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Dissertation 12-06-2007

Dissertation 12-06-2007

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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

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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

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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 ii

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

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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.

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Abbreviations

AACEI ASAP ASBCA BCA CDM CPAT CPM C/SCSC DDV DOD DOT EBCA EFC ENG BCA EVA EVMS FLORA FOH FS G&A

: The Association for the Advancement of Cost Engineering : Activity-specific overhead allocation process : The Armed Services Board of Contract Appeals : Board of Contract Appeals : Continuous delay measurement : Contemporaneous period analysis technique : Critical path method : Cost/Schedule Control Systems Criteria : Daily delay values : The U.S Department of Defense : The Departments of Transportation : The Department of Energy Board of Contract Appeals : Early finish cost : The Army Corps of Engineers Board of Contract Appeals : Earned Value Analysis : The earned value management system : A new forensic schedule analysis technique : Field office overhead : Finish-Start : General and administrative expense
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GSBCA HOOH IDT JLARC LFC LOE NCHRP P3 SS TIA TRB VABCA

: The General Services Board of Contract Appeals : Home office overhead : Isolated delay type : The Joint Legislative Audit and Review Commission : Late finish cost : Level of effort : National Cooperative Highway Research Program : Primavera Project Planner : Start-Start : Time impact analysis : Transportation Research Board : The Veterans Affairs Board of Contract Appeals

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Symbols

ATF Ba Bc Be Bo CD CDi Di Da De Do DDj DP (DP)Wj ∆TF

: Allowable total float : Total billings for actual contract period : Contract billings : Contract billings for extended period : Total billings for original contract period : Cost driver value for the whole contract : Cost driver value for activity i : Duration of activity i : Actual days of contract performance : Days of owner-caused delay : Original days of contract performance : The delay day(s) for the jth analysis : Delay period identified by a window analysis : Delay period of window Wj : Difference in total float that an activity has after and before the occurrence of the corresponding event and analysis

FOH FOHn FOHni FOHt

: Field overhead : Non-time-related field overhead : Non-time-related field overhead for activity i : Time-related field overhead
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FOHti FOHC (FOHC)Wj HOOH i iD iDo La Ld Ma Me Mn Mp OH Oa Oc Oo PDD Rd RDD TDD TF TFC

: Time-related field overhead for activity i : Total compensable field overhead damages : Compensable field overhead damages in window Wj : Home office overhead : ith activity or activity i : Critically delayed activity i : Owner-caused critically delayed activity i : Total labor costs: actual period : Labor costs: delay period : Actual HOOH: entire period (%) : Actual HOOH: delay period (%) : Normal HOOH (%) : Planned HOOH and profits at time of bid : Overhead : Total overhead during actual contract period : Overhead allocable to contract : Total overhead during original contract period : The number of days that the party delays on the affected activity path : Daily overhead allocable to contract : The number of delayed days that a party is held responsible : The total delayed days of the entire project : Total float : Contractor’s total float
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TFO uFOHni uFOHti uFOHtiD uFOHtiDo

: Owner’s total float : Non-time-related field overhead for activity i per time unit : Time-related field overhead for activity i per time unit : Time-related field overhead for critically delayed activity i per time unit : Time-related field overhead for owner-caused critically delayed activity i per time unit

Vo Wj

: Original contract value : 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 2

A proverbial expression 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).

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

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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 This research aims at developing such an

concurrent delay scenarios is necessary. approach.

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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.

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The amount of compensation in delay claims

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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 realtime analysis are captured in forensic scheduling analysis.

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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).

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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;

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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).

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

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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
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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.

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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 mid1960s. 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
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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).
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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

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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.

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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

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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).

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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 1

Task Name

Duration

-1

1

2

3

4

5

6

7

8

9

10

11

12

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.

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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;
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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

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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.

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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
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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 “nodamage-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 multipleresponsibility activities are being performed at the same time (Baram, 2000). Delay claims are much more complicated when concurrent delays possibly exist. Analysis of

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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

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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 nonoverlapping 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 Excusable & Inexcusable 1 2 3 4 Ponce de Leon (1987)1 Reams (1989) ; Battikha and Alkass (1994) 1 Arditi and Robinson (1995) 1; AlSaggaf (1998) 1 Rubin (1983); Galloway and 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) Construction (1993) 1; Baram (2000) 1; Construction (2002) 1 Kraiem and Diekmann, (1987); James (1991); Kutil and Ness (1997); Finke (1999); Ness (2000); Bubshait and Cunningham (2004) Hughes and Ulwelling (1992); Wickwire et al. (2003)
1

Concurrent Delays Excusable & Compensable Compensable & Inexcusable Compensable Excusable Excusable Excusable Excusable Not available Not available Excusable

Excusable Excusable Inexcusable Excusable

5 6

Inexcusable Excusable

Excusable Excusable

Inexcusable Excusable or Apportioning

7

Excusable

Excusable

Apportioning

Note: 1Based on Peters (2003)

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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:

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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.

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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 byproduct 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
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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 resourceconstrained 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

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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

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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
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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?
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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 Documentation

Analyze the Original Schedule (OCPM)

Develop the As-Built Schedule (ABS)

- Daily Inspection Reports (DIR) - Schedule Updates - Submittal Logs Request for Info (RFI) - Contract Document - Clarification (CDC) - Potential Cost/ Schedule Incidents Reports (PCS) - Change Order Log - Claims Logs - Cost & Progress Payments

Identify & Analyze Concurrent Delays - The Level of Analyze Detail Project - The Logic Documents - The Production Rates Analyze Project Resources Utilization - Summarize the DIR - Plot the DIR - Develop Various Level of Details Analyze the Impact of Specific Issues Identify & Analyze Delay Disruption Periods Apply the Contemporaneous Period Analysis Technique (CPAT) Analyze & Evaluate Contractor’s Claims Summarize, Analyze & Calculate Compensation

Conduct Effective Meetings to Present, Negotiate, & Settle Claims

Figure 2.4 Generic methodology for analyzing delay claims (Source: Kartam, 1999)

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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
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project documentation needed and effort to prepare are associated among schedule analysis techniques. In this dissertation, the term reliability describes the result of Major

forensic schedule analysis that accurately presents and captures the facts. 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)

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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 wouldhave-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. difference between them (5 days) is the total amount of delays recoverable. The

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ID 1 2 3

Task Name

Duration -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

As -Planned As -Built Delays

10 days 15 days 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

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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; Alsaggaf, 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 asbuilt 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).

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This method can be acceptable in the industry. Despite incompleteness, a collapsed asbuilt 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”

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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. 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). It also may not scrutinize delay type during the

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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

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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.

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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 Inexcusable delays Total time Modified total time Impacted as-planned (owner delays) Impacted as-planned (contractor delays) Collapsed as-built Window analysis 3 2 5 5 1 Number of days Excusable delays Compensable delays 8 5 6 3 3 5

2

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.
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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
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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):

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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.
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Profit COST BREAKDOWN STRUCTURE (CBS) Home Office General Overhead Contingency Reserve INDIRECTS Staff Facilities Supplies & Services

Work Packages Direct Items Time & Materials Accounts

Materials 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
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Work Breakdown Structure (WBS)

DIRECT COSTS

Field Labor

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):

Delay Period Daily Rate =

Total Time Dependent Costs to Date 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.

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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
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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:
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Overhead Allocable to Contract =

Contract Billings x Total Overhead 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 Eichleay Eichleay - Var. 1 Eichleay - Var. 2 Hudson Ernstrom & Essler Manshul Carteret Allegheny Emden Legend:
Bc Bo Ba Be Oo Oa Vo La Ld

Origin Home Office Overhead (HOOH) Country Year Allocable HOOH Daily Rate HOOH Owned USA 1960 (Bc/Ba)*Oa Oc/Da Rd*De USA 1984 (Bc/Bo)*Oo Oc/Do Rd*De USA 1980 [Bc/(Bo+Be)]*Oo Oc/Do Rd*De UK 1989 (Vo/Do)*Op Rd*De USA 1982 (Oa/La)*Ld USA 1981 [Be/(1+Mp)]*Mn USA 1954 (Me-Mn)*Be USA 1958 (Me-Ma)*Vo Canada 1995 (Mp*Vo)/Do Rd*De
Da Do Mp Mn Ma Me Rd De Oc Actual days of contract performance Original days of contract performance Planned HOOH and profits at time of bid Normal HOOH (%) Actual HOOH: entire period (%) Actual HOOH: delay period (%) Daily overhead allocable to contract Days of owner-caused delay Overhead allocable to contract

Contract billings Total billings for original contract period Total billings for actual contract period Contract billings for extended period Total overhead during original contract period Total overhead during actual contract period Original contract value Total labor costs: actual period Labor costs: delay period

(Based on Zack, 2001; NCHRP, 2003; Ottesen and Dignum, 2003)

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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.

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Table 2.4 Allowed markup for home office overhead (Source: NCHRP, 2003)
State Colorado Allowable Markup 10% Covers Home office overhead and profit Applied to
• • • • •

Connecticut

10%

Home office overhead and profit Home office overhead and profit

• • •

Georgia

15%

• • • • •

New Jersey

10%

New York

10%

Overhead, general superintendence, and other costs attributable to delay (specifically excluding profit, as profit is not allowed on delay claims) Home office overhead and profit

• • •

Nonsalaried labor costs Added bond, insurance, and tax expense Increased material costs Added equipment costs Added job site overhead costs Nonsalaried labor costs Increased material costs Added job site overhead costs Nonsalaried labor costs Added insurance and tax expense Increased material costs Added equipment costs Added job site overhead costs Nonsalaried labor costs Bond, insurance, and tax expense Added equipment costs

Virginia

15%

Field and home office overhead

Nonsalaried labor costs Added insurance and tax expense • Added equipment costs • Added job site overhead costs • Costs associated with a 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
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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

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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.

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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
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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: butfor, 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.

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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 wellknown 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 asplanned (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

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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
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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.

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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. comparative evaluations. There are some published case studies appropriate for the 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 Practical and necessary steps are

allocation practice is considered in the analysis.

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;
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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.

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Activity \ Week Site preparation Excavation Trench 1 Excavation Trench 2 Excavation Trench 3 Piping & backfilling

1 0

2

3

4

5

6

7

8

1 1

1 1

1

1

1 1 1 1 7 8

Number of backhoes 0 Activity \ Week Site preparation Excavation Trench 1 Excavation Trench 2 Excavation Trench 3 Piping & backfilling Number of backhoes 0 Activity \ Week Site preparation Excavation Trench 1 Excavation Trench 2 Excavation Trench 3 Piping & backfilling Number of backhoes 0 1 0 1 0

2 2

2 3

2 4

1 5

1 6

(a) As-planned schedule

1 c

1 c

o 1 1

o 1 1

1

1 1 2 1 3 2 4 2 5 1 6 1 7

1 1 8

(b) As-built schedule

1 c

1 c

1 1 1 1 1 1 1 1

1

1

3

2

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 asbuilt 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.
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The effect of resource allocation actually reverses the above result. The collapsed asbuilt 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.

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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 Prepare or recover the original as-planned schedule Prepare and update the as-planned CPM schedule under technical and resource constraints, and resource availability and allocation practice Select meaningful window periods to analyze Enter actual progress and delay activities to a copy of the original as-planned schedule, using contemporaneous project documents for the first window period

1

2 3

Select meaningful window periods to analyze Enter actual progress and delay activities to a copy of the original as-planned schedule, using contemporaneous project documents for the first window period

4a

Reschedule and resequence, if necessary and feasible, the not-yet-completed and notyet-started activities reflecting technical and resource constraints, and resource availability and allocation practice Calculate the schedule to analyze delay for the first window analysis Calculate owner-caused delay, contractor-caused delay, and concurrent delay for the first window period Copy the schedule to use as a basis for the second window Repeat this procedure for each period to the end of the project Calculate the schedule to analyze delay for the first window analysis Calculate owner-caused delay, contractorcaused delay, third party-caused delay and concurrent delay for the first window period Copy the schedule to use as a basis for the second window Update step 0, if necessary, and repeat the procedure from Step 2 to Step 6 for each window period to the end of the project

4b

5

6 7
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 resourceconstrained 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 1 "Simple" Project 2 A 3 B 4 C 5 D 6 E 7 F 8 G Duration Predecessors -1 13 days 2 days 4 days 5 days 5 days 2 days 3 days 2 days 2 2 2 2 3 4,5,6,7 100% 50% % Work Allocated: Type A 100% 50% % Work Allocated: Type B -1 1 2 -1 1 2 3 4 5 Type A Type A Type A Type B Type B 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Planned completion time: 13 days Resource constraints: satisfied

6

7

8

9

10

11

12

13

14

15

100% 100% 100% 100% 100% 50% 50% 50% 50% Overallocated: 3 4 5 6 Allocated: 7 8 9 10 11 12 13 14 15

100% 100% Overallocated:

100% 100% 100% 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 E F G D D1 Inexcusable delays D2 C Excusable delays Inexcusable delays C "Simple" Project A B Compensable delays B

Duration -1 16 days 2 days 8 days 4 days 4 days 7 days 1 day 1 day 5 days 12 days 3 days 6 days 3 days 2 days 3 days 2 days 100% 50% 50% 50% 50% Type A 100% 50% % Work Allocated: Type B -1 1 2 Overallocated: 3 4 5 6 7 50% 50% 100%100%50% 100%100%50% Allocated: 8 9 10 11 12 13 14 15 16 17 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 Type B Type B 14 15 16 17 Type A Type A Type A Type A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Actual completion time: 16 days Total delays: 3 days Resource constraints: satisfied

% Work Allocated:

100%100% Overallocated: Allocated:

100%100%100%

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 1 2 3 4 5 6 7 8 9 10 11 12 13 E F G D D1 D2 C C "Simple" Project A B Compensable delays B Duration -1 14 days 2 days 7 days 3 days 4 days 5 days 5 days 6 days 3 days 3 days 2 days 3 days 2 days 200% 100% % Work Allocated: Type A 50% 50% 50% 100%150%150%100% 50% 50% Overallocated: Allocated: -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Over-allocation Type B Type B Type A Type A Type A Type A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Resource allocation: Type A is over-allocated at days 7 and 8

Figure 4.4. Traditional window analysis: window #1
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ID Task Name 1 2 3 4 5 6 7 8 9 10 11 12 13 E F G D D1 D2 C C "Simple" Project A B Compensable delays B

Duration -1 15 days 2 days 7 days 3 days 4 days 5 days 5 days 6 days 3 days 3 days 2 days 3 days 2 days Type B Type B Type A Type A Type A Type A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 E F G D D1 Inexcusable delays D2 C C "Simple" Project A B Compensable delays B Duration 15 days 2 days 8 days 4 days 4 days 5 days 5 days 7 days 3 days 1 day 3 days 2 days 3 days 2 days 200% 100% -1 1 2 3 4 5 6 7 8 9 10 11 12 13 Over-allocation 14 15 16 17 Type B Type B Type A Type A Type A Type A -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Resource allocation: Type A is over-allocated at days 7, 8 and 9

% Work Allocated: Type A

50% 50% 50% Overallocated:

150%150%150%100% 50% Allocated:

Figure 4.6. Traditional window analysis: window #2

ID Task Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 E F G D D1 Inexcusable delays D2 C C "Simple" Project A B Compensable delays B

Duration -1 15 days 2 days 8 days 4 days 4 days 5 days 5 days 11 days 3 days 1 day 3 days 2 days 3 days 2 days Type B Type B Type A Type A Type A Type A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

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 Number 1 2 3 4
1

Window Period (date) 1–5 6 7 8 – 16

Completion Duration (days) 15 (14)1 15 (15) 15 (15) 16 (16)

Compensable 2 (1) -

Delays (day) Excusable Inexcusable 1 (1)

Concurrent 0 (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. analysis. It enables more reliable forensic schedule

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 The “one-size-fits-all” daily rate is often

calculating field overhead damages. 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 asplanned 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-timerelated 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-timerelated 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 1 Estimate or calculate field overhead in the form of time-related (FOHt) and non-timerelated (FOHn) costs. 2 Basis/Formula % of direct costs, historical data, or actual project records FOH = FOHt + FOHn FOHtxCDi FOHnxCDi Allocate field overhead to schedule ; FOHni = FOHti = activities based on a selected cost driver CD CD th (i.e. labor hour, labor cost, direct cost) CD: cost driver value; i: i activity FOHti FOHni Calculate time-related activity-specific uFOHti = D ; uFOHni = D field overhead per time duration unit for i i t t each activity (uFOHti) uFOH i: FOH for i per time unit Di: ith activity duration 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 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) Calculate compensable field overhead (FOHC)Wj = ∑ uFOHtiDo x (DP)Wj iDo damages (FOHC)Wj in the analyzed window 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 Update Steps 1-3 and repeat Steps 4-7 FOHC = ∑ (FOHC)Wj Wj when delaying event(s) occur. Total compensable FOHC damages are the sum FOHC: total compensable FOH damages of compensable (FOHC)Wj damages in all window sizes

3

4

5

6

7

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 1 2 3 4 5 6 7 8 9 10 11 12

Duration Predecessors 1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

Excavation Foundation Joining w all Hous e w alls Hous e roof Select f inishes Interior finishes Clean up Fab/del garage doors Garage w alls Garage roof Garage doors

2 w ks 2 w ks 1 wk 4 w ks 3 w ks 1 wk 3 w ks 1 wk 6 w ks 3 w ks 2 w ks 2 w ks

1 2 3 4 5,6 7,12 3 10 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. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Item Excavation Foundation Joining wall House walls House roof Select finishes Interior finishes Clean up Fab/del garage doors Garage walls Garage roof Garage doors Subtotal Overhead (OH) Total cost Unit m3 Lump sum m2 m2 m2 Lump sum Lump sum Lump sum door m2 m2 door Quantity 122 1 42 109 67 1 1 1 2 88 33 2 Unit Cost 106 15,000 431 431 323 1,000 100,000 2,000 3,000 431 323 1,000 Direct Cost 12,960 15,000 18,000 46,800 21,600 1,000 100,000 2,000 6,000 37,800 10,800 2,000 273,960 54,792 328,752

20% of Direct Costs

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 1 Excavation 2 Start ex cavation 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Duration 1 5 wks 1 wk

2

3

4

5

6

7

8

9

10

11

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13

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18

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24

3 wks Excavation delay (o) 1 wk Complete excav ation 2 wks Foundation 1 wk Joining w all 7 wks House w alls 2 wks Start house w alls 2 wks Reconsider w indow design (o) 3 wks Replace carpenters (c) 2 wks Complete house w alls 3 wks Hous e roof 7 wks Se lect finishe s 6 wks Late selection of finishes (o) 1 wk Selec t finishes 5 wks Interior finishes 3 wks Interior f inishes 2 wks Extended f inishes duration (c) 1 wk Clean up 10 wks Fab/de l garage doors 4 wks Late garage door order (c) 6 wks Fab/del garage doors 7 wks Garage walls 2 wks Start garage w alls 1 wk Complete garage w alls 1 wk Extended duration of garage w alls (c) 2 wks Garage roof 6 wks Garage doors 4 wks Revis e garage doors (o) 2 wks Garage doors

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 nontime-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. (1) 1 2 3 4 5 6 7 8 9 Item Duration Planned Actual (3) (4) 2 5 2 2 1 7 3 7 5 1 10 Direct Cost (5) 12,960 15,000 18,000 46,800 21,600 1,000 100,000 2,000 6,000 Non-Time-Related FOH Total Plan/wk Actual/wk (6) (7) (8) 946 473 189 1,095 548 548 1,314 3,417 1,577 73 7,300 146 438 1,314 854 526 73 2,433 146 73 1,314 488 526 10 1,460 146 44 Time-Related FOH Total FOHt/wk (9) (10) 936 468 1,084 542 1,300 3,381 1,560 72 7,224 144 433 1,300 845 520 72 2,408 144 72

10 11 12 13 14 15 16 17 18

(2) Excavation Foundation Joining wall 1 House walls 4 House roof 3 Select finishes 1 Interior finishes 3 Clean up 1 Fab/del 6 garage doors Garage walls 3 Garage roof 2 Garage doors 2 Total Direct Costs Overhead (OH) Home Office OH (HOOH) Field OH (FOH) Non-Time-Related FOH Time-Related FOH

7 2 6

37,800 10,800 2,000 273,960 54,792 15,000 39,792 20,000 19,792

2,760 788 146

920 394 73

394 394 24

2,731 780 144

910 390 72

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) 1 (1 – 4) 2 (5 – 8) 3 (9 – 13) 4 (14 -17) 5 (18 – 21) Total FOH Damages Daily FOH Rate 1,237 x 3 = 3,711 0 0 0 1,237 x 2 = 2,474 6,185 ASAP 468 + 468 + 468 = 1,404 0 0 0 72 + 72 = 144 1,548 Remark 3-week compensable delays No delay 1-week Liquidated Damages No delay 2-week compensable delays

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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 timerelated 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. realistically allocates field overhead to schedule activities. It

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 Thus

techniques generally give different results for project parties (Stumpf, 2000).

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-offloat 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 asplanned schedule is 10 weeks. The project is delayed 2 weeks. At week one there is a 2week 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 StartStart (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 Until recently though schedule

allocation profiles (Mohan and Al-Gahtani, 2006).

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

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3

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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

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7

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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

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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 A 0 B 0 E 0 C 0 F 0 D 3 H 0 G 1 Legend: 0 0 0 0 0 1 0 0

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0 0 0 0 0.5 -0.5 0 0 0 0 1.5 1.5 0 0 0.5 0.5 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 A 0 B 1 E 1 C 0 F 0 D 3 H 0 G 1 Legend: 0 1 1 0 0 0 0 0

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0 0 0 1 0.5 0.5 0 0 0 0 0.5 2.5 0 0 0.5 0.5 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

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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

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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 . 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, halfday 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 Type of Delays (Day) Analysis/ Project Window Duration Excusable/ Excusable/ Inexcusable (Day) (Date) Compensable Non-compensable 2 12 -0.5 (0)a – 0.5 (0) 4 12 – – – 5 13 0.5 (0) – – 6 14 1 (1) – – 7-8 14 – – – 10-11 16 2 (1) – 0 (1) Total 16 3 (2) – 0.5 (1) a Results of FLORA (window analysis technique).

Concurrent – – 0.5 (1) – – – 0.5 (1)

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 (1) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Activity (2) Duration (Day) Planned (3) Actual (4) 3 5 6 6 4 3 6 6 Direct Cost (5) 20,000 18,000 30,000 24,000 30,000 45,000 20,000 28,000 215,000 43,000 13,000 30,000 10,000 20,000 Non-Time-Related FOH Total (6) 930 837 1,395 1,116 1,395 2,093 930 1,302 Plan/day (7) 465 279 349 372 698 698 233 651 Actual/day (8) 310 167 233 186 349 698 155 217 Time-Related FOH Total (9) 1,860 1,674 2,791 2,233 2,791 4,186 1,860 2,605 FOHt/day (10) 930 558 698 744 1,395 1,395 465 1,302

A 2 B 3 C 4 D 3 E 2 F 3 G 4 H 2 Total Direct Costs Overhead (OH) Home Office OH (HOOH) Field Overhead (FOH) Non-Time-Related FOH Time-Related FOH

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 (Date) 2 4 5 6 7-8 10-11 Total FOH Damages Daily FOH Rate Window Analysis 0 0 0 1,667x1=1,667 0 1,667x1=1,667 3,334 FLORA 1,667x(-0.5)= -834 0 1,667x0.5=834 1,667x1=1,667 0 1,667x2=3,334 5,001 ASAP Window Analysis 0 0 0 698 0 1,395+465=1,860 2,558 FLORA 930x(-0.5)= -465 0 558x0.5=279 698 0 1,395+465+465 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
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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.

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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 schedulerelated 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

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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

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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.

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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
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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
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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

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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.

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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.

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