Specific Period Analysis Contractor’s Calculate
- Potential Cost/ Documents - The Production Negotiate, &
Utilization Various Level Issues Technique (CPAT) Claims Compensation
Schedule Incidents Rates Settle
of Details
Reports (PCS) Identify Claims
- Change Order Log & Analyze
- Claims Logs Delay
- Cost & Progress Disruption
Payments Periods

Figure 2.4 Generic methodology for analyzing delay claims (Source: Kartam, 1999)

38
In general, CPM schedules play a critical role in success or failure of schedule analysis.

The use of CPM schedules to prove construction claims became the standard (Wickwire

and Smith, 1974). A CPM analysis is one of the best ways to persuade courts and

mediators who want to hear in the simplest possible terms what really occurred day to

day on the project (Frost, 2002). Though its success varied, CPM was used for

supporting delay and disruption claims in early 1970s such as in Chaney & James

Construction Company v. United States (1970) and Continental Consolidated

Corporation v. United States (1972).

2.6 Forensic Schedule Analysis Techniques

Many schedule analysis techniques are available in the industry. Each technique may

also have many variants. Oles (1997) claimed that the “scientific” principles of schedule

analysis can occasionally be lost by the confusion of conflicting illustrations and eloquent

expert witnesses. One can manipulate a methodology to provide a desired answer

(Farrow, 2007). However, an appropriate schedule analysis technique and its proper use

are keys to schedule analysis’s success. This section reviews and discusses current

techniques employed by the industry.

Figure 2.5 conceptually illustrates these techniques based on views of previous studies

(Wickwire et al., 1989; Pinnell, 1992; Alkass et al., 1996; Bubshait and Cunningham;

1998a,b; Finke, 1999; McCullough, 1999; Zack, 1999; Wickwire and Ockman, 1999;

Stumpf, 2000; Fredlund et al., 2003; Lee, 2003; Zack, 2003; Lovejoy, 2004; Niesse;

2004; Mbabazi et al., 2005). Intuitively, reliability and the extent of contemporaneous

39
project documentation needed and effort to prepare are associated among schedule

analysis techniques. In this dissertation, the term reliability describes the result of

forensic schedule analysis that accurately presents and captures the facts. Major

techniques presented herein are as follows:

Figure 2.5 Mapping of forensic schedule analysis techniques

a. Global impact method

b. As-planned vs. as-built method (a.k.a. total time, net impact)

c. Impacted as-planned method (a.k.a. “what-if”, adjusted-baseline)

d. Collapsed as-built method (a.k.a. “but-for”)

e. Schedule window analysis (a.k.a. snapshot, contemporaneous period analysis)

f. Time impact analysis (a.k.a. modified as-built)

40
2.6.1 Global Impact Method

This method treats all delays equally regardless of whether they are on critical paths,

concurrent with other delays or really impact project completion time. Under this

method, the total delay is determined by the sum of the durations of all delaying events

(Alkass et al., 1996). Alkass et al. (1996) reveal that the sum of delays can exceed the

actual completion date in some circumstances. This technique is generally the least

reliable among the schedule analysis techniques identified and discussed in this research

(Figure 2.5).

2.6.2 As-Planned vs. As-Built Method

The as-planned versus as-built method compares the as-built schedule to the as-planned

schedule (Stumpf, 2000). That is why it is also known as the total time or net impact

method. It illustrates the as-planned and as-built schedules and occasionally the would-

have-been schedule as either single bars or summary bar charts (Pinnell, 1992). The

“total time” method analogously indicates the “total cost” method in quantifying

inefficiency of cumulative disruptions or “ripple” effects. In its simplest form, the

method assumes that the party (the contractor) using it causes no delays, and that the

other party (the owner) causes all delays (Stumpf, 2000). Thus, the amount of delays

having an impact on the project’s completion date is likely overestimated (Alkass et al.,

1996). Figure 2.6 illustrates an example of the total time method in the simplest form.

The as-planned and as-built schedules are 10 days and 15 days, respectively. The

difference between them (5 days) is the total amount of delays recoverable.

41
ID Task Name Duration
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
1 As -Planned 10 days

2 As -Built 15 days

3 Delays 5 days

Figure 2.6 As-planned vs. as-built method

The total time method has some variants. The total time method can be called the

adjusted as-built CPM method when it employs CPM-based schedules. The critical paths

are identified in the as-planned and as-built schedules with delaying events are displayed

as activities and linked to specific work activities (Alkass et al., 1996). This variant is

similar to the total time method in the simplest form, except that it uses CPM (Pinnell,

1992). The two methods typically yield similar results since both methods only display

the net impact of all claimed delays on the project schedule (Leary and Bramble, 1988).

Alternatively, the total time method can go further by scrutinizing categories of delays as

owner-, contractor-, or third party-caused delays. It is called the modified total time

method in this research. The result of the schedule analysis can be different and

expectedly less unreliable (Figure 2.5). An example can be found in Stumpf (2000).

2.6.3 Impacted As-Planned Method

The impacted as-planned method is also known as the “what-if” or adjusted-baseline

method. It aims to present a fair view of responsibility for owner delays on the project’s

completion time by impacting the initial CPM solely with owner-caused delays

(Wickwire and Ockman, 1999). The process is similar for measuring impacts of

42
contractor-caused delays on the original CPM schedule. The as-planned schedule is

utilized as a baseline against which to determine schedule delays (Schumacher, 1995; Al-

saggaf, 1998; Kim et al., 2005).

Notably, the “what-if” method assumes that the as-planned schedule was reasonable.

This is almost always impossible in the real world. In addition, delay concurrency is not

considered properly since the method treats each type of delays separately. The courts,

boards and other legal bodies have generally held that a delay analysis must be based

upon and consider the actual performance by all parties on the project (Wickwire and

Ockman, 1999). Nevertheless, because it differentiates types of delays, the “what-if”

method is more reliable compared to the total time method.

2.6.4 Collapsed As-Built Method

The development of an as-built schedule is a key process since the method uses the as-

built schedule instead of an as-planned schedule as described in the “what-if” analysis. It

theoretically shows when the work would have been completed “but-for” the delays of

the other party (Wickwire and Ockman, 1999). That explains why it is also called the

“but-for” method. Specifically, the collapsed as-built analysis starts with an as-built

schedule, including all known delaying events, then subtracts delays of one party from

the schedule to illustrate how work would have progressed but for those delays by the

other party (Lovejoy, 2004).

43
This method can be acceptable in the industry. Despite incompleteness, a collapsed as-

built analysis addresses the issue of concurrent delays and assesses types of delays

(Alkass et al., 1996). In construction litigation, the method has been utilized by the

Boards of Contract Appeals (Wickwire et al., 1989). Lovejoy (2004) says that the

collapsed as-built method has risen to an acceptability level almost equal to that of the

contemporaneous period analysis.

Some research has attempted to improve the collapsed as-built method. Mbabazi et al.

(2005) propose a modified but-for method that considers and reconciles the viewpoints of

all the parties based on a mathematical basis. The modified but-for method uses Venn

diagrams to represent the different sets of one-party, two-party, and three-party

concurrent critical delays. The authors claims that the modified but-for method could

identify the hidden concurrent delays. Nevertheless, those hidden concurrent delays

described by the authors can be questioned when the conditions of the occurrence of

concurrency in construction (Ponce de Leon, 1987) are tested.

2.6.5 Schedule Window Analysis

Unlike previous methods which analyze delays by looking at an entire project, window

analysis assesses delays in certain periods of time separately and independently. Window

analysis divides a project into specific time periods (that is, window sizes, windows of

time, or snapshots) which are determined by the contemporaneous project program and

documentation (Galloway et al., 1997). Thus, the window analysis method is also known

as the snapshot method or contemporaneous period analysis. The term “snapshot”

44
naming this method underlines the need for relying only on factual as opposed to fictional

data (Reynolds and Revay, 2001).

Courts and boards as well as practitioners and researchers generally agree that window

analysis is the best available option. The window analysis method utilizes up-to-date

information to enable evaluation against varying critical activities which reflect actual job

statuses at the time (Galloway et al., 1997). It builds a period analysis upon the previous

period’s analysis and assesses each new period for delay, causation, and responsibility as

the analysis proceeds (Zack, 1999). A major drawback is potentially selecting window

sizes arbitrarily and subjectively. It also may not scrutinize delay type during the

analysis (Alkass et al., 1996).

2.6.6 Time Impact Analysis

Time impact analysis (TIA) is currently one of the most reliable delay analysis

techniques. It is a chronological and cumulative method to analyze delay (Wickwire and

Ockman, 1999). Similar to schedule window analysis, TIA uses the current update of the

project schedule when an impacting event occurs as the baseline for measuring the

impact (McCullough, 1999). It is an iterative process of multiple analyses, starting with

the as-planned schedule which is adjusted each time an event occurs (Pinnell, 1992). The

difference between these two methods is that TIA focuses on a specific delay or delaying

event, whereas the windows method focuses on a time period (a.k.a. window or snapshot)

which may contain multiple delays or delaying events (Alkass et al., 1996).

45
The timely evaluation of impacts of a delaying event is a prominent advantage of TIA. In

other words, it enables the contracting parties to determine a contractor’s right to obtain a

time extension in a real-time manner and to provide the capability for the parties to

resolve disputes prior to an exhaustive after-the-fact analysis reconstructed upon the

completion of the project (Wickwire and Ockman, 1999). However, TIA is unable to

capture and scrutinize potential concurrent delays. Since delayed activities are analyzed

discretely, the effect of concurrent delays is not instantaneously addressed in the analysis

(Alkass et al., 1996). Wickwire and Ockman (1999) recommend one way to avoid this

problem is through the use of measuring points such as monthly updates. The authors

describe this way as a “fact finder” which can look not only at the location of the critical

path at the initiation of the delay, but also can confirm the actual effect of the delay by

reviewing the project status at the end of each update and the history of actual events.

2.6.7 Other Schedule Analysis Techniques

Inspired by the sometimes inexact and inconsistent results yielded by these techniques,

both researchers and practitioners have attempted to either improve the existing

techniques or propose new methods for forensic schedule analysis. Yates (1993)

develops a construction decision support system for delay analysis. Alkass et al. (1996)

propose a new method called “isolated delay type” which utilizes advantageous attributes

of the three techniques; namely but-for, window analysis, and time impact analysis.

Unfortunately, there is no successful case using that method reported during the last 10

years. Shi et al. (2001) propose a computation method using as-planned schedules as a

basis of analysis and not based on the criticality of activities. Those premises in concert

46
with other limitations can hamper its acceptability in the real world. Seals (2004)

presents an analytical tool combining continuous delay measurement (CDM) and daily

delay values (DDV). Similarly, Hegazy and Zhang (2005) develop a spreadsheet to

facilitate daily window analysis for small and medium-size projects. From a practical

viewpoint, however, daily window analysis tends to be too much work. In addition,

current time impact analysis may be used instead of daily window analysis with similar

effort and accuracy.

Lee et al. (2005) present a delay analysis method considering lost productivity. Unclear

differentiation between delay and disruption as well as between their claims may really

challenge its applicability. Discussion of delay versus disruption is presented previously.

Kim et al. (2005) propose a method using delay section, which addresses the two

limitations of available methods, namely ambiguity in the analysis of concurrent delays

and inadequate consideration of time-shortened activities. As the authors point out the

method requires much effort and time in project records, updates, and analyses. Mbabazi

et al. (2005) interestingly employ a Venn diagram to eliminate such drawbacks of the

but-for method as its narrow focus on the viewpoint of a single party and its inability to

accurately consider concurrent delays. However, when applied to their case study the

modified method results in so-called hidden concurrent delays, whereas no concurrency

apparently exists in their as-built schedule, thus producing a questionable result. For

instance, there is no concurrent delay identified in that case by using “daily” window

analysis.

47
2.6.8 Criticism of Available Schedule Analysis Techniques

As previously discussed, the current delay analysis methods have different levels of effort

and accuracy. Previous studies (e.g. Alkass et al., 1996; Stumpf, 2000; Zack 2003; Ng et

al., 2004) illustrates that different techniques yield different results. Table 2.2 displays as

an example the delay analyses for a small home construction project. In addition, the

same method may result in different outputs. For instance, Hegazy and Zhang (2005)

shows that within the window analysis method, results can be different by selecting

different time periods for the analyses.

Table 2.2 Comparative results of schedule analysis methods (Source: Stumpf, 2000)
Method Number of days
Inexcusable delays Excusable delays Compensable delays
Total time 8
Modified total time 3 5
Impacted as-planned 2 6
(owner delays)
Impacted as-planned 5 3
(contractor delays)
Collapsed as-built 5 3
Window analysis 1 2 5

Although various techniques are available, none of them can overcome some major

limitations. Paradoxically, schedule-related issues such as float, float ownership, change

in logic, and resource allocation can cause delays yet their effects are typically neglected.

In addition, the current methods potentially “compare apples and oranges.” That is, two

events will be considered to have the same impact if they cause the same delay of the

project completion date. Crucial issues such as their timing and relative importance of

the corresponding delayed activities are not scrutinized during the analysis. This research

will focus on resolving those problems.

48
2.7 Delay Damages and Commonly Applied Methodologies

The determination of damages is the third component of the “triad of proof” for proper

delay claims (Figure 1.1). Hughes (2003b) states: “after all this effort to document

delays, comply with notice provisions, analyze schedules and the like, the final question

is: What is the payday from all this work? In the context of a delay claim, the question

translates to: What are the possible damages that flow from a delay claim?” This section

presents possible damages of contractors and owners. The contractor’s damages are

however focused due to their controversial issue among courts, boards, practitioners, and

researchers.

2.7.1 Overview of Delay Damages

Together with proving causation and liability, properly quantifying damages in delay

claims is an arduous task. They require creative analysis, laser-like attention to factual

detail, and experience and great judgment (Strogatz et al., 1997). They also require

detailed analysis of numerous cost accounts and schedule activities, complicated by a

practical inability to separate the impacts of each impacting event giving rise to a claim

(Oles, 1998). National Cooperative Highway Research Program of Transportation

Research Board (NCHRP, 2003, p.18) expresses the courts’ views:

“Courts have long recognized that damages need not be calculated with

absolute certainty to be recoverable. Courts have also long held that damage

calculations that are based upon speculation may not be recovered, even if

some damage was almost certain. The ground between certainty and

speculation, however, provides a fertile playing field for courts and boards to

49
make decisions that will continue to affect the fate of owners and contractors

alike.”

Either owner or contractor may be entitled for recovery of damages caused by the other

party. An owner typically recovers damages subject to a liquidated damages clause in the

contract with his/her contractor. Alternatively, an owner may recover based upon his/her

own actual damages due to inexcusable delays when no such a liquidated damages clause

exists. A contractor however has to prove his/her actual damages incurred as a result of

compensable delays. Some contract clauses such as no-damage-for-delay may place the

contractor in an inferior situation in delay claims.

2.7.2 Owner’s Delay Damages

As previously discussed, a liquidated damages clause is normally a basis for calculation

of the owner’s damages. Absent such a predetermined provision the owner has to be

prepared to prove its actual damages incurred as a result of contractor-caused delay

(Strogatz et al., 1997). Some owners do not want to be bound by that predetermined

provision due to: (i) if they suffer damages, the quantification of actual damages after the

fact will be a much more favorable outcome and consistent with damages incurred; and

(ii) they have little to no confidence in their quantification of liquidated damages, which

may be equivocal when it comes to enforcing them (McCormick, 2003). Hosie (1994)

discusses the use of liquidated damages in details. Types of owner’s delay damages

include (Strogatz et al., 1997):

50
a. Direct damages: They are incurred due to the extended construction period such

as extended construction supervision, additional engineering service, extended

financing, and so forth.

b. Consequential damages: They are indirectly incurred due to the delayed use of

the project or delay impacts on the owner’s business such as lost profits and lost

rents.

2.7.3 Contractor’s Delay Damages

Figure 2.7 demonstrates a typical cost breakdown structure of a contractor. Pricing

contractor’s delay damages on construction contracts is very intricate. On any project,

the facts are complex and extensive, and testimony of liability can be elusive (Overcash

and Harris, 2005). This section presents types of recoverable damages, principles of

recovery or equitable adjustments, calculating formulas, and conditions of damages

recovery. Field overhead and home office overhead damages are highlighted because

they are more controversial than direct costs incurred due to delays.

2.7.3.1 Types of Recoverable Damages

Contractor delay damages can be direct and indirect. The direct damages are related to

mobilization/demobilization, standby time/idle tools and equipment, extended general

conditions or field office overhead, extended home office overhead, escalated labor or

material costs, and loss of productivity (Strogatz et al., 1997). Indirect damages or

consequential damages are those impacting upon other aspects of the contractor’s

business – loss of profits on the delayed project, loss of profit on other projects, and

destruction of business.

51
Profit

Home Office General Overhead

COST BREAKDOWN STRUCTURE (CBS)


Contingency Reserve

INDIRECTS
Staff

Facilities

Supplies & Services

Time & Materials


Field Labor

Work Breakdown
DIRECT COSTS

Structure (WBS)
Materials

Direct Items
Packages

Accounts
Work Equipment

Tools & Supplies

Subcontracts
Figure 2.7 Contractor’s cost breakdown structure (Source: Overcash and Harris, 2005)

2.7.3.2 Equitable Adjustments

Equitable adjustments are normally used for governmental caused delays. The primary

pricing rules for an equitable adjustment for damages are (Love, 2000):

a. Only foreseeable cost increases are recoverable, which generally precludes

recovery of cost increases that the delay causes to other contracts;

b. The contractor is to be restored in as good a position as if the delay had not

occurred; and

c. All direct and allocable indirect costs can be recovered, if reasonable.

2.7.3.3 Field Overhead Damages

Field office overhead or job site overhead is the costs spent to manage, control and

administer a specific contract or project such as the costs of connecting and mobilizing

utilities, providing a job site office, and supervising the project. The calculation of field

52
overhead damages needs to differentiate between time-related costs and activity-related

costs. Only time-related costs can be included in estimating the delay period daily rate

for field overhead. For the total cost claim approach, the industry currently uses the

following formula for calculating field overhead damages (Lankenau, 2003):

Total Time Dependent Costs to Date


Delay Period Daily Rate =
Project Duration to Date

Field Overhead for Delay Period = (Delay Period Daily Rate) x (Delay Period)

Field overhead for a delay period determined by the above formula is potentially unfair.

It assumes that all time-related costs are the fault of the owner and a complete

extrapolation is foreseen by the owner (Lankenau, 2003). In WRP Corporation (WRP

Corporation v. United States, 1968; cited in Lankenau, 2003), the court ruled that the

total cost claim approach can only be used when four elements are satisfied:

a. It is impossible to determine losses with reasonable accuracy;

b. The bid was realistic;

c. The costs are reasonable; and

d. The contractor was not responsible for the costs.

Delay claims therefore need a more accurate methodology of calculating field overhead

damages. The above formula which results in the “one-size-fits-all” daily rate is not

appropriate. Lankenau (2003) states that this is unfortunate since the pertinent data are

normally available and maintained in an easy-to-use electronic form.

53
2.7.3.4 Extended HOOH versus Unabsorbed HOOH

Home office is the contractor’s principal office, where executive and administrative

actions are undertaken for the business as a whole (NCHRP, 2003). As such, HOOH is

typically described as enterprise costs incurred by the contractor for the benefit or support

of all of a contractor’s projects in progress (Zack, 2001). HOOH is frequently expressed

as a percentage of other costs, and thus is sometimes described as a contractor’s general

and administrative (G&A) expense (NCHRP, 2003).

Owner caused delays can increase a contractor’s HOOH. There are two different types of

HOOH damages, namely extended HOOH and unabsorbed HOOH. Extended or

overextended overhead arises when the extension of the performance period of a contract

increases HOOH costs (Ottesen and Dignum, 2003). Unabsorbed, underabsorbed or

underutilized overhead occurs when a contractor’s cash flow on a project is considerably

reduced as a result of an owner-caused delay of unknown duration at the outset (Zack,

2001). Similar definitions can be found elsewhere (e.g. Wright and Bedingfield, 1979;

Nash, 1989).

Some courts and authors differentiate the two terms by stating that unabsorbed HOOH is

associated with the manufacturing industry, whereas extended HOOH is associated with

the construction industry (Schwartzkopf and McNamara, 2001). The General Services

Board of Contract Appeals (GSBCA) once stated that extended overhead is a concept

unique to construction contracting (Capital Electric Company, 1984). Other authors

differentiate between them based upon whether a project was formally suspended or only

54
partially or informally suspended (Trauner, 1990). In sum, unabsorbed overhead occurs

in the original contract period while extended overhead occurs when original work is

performed in a period beyond the original contract period and can occur when a

contractor is in a standby status beyond the original contract period (Kenyon, 1996).

2.7.3.5 Methodologies for Calculating HOOH Damages

There are several methodologies for calculating HOOH incurred by compensable delays.

Ottesen and Dignum (2003) listed three frequently applied methodologies: (i) application

of the Eichleay-type formula; (ii) use of a markup percentage multiplier; and (iii)

execution of a change order authorizing additional cost and/or time. The federal

government is normally tied to the Eichleay formula through precedent and practice

(NCHRP, 2003). For instance, in Wickham Contracting Company (1994), the Federal

Circuit held that the Eichleay formula was the only appropriate means for calculating

HOOH. The Departments of Transportation (DOT) in some states such as California,

Colorado, Connecticut, Florida, Georgia, New Jersey, New York, Ohio and Virginia have

established their standard markups (NCHRP, 2003).

Formulas for Calculating HOOH

Courts, boards and participants have proposed and used various formulas for pricing

HOOH damages in delay claims. The use of a formula for calculation of HOOH was

tracked back to more than 60 years ago in Fred R. Comb Company v. United States

(1945). Fifteen years later in Eichleay Corporation (1960), the Armed Services Board of

Contract Appeals allowed Eichleay Corporation to calculate HOOH damages using the

so-called Eichleay formula. Description of the Eichleay formula is as follows:

55
Contract Billings x Total Overhead
Overhead Allocable to Contract =
Total Billings for Actual Contract Period

Overhead Allocable to Contract


Daily Overhead Allocable to Contract = Actual Days of Contract Performance

Home Office Overhead Owed = Daily Overhead x Days of Compensable Delay

Succeeding cases have proposed various formulas. Table 2.3 summarizes nine formulas.

Eight of them are derived from court cases. The other is reported by Ernstrom and Essler

(1982). Different formulas generally result in very different HOOH damages. Examples

can be found elsewhere (Zack, 2001).

Table 2.3 Formulas for calculating home office overhead


Formula Origin Home Office Overhead (HOOH)
Country Year Allocable HOOH Daily Rate HOOH Owned
Eichleay USA 1960 (Bc/Ba)*Oa Oc/Da Rd*De
Eichleay - Var. 1 USA 1984 (Bc/Bo)*Oo Oc/Do Rd*De
Eichleay - Var. 2 USA 1980 [Bc/(Bo+Be)]*Oo Oc/Do Rd*De
Hudson UK 1989 - (Vo/Do)*Op Rd*De
Ernstrom & Essler USA 1982 - - (Oa/La)*Ld
Manshul USA 1981 - - [Be/(1+Mp)]*Mn
Carteret USA 1954 - - (Me-Mn)*Be
Allegheny USA 1958 - - (Me-Ma)*Vo
Emden Canada 1995 - (Mp*Vo)/Do Rd*De
Legend:
Bc Contract billings Da Actual days of contract performance
Bo Total billings for original contract period Do Original days of contract performance
Ba Total billings for actual contract period Mp Planned HOOH and profits at time of bid
Be Contract billings for extended period Mn Normal HOOH (%)
Oo Total overhead during original contract period Ma Actual HOOH: entire period (%)
Oa Total overhead during actual contract period Me Actual HOOH: delay period (%)
Vo Original contract value Rd Daily overhead allocable to contract
La Total labor costs: actual period De Days of owner-caused delay
Ld Labor costs: delay period Oc Overhead allocable to contract
(Based on Zack, 2001; NCHRP, 2003; Ottesen and Dignum, 2003)

56
Although the Eichleay formula has long-standing precedent that supported its use, it has

been rejected by many court cases, for example Berley Industries, Inc. v. City of ew

York (1978) and Capital Electric Company (1984). In California, the Court in W.B.

Construction v. Mountains Community Hospital District (2005) noted that “the Eichleay

formula has not been adopted by any California decisional authority, and it is

questionable whether it should be.” Similarly, many practitioners and researchers

showed that the Eichleay formula is very often inappropriate (e.g. Kenyon, 1999; Love,

2000; Ottesen and Dignum, 2003). Love (2000) finds that the Eichleay formula has no

meaningful relation to unabsorbed overhead, extended overhead, or the difference

between the two. Many criticisms made of the Eichleay formula include, but are

certainly not limited to (Lubka, 2005):

a. That there is a lack of evidence of damages. That the damages are awarded

simply as the result of making a prima facie case and assumption that such

damages exist;

b. That the damages only exist to the extent that there is an actual delay in the

project. Increased overhead resulting from a breach that does not result in a

project delay and does not yield damages;

c. That if the government simply provides a date of resumption of work, that there is

no uncertainty with regard to the delay, and damages are precluded;

d. That the concept of "stand-by status" is still uncertain and that the extent to which

a contractor can perform work without impairing its Eichleay rights is not well

defined; and

e. Situations where there is a suspension, followed by a termination.

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Standard Markups in State DOTs

In a recent survey of the transportation agencies of all 50 states, Puerto Rico, and the

District of Columbia, the Transportation Research Board (NCHRP, 2003) classifies the

approaches to the issue of unabsorbed HOOH into three models. They are Avoidance,

Compliance, and Proactive models. Brief descriptions are as follows (NCHRP, 2003):

a. Avoidance Model: Contractors are never paid for HOOH. Arkansas, Minnesota,

Nebraska, North Dakota, and Wisconsin were examples.

b. Compliance Model: Contractors are paid for HOOH based primarily on court

and board precedent such as the use of Eichleay-type formulas. Arizona, Indiana,

and Texas were in this group.

c. Proactive Model: Payment of HOOH is addressed in the standard specifications,

normally standard markups. As previously mentioned, California, Colorado,

Connecticut, Florida, Georgia, New Jersey, New York, Ohio and Virginia were in

this group at the time of the survey.

Under the proactive model, these states have established their own standard markups and

perhaps different formulas. For instance, the Florida approach is essentially the same as

the above Emden or Canadian formula except that this approach establishes the markup

at a constant 8% (NCHRP, 2003). Table 2.4 presents standard markups in six states.

58
Table 2.4 Allowed markup for home office overhead (Source: NCHRP, 2003)
State Allowable Covers Applied to
Markup
Colorado 10% Home office overhead and • Nonsalaried labor costs
profit • Added bond, insurance, and tax
expense
• Increased material costs
• Added equipment costs
• Added job site overhead costs
Connecticut 10% Home office overhead and • Nonsalaried labor costs
profit • Increased material costs
• Added job site overhead costs
Georgia 15% Home office overhead and • Nonsalaried labor costs
profit • Added insurance and tax expense
• Increased material costs
• Added equipment costs
• Added job site overhead costs
New Jersey 10% Overhead, general • Nonsalaried labor costs
superintendence, and other • Bond, insurance, and tax expense
costs attributable to delay • Added equipment costs
(specifically excluding
profit, as profit is not
allowed on delay claims)
New York 10% Home office overhead and • Nonsalaried labor costs
profit • Added insurance and tax expense
• Added equipment costs
• Added job site overhead costs
Virginia 15% Field and home office • Costs associated with a
overhead compensable delay claim

Prerequisites for Recovering HOOH

Many federal court decisions have stated similar prerequisites for recovering HOOH

and/or an Eichleay award. A synthesis undertaken by TRB (NCHRP, 2003) states:

“Among the distinctions articulated by courts that adopt the Eichleay Formula

are variations that require the analysis of (1) unabsorbed overhead versus

extended overhead and (2) delays caused by additional work versus delays

caused by suspensions. Among the prerequisites that have been articulated by

59
courts adopting the Eichleay Formula are (1) an owner-imposed suspension of

critical work, (2) an owner requirement that the contractor stand-by during the

associated delay, and (3) proof that while standing-by the contractor was

unable to take on additional work.”

In other words, in order to recover HOOH a contractor has to show that (i) the

government-caused delay exists, (ii) the “standby” test is passed, and (iii) proper

mitigation of damages. Detailed discussions of these prerequisites can be found in

Kauffman and Holman (1995).

Figure 2.8 presents the application areas of the two common methodologies – the

Eichleay-type formula and the percentage markup method. From reviewing different

court decisions, the use of the percentage markup approach is possibly appropriate when

compensable delays are caused by scope additions. The change clause is normally

applied in this situation. In contrast, the Eichleay formula is more appropriate when

compensable delays are caused by a suspension of work. The Army Corps of Engineers

Board of Contract Appeals (ENG BCA) in R.G. Beer Corporation notes that only in rare

cases will an Eichleay award be proper for delays caused by changes to the contractual

scope of work (Love, 2000).

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Figure 2.8 Application areas of percentage markup versus Eichleay formula

The U.S Claims Court in C.B.C. Enterprises, Inc. v. United States (1991) stated:

“When a contract period is extended for additional work, rather than a

suspension of work, home office overhead generally can be calculated more

accurately by applying a percentage overhead markup to direct costs rather

than by use of the Eichleay formula. This is so because, by definition, a

suspension of work means that little or no work is being performed, with a

corresponding decrease in direct costs incurred. Thus, applying a percentage

overhead markup to direct costs would produce little or no overhead, and

would not adequately compensate the contractor for overhead costs incurred.

On the other hand, when changes are made to add work and the performance

period is extended solely to accommodate the extra work as in the present

situation, there is an ongoing level of work which usually produces sufficient

61
direct costs such that the contractor generally is adequately compensated by

applying a percentage overhead markup to direct costs.”

The illustration of the application areas (Figure 2.8) raises various issues. How these

approaches are applied when both additional work and a suspension of work cause

compensable delays. Are HOOH damages incurred by the additional work and the

suspension of work calculated separately? If yes, how does one ensure that no

overlapped or overallocated HOOH recovery exists? If no, which methodology will

be more accurate and equitable? The current methodologies cannot handle these

issues.

2.8 Summary of the Literature Review

This chapter has reviewed various topics related to delay claims in the construction

industry. Different concepts, techniques, and methodologies currently used in delay

claims and disputes have been summarized and their rationale, strengths, and limitations

have been analyzed. This review shows that the existing ways of proving causation and

pricing damages in delay claims need improving to obtain general consensus among the

project stakeholders (e.g. owners, contractors, courts, boards, and so on) when project

schedule delays and disputes occur. Specifically, forensic schedule analysis techniques,

apportionment of delay responsibility in concurrent delay situations, and quantification of

recoverable damages, among other things, need to be improved.

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Chapter 3
Research Methodology

This chapter presents the methodology used to achieve the research objectives. A

research framework illustrates the process of conducting the research associated with the

use of various concepts, techniques, tools, and data sources. Next, those concepts,

techniques, tools, and data sources are elaborated to what extent they have been applied

to this research.

3.1 Research Framework

As discussed in chapter 1, this research solves problems surrounding the “causation” and

“resultant damages” in the triad of proof in construction delay claims. on the intent is to

improve both forensic schedule analysis and delay-damages analysis that delay claims

typically require. Figure 3.1 displays the research framework. The research objectives

are numbered in the order listed in chapter 1. The left side displays concepts, techniques,

tools, and data sources adopted to achieve the research objectives listed on the right side.

The research starts with a review of the literature. Relevant concepts of delay claims,

forensic schedule analysis techniques, and methodologies for calculating damages are

reviewed to identify and understand research problems.

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Figure 3.1 Research framework

To examine the effects of resource allocation in schedule delay analysis, this research

constructs some simple project cases illustrating different delay scenarios. Next, some

best available schedule analysis techniques are used to analyze the delays. Historical data

on resource allocation practice in these cases are then loaded into the project schedules to

observe whether the existing techniques are adequate and reliable. It should be noted that

current delay analyses very often neglect resource allocation. An enhanced schedule

window analysis technique is introduced to capture resource allocation practice.

64
Resource-constrained CPM and a project scheduling software package facilitate the

analysis.

The measurement and apportionment of delay damages are a necessary step in delay

claims. This is because a single party rarely causes all delays in a project. Thus, the

effects of the context of a delay must be considered. The context of a delay is understood

to include the timing of a delay and the degree of suspension. This research introduces

the concept of the activity-specific overhead allocation process to resolve this problem.

A case study published in a previous work is used to demonstrate the application of the

process and comparisons between it and the daily overhead rate-based method.

Existing methods for calculating field overhead damages assume that these damages

cannot be traced to a specific schedule activity. In addition, home office overhead

damages cannot be traced to a specific contract. These have generated controversy over

the amount of recoverable damages. This research develops a process for quantifying

field overhead damages incurred by schedule delays. This research also recommends a

possible direction to develop a new approach for quantifying home office overhead

damages. This is presented in the last chapter – conclusions and recommendations.

This dissertation develops a novel forensic schedule analysis technique that

systematically addresses the dynamics of float, logic, and resource allocation. Current

bases and tools include total float in the critical path method, resource-constrained

scheduling, float ownership, hard logic versus soft logic, and the resource allocation

65
practice. The consideration of resource allocation in this new technique is based upon the

initial investigation for the first research objective of this dissertation.

Finally, this research introduces a new framework to foster the analyses of the causation

and quantum in delay claims. That is, the framework advances the credibility of both

forensic schedule analysis and delay-damages calculation. The development of this

framework is based on the integration of the new techniques achieved in the second and

the third objectives. The framework is then applied to a case study to compare results

with those derived from previously available methods.

3.2 Bases, Tools, and Techniques

This section describes major bases, tools, and techniques used for this research. Other

concepts and techniques may be discussed in the relevant sections of the following

chapters.

3.2.1 Current Forensic Schedule Analysis Techniques

There are many schedule delay analysis techniques. Chapter 2 describes them in detail.

However, this research mainly uses the most acceptable techniques in the industry: but-

for, time impact analysis, and especially window analysis. Specifically, this research

focuses on improving the window analysis method by integrating necessary steps so that

effects of resource allocation can be captured during analysis. They are also a

cornerstone for developing a novel forensic schedule analysis technique in this

dissertation.

66
3.2.2 CPM, Linked Bar Charts, and Resource-Constrained Scheduling

CPM is used for forensic schedule analysis. However, graphical exhibitions include bar

charts and linked bar charts for ease of understanding. Since one of the major ideas is to

examine the impacts of resource allocation practice on delay analysis, the concepts of

resource-constrained scheduling are also employed to develop as-planned, as-built, and

entitlement schedules8.

3.2.3 Scheduling Software Packages

Microsoft (MS) Project, Primavera Project Planner (P3), and SureTrak are project

scheduling software packages commonly used in the construction industry. In this

research, MS Project is used in most cases to facilitate schedule analyses. MS Project is

chosen because it is available and adequately sophisticated for those analyses.

3.2.4 Project Overhead Allocation

The earned value management system (EVMS) is used to manage and control project

performance. Remarkably, the U.S Department of Defense (DOD) replaced its well-

known Cost/Schedule Control Systems Criteria (C/SCSC) for EVMS in 1996. In EVMS,

Earned Value Analysis (EVA) is a method of comparing the amount of work planned

with what is actually completed to determine if cost and schedule performance is as-

planned (Barr, 1996). EVA and EVMS are now using in project management by many

industries (Singletary, 1996). Discussions of EVA can be found in any recent project

management textbook.

8
Refer to section 2.1.1 “types of schedules” in Chapter 2

67
However, this research does not use EVA to apportion delay responsibility between the

project parties. EVA cannot do that. Instead, the principles of the allocation of indirect

costs through the project and schedule activities in EVMS are employed, modified, and

elaborated to embrace the effects of the context of a delay in terms of the timing of a

delay and degree of suspension in the apportionment of delay damages. This research

adopts these principles since EVMS is now a popular and effective tool used in the

construction industry. Thus, the proposed activity-specific field overhead allocation

process presented in Chapter 5 for quantifying and apportioning field overhead delay

damages can be readily applicable in the real world. Figure 3.2 depicts the EVMS’s

types of effort. The bottom part of the figure lists the equivalent and normally-used

terms. Similar to C/SCSC (Raz and Elnathan, 1999), with these subdivisions of control

account efforts, EVMS recognized two cost drivers for overhead allocation: direct cost

and activity duration. Specifically, the Department of Defense Earned Value

Management Implementation Guide (2005) describes these types of effort as follows:

a. Discrete Effort: Efforts with definable scope and objectives that can be

scheduled and on which progress can be objectively measured.

b. Apportioned Effort: Activity dependent on and related in direct proportion to the

performance of other discrete effort. The resource plan for apportioned efforts

will be in accordance with the plans of the base accounts.

c. Level-of-Effort (LOE): Work scope of a general or supportive nature for which

performance cannot be measured or is impractical to measure. Resource

requirements are represented by a time-phased budget scheduled in accordance

with the time the support will likely be needed. For discrete effort

68
accomplishment can be measured based on the completed pieces of work but LOE

is “measured” through the passage of time.

Figure 3.2 Types of effort and overhead costs

This research classifies project overhead in terms of home office overhead, time-related

field overhead, and non-time-related field overhead based on these types of effort in

EVMS as a structured approach to determine the level of overhead incurred during

construction (Figure 3.3). This forms a basis for introducing a new process for

quantifying field overhead damages, which will be discussed in Chapter 5.

69
Figure 3.3 Contactor’s overhead costs (Adapted from Scott and Harris, 2004)

3.2.5 Research Evaluation

All approaches proposed in this dissertation are comprehensively evaluated in the form of

case applications. They are compared to the best available techniques or methodologies.

Case studies are used to evaluate performance of the proposed approaches and the best

available ones. Evaluation criteria include, but are not limited to, consistency,

practicality, reliability, and acceptability of results obtained. Table 3.1 describes these

criteria.

Table 3.1 Criteria for evaluating forensic schedule analysis techniques


Criteria Description
Consistency Forensic schedule analysis is logical coherence and
accordance with the project facts.
Practicality Forensic schedule analysis can be applied to the real
project rather than presents theoretical possibilities.
Reliability The result of forensic schedule analysis can accurately
present and capture the project facts.
Acceptability The result of forensic schedule analysis can satisfy the
concerned project parties.

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3.3 Data Sources

This research uses both primary and secondary data to develop, evaluate, and validate its

proposed methodologies. Secondary data include published case studies and documents

of related law cases. There are some published case studies appropriate for the

comparative evaluations. Cases reported in Fondahl (1991), Alkass (1996), Stumpf

(2000), Kim and de la Garza (2003), and so forth are used for the evaluations of the

proposed approaches. Occasionally, this research formulates hypothetical case studies to

conduct the evaluations and cross-comparisons.

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Chapter 4
Impacts of Resource Allocation on Forensic Schedule Analysis

The construction industry has employed various schedule analysis techniques to support

delay claims. Resource-related issues are frequently ignored even though they can affect

project completion time. This chapter shows that delay analysis without considering

resource allocation substantially affects results. Some delay can cause unrealistic

resource allocation in downstream work, which in turn may further delay the project.

The effect of resource allocation can either add to or reduce the severity of a delaying

event. Apportionment of delay responsibility may be inaccurate unless resource

allocation practice is considered in the analysis. Practical and necessary steps are

proposed to enhance the existing window analysis technique. A case study is presented

to compare the enhanced window analysis with the existing window analysis.

4.1 Introduction

As discussed in chapter 2 the industry has created and employed many schedule analysis

techniques. The level of acceptability of each technique depends on its credibility and

the court or board ruling the corresponding delay claims. However, resource-related

issues such as constraints, availability, or in broader term resource allocation can cause

delays yet their effects are typically neglected in those techniques. It should be noted that

although a number of studies have focused on scheduling with resource allocation (e.g.

Wiest, 1967; Davis, 1974; Willis, 1985; Fondahl, 1991; Bowers, 1995; Hegazy, 1999;

72
Kim and de la Garza, 2003; 2005; Chua and Shen, 2005), none have addressed resource

allocation in “after-the-fact” schedule delay analysis.

The objectives of this chapter are threefold: (i) show that effects of resource allocation

should not be neglected in schedule analysis by means of a motivating case; (ii) propose

practical and necessary steps for dealing with resource allocation and embed them in the

most acceptable technique – schedule window analysis; and (iii) compare the enhanced

window analysis with the existing window analysis for a simple case study. The benefit

is that schedule analysis will be more acceptable and practical for project parties. This

chapter also raises issues that need further studies to improve reliability of schedule

analysis.

4.2 Motivating Case

Figure 4.1 illustrates the as-planned, as-built, and collapsed as-built schedules of the

motivating case. The as-planned duration is seven weeks. The contractor will only be

able to allocate two backhoes to this site. Numbers denoted in each activity bar indicate

the number of backhoes needed for that activity. During the course of work there are two

two-week delays by the owner and the contractor on two activities, namely “excavation

trench 1” and “excavation trench 2,” respectively (Figure 4.1(b)). The project is therefore

delayed one week. Similar to Hagazy and Zhang (2005), the “o” (or “c”) denoted in the

bar indicate the owner-caused (or contractor-caused) delay in that activity.

73
Activity \ Week 1 2 3 4 5 6 7 8
Site preparation 0
Excavation Trench 1 1 1 1
Excavation Trench 2 1 1
Excavation Trench 3 1 1
Piping & backfilling 1 1
Number of backhoes 0 2 2 2 1 1 1
(a) As-planned schedule
Activity \ Week 1 2 3 4 5 6 7 8
Site preparation 0
Excavation Trench 1 1 1 o o 1
Excavation Trench 2 c c 1 1
Excavation Trench 3 1 1
Piping & backfilling 1 1
Number of backhoes 0 1 1 2 2 1 1 1
(b) As-built schedule
Activity \ Week 1 2 3 4 5 6 7 8
Site preparation 0
Excavation Trench 1 1 1 1
Excavation Trench 2 c c 1 1
Excavation Trench 3 1 1
Piping & backfilling 1 1
Number of backhoes 0 1 1 3 2 1 1
(c) Collapsed as-built schedule
Figure 4.1. Schedules of the motivating example

The But-for method is used to analyze the delays. Figure 4.1(c) shows the collapsed as-

built schedule, which results from removing the owner delay in the as-built schedule.

The difference in time between the completion date on the as-built and collapsed as-built

schedules is the amount of owner-caused delays (Schumacher, 1995). Thus, the owner

solely caused the one-week delay. Note that a window analysis with day-by-day window

sizes also yields the same result.

74
The effect of resource allocation actually reverses the above result. The collapsed as-

built schedule indicates that the contractor would have completed the project in seven

weeks but for the owner-caused delay. However, this is not true and practical. At the

fourth week the work would have required three backhoes for simultaneously performing

the three excavation activities (Figure 4.1(c)). This contradicts the fact that the contractor

could have been able to allocate only two backhoes on this site. That is, the contractor

would still have delayed (paced) the project one week even if the owner had not caused

the delay. The one-week compensable delay yielded from available schedule analyses is

therefore misleading. In other words, the owner has to be responsible for what he or she

does not if the effect of resource allocation is not taken into consideration in this

circumstance. This example case demonstrates that resource allocation practice may

substantially affect the results of schedule analysis and therefore should not be neglected.

4.3 Window Analysis under the Effect of Resource Allocation

The need for reflecting and capturing the practice of resource allocation in schedule

analysis is apparent and imperative. Many existing and new techniques pay little or no

attention to this crucial issue. This chapter adopts window analysis as a technique for

improvement. The reasons are twofold. First, courts and boards as well as practitioners

and researchers generally agree that window analysis is the best available option (Finke,

1999; Kartam, 1999; Stumpf, 2000; Hegazy and Zhang, 2005). Second, a mechanism

that incorporates resource allocation is more feasible, practical, and ready to use.

75
Table 4.1. Step-by-step schedule window analysis
Step Existing window analysis Enhanced window analysis considering
without considering resource resource allocation
1
allocation
0 Document, disseminate, and consent
technical and resource constraints, and
resource availability and allocation practice
1 Prepare or recover the original Prepare and update the as-planned CPM
as-planned schedule schedule under technical and resource
constraints, and resource availability and
allocation practice
2 Select meaningful window Select meaningful window periods to
periods to analyze analyze
3 Enter actual progress and delay Enter actual progress and delay activities to
activities to a copy of the original a copy of the original as-planned schedule,
as-planned schedule, using using contemporaneous project documents
contemporaneous project for the first window period
documents for the first window
period
4a Reschedule and resequence, if necessary
and feasible, the not-yet-completed and not-
yet-started activities reflecting technical and
resource constraints, and resource
availability and allocation practice
4b Calculate the schedule to analyze Calculate the schedule to analyze delay for
delay for the first window the first window analysis
analysis
5 Calculate owner-caused delay, Calculate owner-caused delay, contractor-
contractor-caused delay, and caused delay, third party-caused delay and
concurrent delay for the first concurrent delay for the first window period
window period
6 Copy the schedule to use as a Copy the schedule to use as a basis for the
basis for the second window second window
7 Repeat this procedure for each Update step 0, if necessary, and repeat the
period to the end of the project procedure from Step 2 to Step 6 for each
window period to the end of the project
1
Adapted from Stumpf (2000)

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Table 4.1 above displays the steps of the enhanced window analysis considering resource

allocation and the current window analysis. Seven steps of current window analysis are

adopted from Stumpf (2000). Basically, steps 2, 3, 5, and 6 between current and

enhanced window analyses are similar. The enhanced window analysis introduces step 0

which emphasizes that technical and resource constraints, and resource availability and

allocation practice should be documented, disseminated, and obtained a consensus

between the contractor and owner. This ensures that schedule analysis considering the

effect of resource allocation is legally enforceable thereafter. For instance, the contractor

must inform the owner at the beginning that he or she will only be able to allocate two

backhoes on site in the case described above. Resource allocation practices can change

and/or be changed over time when more information from the project or the project

parties is available. This is reflected in step 7, which includes updating step 0 and repeats

the procedure from Step 2 to Step 6 for each window period to the end of the project.

Step 1 is to prepare and periodically update the as-planned CPM schedule under technical

and resource constraints, and resource availability and allocation practices from step 0.

Step 4 of the current window analysis is subdivided into steps 4a and 4b. Step 4b is the

same between the two analyses. By including step 4a, the enhanced analysis stresses

rescheduling and resequencing the not-yet-completed and not-yet-started activities, which

reflects technical and resource constraints, and resource availability and allocation

practice. Delays not only change critical path(s) but also disorganize planned resource

allocation practices. This appears to be disregarded in current window analysis.

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Finally, existing CPM scheduling with resource constraints, resource-constrained

scheduling, and resource leveling in commercial scheduling software packages can

facilitate steps 1 and 4a. The answer to which one is chosen depends upon various

factors such as contractual stipulations, availability of those scheduling techniques and/or

software packages, and reliability of their underlying algorithms. Discussion of this issue

is also beyond scope of this paper.

Although several steps in the enhanced and current window analyses are similar, the

enhanced method will result in more reliable delay analysis. As the motivating case

suggests, resource allocation practice can significantly affect delay analysis.

Unfortunately, the current method barely weighs resource allocation. The enhanced

window analysis presented herein fundamentally solves this problem. It ensures how

resource allocation practice should be embedded during delay analysis so that its effects

in apportionment of delay responsibility can be captured in an equitable manner. As

such, an answer to the question “who really caused delays” is more reasonable and

potentially less disputable.

4.4 Case Study

4.4.1 Case Overview

Figure 4.2 presents the as-planned schedule of the case study adopted from a resource-

constrained CPM schedule (Kim and de la Garza, 2003). The original planned contract

duration was 13 days. The maximum available resource limits were two and one unit(s)

per day for resource types A and B, respectively (Figure 4.2). Both the as-planned and

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as-built schedules met the resource limits. The actual contract duration was 16 days as

shown on the hypothesized as-built schedule (Figure 4.3). The project was thus delayed

three days. There were four delays during the course of contract work. Like Mbabazi et

al. (2005), these delays are directly inserted in the corresponding delayed activities

(Figure 4.3). Responsibility for this three-day delay needs analyzing and apportioning.

ID Task Name Duration Predecessors


-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1 "Simple" Project 13 days
2 A 2 days
3 B 4 days 2 Type A
4 C 5 days 2 Type A
5 D 5 days 2 Type A
6 E 2 days 2 Type B
7 F 3 days 3 Type B
8 G 2 days 4,5,6,7
Planned completion time: 13 days -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Resource constraints: satisfied 100%
50%

% Work Allocated: 100% 100% 100% 100% 100% 50% 50% 50% 50%
Type A Overallocated: Allocated:
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
100%
50%

% Work Allocated: 100% 100% 100% 100% 100%


Type B Overallocated: Allocated:

Figure 4.2. As-planned resource-constrained schedule

4.4.2 Analysis of Delays

This section presents window analyses for the case study. For comparison purposes, both

current and enhanced window analyses described above are presented simultaneously.

Microsoft (MS) Project is used for the analyses. As previously discussed, enhanced

window analysis can employ existing CPM scheduling with resource constraints,

resource-constrained scheduling, or resource leveling in commercial scheduling software

packages for steps 1 and 4a. In this case study, we use CPM scheduling and resource

leveling in MS Project for the analyses.

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ID Task Name Duration
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
1 "Simple" Project 16 days
2 A 2 days
3 B 8 days
4 Compensable delays 4 days
5 B 4 days Type A
6 C 7 days
7 Excusable delays 1 day
8 Inexcusable delays 1 day
9 C 5 days Type A
10 D 12 days
11 D1 3 days Type A
12 Inexcusable delays 6 days
13 D2 3 days Type A
14 E 2 days Type B
15 F 3 days Type B
16 G 2 days
Actual completion time: 16 days -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Total delays: 3 days 100%
Resource constraints: satisfied 50%

% Work Allocated: 50% 50% 50% 50% 50% 100%100%50% 100%100%50%


Type A Overallocated: Allocated:
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
100%
50%

% Work Allocated: 100%100% 100%100%100%


Type B Overallocated: Allocated:

Figure 4.3. Hypothesized as-built schedule

Step 0: Dissemination and consensus of resource allocation practice

Resource allocation practice was simply to meet the resource limits for both resource

types A and B. This practice and other technical constraints (e.g. precedence

relationships) remained unchanged during the course of work. The parties agreed on

these issues.

Step 1: Development of the as-planned CPM schedule considering resource allocation

practice

The as-planned resource-constrained CPM schedule was developed based on Kim and de

la Garza (2003) (Figure 4.2). The contract duration was 13 days.

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Step 2: Selection of meaningful window sizes

Both existing window analysis and enhanced window analysis use similar window

periods. Based on the as-built schedule (Figure 4.3), the project is divided in four

windows. Windows 1, 2, 3, and 4 are days 1 – 5, day 6, day 7, and days 8 – 16,

respectively. Guidelines for defining reasonable windows can be found in Finke (1999).

Steps 3 – 7: Apportionment of delays

The windows method is a repetitive process. To avoid unnecessary redundancy in

presentation, I describe the analyses from steps 3 to 7 in the same section. Schedule

analysis of windows 1 and 2 has graphical illustrations for representative purposes. Also,

only resource allocation graphs that do not satisfy resource allocation practices will be

presented and embedded in the corresponding schedule windows. Since the enhanced

window analysis ensures proper resource allocation for the remaining work after a

window period, resource allocation graphs are not encompassed in that window.

ID Task Name Duration


-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
1 "Simple" Project 14 days
2 A 2 days
3 B 7 days
4 Compensable delays 3 days
5 B 4 days Type A
6 C 5 days
7 C 5 days Type A
8 D 6 days
9 D1 3 days Type A
10 D2 3 days Type A
11 E 2 days Type B
12 F 3 days Type B
13 G 2 days
Resource allocation: Type A is -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
over-allocated at days 7 and 8 200%
Over-allocation
100%

% Work Allocated: 50% 50% 50% 100%150%150%100% 50% 50%


Type A Overallocated: Allocated:

Figure 4.4. Traditional window analysis: window #1

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ID Task Name Duration
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
1 "Simple" Project 15 days
2 A 2 days
3 B 7 days
4 Compensable delays 3 days
5 B 4 days Type A
6 C 5 days
7 C 5 days Type A
8 D 6 days
9 D1 3 days Type A
10 D2 3 days Type A
11 E 2 days Type B
12 F 3 days Type B
13 G 2 days

Figure 4.5. Enhanced window analysis: window #1

Figures 4.4 and 4.5 display results of the first window by traditional and enhanced

window analyses, respectively. Traditional window analysis shows a one-day

compensable delay in this window period (days 1 – 5). However, the resource type A

would be over-allocated at days 7 and 8. This implies that compensable delays in this

period did not only delay the project 1 day but also make the initial resource allocation

for remaining work become impractical. Enhanced window analysis shows a two-day

compensable delay in the same period. Compared to the traditional window analysis, the

actual compensable delay is one more day (2 versus 1).

The analysis is similar for the other windows. Figures 6 and 7 depict the traditional and

enhanced window analyses for the second window, respectively. There is a one-day

concurrent delay (compensable and inexcusable) in this period under traditional analysis.

Again, the resource type A would be over-allocated at days 7 – 9. In contrast, the

enhanced window analysis shows that the project did not suffer any delay due to the

delays in this window. The excusable and inexcusable delays on activities C and D,

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respectively in the third window actually did not cause project delay by both traditional

and enhanced window analyses. However, the traditional analysis results in resource

over-allocation on days 8 – 10. Both the traditional and enhanced analyses for the fourth

and last window yield the same results, which show a one-day inexcusable delay.

ID Task Name Duration


-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
1 "Simple" Project 15 days
2 A 2 days
3 B 8 days
4 Compensable delays 4 days
5 B 4 days Type A
6 C 5 days
7 C 5 days Type A
8 D 7 days
9 D1 3 days Type A
10 Inexcusable delays 1 day
11 D2 3 days Type A
12 E 2 days Type B
13 F 3 days Type B
14 G 2 days
Resource allocation: Type A is -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
over-allocated at days 7, 8 and 9 200%
Over-allocation
100%

% Work Allocated: 50% 50% 50% 150%150%150%100% 50%


Type A Overallocated: Allocated:

Figure 4.6. Traditional window analysis: window #2

ID Task Name Duration


-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
1 "Simple" Project 15 days
2 A 2 days
3 B 8 days
4 Compensable delays 4 days
5 B 4 days Type A
6 C 5 days
7 C 5 days Type A
8 D 11 days
9 D1 3 days Type A
10 Inexcusable delays 1 day
11 D2 3 days Type A
12 E 2 days Type B
13 F 3 days Type B
14 G 2 days

Figure 4.7. Enhanced window analysis: window #2

Table 4.2 summarizes results of the two schedule analyses. Compensable, concurrent

(compensable and inexcusable), and inexcusable delays are one, one, and one days,

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respectively under traditional window analysis. Enhanced window analysis results in two

days and one day for compensable and inexcusable delays, respectively. Comparing the

traditional analysis to the enhanced analysis, we see that there is a one-day delay shift

from the concurrent delay category to the compensable delay category. It should be

noted that contractors are normally entitled to time extensions for concurrent delays.

Consequently, the contractor would be penalized if resource allocation were neglected in

this case study.

Table 4.2. Schedule analysis summary


Window Window Completion Delays (day)
Number Period Duration Compensable Excusable Inexcusable Concurrent
(date) (days)
1 1–5 15 (14)1 2 (1) - - -
2 6 15 (15) - - - 0 (1)
3 7 15 (15) - - - -
4 8 – 16 16 (16) - - 1 (1) -
1
Results of enhanced window analysis (existing window analysis)

4.5 Discussion

This chapter demonstrates that resource allocation significantly affects results of schedule

delay analysis and apportionment of delay responsibility. This raises several interesting

issues for practitioners and researchers as follows.

4.5.1 Possible Extended Effect of Delays

Traditional schedule analysis evaluates whether an event, several or all events prolong

the critical path(s) of the project. This chapter shows that some delay can make

unrealistic resource allocation in downstream work, which in turn may further delay the

project. Available schedule analysis methods do not readily capture this possible

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extended effect of the delay. In other words, a schedule delay analysis that considers

resource allocation is able to evaluate the “forward” effects of a delay. This results in a

more trustworthy apportionment of delay responsibilities. Delay analysis aims at

measuring the time difference between the actual project completion date and when the

project would have ended but-for the owner-caused delays (Zack, 2000). Unfortunately,

the answer to “when the project would have ended but-for the owner-caused delays” will

be unreasonable unless the effect of resource allocation is addressed in that delay

analysis. Future research may develop systematic algorithms that can readily identify

whether a certain delaying event causes an extended effect and effectively quantify it, if

any.

4.5.2 Positive/#egative Effect of Resource Allocation on Delay Responsibility

The effect of adding resource allocation considerations to a traditional schedule analysis

can either increase or reduce the impact of a delaying event. That is, either owners (i.e.

in the motivating case) or contractors (i.e. in the case study) may face disadvantages in

apportionment of delays under existing schedule analysis. The key question is “under

what delay circumstances will contractors or owners face such disadvantages?” My

future research will continue on this issue.

4.5.3 Legal Acceptability

Available schedule analysis techniques have frequently not incorporated the effects of

resource allocation. Nevertheless, courts and review boards have supported delay claims

based upon rigorous analysis techniques, especially the schedule window analysis

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method. It is believed that the methodology presented herein is logical and rigorous and

will, over time, be acceptable to such bodies.

4.5.4 Implications of Applying the Enhanced Window Analysis

Undoubtedly, the enhanced method potentially yields more reliable results. It however

requires much more information from the project under dispute. Data collection for

traditional window analyses is already an arduous task. Together with project records

regarding delays (i.e. weather, change orders, etc.) as in the traditional method, the

enhanced method further requires project records regarding practices of resource

allocation. Although initial agreed resource allocation is important for the analysis,

actual resource allocation also needs to be recorded and used in the enhanced method.

The reason is that some planned resource allocation practices have to be changed to

accommodate uncertainties (including delay occurrences) that manifest during project

execution. Other allocation practices such as spatial resource constraints for a given

activity may rarely change over time.

Work methods can lead to changed resource allocation. For example, a shift from a

labor-intensive method on equipment-intensive one and vice versa may result in radical

changes in both resource allocation practices and project completion time. This raises an

interesting issue that unrealistic resource allocation in downstream work in certain

circumstance can be caused by either current delays as previously discussed or by current

changes in work methods. Thus, the status of work methods especially when differing

from original approved plans has to be recorded and addressed during delay analysis.

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The analysis also needs to separate changes in resource allocation due to delays from

those due to work method changes. This further emphasizes the importance of collecting

pertinent project records under the contexts of delays.

Recording project data for the enhanced window analysis can be less burdensome if

resource allocation practices are selectively collected. Only critical resources which

likely affect project schedule need to be tracked. They include, but are not limited to,

manpower, scarce and long-lead materials, and major equipment. Their status consists of

availability, delivery issues, technical and market constraints, planned versus actual

allocations, and so forth. A computer-aided tool such as a spreadsheet program may

facilitate tracking these resource allocation practices.

4.6 Summary

Resource allocation substantially influences project time performance. Impractical

allocation may account for the project delay. Unfortunately, current schedule analysis

often does not consider a project’s resource allocation. This chapter illustrates that

resource allocation can affect the results of a delay analysis. Performing a schedule

analysis without considering resource allocations may increase the owner’s or

contractor’s risk of assuming delay responsibility which is not his or her fault.

This chapter has proposed steps to ensure that delay analysis considers impacts of

resource allocation. They are embedded in the window analysis, which is currently the

most acceptable schedule analysis technique, to enhance its credibility. A case study was

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used to compare the analyses and results of the traditional and enhanced schedule

window analysis methods.

A delay analysis that includes the resource allocation used on the project is more

trustworthy. As such, the enhanced schedule window analysis technique is useful to both

industry professionals and researchers. It enables more reliable forensic schedule

analysis.

This initial investigation of the impacts of resource allocation reveals several needs to

improve the integrity of construction delay claims. Delay damages should be quantified

in the context of a delay. Ideally, they need to relate to the results of forensic schedule

analysis in a real-time manner. These are presented in the next chapter. Similarly, the

need for a new forensic schedule analysis technique that can holistically address not only

resource allocation but also other key schedule-related factors such as float, float

ownership, logic changes is apparent. Chapter 6 presents and discusses this technique.

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Chapter 5
Delay Damages and Schedule Window Analysis

The previous chapter shows the effects of resource allocation on delay analysis. This

chapter further argues that the context of delays significantly affects delay responsibility.

Among other things, recoverable damages for a delay should be related to the timing of

the corresponding delay and its effect on indirect costs. This chapter presents an

alternative and integrated approach for quantifying and apportioning delay responsibility.

It considers the context of a delay in terms of its timing and the degree of suspension

during the course of a project. The proposed approach allocates project site overhead

costs to schedule activities. It then helps track site overhead damages in a “real-time”

manner while schedule window analysis is employed to analyze the delay. A case study

is used to illustrate its application. Results suggest that the conventional daily overhead

rate-based method can cause double payments because conventional recovery may cover

parts of field overhead already paid from the original contract. This new approach also

enables the application of the comparative negligence doctrine when concurrent delays

occur by fairly sharing delay damages between the project parties.

5.1 Introduction

Current practice normally determines a uniform daily overhead rate based on estimates or

actual expenses to compensate for increased field overhead when compensable delays

occur. The daily overhead rate is either predetermined in contract documents or

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calculated in delay claims. Among other things, this practice has two major limitations.

Specifically, it does not properly consider (i) the timing of delays and (ii) the degree of

suspension (total or partial) in the calculation of the rate.

Because of those limitations this chapter proposes an analytical approach that integrates

schedule window analysis and an activity-specific field overhead allocation process

(ASAP) to fairly apportion delay days and field overhead damages between the project

parties in an ongoing basis. Delays and suspensions can incur both field overhead and

home office overhead. The proposed approach helps the project parties quantify field

overhead damages of delays and suspensions.

5.1.1 Delay Context versus Delay Responsibility

Successful delay claims require proper apportionment of delay responsibility.

Unfortunately, apportionment of delay responsibility is an arduous endeavor. Schedule

delay analysis methods such as as-planned vs. as-built, impacted as-planned, collapsed

as-built, time impact analysis, and schedule window analysis are used to apportion delay

days attributable to each project party. Project site overhead damages, unabsorbed

overhead, extended overhead, loss of profits, liquidated damages and so forth are

potentially recoverable damages for either the contractor or owner. However, current

delay analysis techniques solely focus on “time” criticality of schedule activities. That is,

1-day delay at the ith day and 1-day delay at the jth day during the course of work are

frequently treated the same.

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The premise of this research is that quantification of delay damages should consider the

context of a delay and suspensions, namely its timing and degree of suspension. Degree

of suspension means the proportion of work under a contract that is delayed, suspended,

or interrupted in a certain period of time; i.e. partial or total suspension. Timing of a

delay and relative importance, rather than duration, of the delayed activity can affect

delay responsibility. The relationship between project cost items and activities in CPM

schedules should be considered since this can be crucial, especially for evaluating the

impact of delays on the work (Overcash and Harris, 2005). Different portions of the

project need different types of managerial effort, which in turn have different costs

(Lankenau, 2003). In addition, the ultimate objective of delay-related disputes is to

identify who is responsible for the damages. As such, damages incurred at the time of a

delay should be timely estimated for recovery. In other words, an overhead rate that is

constant over the whole course of contract work is inappropriate. Also, although the

compensation based on a daily overhead rate may work for total suspensions, how the

compensation is determined based on this rate when the project only suffers partial

suspensions is not easy, if not arbitrary. That is, the percentage of the daily overhead rate

that the contractor is allowed to recover if only part of the contract work is delayed,

suspended, or interrupted is unclear.

Figure 5.1 presents the issue. The as-planned schedule has four activities A, B, C, and D.

Scenarios 1 and 2 show the as-built schedules under non-concurrent and concurrent

delays, respectively. In scenario 1, there are two 1-week delays by the owner and

contractor on activities A and D, respectively. It is straightforward to divide the 2-week

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project delays into 1-week compensability and 1-week inexcusability. Given that the

time-related overhead level fluctuates, these two 1-week delays cause different overhead

damages. Scott and Harris (2004) note that whether the level of overheads during the

extended period or that at the time of the delaying event should be paid is controversial.

This implies that the timing of delays really matters in apportioning delays and damages.

Figure 5.1. The context of delays versus delay responsibility

In scenario 2, the 2-week delay on activity B and 3-week delay on activity C are

concurrent (inexcusable and compensable delays, respectively). Current practice treats

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concurrent delays as excusable delays. Thus, the contractor would only be granted a time

extension and the parties would each bear their own damages.

“The contractor is barred from recovering delay damages to the extent that

concurrent contractor-caused delays offset owner-caused delays, and the owner

is barred from recovery of liquidated or actual delay damages to the extent that

concurrent owner-caused delays offset contractor-caused delays” (AACEI,

2007).

However, a recent trend advocates an equitable apportionment when compensable and

inexcusable concurrent delays occur. A party causing less impact of concurrent delays

should be permitted to recover damages from the other (Kelleher, 2005). This trend also

supports the view that sharing burdens between project parties makes expensive changes

less excruciating (Kasen and Oblas, 1996). Kraiem and Diekmann (1987) call such

equitable apportionment a “fair rule”. This rule is rooted in the doctrine of comparative

negligence, in contrast to the doctrine of contributory negligence, in tort law. For

instance, if two critical activities “roofing” and “landscaping” are simultaneously delayed

by a contractor and an owner, respectively, it is difficult to accept that their effects on

project indirect costs are similar.

Hughes and Ulwelling (1992) urged rejecting the rule “damages not be apportioned” in

concurrent delay situations. In practice a few cases have held that despite the difficulty

the parties incur trying to segregate damages or costs attributable to each cause. James

(1991) claims that forfeiture of such damages because of non-apportionability is

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excessively harsh. Courts often use a jury verdict method to apportion damages to each

party (James, 1991). This is very subjective and sometimes incorrect, and places the

project parties in a passive, reactive position. The parties do not have an effective way to

provide and demonstrate fair apportionment in front of the courts. Consequently, the

outcome of the jury verdict is what the parties will receive, which is highly speculative

and can be grossly inequitable. The project parties should therefore proactively apportion

damages in concurrent delays, ideally by employing a logical and systematic approach.

5.1.2 Field Overhead Damages

Project delays almost always cause damages – increased direct and/or indirect costs on a

project. When a project suffers a delay while substantial work is in progress,

construction job site support costs, such as trailers, supervision costs, maintenance,

utilities, tools, and equipment, will continue to accumulate unless these resources are

moved to another job site (Love, 2000). The detailed types of the delay damages for both

owners and contractors can be found elsewhere (e.g., Strogatz et al., 1997). However, the

trickiest part of construction cases is how to measure and present evidence on damages

(Overcash and Harris, 2005).

Field overhead damages require proper estimation although many practitioners agree that

damages of field overhead are less complicated than those of home office overhead.

Determination of daily field overhead is not difficult if the contractor maintains

reasonably good job cost records (Zack, 2001). Unfortunately, field overhead costs that

are determined by a stipulated or bid daily rate are potentially unfair. It assumes that all

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time-related costs are the fault of the owner and a complete extrapolation is foreseeable

by the owner (Lankenau, 2003). Delay claims need a more accurate approach for

calculating field overhead damages. The “one-size-fits-all” daily rate is often

unreasonable.

5.2 An Integrated Approach

The proposed approach starts at the beginning of a project. Efforts dedicated to the delay

claims process start at project commencement (Yates and Epstein, 2006). From the as-

planned schedule and the project’s cost estimate, direct costs, labor costs, and/or labor

hours are estimated and/or calculated for each activity in the as-planned schedule. This is

because items of the project’s cost estimate may not be schedule activities. The

calculation of activity-specific direct costs, labor costs, or labor hours is straightforward

and not discussed here. Current practice normally considers indirect costs or overhead at

the project and contract level, not the activity level. In contrast, our approach attempts to

allocate field overhead costs to each schedule activity based on a reasonable basis.

Current practice makes delay damages more difficult to derive when a delaying event

occurs. Project parties often have more serious disagreement over indirect costs than

direct costs.

ASAP is the key to quantifying field overhead damages on a real-time or ongoing basis.

This analytical method classifies field overhead into time-related and non-time-related

costs. Time-related overhead refers to overhead incurred through and directly connected

to the passage of time; e.g. supervision, administration, and utilities. It is associated with

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delay claims (Harris and Ainsworth, 2003). Time-related costs that are not allowed by

the contract or regulations must be excluded (Lankenau, 2003). Non-time-related

overhead includes, but is not limited to, temporary construction, bonds, insurance, and

project office supplies that are one-time expenses.

Accordingly, ASAP first divides project field overhead into time-related and non-time-

related overhead cost categories. Each is then allocated to schedule activities in direct

proportion to their direct costs, labor costs, labor hours, or whatever cost driver is

reasonable. ASAP will never be precisely accurate. Next, time-related and non-time-

related overheads per time unit (e.g., day, week, and month) are calculated for each

schedule activity based on the corresponding activity duration. This enables allocation

on the basis of an “as-planned” field overhead level throughout the course of the contract.

When a schedule activity is delayed, the activity duration is increased. This duration

extension in turn normally increases the field overhead cost of the corresponding activity

and then that of the project. Although the delayed activity’s non-time-related field

overhead will not change, its value per time duration unit will decrease due to the

increase in the activity duration. This is the basis for compensating field overhead

damages incurred by critical delays, which are drawn from a window analysis.

If a new activity is added to the schedule and extends the project duration, the markup of

the corresponding change order already includes the FOH increase. Thus, the above

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process should not be applied. Otherwise, FOH should be redistributed to update any

new schedule activity. Table 5.1 summarizes the necessary steps in this approach.

Table 5.1. ASAP’s steps for quantifying field overhead damages


Step Description Basis/Formula
1 Estimate or calculate field overhead in the % of direct costs, historical data, or actual
form of time-related (FOHt) and non-time- project records
related (FOHn) costs. FOH = FOHt + FOHn
2 Allocate field overhead to schedule t FOHtxCDi n FOHnxCDi
activities based on a selected cost driver FOH i = CD ; FOH i = CD
(i.e. labor hour, labor cost, direct cost) th
CD: cost driver value; i: i activity
3 Calculate time-related activity-specific t FOHti n FOHni
field overhead per time duration unit for uFOH i = ; uFOH i =
Di Di
t
each activity (uFOH i) t t
uFOH i: FOH for i per time unit
Di: ith activity duration
4 Perform a window analysis when a iD: critically delayed activity I
delaying event(s) occurs and identify the iDo: owner-caused critically delayed
critically delayed activity(ies) in the activity i
analyzed window size (Wj).
Wj: jth window period
5 Extrapolate time-related field overhead as a uFOHtiD = uFOHti
function of the passage of time for
critically delayed activity(ies) in the delay
period (DP)
6 Calculate compensable field overhead (FOHC)Wj = ∑ uFOHtiDo x (DP)Wj
damages (FOHC)Wj in the analyzed window iDo

size Wj, if any, by summing the time- (FOHC)Wj: compensable FOH damages in
related overhead occurring in the delay window Wj
period in step 5 and in which the owner is
responsible
7 Update Steps 1-3 and repeat Steps 4-7 FOHC = ∑ (FOHC)Wj
when delaying event(s) occur. Total Wj

compensable FOHC damages are the sum FOHC: total compensable FOH damages
of compensable (FOHC)Wj damages in all
window sizes

ASAP is based on the following assumptions:

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a. When the approach is used for forward pricing or project records are unavailable,

the contractor’s cost estimate is reasonable and/or acceptable. Otherwise, FOH

calculated in Step 1 should be from actual project cost records.

b. Field overhead can be classified and estimated as time-related field overhead

(FOHt) and non-time-related field overhead (FOHn). Only FOHt is affected by

delays and hence recovered (Lankenau, 2003; Harris and Ainsworth, 2003).

c. The contractor is unable to remobilize their resources to absorb overhead. Periods

of delays are relatively small or in short durations if the as-bid FOH is used in

Step 1. This is to ensure that cost extrapolations for calculating FOH damages are

plausible. A 10–25 percent increase in project duration is reasonable (Lankenau,

2003).

d. The project owns float. That is, float is used on a first-come, first-served basis.

e. Activity costs are uniform distributions across the duration of the activity.

5.3 Hypothetical Case Study

This case study is a home construction project in which as-planned schedule, as-built

schedule, and delaying events are adapted from Stumpf (2000). Detailed descriptions are

available in Stumpf (2000). The planned project duration was 16 weeks. Figure 5.2

illustrates the as-planned schedule, which includes twelve schedule activities. These

activities were to build the house and its garage.

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ID Task Name Duration Predecessors 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
1 Excavation 2 w ks
2 Foundation 2 w ks 1
3 Joining w all 1 wk 2
4 Hous e w alls 4 w ks 3
5 Hous e roof 3 w ks 4
6 Select f inishes 1 wk
7 Interior finishes 3 w ks 5,6
8 Clean up 1 wk 7,12
9 Fab/del garage doors 6 w ks
10 Garage w alls 3 w ks 3
11 Garage roof 2 w ks 10
12 Garage doors 2 w ks 11,9
Figure 5.2. As-planned schedule

Table 5.2 shows the project cost estimate. Items are also activities in the as-planned

schedule (Figure 5.2). The allowable overhead is 20 percent of total direct costs.

Overhead ($54,792) includes $15,000 HOOH and $39,792 FOH. In turn, FOH consists

of $19,792 time-related FOH and $20,000 non-time-related FOH. The average daily

time-related FOH rate is $1,237 per week ($19,792/16).

Table 5.2. Project cost estimate (in dollars)


No. Item Unit Quantity Unit Cost Direct Cost
1 Excavation m3 122 106 12,960
2 Foundation Lump sum 1 15,000 15,000
3 Joining wall m2 42 431 18,000
4 House walls m2 109 431 46,800
5 House roof m2 67 323 21,600
6 Select finishes Lump sum 1 1,000 1,000
7 Interior finishes Lump sum 1 100,000 100,000
8 Clean up Lump sum 1 2,000 2,000
9 Fab/del garage doors door 2 3,000 6,000
10 Garage walls m2 88 431 37,800
11 Garage roof m2 33 323 10,800
12 Garage doors door 2 1,000 2,000
13 Subtotal 273,960
14 Overhead (OH) 20% of Direct Costs 54,792
15 Total cost 328,752

Figure 5.3 illustrates the as-built schedule. During construction the project is delayed.

The actual project duration was 24 weeks, 8 weeks longer than the original plan. Figure

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5.3 also illustrates the delaying events. Events with (o) are owner-caused delays, and (c)

are contractor-caused delays.

ID Task Name Duration 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24


1 Excavation 5 wks
2 Start ex cavation 1 wk
3 Excavation delay (o) 3 wks
4 Complete excav ation 1 wk
5 Foundation 2 wks
6 Joining w all 1 wk
7 House w alls 7 wks
8 Start house w alls 2 wks
9 Reconsider w indow design (o) 2 wks
10 Replace carpenters (c) 3 wks
11 Complete house w alls 2 wks
12 Hous e roof 3 wks
13 Se lect finishe s 7 wks
14 Late selection of finishes (o) 6 wks
15 Selec t finishes 1 wk
16 Interior finishes 5 wks
17 Interior f inishes 3 wks
18 Extended f inishes duration (c) 2 wks
19 Clean up 1 wk
20 Fab/de l garage doors 10 wks
21 Late garage door order (c) 4 wks
22 Fab/del garage doors 6 wks
23 Garage walls 7 wks
24 Start garage w alls 2 wks
25 Complete garage w alls 1 wk
26 Extended duration of garage w alls (c) 1 wk
27 Garage roof 2 wks
28 Garage doors 6 wks
29 Revis e garage doors (o) 4 wks
30 Garage doors 2 wks

Figure 5.3. As-built schedule

A window analysis with five window periods apportions the 8-week project delay to 1

week of inexcusable, 2 weeks of excusable, and 5 weeks of compensable delays.

Specifically, the five window periods are weeks 1 – 4, 5 – 8, 9 – 13, 14 – 17, and 18 – 21.

Among them, the first, the third, and the fifth window periods experienced 3 weeks of

compensable delays (weeks 2, 3, 4), 2 weeks of concurrent delays (weeks 11 and 12) and

1 week of inexcusable delays (week 13), and 2 weeks of compensable delays (weeks 18

and 19), respectively. Periods 2 and 4 did not suffer schedule slippage. The window

periods herein are defined based on a suggestion that the beginning of each delay should

be the beginning of a window (Finke, 1999). The detailed schedule analysis of this case

can be found elsewhere (Stumpf, 2000; Hegazy and Zhang, 2005).

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After the delay days are apportioned among the parties, the question is how to properly

quantify and apportion delay damages, FOH and HOOH damages. For HOOH damages,

there are a variety of formulas available (Zack, 2001; Taam and Singh, 2003). FOH

damages are however calculated based on an average daily FOH rate or the mean of daily

overhead costs. As previously discussed, a uniform daily FOH rate fails to take into

account the context of delays. To consider the context of delays in quantifying damages,

ASAP distributes FOH to schedule activities. In this case it is assumed that the original

FOH estimates are reasonable and that actual overhead records are not available. The

method also works when actual project costs are well maintained as discussed later.

Table 5.3 shows the distribution of activity-specific FOH. In this example direct costs

are selected as the cost driver. That is, time-related (non-time-related) FOH for a certain

activity equals the ratio of the activity’s direct costs and total direct costs times the

corresponding project time-related (non-time-related) FOH. In Table 5.3, columns 6 and

9 present “as-planned” activity-specific non-time-related and time-related FOHs,

respectively. Similarly, columns 7 and 10 present “as-planned” activity-specific non-

time-related and time-related FOHs per time duration unit, respectively. Column 8

shows “as-built” activity-specific non-time-related FOH per time duration unit. Because

the activity-specific non-time-related FOH does not change due to delays, its “as-built”

value per time duration unit for delayed activities will be inversely proportional to the

ratio of the actual and planned activity durations. In contrast and as previously described,

activity-specific time-related FOH per time duration unit would remain unchanged.

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Table 5.3. Distributed activity-specific field overhead (in dollars)
No. Item Duration Direct Non-Time-Related FOH Time-Related FOH
Planned Actual Cost Total Plan/wk Actual/wk Total FOHt/wk
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1 Excavation 2 5 12,960 946 473 189 936 468
2 Foundation 2 2 15,000 1,095 548 548 1,084 542
3 Joining
wall 1 1 18,000 1,314 1,314 1,314 1,300 1,300
4 House
walls 4 7 46,800 3,417 854 488 3,381 845
5 House roof 3 3 21,600 1,577 526 526 1,560 520
6 Select
finishes 1 7 1,000 73 73 10 72 72
7 Interior
finishes 3 5 100,000 7,300 2,433 1,460 7,224 2,408
8 Clean up 1 1 2,000 146 146 146 144 144
9 Fab/del 6 10 6,000 438 73 44 433 72
garage
doors
10 Garage
walls 3 7 37,800 2,760 920 394 2,731 910
11 Garage roof 2 2 10,800 788 394 394 780 390
12 Garage
doors 2 6 2,000 146 73 24 144 72
13 Total Direct Costs 273,960
14 Overhead (OH) 54,792
15 Home Office OH (HOOH) 15,000
16 Field OH (FOH) 39,792
17 Non-Time-Related FOH 20,000
18 Time-Related FOH 19,792

Figure 5.4 shows the time-related FOHs over time. They are based on the values in

column 10 (Table 5.3) and the timing of the activities in the as-planned and as-built

schedules (Figures 5.2 and 5.3). In other words, FOH for a certain week equals the sum

of time-related FOH per week for all activities performed (either planned or actual) in

that week. Obviously, both “as-planned” and “as-built” time-related FOHs fluctuate

considerably over the course of the contract. This explains why the uniform daily

overhead rate for compensating delay damages is inappropriate. It should be noted that

we call these FOH costs “as-built” because they are distributed to activities based on their

timing in the as-built schedule.


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$3,000

$2,500
$2,000

$1,500
$1,000
$500
$0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Week

"As-Planned" Time-Related FOH "As-Built" Time-Related FOH

Figure 5.4. Time plot for time-related field overhead versus week

Table 5.4 summarizes the compensable FOH delay damages under the conventional,

daily rate method and the analytical method proposed in this paper. The results are

significantly different. Total FOH delay damages for the two methods are $6,185 and

$1,548, respectively. It should be noted that in this example liquidated damages are

stipulated by the contract and hence similar for the two methods if inexcusable delays

occur. This demonstrates the value of computing FOH damages by our proposed

approach. If a liquidated damages provision does not exists – though this is rarely true –

owner’s actual economic losses will replace the liquated damages in the above analysis.

Table 5.4. Field overhead delay damages (in dollars)


Window (Week) Daily FOH Rate ASAP Remark
1 (1 – 4) 1,237 x 3 = 3,711 468 + 468 + 468 = 1,404 3-week compensable delays
2 (5 – 8) 0 0 No delay
3 (9 – 13) 0 0 1-week Liquidated Damages
4 (14 -17) 0 0 No delay
5 (18 – 21) 1,237 x 2 = 2,474 72 + 72 = 144 2-week compensable delays
Total FOH Damages 6,185 1,548

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5.4 Discussion

From the analytical approach and the case study presented, some issues need to be

discussed:

5.4.1 Estimated FOH versus Actual FOH

The applicability of the proposed method does not depend on the availability of project

field overhead records. The case study illustrates the use of the method when project cost

records are not available or verifiable. However, the project parties have to agree on the

original estimate, which is a fair assumption since they entered into a contract that was

based on that original estimate. In this circumstance the method can quantify FOH

damages, if any, in a real-time manner whenever a delaying event occurs without waiting

for the actual project cost documentation. For after-the-fact delay analysis, the method

may use actual FOH costs instead. The analytical process is the same as presented in

Table 5.1, except that project FOHs in Step 1 obtains data from actual records.

Accordingly, an actual time-related FOH level can replace the “as-built” one in Figure

5.4.

5.4.2 Degree of Suspension

This new approach considers the degree of suspension in calculating FOH damages.

FOH delay damages are typically paid based on a daily overhead rate when a delay is

compensable. However, a daily rate-based indemnification may cover some parts of

FOH already paid in the original contract. In other words, an average daily FOH rate for

compensating damages potentially causes a “double payment.” For instance, week 19 in

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the above project was similar to a partial suspension. The schedule analysis indicated

that there was a 1-week compensable delay at week 19. Under the daily overhead rate

method the contractor was automatically compensated for FOH damages for the whole

week. The as-built schedule however reflects that the activity “interior finishes” was still

performed in week 19 and hence its overhead was already included in the as-bid FOH

price. As such the daily FOH rate-based compensation in this circumstance is unable to

differentiate FOH delay damages from FOH already approved. By allocating FOH to

schedule activities and evaluating damages at the activity level the proposed method can

avoid any double-payment problem, especially in the event of a partial suspension.

5.4.3 Apportionment for Concurrent Delays

Analysis of concurrent delays raises various issues, because both owners and contractors

employ concurrent delays as a strong defense tool against each other (Baram, 2000). As

previously discussed, the “shield” rule, which grants the contractor time but no money

and the owner no liquidated damages in the situation of concurrent delays, should be

replaced by equitable apportionments (Hughes and Ulwelling, 1992). Kelleher (2005)

noted that apportionment analysis may yield fairer results than non-apportionment.

The approach presented here enables such equitable apportionments. FOH delay

damages are now calculated at the schedule activity level. Thus a project party may only

be responsible for activities for which he/she causes critical delays. In other words,

he/she may only pay for FOH damages incurred by critical delays on those activities. If,

for example, the contractor and the owner caused concurrent delays on activities B and C,

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respectively (Scenario 2, Figure 5.1), the owner would be responsible for a 2-week time-

related FOH increase of activity C while the contractor would be responsible for 2 weeks

of liquidated damages. In other circumstances, owners and contractors may cause

concurrent delays on the same activities. A 2-week concurrent delay at weeks 11 and 12

of the case project is an example. This concurrent delay delayed the activity “house

walls” and increased project costs by $1690 ($845/week x 2 weeks) of time-related FOH.

The parties can equally share this amount of damages. Therefore, the owner would owe

the contractor $845 while the contractor would owe the owner 2 weeks of liquidated

damages. It should be noted that HOOH damages can be equally shared when concurrent

delays truly do exist. Discussion of this issue is beyond the scope of this dissertation.

5.4.4 Float Ownership

With some modification the proposed approach can work in different types of float

ownership. As previously mentioned ASAP assumes that the project owns float. In other

words, float is used on a first-come, first-served basis. The other scenarios are float

owned by owner or contractor or shared by these two parties. On the one hand, float

ownership defines when an event is considered a delay, the type of delay, and whether

damages associated with the delay are assessed to the responsible party. On the other

hand, the key concept of our approach is to allocate FOH to specific schedule activities

and to assess FOH damages at the activity level. As such, if float ownership helps

classify a delay on certain activity, the proposed method is able to calculate if any FOH

damages are caused by the corresponding delay. For instance when float is owned by the

contractor, any owner-caused delay on an activity is excusable and compensable whether

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or not it is critical. The increased time-related FOH of the corresponding activity due to

this delay is damages for which the owner is responsible. Accordingly, steps 4 and 5 in

Table 5.1 need to be modified to reflect this view of float ownership. Float ownership

will be addressed in the next chapter.

5.4.5 Statistical Implications

The daily overhead rate-based method can be traced to the concept “mean” (or average)

in statistics. Statistically speaking, the mean is not always a good measure of data. At

best, the mean is a proper summary for data with symmetric and unimodal distributions.

Figure 5.5 depicts the histogram of the as-planned FOHt per week of the case project

from Figure 5.4. The mean of these data (and also the daily FOHt rate) is $1,237/week.

The histogram however shows that the distribution of the data is actually skewed and

asymmetric. The median value ($1073/week) is a better measure in this case. A fairer

weekly FOH rate for delay period should therefore be $1073/week for total suspensions

or similar circumstances. As a result, calculation of FOH damages using an average daily

rate is often unreasonable.

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Figure 5.5. Histogram of per-week time-related field overhead

5.4.6 Difficulties in Using the Proposed Method

Some issues may arise when the proposed method is employed. Segregation of FOH and

HOOH and proper classification of FOH costs may be problematic. This is because

definition of these terms is sometimes different from one contractor to another (Holland

and Hobson, 1999). Parties may need to write contracts more carefully, specifying the

different types of overhead. In addition, some time-related FOH damages, i.e. utilities,

may not be reasonably calculated as being directly proportional to the passage of time.

These types of time-related FOH should be treated separately if their amounts are

considerable. Selecting the right cost driver among labor hours, labor costs, direct costs,

and so forth to allocate FOH into schedule activities is also not simple. Ideally, the

parties should agree on the cost driver in advance.

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A cost driver-based FOH allocation may be another source of unbalanced bids. For

instance, a contractor may inflate direct costs, labor costs and/or labor hours for certain

activities that will likely be delayed by his/her owner. Current strategies for preventing

unbalanced bids also work in this situation.

5.5 Summary

This chapter argues that apportionment of delay responsibility according to the context of

delays is essential. In addition, the calculation of field overhead damages based on a

daily rate is far from reasonable. A “one-size-fits-all” method neglects the relative

importance of delayed activities and the fluctuating nature of overhead levels during the

course of contract work. Double payment of field overhead may occur if a project suffers

a partial suspension. It also indirectly hinders the application of the “fair rule” or the

comparative negligence doctrine to apportionment for concurrent delays.

The analytical approach, ASAP, proposed in this chapter takes into account the timing of

delays and the degree of suspensions in quantifying field overhead damages. It

realistically allocates field overhead to schedule activities. Field overhead delay

damages, if any and/or allowable, are calculated based on activity-specific field overhead.

When integrated with schedule window analysis, the proposed approach is able to

produce a reasonable damage computation in a real-time manner. For that reason this

approach can be used very effectively in forward pricing and negotiation of delay

compensation. Finally, it can also be a practical and systematic approach that enables

equitable apportionments for concurrent delays. When the proposed method is applied to

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the case study project, its result differed substantially from that of the daily rate method.

The case study illustrates that the daily rate-based method may cause double payments

when the recovery probably covers some parts of field overhead already included in the

as-bid price.

ASAP is useful for both practitioners and researchers. It facilitates systematic

apportionment analysis in delay claims. Practitioners are more proactive in measuring

and presenting delay damages. Researchers should benefit from exploring insights into

its application and implementation in the real world. The next chapter presents a novel

forensic schedule analysis technique which is later integrated with ASAP to form a new

framework for analyzing schedule delays and their associated damages.

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Chapter 6
#ovel Forensic Schedule Analysis Technique

Although factors such as float ownership, logic change, and resource allocation affect

results of delay analysis, existing delay analysis techniques tend to ignore them. Chapter

4 discusses the initial investigation of one of these important factors – resource

allocation. To systematically address this insufficiency this chapter proposes a new

schedule analysis technique called FLORA that simultaneously captures the dynamics of

float, logic and resource allocation (FLORA) in its analyses. FLORA analyzes not only

the direct impact of a delay but also its “secondary” effect. The analysis process follows

ten rules that are flexible and customizable. A case study is employed to illustrate its

application. FLORA yields different and more reasonable outcomes compared to the

window analysis technique, each single analysis of which may yield different or even

conflicting results. By properly dealing with the current issues of schedule analysis,

FLORA can produce more reliable results.

6.1 Introduction

Time impact analysis in schedule delay situations is not simple. Various events caused

by different parties occur during the course of contract work. These events may impact

project schedules and costs, positively or negatively. They can delay, disrupt, or

accelerate project completion. Thus a reliable forensic schedule analysis technique that

helps evaluate the extent of project delay or acceleration of an event and its responsible

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party is very essential. Proper and accurate analysis of delays is also requisite to allocate

time-related costs to the responsible parties (Hegazy and Zhang, 2005). Unfortunately,

today’s preferred techniques such as but-for and window analysis techniques have

substantial limitations and require improvement (Mohan and Al-Gahtani, 2006). In

addition, industry practitioners do not agree which schedule analysis technique is

preferable (Arditi and Pattanakitchamroon, 2006; Zack, 2006).

This chapter presents a new schedule analysis technique called FLORA that

simultaneously and comprehensively captures the dynamics of float, logic and resource

allocation (this explains the name FLORA) during the course of work and thus analysis.

The total float (TF) of an activity in a project schedule may change over time. Critical

paths/activities are therefore time-dependent. Float ownership is another issue which has

increasingly concerned project participants (Peterman, 1979; Ponce de Leon, 1986;

Householder and Rutland, 1990; Al-Gahtani and Mohan, 2007). Some logical sequences

between activities can also be changed to accommodate new progress and information.

These are known as soft logic. Tamimi and Diekmann (1988) assert the need for

reflecting the impact of logic change on project schedule. However, how logic change

affects the results of schedule analysis is frequently ignored in current techniques. The

previous chapter, Chapter 4, identifies possible extended effects of delays due to the

disturbance of resource allocation in downstream work. FLORA solves these various

problems in an integrated and interactive manner.

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6.2 Issues in Forensic Schedule Analysis

A variety of schedule analysis techniques are available in the industry. Different

techniques generally give different results for project parties (Stumpf, 2000). Thus

extensive effort has been made to improve schedule analysis (i.e. Alkass et al., 1996; Shi

et al., 2001; Kim et al., 2005; Mbabazi et al., 2005; Al-Gahtani and Mohan, 2007).

Various issues have also been raised such as concurrent delays, pacing delays, fair

treatment of non-critical activities, real time analysis, float ownership, scheduling

options, resource allocation (Zack, 2000; Arditi and Pattanakitchamroon, 2006; Mohan

and Al-Gahtani, 2006; Nguyen and Ibbs, 2006; Ibbs and Nguyen, 2007a). Current

methods and their improvements can only solve one or some of these issues. The

improved window analysis technique proposed in Chapter 4, for example, only addresses

resource allocation. In addition, the impact of logic change on delay responsibility has

really not been addressed in these previous studies. The following sections will discuss

critical issues and then show their relationship in forensic schedule analysis.

6.2.1 Float and Float Ownership

In the critical path method total float or slack is defined as the total amount of time that

an activity can be delayed without delaying the project completion date. Since float is a

critical asset the question “who owns float?” has increasingly concerned contractual

parties. The result of schedule delay analysis can be affected by the various views

regarding who owns float (Arditi and Pattanakitchamroon, 2006). Consequently, float

ownership and its use can be a major source of dispute when the project suffers from

delay (Prateapusanond, 2003). For example, it is impossible to identify who is

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responsible for the 2-week project delay in the case shown in Figure 6.1(a) unless the

parties have agreed on float ownership. It should be noted that owner caused-,

contractor-caused, and third party-caused, inexcusable, excusable/compensable, and

excusable/non-compensable delays are denoted as (o), (c), (t), IE, EC, and EN,

respectively, in this dissertation.

Several studies have proposed different alternatives for total float ownership, sharing,

and/or management. Householder and Rutland (1990) propose that the party who loses

or gains as a result of fluctuation in the project cost should own and use float as a

resource. de la Garza et al. (1991) suggest that the contractor owns float but has to trade

it on demand by the owner. Zack (1993) recommends the use of a joint-ownership-of-

float provision and a systematic time-impact analysis of each delay event. Pasiphol and

Popescu (1994) allocate total float to individual activities on the paths such that all

activities are critical. Gong (1997) calculates “safe float”, which can be used without

severely affecting the risk of project delay. Sakka and El-Sayegh (2007) propose a

method that quantifies the impact of float loss on project schedule and cost. Detailed

discussion of these studies can be found elsewhere (i.e. Prateapusanond, 2003; Arditi and

Pattanakitchamroon, 2006; de la Garza et al., 2007). In general, while these studies

recommend how float should be allocated and managed they do not provide a practical

and systematic approach that can be used in forensic schedule analysis.

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Figure 6.1. The dynamics of float, logic, and resource allocation

A few approaches to total float management for schedule delay analysis have been

proposed in recent years. Prateapusanond (2003) suggests that the owner and the

contractor each own half (50-50) of total float available on any activity, namely

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“allowable total float” (ATF). In addition, the number of delayed days that a party is held

responsible for (RDD) equal the minimum value of: (i) the total delayed days of the

entire project (TDD) and; (ii) the difference between the number of days that the party

delays on the affected activity path (PDD) and its allowable total float. That is,

RDD = Min (TDD, PDD – ATF)

This concept of 50-50 pre-allocation of total float is a workable and interesting idea. In

the survey (Prateapusanond, 2003), the fact that most participants generally agreed this

concept is evident. However, this concept alone is impractical if applied to delay analysis

because it cannot capture the changing nature of activity paths during the course of work

such as changes in critical paths and in logical sequences. In addition, six different

examples used in Prateapusanond (2003) to illustrate the application of this delay analysis

methodology are not representative. There is no activity that belongs to two or more

paths – a common situation in construction schedules. In such a situation the use of that

proposed method can be impossible or problematic.

Al-Gahtani and Mohan (2007) proposes a new total float management technique for

delay analysis. It sets fairly reasonable rules for the entitlements of total float. If total

float changes due to delay events the responsible party will be discredited total float for

delays to the affected activity and will gain or lose total float of successor activities.

However, the apportionment of concurrent delay in this method is arbitrary since it only

considers the number of delays caused by each party rather than the degree of importance

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of different paths and/or activities on which these delays occur. Proper consideration of

this degree in fairly apportioning concurrent delays is essential as presented in Chapter 5

and in Ibbs and Nguyen (2007b). The calculation of owner- and contractor-caused delay

days is also questionable. For instance, the fact that the sum of excusable/compensable

delays and inexcusable delays can be greater than total project delays is difficult to accept

in the industry.

6.2.2 Hard Logic vs. Soft Logic

Relationships involving both hard and soft logic are one of the key elements in project

scheduling. Four factors that govern the sequencing of activities are physical

relationships among project components, trade interaction, path interference, and code

regulations (Echeverry et al., 1991). In addition, sequencing constraints can be flexible

or inflexible (Echeverry et al., 1991). Accordingly, hard or fixed logic is network logic

requiring an “only link” definition due to inflexible constraints while soft, preferential, or

discretionary logic is network logic configured with more flexible constraints.

Soft logic draws extensive research which mostly focuses on schedule updates. Logic

change is inevitable and complicated when a schedule contains soft logic. Soft logic in

network scheduling is unfortunately typical. Several models have been proposed to

handle the soft logic in schedule updating (i.e., Tamimi and Diekmann, 1988; El-Sersy,

1992; Hanks, 1999; Fan et al., 2002; Fan and Tserng, 2006). The impact of soft logic on

the project duration and critical paths is also significant (Wang, 2005).

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No schedule analysis technique properly addresses the impact of logic change on delay

responsibility. This impact may be considerable since the logic change is caused by

different sources which can be ultimately traced to the contractual parties. Before

applying the delay events of the next time period, the “isolated delay type” (IDT)

technique (Alkass et al., 1996) only requires incorporating any changes to the as-planned

schedule logic that occurred beyond the previous time period. This can be insufficient

and inappropriate. The reason is discussed next.

Figure 6.1(b) illustrates the effect of logic change on delay responsibility. The as-

planned schedule is 10 weeks. The project is delayed 2 weeks. At week one there is a 2-

week owner-caused delay on activity A. Up to this point the 2-week project delay is

excusable and compensable. At week eight the contractor causes a 3-week delay on the

same activity. This would delay the project for another three weeks. However, the

contractor changes the soft logic of activities B and C from Finish-Start (FS) to Start-

Start (SS). The result is no additional 3-week project delay. In this situation it would be

unfair to conclude that the 2-week project delay is excusable and compensable given that

the contractor delays activity A more than the owner does. As a result logic change

should be considered when assigning delay responsibility.

6.2.3 Resource Allocation

Resource allocation can also affect delay responsibility. The need for incorporating

resource allocation in schedule delay analysis has been known for years. Pinnell (1992)

suggests that the work plan in the form of a bar chart or network diagram should be

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“resource loaded.” An ideal delay analysis method should consider real resource

allocation profiles (Mohan and Al-Gahtani, 2006). Until recently though schedule

analysis explicitly and separately incorporated resource allocation. Chapter 4 proposes

steps to enhance window analysis by incorporating resource analysis inherently in the

delay calculation. Among other things, it includes the possible extended effect of delays

due to changes in resource allocation and the positive/negative effect of resource

allocation on delay responsibility.

6.2.4 The Dynamics of Float, Logic, and Resource Allocation

The previous sections demonstrate that float and its ownership, logical sequences, and

resource allocation really affect delay responsibility. These three issues are discussed

separately. To improve the reliability of schedule analysis, they clearly should be

considered. Whether they should be treated discretely or jointly in schedule analysis

needs to be further considered.

The premise of this research, as the reader might discern, is that float, logic, and resource

allocation have interrelationships that require them to be considered in an integrated

fashion in any schedule analysis. Resource leveling is traditionally neglected in the

calculation of float (Householder and Rutland, 1990). Nevertheless a non-critical activity

may be “resource critical” because it will extend project duration if it does not release

resources on time (Fondahl, 1991). In addition the use of soft or preferential logics,

artificial activity durations, or constraints can sequester total float (Prateapusanond,

2003). Thus fair float ownership specification also requires non-sequestering of float.

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Schedule analysis should therefore address the dynamics of float, logic, and resource

allocation in an integrated manner.

Figure 6.1(c) depicts the dynamics of float, logic, and resource allocation in schedule

analysis. The as-planned project duration is nine weeks with four activities A, B, C, and

D. The maximum allowable number of workers on this site is ten. At week 5 the owner

issues a change order that extends activity D three weeks. The project would not be

delayed since the change order only consumes float of activity D. However the required

number of workers during weeks 6 – 8 would be 12, which exceed the allowable

allocation of workers. To accommodate this problem the contractor has to reschedule

activity C by removing the FS logic between A and C and adding FS logic between D

and C. This logic change delays the project two weeks. Consequently, the change order

does not simply consume time float but alters the schedule’s downstream logic and

resource allocation and delays the project. Forensic schedule analysis should capture this

dynamic properly to provide a more reasonable result. FLORA attempts to fulfill this

need.

6.3 #ovel Forensic Schedule Analysis Technique

As a new time impact analysis technique FLORA addresses the dynamics of float, logic,

and resource allocation in its analyses. It considers ownership and use of float in

apportioning delay responsibility. Float is shared based upon prior agreements between

the owner and contractor. For instance, the owner and the contractor may mutually agree

that each owns half (50-50) of the total float available on any activity (Prateapusanond,

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2003). FLORA evaluates not only the direct impact of a delay on project schedule but

also its “secondary” effect. The secondary effect of a delay may be a mandatory logic

change and/or the disturbance of resource allocation in downstream activities caused by

the corresponding delay.

Table 6.1. FLORA’s rules for time impact analysis


Rule Description
1 Real-time analysis chooses the as-planned schedule as a baseline schedule.
After-the-fact analysis develops a baseline schedule based on the as-planned and
as-built schedules after changing errors found in the as-planned schedule.
2 Total float of each activity is shared between the owner and contractor, namely
owner’s total float (TFo) and contractor’s total float (TFc), based on the agreed
basis (e.g. 0-100, 50-50, 100-0). Total float of new activities which are added
later to project schedules will also be shared in the same manner.
3 An analysis may cover the whole time span of a delay event or logic change. If
two or more delays occur in the same timeframe, the analysis in this overlapping
timeframe will include all of these delays.
4 If the owner or contractor causes a delay or acceleration event, any increase
(decrease) in the total float of an activity will add to (deduct from) the
responsible party’s total float of the corresponding activity.
5 If the third party causes a delay event such as force majeure, any increase
(decrease) in the total float of an activity will add to (deduct from) the owner’s
total float of the corresponding activity.
6 Any increase (decrease) in the total float of an activity due to an approved logic
change will be shared on the agreed basis.
7 Float is an expiring resource. A party may freely use the other party’s total float
if the other does not use it and this “free ride” does not subsequently cause
project delay. Otherwise, the party has to hold delay responsibility for total float
he/she has overused.
8 Any increase (decrease) in the total float of an activity due to the secondary
effect of a delay or acceleration will add to (deduct from) the responsible party’s
total float of the corresponding activity.
9 Total float of an activity for a certain party will be increased accordingly if the
consumption of this float contributes to project delays.
10 Any project delay or acceleration due to an approved logic change will be shared
between the parties on the agreed basis.

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FLORA uses a set of general rules, called FLORA’s rules, for time impact analysis

(Table 6.1). These ten rules are flexible and enable contractual parties to customize them

to fit a specific context. Most are straightforward. For instance, Rule 4 follows the

principle of the total float entitlement in Al-Gahtani and Mohan (2007). That is, the

responsible party will be discredited any change of total float on the affected activity and

gain or lose in the total float of successor activities (Al-Gahtani and Mohan, 2007). Rule

5 is codification of the current general practice that the owner will grant the contractor a

time extension if there is a third party-caused delay and the owner will gain or lose total

float for excusable and non-compensable delays. Due to the flexibility of FLORA’s

rules, however, the project parties may agree to assign any change in total float for

excusable and non-compensable delays to the contractor.

Figure 6.2 illustrates the decision logic of FLORA for forensic schedule analysis.

FLORA can apply to either “real-time” or “after-the-fact” analysis. A real-time analysis

activates when a delay event or a logic change occurs while an after-the-fact analysis is

performed for each delay event or logic change in chronological order. FLORA first

defines the baseline schedule by following Rule 1. It then allocates total float of all

activities in the baseline schedule to the owner and contractor based on the second rule.

If a delay event or logic change occurs, a primary analysis and secondary analysis, if

necessary, will start. Rules 3 – 8 will be applied in these analyses. Assigning project

delay days to the responsible party and updating owner-owned and contractor-owned

total floats can be carried out simultaneously. If there is a delay event or logic change

that has not been addressed, the analysis will continue. Otherwise final delay

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responsibility of each project party will be determined by summing all delay days he/she

has caused in the above analyses. The following case study demonstrates the application

of FLORA.

Figure 6.2. FLORA process flowchart for “real-time” analysis

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6.4 Case Study

The project has eight activities and is planned to finish in 12 days. Figure 6.3 depicts the

as-planned schedule in the form of the linked bar charts. Resource constraints are

omitted for simplicity. Its owner and contractor agree to the FLORA rules (Table 6.1)

without any modification. Rule 2 is also specified by equally shared total float of all

activities. This equally shared float ownership is considered “fair” by many practitioners

(Prateapusanond, 2003). Accordingly, total float is distributed 50-50 to owner’s total

float (TFo) and contractor’s total float (TFc) (Figure 6.3). Finally, total float and project

schedule changes due to an approved logic change are equally shared between the owner

and the contractor.

Act Du Pre TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12


A 2 - 0 0 0
B 3 A 0 0 0
E 2 B 0 0 0
C 4 A 1 0.5 0.5
F 3 E 0 0 0
D 3 A 3 1.5 1.5
H 2 F 0 0 0
G 4 C,D 2 1 1
Legend: Act - Activity; Du - Duration; Pre - Predecessor; TF - Total Float
Figure 6.3. As-planned schedule

Several delay events occur during construction. FLORA with its rules (Table 6.1) and

process (Figure 6.2) helps apportion delay responsibility between the owner and the

contractor. Real-time forensic schedule analysis under FLORA will apply to this case.

Results of the window analysis technique are also given for comparisons. Table 6.2

summarizes delay events during the course of work.

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6.4.1 Day 2: One-Day Contractor-Caused Delay on Activity A

Activity A is delayed one day by the contractor on day 2. This delay would extend the

project one day, from 12 days to 13 days. To recover this one-day delay the contractor

changes the soft logic between activities E and F from finish-start to start-start and adds a

new logic finish-start between E and H. These changes ensure the project completion in

12 days. Thus by using a delay analysis technique like window analysis the contractor

has no responsibility for his/her delay on activity A.

Table 6.2. Delay events and their secondary effects


Day Description
2 The contractor delays one day on activity A. To bring the schedule back as
planned, the contractor changes some logical relationships by altering the
relationship between activities E and F from finish-start to start-start and
adding a new finish-start relationship between activity E and H.
4 The owner fails to allow activity B to proceed on time. Activity B now takes
4 days.
5 The contractor fails to mobilize resources to start activity B until day 6.
5 and 6 The owner does not respond to the request for information (RFI) on activity
C timely. This inaction delays activity C two days.
6 The contractor stops the work on activity D without any reasonable excuse.
7 and 8 Activity D continues being stopped due to inclement weather.
10 and The owner makes a change order which extend activities E and G two more
11 days. Activity F requires a lot of workers to finish on its last day (day 12).
This means that activities E, F, and H cannot be performed concurrently on
day 12 since the contractor is unable to send adequate workers in such a fast
change and notice. As a result, the contractor has to temporarily stop activity
G on day 12 and restarts it as soon as activities E and F finish.

Figure 6.4 illustrates the analyses for this delay and the corresponding logic changes

using FLORA. The ∆TF column shows any difference in total float that an activity has

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after and before the occurrence of the corresponding event and analysis. For instance, the

∆TF in Figure 6.4(a) is determined by subtracting total float of an activity after the delay

on activity A occurs (the schedule in Figure 6.4(a)) from that of the same activity before

the delay on activity A occurs (the baseline schedule in Figure 6.3).

Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13


A 0 0 0 0
B 0 0 0 0
E 0 0 0 0
C 1 0 0.5 0.5
F 0 0 0 0
D 3 0 1.5 1.5
H 0 0 0 0
G 2 0 1 1
(a) First analysis for 1-day contractor-caused delay on A
Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12
A 0 0 0 0
B 1 1 0.5 0.5
E 1 1 0.5 0.5
C 0 -1 0 0
F 0 0 0 0
D 2 -1 1 1
H 0 0 0 0
G 1 -1 0.5 0.5
(b) Secondary analysis for changed logics:E & F (FS→SS);E & H (FS)
Legend: Contractor-caused
Figure 6.4. Analyses for the contractor-caused delay on activity A at day 2

Figure 6.4 shows two analyses. The first analysis is the direct impact of the delay on

project schedule (Figure 6.4(a)). The project is delayed one day for which the contractor

is responsible. This delay does not change total float of any activity. Next, the contractor

has to revise some construction sequencing as a result of this delay. Figure 6.4(b)

portrays the secondary analysis. These changes of the relationships help accelerate the

project one day. Total floats of several activities are changed as well. Specifically, the

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total floats of activities B and E are increased one day while those of activities C, D, and

G are decreased one day. FLORA’s Rule 6 ensures these changes in total float are shared

between the owner and the contractor. Similarly, the one-day project acceleration due to

the logic changes is equally shared between the two parties (Rule 10). That is, each party

accelerates 0.5 day or delays -0.5 day. In sum, with the one-day delay on activity A at

day 2 and its secondary effect, the contractor is responsible for 0.5 delay day while the

owner is responsible for -0.5 delay day. This result is different from the one derived from

the window analysis previously mentioned. Importantly, the secondary analysis can also

be considered an independent analysis without affecting or changing the results of delay

responsibility.

6.4.2 Day 4: One-Day Owner-Caused Delay on Activity B

The owner delays a day on activity B at day 4 (Figure 6.5). This delay does not delay the

project since activity B is a non-critical activity. Instead it consumes the whole one-day

total float of this activity and makes activities B and E become critical. Activity E is now

critical because the early start of activity E cannot delay unless F and hence the project,

are delayed. Following FLORA’s Rule 4 the owner will be responsible for this decrease

in total float of activities B and E. For that reason, TFo of these activities will be

deducted, from 0.5 day to -0.5 day. The owner has no responsibility at the moment since

this delay event does not cause any project delay. In terms of delay responsibility, a

window analysis would derive the same conclusion.

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Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12
A 0 0 0 0
B 0 -1 0.5 -0.5
E 0 -1 0.5 -0.5
C 0 0 0 0
F 0 0 0 0
D 2 0 1 1
H 0 0 0 0
G 1 0 0.5 0.5
Legend: Contractor-caused Owner-caused
Figure 6.5. Analysis for the owner-caused delay on activity B at day 4

6.4.3 Day 5: One-Day Concurrent Delays, Contractor- and Owner-Caused, on

Activities B and C

Concurrent delays occur on day 5. The contractor causes a delay to activity B while the

owner delays activity C. Although the owner delays activity C by two days (days 5 and

6), Rule 3 dictates that these two days be analyzed separately. The project is extended

one day from 12 days to 13 days for the events occurring until day 5.

Figure 6.6 shows the analysis of the concurrent delays. The project is delayed one day.

Notably, total float of activities B and C is zero in the updated schedules on day 4 (Figure

6.5) and day 5 (Figure 6.6). In other words, both activities B and C are critical before and

after the concurrent delays occur on day 5. Each single delay event would have caused

project delay if the other had not occurred. As such, both contractor and owner are

responsible for this one-day project delay. Window analysis would yield one-day

concurrent delays, where the contractor is typically granted a time extension but not delay

damages.

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Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13
A 0 0 0 0
B 0 0 0 0
E 0 0 0.5 -0.5
C 0 0 0 0
F 0 0 0 0
D 3 1 1.5 1.5
H 0 0 0 0
G 1 0 0.5 0.5
Legend: Contractor-caused Owner-caused
Figure 6.6. Analysis for concurrent delays on B and C at day 5

FLORA goes an extra step in this scenario. Activity B is delayed by two days, one day

by the owner at day 4 and the other day by the contractor at day 5. While the delay event

at day 4 does not directly result in the project delay as analyzed above, it contributes to

the one-day project delay in the present analysis. The contractor-caused delay on activity

B at day 5 would not have made activity B critical if the owner-caused delay on activity

B at day 4 had not existed. It is therefore unfair to neglect this owner-caused delay in the

analysis.

Float ownership plays a role in this apportionment. The contractor has owned a half-day

of total float of activity B until day 5 while the owner overuses a half-day of that due to

his/her one-day delay at day 4 (Figure 6.5). Thus the contractor only overuses a half-day

of total float of this activity due to her one-day delay at day 5. Following Rule 7, the

owner has to be held responsible for the total float she has overused. That is, the one-day

delays of the owner on day 4 and the contractor on day 5 on activity B each include a

half-day consuming total float and a half-day causing the project delay. Therefore,

together with the owner-caused delay on activity C at day 5 FLORA divides the one-day

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project delay at day 5 into a half-day of the concurrent delays and a half-day of the

excusable and compensable delay. This result differs from the window analysis result,

which treats the whole one day project extension as a concurrent delay. In addition, TFc

and TFo of activity B will be increased a half day from -0.5 to 0 based on Rule 9 (Figure

6.6).

6.4.4 Day 6: One-Day Concurrent Delays, Owner- and Contractor-Caused, on

Activities C and D

Concurrent delays also occur at day 6. The owner continues delaying activity C. The

contractor delays activity D on the same day. Consequently, the project is delayed one

day (Figure 6.7). The delay on activity D however does not cause the project delay. This

contractor-caused delay only consumes total float since the contractor owns 1.5 of total

float of activity D before the current analysis at day 6. TFc of activity D is deducted from

1.5 to 0.5, which is still positive. In contrast, the owner-caused delay on activity B solely

extends the project one day. That is, the one-day project delay is an excusable and

compensable delay. Window analysis would provide the same result.

Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13 14


A 0 0 0 0
B 1 1 0 1
E 1 1 0.5 0.5
C 0 0 0 0
F 0 0 0 0
D 3 0 0.5 2.5
H 0 0 0 0
G 1 0 0.5 0.5
Legend: Contractor-caused Owner-caused
Figure 6.7. Analysis for concurrent delays on C and D at day 6

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Total floats (TF, TFc, and TFo) need updating. The owner-caused delay on activity C

increases the total float of activities B and E. Rule 4 allocates the increase to TFo for the

same activities. TFo of B and E gains one day from 0 to 1 and from -0.5 to 0.5,

respectively (Figure 6.7). Although TF of activity D does not change, TFc and TFo of this

activity are changed. This can be explained that the contractor-caused delay on activity

D consumes total float while the owner-caused delay on activity C adds to total float of

activity D. This cancels out the change in total float of activity D. Based on Rule 4,

however, one day is shifted from TFc (1.5 to 0.5) to TFo (1.5 to 2.5).

6.4.5 Days 7 and 8: Two-Day Third Party-Caused Delay on Activity D

Unexpected inclement weather delays activity D at days 7 and 8. The project completion

date is not affected by this delay (Figure 6.8). That is, the delay only consumes the total

float of activity D. Following Rule 5, TFo of activity D is deducted 2 days due to this

float consumption. Window analysis would also yield no critical delay in the period of

days 7 and 8.

Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13 14


A 0 0 0 0
B 1 0 0 1
E 1 0 0.5 0.5
C 0 0 0 0
F 0 0 0 0
D 1 -2 0.5 0.5
H 0 0 0 0
G 1 0 0.5 0.5
Legend: Contractor-caused Owner-caused Third party-caused
Figure 6.8. Analysis for the third party-caused delay on D at days 7 and 8

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6.4.6 Days 10 and 11: Two-Day Owner-Caused Delays on Activities E and G

The owner issues a change order which extend activities E and G two more days (Table

6.2). Figure 6.9(a) illustrates the direct impact of these delays on the project schedule.

The project is delayed one day, from 14 days to 15 days. This is an excusable and

compensable delay. Window analysis for the same time period would give the same

result. The delays also cause changes in total float of activities D, F, G, and H. The

owner’s total float of activity F and H will gain one day while that of activity G will lose

one day (Rule 4). It should be noted that TFc and TFo of activities B and D become zero

because these activities completely finish at the current analysis. This follows Rule 7

which treats total float as an expiring resource.

Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15


A 0 0 0 0
`
B 1 0 0 0
E 1 0 0.5 0.5
C 0 0 0 0
F 1 1 0 1
D 0 -1 0 0
H 1 1 0 1
G 0 -1 0.5 -0.5
(a) First analysis for owner-caused delays on E and G at days 10 and 11
Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
A 0 0 0 0
B 2 1 0 0
E 2 1 0.5 1.5
C 1 1 0 1
F 2 1 0 2
D 0 0 0 0
H 2 1 0 2
L.
G 0 0 0.5 -0.5
(b) Secondary analysis for infeasible resource allocation/changed logics at day 11
Legend: Contractor-caused Owner-caused Third party-caused
Figure 6.9. Analyses for the owner-caused delays on E and G at days 10 and 11

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The secondary effect of these delays is the infeasibility of the planned resource

allocation. As described in Table 6.2, activity F requires an excessive number of workers

to finish on its last day (day 12). The contractor has to temporarily stop activity G for

one day and restart at day 13 when E and F are completed. As a result the project is

delayed one more day. If the dynamics of logic and resource allocation are not

considered, which is the case in traditional window analysis, this one-day project delay

would be an inexcusable delay.

FLORA provides the secondary analysis for this infeasible resource allocation and

changed logic situation (Figure 6.9(b)). Two new relationships are added as dotted

arrows. This secondary analysis demonstrates that the owner is responsible for this

additional one-day project delay. In other words, this delay is excusable and

compensable instead of inexcusable, as computed by traditional window analysis.

Table 6.3 summarizes the results of FLORA and the window analysis technique. From

the four-day project delay, window analysis would show one-day inexcusable, one-day

concurrent, and two-day excusable and compensable delays. Half-day inexcusable, half-

day concurrent, and three-day excusable and compensable delays are indicated by

FLORA. Each single analysis may also yield different or even conflicting outcomes.

This confirms that project progress factors play a significant role in forensic schedule

analysis.

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Table 6.3. Summary of forensic schedule analysis
Analysis/ Project Type of Delays (Day)
Window Duration Excusable/ Excusable/ Inexcusable Concurrent
(Date) (Day) Compensable Non-compensable
2 12 -0.5 (0)a – 0.5 (0) –
4 12 – – – –
5 13 0.5 (0) – – 0.5 (1)
6 14 1 (1) – – –
7-8 14 – – – –
10-11 16 2 (1) – 0 (1) –
Total 16 3 (2) – 0.5 (1) 0.5 (1)
a
Results of FLORA (window analysis technique).

The differences between the two results derived from FLORA and the window analysis

technique are significant. The one-day difference of excusable and compensable delays

is really considerable given that the project is only delayed four days. This difference

leads to the change in damages paid (recovered) by the owner (the contractor). Other

differences in the results of inexcusable delays and concurrent delays also affect resultant

damages. In a single analysis, at day 5 for instance, FLORA yields half-day excusable

and compensable and half-day concurrent delays while the window analysis technique

does one-day concurrent delays. A shift in a half day from concurrent delay to excusable

and compensable delay apparently changes the associated damages. This is because the

contractor is typically granted time extension only for concurrent delays whereas he/she

receives delay damages for excusable and compensable delays. As such, the outcomes of

delay claims and disputes are impacted by the project progress factors.

6.5 Discussion

FLORA solves various issues in forensic schedule analysis. By capturing the dynamics

of float, logic, and resource allocation, it also helps solve other schedule analysis

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dilemmas such as pacing delays, acceleration, concurrent delays, sequestering of float,

fair treatment of non-critical activities, and real time analysis. A pacing delay is the

deceleration of the work by the contractor (owner) due to a delay to the end date of the

project caused by the owner (contractor) to maintain balanced progress with the updated

project schedule (Zack, 2000). Zack (2000) notes that pacing delays relieve the owner

(contractor) of some delay damages it otherwise may have owed to the contractor

(owner) since they can cause concurrent delays and/or float consumption. FLORA

indirectly considers this issue in analyses because its rules clearly address float ownership

and consumption. Additionally, the rules weigh acceleration as equally important as

delay. That is why FLORA is characterized as a new time impact analysis or forensic

schedule analysis technique rather than a delay analysis technique per se. The proper

treatment of logic change in such analyses enables FLORA to deal with any sequestering

of total float in project schedules. Prior approved float sharing and clear rules for float

consumption helps treat non-critical activities fairly. Finally, FLORA can work for both

real-time and after-the-fact schedule analyses.

The rules of FLORA are flexible. A flexible and more accurate delay analysis technique

is valuable (Alkass et al., 1996). Project parties may follow a certain view of float

ownership and allocation in their specific project as long as the view is agreed by the

parties. That is, total float can be owned by the owner or the contractor or shared

between the two (Rule 2). Instead of being assigned to the owner, changes in total float

due to third-party-caused delays can alternatively be assigned to the contractor or shared

between the parties (Rule 5). In addition, total float changes and delay or acceleration

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due to approved logic changes can be shared based on any ratio rather than equally

shared between the project parties (Rules 6 and 10).

In addition to inheriting strengths of available delay analysis techniques FLORA is by

and large more advantageous. The window snapshot and traditional time impact analysis

techniques do not directly capture the impacts of float ownership, logic changes, and

resource allocation on delay responsibility. The comparison in the above case study

makes this evident. The “isolated delay type” technique (Alkass et al., 1996) does not

deal with logic changes properly. The fact that the IDT technique incorporates delays in

one shot in each window period is not practical (Mohan and Al-Gahtani, 2006). As

previously discussed, the pre-allocation of total float (Prateapusanond, 2003) is

unrealistic since the critical path(s) and, hence the total float of each activity, can change

during the course of work. A total float management technique (Al-Gahtani and Mohan,

2007) only addresses float ownership not the other problems discussed above.

FLORA has several weaknesses. It is somewhat more complicated than window

analysis. Window analysis however becomes arduous if the window sizes are set to

small time periods to gain more accuracy. By incorporating the secondary effect of

delays, FLORA requires project records about logic changes and resource allocation

together with delay and acceleration events. Fortunately, these records can be readily

obtained if the project team updates and documents project progress.

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Finally, its analysis takes more effort since schedule delay or acceleration and the impacts

on different types of total floats (TF, ∆TF, TFc, and TFo) must be computed.

6.6 Summary

Various factors affect the results of delay analysis. Different views of float, float

ownership, logic change, concurrent delays, resource allocation, and so on may lead to

different results. They should therefore be considered in schedule analyses to ensure

more reliable outcomes. Current delay analysis techniques tend to overlook most if not

all of them. While achieving modest success, recently proposed techniques try to

incorporate some of these factors. They mainly deal with concurrent delays and float

ownership.

FLORA addresses various issues that remain unsolved and/or neglected in forensic

schedule analysis. It effectively captures the dynamics of float, logic and resource

allocation. It can be used for either real-time or after-the-fact analysis. The analysis

processes are based on ten rules, which are flexible and customizable. A case study is

used to illustrate its application. FLORA may yield different results compared to other

available schedule analysis techniques like window analysis because it is more inclusive

of project progress factors. By properly dealing with the issues of schedule analysis,

FLORA can be more reliable. Finally, its outcomes can be easily accepted by the project

parties since they are enabled to specify and agree FLORA’s rules for schedule analysis

in advance.

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Thus far, the current analyses of delays and their damages reveal considerable limitations.

This chapter and the last two chapters reveal the impacts of various factors on the

analysis of causation and quantum in construction delay claims. They also present new

approaches to improve the reliability of delay claims. However, whether or not the

proposed approaches can work together is another issue. The next chapter explores and

discusses the integration of these approaches.

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Chapter 7
Integrated Framework of Schedule and Damage Analyses

This chapter presents a new framework to improve the analyses of the causation and

quantum of construction delay claims. The framework is the integration of the two

approaches, namely ASAP and FLORA, presented in the last two chapters. ASAP and

FLORA are able to work in a real-time and interactive manner. A case study developed

from the case project in Chapter 6 demonstrates application of the framework. The case

study shows that the framework works well and improves the reliability and acceptance

of construction delay claims.

7.1 Introduction

The two previous chapters separately propose novel techniques for analyzing schedule

delays and their damages. Chapter 5 presents ASAP for quantifying delay damages while

Chapter 6 presents FLORA as a new forensic schedule analysis technique. As previously

discussed, FLORA is able to capture the dynamics of float, logic, and resource allocation

during schedule analysis. In Chapter 5, ASAP has been embedded in the window

analysis technique, not FLORA. Chapter 6 however shows that FLORA is more credible

than the window analysis technique. In addition, ASAP is superior to the conventional

daily overhead rate-based method. Thus, a new framework for simultaneously analyzing

schedule delays and their associated damages would make construction delay claims

more acceptable among the project parties.

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For that reason, this chapter presents that new framework by integrating ASAP and

FLORA. FLORA plays the role of a new forensic schedule analysis technique whereas

ASAP quantifies field overhead damages based on the ongoing output of FLORA.

Similar to each single method, this framework can be employed in either real-time or

after-the-fact delay analysis. A case study will demonstrate the application of this new

integrated framework.

7.2 Framework Description

Figure 7.1 illustrates the integrated framework for analyzing schedule delays and their

field overhead damages. Basically, the left-hand and right-hand sides are from FLORA

and ASAP, respectively. These are discussed in Chapters 5 and 6. A dotted link is

established between these two processes from “assign any project delay day(s) to the

responsible party” on the left-hand side to the conditional node “is the owner solely

responsible for the delay day(s) (DDj)” on the other side (Figure 7.1).

These two processes can work in an interactive manner. FLORA will signify ASAP via

the dotted link when FLORA identifies any project delay. That is, compensable FOH

damages can be assessed when any project delay day actually occurs. If a schedule

analysis identifies the owner solely responsible for the delay, FOHC in the current

analysis equals the product of the delay day(s) (DDj) and the time-related FOH of the

owner-caused critically delayed activity(ies) (uFOHtiDo). If the delay day(s) is(are)

negative, due to acceleration or logic change for example, uFOHtiDo is substituted by

time-related FOH of the activity(ies) affected by the corresponding cause.

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Figure 7.1. Integrated framework for schedule and damages analyses

ASAP requires some modification to successfully work with FLORA. The first three

steps and step 7 (Table 5.1) are still the same. Steps 4 – 6 are slightly changed since

FLORA now replaces the window analysis technique. The delay period (DP)Wj and the

jth window period Wj are substituted by the delay day(s) DDj and the jth analysis for

which the owner is responsible for the delay, respectively (Figure 7.1). At the outset, j is

set at zero.

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The framework also simplifies several elements in quantifying damages. It only focuses

on compensable field overhead damages. Home office overhead damages and liquidated

damages are not explicit (Figure 7.1). The reason is that HOOH cannot be reasonably

allocated to schedule activities and is normally assessed by markups or Eichleay-like

formulas which are straightforward. Also, liquidated damages are easily calculated as

long as the liquidated damages clause is inclusive and FLORA pinpoints schedule

analysis results.

7.3 Case Study

7.3.1. Applications of the #ew Framework to a Case Study

The case project in Chapter 6 is reused to demonstrate the practicality of the proposed

framework. Table 7.1 further provides the field overhead allocation based on the first

three steps of ASAP. It should be noted that these steps are discussed in Chapter 5.

Similar to the case study in Chapter 5, this case chooses direct costs as the cost driver.

Overhead is 20 percent of the project direct costs. This overhead includes $13,000 of

home office overhead and $30,000 of field overhead. The field overhead consists of

time-related field overhead ($20,000) and non-time-related field overhead ($10,000).

The project was delayed 4 days. Table 6.2 describes the delaying events during the

course of project work. As discussed in Chapter 6, FLORA and the window analysis

technique provide different results. The window analysis yields 2, 1, and 1 days as

excusable/compensable, inexcusable, and concurrent delays, respectively while FLORA

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yields 3, 0.5, and 0.5 for the same delays (Table 6.3). Similarly, ASAP and the daily

rate-based method provide different results of field overhead damages.

Table 7.1. Activity-specific allocation of field overhead (in dollars)


No Activity Duration (Day) Direct Non-Time-Related FOH Time-Related FOH
Planned Actual Cost Total Plan/day Actual/day Total FOHt/day
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1 A 2 3 20,000 930 465 310 1,860 930
2 B 3 5 18,000 837 279 167 1,674 558
3 C 4 6 30,000 1,395 349 233 2,791 698
4 D 3 6 24,000 1,116 372 186 2,233 744
5 E 2 4 30,000 1,395 698 349 2,791 1,395
6 F 3 3 45,000 2,093 698 698 4,186 1,395
7 G 4 6 20,000 930 233 155 1,860 465
8 H 2 6 28,000 1,302 651 217 2,605 1,302
9 Total Direct Costs 215,000
10 Overhead (OH) 43,000
11 Home Office OH (HOOH) 13,000
12 Field Overhead (FOH) 30,000
13 Non-Time-Related FOH 10,000
14 Time-Related FOH 20,000

Table 7.2 presents compensable field overhead damages by employing different methods.

In general, the methods for calculating field overhead damages (daily rate-based, ASAP)

are based on the outputs of the forensic schedule analysis techniques (window analysis,

FLORA). Thus, there are four combinations where the new integrated framework is used

in the last right column which is indicated by FLORA and ASAP (Table 7.2). The

liquidated damages and extensions of time are not discussed here since their calculations

are straightforward.

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Table 7.2. Field overhead delay damages (in dollars) under different methods
Analysis/Window Daily FOH Rate ASAP
(Date) Window Analysis FLORA Window Analysis FLORA
2 0 1,667x(-0.5)= -834 0 930x(-0.5)= -465
4 0 0 0 0
5 0 1,667x0.5=834 0 558x0.5=279
6 1,667x1=1,667 1,667x1=1,667 698 698
7-8 0 0 0 0
10-11 1,667x1=1,667 1,667x2=3,334 1,395+465=1,860 1,395+465+465
Total FOH Damages 3,334 5,001 2,558 2,837

With the results of delay analyses (Table 6.3), the daily rate-based method yields $3,334

and $5,001 as compensable field overhead damages under window analysis and FLORA,

respectively. Noticeably, the daily rate equals to the time-related field overhead divided

by the scheduled project duration ($20,000/12 = $1,667/day). Reasons why the daily

rate-based method can be unacceptable are discussed in Chapter 5. The second to last

column is based on the combination of ASAP and the window analysis technique. Table

5.1 presents the procedures of this combination.

The last column on the right illustrates the results of the new integrated framework. On

day 2 FLORA analyzes and identifies -0.5 delay day (or 0.5 acceleration day) (Section

6.5.1 and Table 6.3). Thus, the right-hand side of the framework (Figure 7.1) is activated

and yields -$465. The negative sign means that the contractor owes the owner. The same

process will apply to other analyses until all delay events are analyzed.

FOH damages associated with the excusable and compensable delays on days 11 and 12

in the last analysis should be calculated separately and differently. On the one hand, the

144
owner causes critical project delay on day 11 on both activities E and G (Figure 6.9(a)).

Accordingly, field overhead damages are the time-related field overhead of these two

activities, that is, $1395 + $465. On the other hand, the secondary analysis (Figure

6.9(b)) indicates that only activity G is delayed (suspended) on day 12 due to infeasible

resource allocation and changed logics. Its corresponding field overhead damages are

therefore the time-related field overhead of activity G ($465).

7.3.2 Discussion

The above case study demonstrates that the framework works well and provides more

credible outcomes. It yields different results compared to current methods. There are

two reasons for this. First, the forensic schedule analyses between FLORA and the

window analysis technique can be different. A case study in Chapter 6 shows and

discusses this issue. Second, the calculations of field overhead damages based on the

daily rate based method and ASAP are different (Chapter 5). The framework is the

integration of the two new and more plausible methods.

7.4 Summary

This chapter demonstrates that with minor modifications ASAP and FLORA can work

together to provide a better framework for analyzing schedule delays and field overhead

damages in construction delay claims. The outcomes of this framework when being

applied to the case study differ from those of the traditional analysis techniques and

calculations. The framework can work in either real-time or after-the-fact delay analysis.

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Chapter 8
Conclusions and Recommendations

This chapter summarizes research findings and contributions, presents recommendations

to practitioners and researchers, and discusses limitations and future research. These are

separately described in the three following sections.

8.1 Conclusions and Contributions

This section discusses major research findings and contributions.

8.1.1 The Effect of Resource Allocation on Forensic Schedule Analysis

The practice of resource allocation in a disputed project usually impacts the outcome of

forensic schedule analysis. This research confirms that some delay can make unrealistic

resource allocation in downstream work, which in turn may further delay the project.

Available forensic schedule analysis techniques do not address this possible extended

effect of the delay. That is, schedule delay analysis that considers resource allocation can

capture the “forward” effects of delays. The incorporation of resource-allocation

considerations into a traditional schedule analysis can either increase or reduce the impact

of a delaying event. Either owners or contractors may suffer disadvantages in the

apportionment of delays under the existing schedule analysis techniques.

146
8.1.2 The Enhanced Schedule Window Analysis Technique

The best available schedule analysis technique is enhanced to take into account the effect

of resource allocation. This research embeds necessary steps in the current window

analysis technique to improve its reliability. This is to ensure that forensic scheduling

includes the impacts of resource allocation. A case study was used to compare and

evaluate the analyses and results of the current and enhanced analysis methods. One

major benefit of this enhanced window analysis technique is that claims analysts do not

have to get acquainted with a totally new method to increase the reliability of their delay

claims. However, the enhanced method is not able to capture other major schedule-

related factors that potentially affect its analysis.

8.1.3 ASAP as a #ew Approach for Quantifying Field Overhead Damages

The analysis of delay responsibility in line with the context of delays should be

indispensable. The traditional calculation of field overhead damages based on a daily

rate is far from logical. A “one-size-fits-all” method undermines the relative importance

of delayed activities and the fluctuating nature of overhead levels during the course of

project work. In addition, the “one-size-fits-all” method indirectly impedes the

application of the “fair rule” or the comparative negligence doctrine to apportionment for

concurrent delays.

The analytical approach, ASAP, proposed in this dissertation takes into account the

timing of delays and the degree of suspensions in quantifying field overhead damages. It

realistically allocates field overhead to schedule activities. Field overhead delay

147
damages, if any and/or allowable, are calculated based on activity-specific field overhead.

ASAP can be used effectively in forward pricing practice and the negotiation of delay

compensation. It is also a realistic and systemic approach that enables equitable

apportionments for concurrent delays. When ASAP is applied to the case study project,

the results differ considerably from those of the daily rate-based method. The case study

illustrates that the daily rate-based method may cause double payments when the

recovery covers some parts of field overhead already included in the as-bid price.

8.1.4 FLORA as a #ovel Forensic Schedule Analysis Technique

A variety of factors affect the results of forensic schedule analysis. Different views of

float, float ownership, logic change, concurrent delays, resource allocation, and so on

may lead to different results. As such, these factors should be considered in forensic

schedule analyses to ensure more reliable outcomes. Current techniques tend to overlook

these factors.

FLORA solves various issues in forensic schedule analysis. The rules of FLORA are

flexible and customizable. By addressing the dynamics of float, logic, and resource

allocation, it also helps solve other schedule analysis related issues such as pacing delays,

acceleration, concurrent delays, sequestering of float, fair treatment of non-critical

activities, and real-time analysis. FLORA indirectly considers pacing delays in analyses

because its rules clearly address float ownership and consumption. Additionally, the

rules weigh acceleration as equally significant as delay. That is why FLORA is

characterized as a novel forensic schedule analysis technique rather than a delay analysis

148
technique. The appropriate handling of changes in logic in such analyses enables

FLORA to deal with any sequestering of total float in project schedules. Prior approved

float sharing and coherent rules of float consumption help treat non-critical activities

fairly. FLORA can work for both real-time and after-the-fact schedule analyses. Lastly,

its outcomes can be easily accepted by the project parties since they are able to specify

and agree FLORA’s rules for forensic schedule analysis in advance.

FLORA has several weaknesses. By incorporating the secondary effect of delays,

FLORA additionally requires project records regarding logical changes and resource

allocation together with delay and acceleration events. Fortunately, these records can be

readily obtained if the project team updates and documents project progress well.

FLORA requires more effort since schedule delay or acceleration and the impacts on

different types of total floats must be computed and/or updated in any single analysis.

8.1.5 #ew Integrated Framework for Analyzing Schedule Delays and Damages

This dissertation proposes a new framework for analyzing the causation and quantum of

construction delay claims. The framework is the integration of ASAP and FLORA.

When applied to a case study, ASAP and FLORA are shown to work in a real-time and

interactive manner. The case study shows the framework works well and can provide

more convincing outcomes. It yields different and superior results compared to those of

the current methods.

149
8.2 Recommendations

8.2.1 Schedule Analysis Considering Resource Allocation

Schedule analysis should consider resource allocation. This research shows the potential

effects of resource allocation on delay analysis. The consideration of resource allocation

ensures that schedule delays are quantified and divided reasonably. That is, a certain

party can avoid assuming delay responsibility caused by the other party. The outcome of

the analysis is therefore more acceptable. Previously available schedule analysis

techniques have frequently not incorporated the effects of resource allocation.

Nevertheless, courts and review boards have supported delay claims based upon rigorous

analysis techniques, especially the schedule window analysis method. The techniques

developed herein are logical and rigorous and will, over time, be acceptable to such

bodies. At a starting point, the enhanced schedule window analysis method presented in

this dissertation facilitates schedule analysis under the effect of resource allocation. It is

easy to use since window analysis has been frequently employed by claims analysts.

8.2.2 Schedule Analysis Capturing the Dynamics of Float, Logic, and Resource

Allocation

In addition to resource allocation, other schedule-related factors such as float and logic

affect forensic schedule analysis. These factors should be simultaneously addressed

during the analysis. Project parties should answer the question “who owns float?” in

advance. Float can be owned by the owner, the contractor, or shared between the two.

Clear float ownership specifications enable forensic schedule analysis to reasonably

capture the dynamics of float, logic, and resource allocation. Changes in logic should

150
also be taken into consideration in forensic schedule analysis. This is to avoid the

sequestering of float by parties who prepare and update project schedules. If these

factors are addressed properly, other schedule-analysis-related issues such as pacing

delays, acceleration, and the fair treatment of non- and near-critical activities can also be

considered in the analysis. FLORA developed in this research is an example of such a

solution.

8.2.3 The Context of a Delay Addressed in Calculating Delay Damages

The quantification of delay damages should consider the context of a delay in terms of

the timing of the delay and degree of suspension. Current methods and formulas are

prone to ignore this context. That is, a “one-size-fits-all” approach is normally used in

the industry. By defining the context of a delay, delay damages can be logically traced to

certain specific delaying events. As such, the damages can be calculated more accurately

and fairly. Double overhead payment, for example, can be avoided if the calculating

process of delay damages addresses the delay context. For quantifying field overhead

damages, ASAP provides much more plausible results compared to those of current

practice.

8.2.4 Apportionment for Concurrent Delays

Concurrent delays need to be apportioned in terms of their damages. Equitable

apportionments should replace the current practice which grants the contractor time but

no money and the owner no liquidated damages in the circumstances of concurrent

delays. Equitable apportionments follow a fairer and more modern doctrine, namely

comparative negligence, instead of contributory negligence. Specifically, ASAP

151
proposed in this research enables such equitable apportionments. In ASAP, a project

party may only be responsible for activities for which he/she causes critical delays and

pay for delay damages incurred by those critical delays on those activities.

8.2.5 Applications of ASAP and FLORA in the Industry

ASAP and FLORA are useful for both practitioners and researchers. ASAP facilitates

systematic apportionment analysis in delay claims. It helps practitioners be more

proactive in measuring and presenting delay damages. FLORA enables practitioners to

capture the dynamics of float, logic, and resource allocation in forensic schedule analysis.

As such, these techniques should be applied to actual projects to obtain more realistic and

acceptable results from the analysis. Project parties may employ the integrated

framework for analyzing delaying/accelerating events and quantifying their associated

financial consequences in their delay claims. Researchers should benefit from exploring

insights into their application and implementation in the real world. .

8.3 Limitations and Future Research

Research should continue investigating conditions that traditional forensic schedule

analysis provides incorrect delay responsibility. This research indicates that schedule

analysis without considering resource allocations may increase the owner’s or

contractor’s risk of assuming delay responsibility which is not his or her fault. The key

question is “under what delay circumstances will contractors or owners face such

disadvantages?” This current research does not fully answer this question and future

research is needed. In addition, future research may develop systematic algorithms that

152
can readily identify whether a certain delaying event causes an extended effect and

effectively quantify it, if any.

The specifications of issues such as float ownership, changes in logic, and pacing delays

need elaborating in the industry. This research proposes flexible techniques to cope with

different views of these issues. However, it does not propose their appropriate and

workable specifications which can fit in a certain circumstance. In the case of float

ownership for example, whether the owner should own float, the contractor should own

float, the project should own float, or the owner and contractor should share float are not

discussed and analyzed in this dissertation. That is, this research itself does not propose

best practices regarding those issues. Future research may investigate the right views

and/or practices for a given scenario. This will help practitioners and professionals

readily find and adopt them for their specific project. The techniques developed in this

research can then be employed for delay claims based on the adopted views/practices.

Further research is needed to develop a proper and realistic approach for fairly

calculating delay damages for home office overhead. This research develops ASAP

which helps quantify field-overhead damages. As pointed out in the literature review,

Eichleay-type formulas and percentage markup multipliers can be and are used in some

circumstances. Their rationale and accuracy are questionable though. A more logical

approach for quantifying extended and unabsorbed home office overhead is therefore

needed. Apportionment for concurrent delays should also be considered in that research.

153
Future research may concentrate on increasing the usability, credibility, and acceptability

of forensic schedule analysis considering the dynamics of float, logic, and resource

allocation by project stakeholders. For instance FLORA and/or its concepts should be

applied in the industry and improved, if required. This is to increasingly reduce the gap

in accuracy between the traditional and proposed forensic schedule analyses.

A new mindset of forensic scheduling analysis may be required in today’s emerging

contractual environments. Forensic schedule analysis is typically used in traditional

contracting where a certain party is solely responsible for a certain process/activity. In

recent innovative contracting where project stakeholders work in a collaborative

environment (i.e. partnering, lean project delivery system), delay responsibility can be

more difficult to apportion. However, a project may suffer delay in such an environment.

Current forensic schedule analysis techniques may need to be modified to work in that

context. Alternatively, a new paradigm for forensic scheduling may be needed. Legal

issues such as contract forms and clauses may differ from those of the traditional

contracting practice. Future studies should investigate these issues.

154
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