Delay and disruption in construction progress in contractor’s is an often burden to the contractor as well as the client as it will result to time and cost overruns. In addition, it will be a major cause to a claims and dispute in construction industry. Mostly the major difficulty of dispute is who will carry and hold its responsibility of delays and extra cost incurring. There are various methodologies have been developed over the years to derive and calculate this issues and but very limited methodologies in the actual practice. In this research, it is initiated to investigate these issues in Oman Construction industry towards reviewing the available literature and current methods in practice. It is very difficult to find literature from Oman; hence, most have been referred to UK methods of practices. Also data will be reviewed by an industry-wide survey on the use of these methodologies and associated problems in Oman construction industry. The interviews were conducted for investigate and identified the programming issues, which will directly influence in delay claims. Data collection will analyse with the software aid like, MS Excel and MS access. The major key finding was the widely usage of methodologies were due to the deficiencies in programming and record keeping practice. Even though the survey data is derived the awareness of the available methodologies and practical usage out of it was fewer. To facilitate the use of more dependable methodologies, it makes sure more successful claims resolution without any major disputes. Finally it is recommending the best practice framework for maintaining prompt record keeping and appropriate delay analysis methodology for any claim situation. Finally, areas for further research were identified.
1. GENERAL INTRODUCTION
1.1 Background to the Research
The duration factor and the expenditure involved in the execution of an undertaking are essentially the key to both the client and the contractor. The reason being, the delays in execution of projects can be detrimental to clients in enjoying the benefits and/or profits that anticipated by implementing the project and may cause them rigid financial and economic repercussions such as enhanced rates of interest and losing of future market opportunities. On the part of contractor, delay in execution means inflated cost, resulting from escalating main office and site office overheads, labour/ machinery standby costs and other contributory factors, mainly the prospective opportunity losses. The contractual conditions in handling Delay Claim (DC) issues have been provided in the contract document, circumstances that are possible to cause project delays and the procedure in settling them. Generally, in most agreements, contractors are exempted from the consequences and/or allow compensation for delays resulting from events or circumstances for which the risk factor is borne by the client or is shared between the two parties. Provisions are also made available for authorising the client to recover liquidated damages from the contractor for failure to execute the project within the agreed timeframe. The clauses in the agreement empower the client to claim Liquidated Damages by way of recovery of specified amount of cash from the contractor for each day or week of delay involved. In both cases, a detailed schedule analysis is essential to examine the events and circumstances that have actually contributed the project to undergo delays in order to determine the justifiable amount of compensations for the prejudiced party. This process is always termed as “Delay and Disruption Analysis (DDA)” and is usually undertaken utilising number of methods/techniques mostly based on critical path method (CPM), presently an accepted tool for this function (Wickwire & Hurlbut, 1989); However, in most circumstances, DC issues, that are meant to be addressed in the
process of a project, are interpreted into claims situations and subsequently disputes (Nelson, 1985; Kumaraswamy, 1997). The dissensions or disputes are often determined by way costly methods of dispute resolution settings such as judicial litigation. Substantial expenditure is involved in applying such a course of action, which may result in untold consequences to all parties involved in the project and, for that matter, to the society as well
1.2 Delay Claims
The term ‘claim’ is defined in the context of Construction Projects as any application by the contractor whether for an extension of time, payment, or otherwise, which arise other than under the normal contract provisions for payment for the value of work (Stephenson, 1989), (Hackett, 2001). The majority of claims by contractors are contractual in nature and always resultant from the project’s delays (Thomas, 2001; Scott, 1991; Yogeswaran et al, 1998; Nelson, 1985; Kumaraswamy, 1997), that surface by matters which are the responsibilities of the client or may be the contractor’s own responsibility or by neither party such as vagaries of weather, natural disasters etc. In order to settle a typical DC successfully, it is normally required the claimants to adhere to five key processes. (Anon., n.d.; (Lee, 1983; Nelson, 2004). Liability : Establishment of contractual/legal basis for the claim; Causation : Establishment of causal link between each delay and/or disruption event and the consequent extended duration and/or additional cost Quantum : Evaluation of effect and quantify the amount of time and/or cost of the impacts. Compilation and submission of claim; and Negotiation of settlement. The second and third elements are somewhat difficult to deal with than the rest (Keane, 1994; Carnell, 2000). This research is, therefore, concerned with the methodologies for proving or disproving these elements in claims of contractual nature, typically allowed for by most of the standard form of contracts.
1.3 Problem Definition
The undertaking of justifying and quantifying the effect of each DC occurrence needs to be satisfied for the proof of causation and quantum is adequately recognised as an extremely difficult task. This is, partly owing to the nature of DC occurrences itself. Not only do these events come from various sources (Borcherding, 1978); (Kumaraswamy, 1997), they also have different effects and implications resulting in complex situations, creating considerable problems to practitioners in claims determinations. For an example, a delay in making available of drawings to a contractor can cause unnecessary problems. Eg:- wrong sequence of work, undue work halts, and poor moral and diminishing of learning curve. The ill-effects of such things could result in less efficiency of the contractor anticipated at the inception, and an additional cost being involved and/or delay to the project execution as a whole. In order to prevent delays of this nature, the contractor could be directed to accelerate the work or may do this constructively, that may result in parallel working with associated disruptions, badly affecting on end result.The said episode may show, as to how a slight delay can turn into a very complicated state of affairs that may be painful in sorting out effectively. Secondly, certain sections point out that, in order to overcome the unexpected claims, more times and funds should be made available at the design phase of the project. (Wilson, 1982; Revay, 1992; Zack, 2001). This viewpoint is based on the fact that most of DCs are caused by varying site facts, incomplete and inaccurate design information (Ashley, 1987; Sidewell, 1991); (Kumaraswamy, 1997). The said sections do recommend including enhancement of period of designing, improvement to ground surveys, also paying particular attention to proper, and systematic documentation checks. However, although such proposals are seemed possible for implementation at its face, those are not always practicable since the nature in constructional undertakings are such that amendments are always a reality and no matter, what an amount of efforts and pains have been taken in designing the work.. Amendments are naturally unavoidable owing high degree of unforeseeable conditions on almost all projects undertaken as a whole, and for that matter, the designers are not divine to provide for all probable eventualities.
Thirdly, there are suggestions for immediate solutions for surfacing DC conditions, before they are developed into major issues. One noteworthy paradigm being adopted is the Delay and Disruption Protocol, a concept recently developed by the UK’s Society of Construction Law (SCL), a body comprising of learned and experienced Engineers, Architects, Quantity Surveyors and Legal Luminaries proposed as a good practical guidance. The protocol pays attention to evade ‘wait and see’ approach by promoting the resolution of matters of extension of time and cost compensations on an on-going basis (SCL,2002). Although, to a greater extent, the protocol gained a considerable acceptance by the industry, the main minus point of it, is the potential difficulty of implementing same in practice. Majority of this protocol’s recommendations stand on right preparation and maintenance of programmes and other project records, which are liable to be varied in present day practices in the industry. (Birkby, 2002; McCaffrey,2003). Nevertheless, on the part of drafting bodies of such a Standard, there have also been irrelevant movement in the adoption recommendations of such protocols. (Pickavance, 2005). Even though said initiatives do possess probability of avoiding disputes to a certain extent, it seems that there had been no tangible bearing on them in taking into account the ground reality that DC so exist as a key point of disagreements as aforesaid. A thorough study of the writings, suggest that the reason for the ever dragging difficulty in solving DCs could well be ascribed to variety of problems inclusive of : devoid of consistency in the adoption of DC systems , lack of required regulation on the part of contracts and case-law on DCA and inferior setting ups and programming practices.
¾ Identifying the effective and efficient way of approaching the Delay Claimants from the contractor’s point of view. ¾ Identifying the available and apposite calculation and methodologies for DC.
¾ To investigate the adoption of available DC methodologies in the Oman Construction Industry. ¾ To examine problematic situations emerging from Planning and
The Contractors are not adequately knowledgeable of all the probable Claims towards the Project Delay in Oman Construction Industry and that can be enhanced by analysing of available Delay Claim methodologies.
1.7 Research Methodology
The problems to be addressed inside the research, have been much intricate as it was necessary to cover several fields : i.e. Industrial Law, Human Behavioural Patterns and Expenditure and Time Analysis. Hence a systematic multiplicity involving both quality and quantity value data was introduced. The function and validation of such a tactical system has been described in Chapter 2. Nonetheless, noted below are the key points that have been followed in order to have an overall idea. A comprehensive data search and an analysis have been followed for the presentation of theoretical backdrop and the milieu of the research. It was taken into consideration, the applications, plus and minus points in relation to present day systematic tactics inclusive of theoretical and legal principles of DC reviews. Consequent upon this analysis, it has been able to identify systematic tactics and various other problems impacting their application, for future studies. In the case of utilising methods or methodologies, the said study went through a preliminary guiding survey and subsequently a country-wide cross sectional question and answer assessment, having spoken to various consultant institutions within the country of Oman. Consequent upon this study, it was revealed, beyond doubt, the necessity to have a more comprehensive probe into the key points that adversely affect the DC analysis presently in practice. It has to be noted that this study was conducted
through viva voce examinations and data thus gathered were reviewed by applying various modern-day statistical technologies.
1.8 Findings of Research and Conclusions Reached
It has been able to identify a series principle governing DC Reviews by analysing the subjective details in relation to DC inclusive of necessity for preparation or assessing of such claims, solving of current delays and the ownership of float. The CPM of programming was found as a compulsory need for conducting DC analysis. The analyses, which have been based on the subjective mastery, are, nevertheless, needed to be conducted in a transparent, unbiased, and objective way supported by acceptable and indisputable evidence. In arriving at a conclusion as to what sort of methods and the extent of knowledge are available for the DC, with regard contractors operating in Construction Industry in Oman, the undernoted means of tests were resorted to a group of 30 Contractors and 25 Consultants were made to involve for the preliminary data survey. They were requested to answer industry-based questions and, further, a group of 10 contractors participated in a viva voce examination. Most of the participants have been holding high-ranking offices in large institutions involved with DCs for over 15 years. In this backdrop, the said participants were absolutely qualified to respond to problems discussed in the research.
2. METHODOLOGY OF RESEARCH
This Chapter covers the method of research chosen for gathering of required details to meet the targets of research. Thus, it is enumerated in following segments: (i) (ii) (iii) (iv) (v) (vi) the design of research and the methods used; range of analysis of details; Survey by mail – administration and sampling; System applied in reviewing the data; Structure and administration of interviews; Applicable and practical suggestions and basis for the selection of relevant DAM.
2.2 Research Design and Methods
The nature of a research topic, its targets a n d objectives and the resources available largely contribute to determine its design (Gill and Johnson, 2002; Creswell, 2003). These criteria adequately contribute for t h e research methodology developed for carrying out this research. The course of action in gaining survey data would be: (Rea and Parker, 1997; Burns, 2000; Creswell, 2003): (1) Forwarding a set of questions by post, facsimile or by email to participants for self-administration. (2) Engaging a person to conduct viva voce examinations or interviews over the telephone.
2.3 Data Review
It was compulsory for reviewing information collected in order to compare with basic objectives of research with presently available knowledge in the selected sphere. Hence, the initial step of research method shall concern on analytical review of data in relation to DC analysis. The main concern for review is to build up an atmosphere and framework on which research to be consolidated. The review concerned over a broad degree of problematic situations such as; ¾ The academic and legal principles that govern the process of solving DC. ¾ Scheduling and programming the problems that have impact on DC. ¾ Ways and means, presently in practice for analysing DD claims The results of the data review will consist the basis for the subsequent field surveys.
2.4 Questionnaire Preparation for the Survey
As noted in section 2.2, the questionnaire survey contemplates on answering the ‘what’ and ‘which’ questions in exploring the present use of DC analysis methodologies in Oman. The survey has been designed in a delicate manner in order to ensure that it generates purposeful responses to these enquiries and to overcome the limited opportunities in the process of postal questionnaire surveys. Having taken into consideration the nature of the response/feedback expected, action was taken to put forward a delicately prepared set of questions, including openended and close-ended queries. In case of both types, there are, in combination, profits, and losses. It was given careful thought to minimise or to discard losses in each case and at the same time to accrue profits. Hence, the set of questions contained multiple queries wanting tick-box answers. The questionnaire therefore consisted of multiple-choice questions requiring tick-box answers and open-ended questions. Action was also taken to provide for the answering parties to add further observations and to put in free-text forms, if they feel appropriate, in case of each queries.
2.5 Collection of Data
The set of queries were submitted to Managing Directors of carefully selected firms engaged in constructional work, together with a covering letter describing the object of the Survey. It was requested that their top-level officers who are tasked with preparation and/or assessment of claims of this nature, be consulted and encouraged to perfect the set of queries. A specimen cover letter is showed in Appendix A. Even though variables that are to be rated had been recognized, following a rigid review, they were put on the body of the document on the DC, the answering parties were requested to include yet another methods/systems or facts that they deem pertinent and appropriate, despite not contained in the said set of queries.
2.6 Interview Data Collection
Having designed the set of queries, the parties to be interviewed were contacted over the telephone in order to arrange a suitable date, time, and location for the interview. Copies of queries were forwarded to answering parties by post or by email few days prior to the date of interview, with a covering letter indicating the time and date. In each of the interview firstly, answering parties were apprised the objective of the interview and the intended duration of same and, at the same time, an assurance was given that the materials thus obtained shall be kept on stern confidentiality, and further their agreement was sought to keep notes in writing and to record on digital media. During the course of interviews, many a step were followed in order to ensure of its apposite performance and to evade any probable prejudices being meted out; which included (Patton, 1990): (i) posing a one query at a time; (ii) maintaining an unbiased atmosphere as far as possible; eg:- by desisting from emotional rejoinders; and (iii) proper administration of interview by limiting only to questions of absolute interest. This particular chapter has offered a sketch on the method of research followed in conducting the research. It has been able to utilise both quality wise and quantity wise research processes. Initially, it was resorted to have a complete description and was followed with preliminary survey for the presentation of splendid set of queries
for the purpose of countrywide assessment in respect of Construction and Consultant agencies, in order to study the present-day DC analysis processes that are being put to use on fast-track projects. Subsequently, such issues were subjected to an in-depth examination resorting to semi-structured interviews with certain answering parties who engaged in the first-hand survey. The data thus gathered were reviewed with the help of Survey Monkey Web and the Excel Software. Information collected from review of details, the Survey and subsequent interviews were utilised to draw deductions and conclusions in respect of the research objectives; put forward a series of fine workable recommendations for DC analysis; and concluded awareness of the construction DC in Oman Construction industry.
3. THEORETICAL CONCEPTS AND LEGAL PRINCIPLES OF DELAY CLAIMS RESOLUTIONS
The significance of prescribing a period to contractors to totally complete a constructional project has been emphasized in Chapter I, by specifying a final date or an overall period. Nevertheless, numerous factors inclusive of shortcomings of two parties, contribute to cause project delays resulting in time-loss and cost escalations. As a means of recovery of such losses, Claims are submitted in number of forms. The most popular system being demands/claims by contractors for extensions of time period and/or for loss of funds. The resolution of similar claims involves claimants/defendants recognizing and quantifying the scope of losses in one of more occurrences that contributed. (Pickavance, 2005): ¾ the reason/s that contributed to cause the delay in completion of project; ¾ prolongation of contractor’s and/or subcontractor’s time-related costs; ¾ delay to progress that caused loss and/or expense to be suffered by contractors or subcontractors; and reduction in that caused loss and/or expense to be suffered by contractors and/or subcontractors; Both Clients and Contractors often employ number of methods and ways in handling claims of such nature. These have been pointed in Section 1.2. There are two major classifications of such methods that are referred to in this thesis as “Delay Analysis Methodology (DAM)” and “Disruption Analysis Methodology (DSAM)”. In order to comprehend rightly, the application of these methods this particular chapter presents a summary of the accepted legal and theoretical concepts that dominate in resolving such problems. The analysis has been based on general research papers on DC Analysis and cases experienced in Oman. However, certain, concepts are based on UK cases, which had to be considered for purpose of reference. The relevant issues reviewed include:
¾ Types of delays; ¾ the resolution of concurrent delays; ¾ float ownership; ¾ Resolving delays when programme shows early completion; ¾ Delays experienced after the date of completion; ¾ Requirements for the production or assessment of Delay Claims. The findings of this review as well as those of the following two chapters, constituted the basis for the subsequent field surveys and the recommended proposals for meaningful and profitable practices.
3.2 Types of Delays
The term “Delay” in the field of Constructional Contracts does not have any specific technical definition. This term could well be employed in number of senses in different situations in execution of projects. (See for example, Pickavance, 2005, p. 8). However, this term is always employed in its fundamental sense to mean any happening or event that compels to expand time duration to complete a project or, for that matter, to postpone the commencement or completion of any activities of a particular project. The Delays thus enhance the timeframe and funds apportioned for execution of various project workings resulting in additional costs and late completions. Delay in completion of Projects, is normally an outcome of functions and dysfunction of parties involved inclusive of Client, Contractor, Sub-contractors, Project Designers, Supervisors and may be neither of these parties (for example: acts of nature). When taken as a base of these sources, and the contractual risk allocation for happenings, resulting in delays, three major Delay Categories have been recognized ie. : (i) Excusable delays; (ii) non-excusable delays; and (iii) compensatory delays. Excusable delays are those, which the contractor retains the right to request for extension of time, under the terms and conditions of the contractual agreement. The contractor is said to be ‘excused’ liability for liquidated damages for the period of the extension, which, in the alternative, would have been liable for payment t o
the client. An ‘ excusable’ delay is, therefore, one for which the Client is generally responsible even though certain excusable delays are beyond the control of Clients e.g. Adverse vagaries of weather. Compensability concerns over the issue whether or not the contractor is entitled for an additional payment because of the delay. Thus, a compensable delay is one, which the contractor is eligible for such a toll. In general, there will be no such an entitlement for delays resultant in events and happenings to which contractor does have some control. Eg:- productivity factor of its labour force and/or machinery and equipment. Should or not a delay is excusable or compensable is a matter of the allocation of risk, in between the client and the employer, as defined in the contract agreement, based on a series of principles (Smith, 1995). Basically, the risks of project delays, by events over which the Client exercises control or for which he is responsible, are apportioned to the client. As for such delays, the contractor is qualified to request for time extensions and recovery of additional cost resultant upon the delay; and they are often referred to as “excusable compensable” (EC) delays. Such instances include, ordering variations, additional work, and belated submission of vital information to the contractor. The risk of delays for events over which neither party has control, e.g. acts of God and worker-strikes, are usually shared between client and contractor. In such an eventuality, the contractor is usually empowered to request an extension of time but not entitled for recovery of additional toll. Accordingly, the client ceases to have any right to recover delay damages from the contractor. This type of delay is defined as “excusable non-compensable” (EN) delay. Generally, the contractor assumes the risks of costs and ill-effects of delay events which are within his control e.g. dearth of staff and/or equipment and machineries, late mobilisation, etc. This type of delay is defined as “non-excusable-noncompensable” (NN) delay, which could be claimed by the Client from the contractor by way of liquidated or actual damages paid by the contractor for belated completion. It is noteworthy that the terms ‘compensable’, ‘excusable’ and ‘non excusable’ are from the perspective of the contractor. Thus, it is concluded that a delay that is ‘compensable’ is compensable to the contractor and non-excusable to the client. On the other hand, a delay deemed non-excusable non compensable is
compensable to the employer since it results in charging of liquidated damages. The Delays are also distinguished between “critical” and “non-critical” delays. The ‘critical’ are those that affect project completion date whilst the ‘non-critical’ has an impact on project progress but not to the overall completion. In most cases, contracts require qualified reasons to warrant an extension of contract time, it must affect the completion of the project (i.e. the delay must be critical). This provides a base for the high importance attached to the use of Critical Path Method (CPM) of scheduling for proving or disproving time-related claims such as extension of time and prolongation cost (Wickwire et al. 1989; Kallo 1996b; Bramble and Callahan, 2000). The terms “independent delays”, “serial delays” and “concurrent delays” are also employed to explain delays based on the interrelation of the above delay types in relation to their duration and time of occurrence. ‘Independent delays’ can be described as that happen in isolation or without other consecutive or simultaneous delays while ‘serial delays’ happen in sequence consecutively and not overlapping with each other on a particular network path. On the other hand, two or more delays in which their time of occurrence or effects overlaps are often termed “concurrent delays”. As a summary,
Figure 3.1 Delay Classifications
Independent and serial delays are somewhat easy to resolve in comparison to concurrent delays. The perception of ‘concurrent delays’ has , therefore, been the theme for broader discussions and deliberations among researchers and
practitioners. Hence, it a mply deserves further review. 3.2.1 Concurrent Delays The resolution of this type of delay has been a touchy legal and technical theme in constructional and engineering spheres (SCL, 2002). The reason being this is largely due to the fact that, for resolution, it requires the consideration of the interaction of different factors such as the time of occurrence of the delays, its length of duration, its criticality , the legal principles of causation and float ownership (Arditi and Robinson, 1995; Bubshait and Cunningham, 2004; Ostrowski and Midgette, 2006). Its resolutions also necessitate the consideration of opposite views of the parties involved, such as argument over concurrent delays as delay- phasing strategy (Zack, 2000). This situation has been made still w o r s e for want of uniformly accepted definition between practitioners as to what concurrent delays actually mean, in the first place (SCL, 2002). Rubin et al. (1983) defined concurrent delays, as the state of affairs in which two or more delays occur simultaneously either of which, had it happened alone, would have affected the eventual date of completion. What it means, in each case, delays should independently affect the critical path. Certain sections argue that it to be considered ‘concurrent delays’, the delays need not be commenced precisely at the same time (for e.g. Reynolds and Revay, 2001). There is also a view that the delays need not occur in the same activity on the same critical path but may exist in different activities on parallel critical path as well (Ponce de Leon, 1987; Arditi and Robinson, 1995). The SCL Protocol (SCL, 2002) defines a true concurrent delay as “the occurrences of the delays, on an employer risk event and the other a contractor risk event, simultaneously, and their impacts felt at the same time“. Occurrence of this nature is, however, not experienced in normal practice, but may be very rarely, since time is noticeably divisible. For instance, two delay events take place on the same day would not essentially be factual concurrent delays, because one may have taken place in the morning whereas the other in the afternoon. Concurrent Delay is
also used rather untruthfully to refer to the incidence of two or more delay events at different times but their impacts are felt (wholly or partially) simultaneously. In a bid to evade perplexity, this is termed as “concurrent effect” of sequential delay events (SCL, 2002). In order to elucidate the above definitions, numerous scenarios of concurrent delays illustrating these definitions are shown in Figure 3.2. A, B, C, & D are the different activities of the particular project.
Figure 3.2 Various Types of Scenarios of Concurrent delay
3.2.2 Concurrent Delay Types and Remedies Thereto
The key challenge with regard to Concurrent Delays lies with assigning the accountabilities
for the ultimate project delay. This challenge does not lie with concurrent delay situations of two or more delays of identical nature (i.e. from the same party) however, those of dissimilar delay types (Eg. Client and contractor delays). Alternative delay types could be coupled in order to classify into four key categories of concurrent delays as noted below: (Kraiem, 1987). Excusable non-compensable delay and non-excusable non-compensable delay ¾ Excusable non-compensable delay and excusable compensable delay ¾ Excusable non-compensable delay, non-excusable non-compensable delay and excusable compensable delay ¾ Non-excusable non-compensable delay and excusable compensable delay In determination of appropriate remedies (lengthening of timeframe and/or delay damages) to be put into action by the parties for these concurrent situations is one issue which is prone for dispute.
The concept of float in projects is often associated with critical path type schedules. The term “float” is used to refer to the time assigned to an activity, which is longer than the shortest time that is justifiably required to execute that activity. It can also be used in the alternative sense of time limit before an activity becomes on (or very close to) the critical path. Float is an invaluable resource to both clients and contractors, as they are inclined to have faith on it for scheduling and managerial motives. Characteristically, it tenders flexibility to contractors in the preparation and performance of non-critical activities, as a resort to making good delays on the critical path. Clients, in the alternative, always look it as a prospect to make amendments since it can make way for the impact of such amendments. As for these facts, a situation can easily be anticipated where a client’s amendments cause a delay as such that the major
portion of float on a particular activity, is digested turning it a close critical activity. Accordingly, any ensuing contractor-caused delay to this activity, will be pushed to turn into a critical situation, and makes a project to be unduly delayed. In a state of this nature, chances are bleak for the contractor to enjoy an extension of time, but would, rather, at risk to account for liquidated damages. Contractors are always put into difficulty in admitting this, contesting that had the client’s delay not taken place, its delay would not have contributed for late completion of project. Whether or not the contractor’s argument is qualified, it is a problem of who is responsible the float that was consumed by the client’s delay. The response to this query is prone to have an impact on the outcome of the delay analysis (Arditi & Pattanakitchamroom, 2006).
3.4 Requirements for the Process and Evaluation of Delay Claims
In transacting with projects DC, broadly accepted strategies of constructional accords, normally necessitate the contractor to bring to the notice of the Architect/Engineer an incidence, no sooner it becomes evident that it has or would adversely affect to completion of project before the due date, and at the same time to submit a cost estimate and/or a probable time period that would cause for completion. On receipt of this claim, the Architect/Engineer is always expected to initiate action factually and reasonably in its appraisal. In both cases, there would always need certain ways of analysis, implemented instantaneously or at a later stage, in order to conclude what, period of time should be allowed as an extension and/or the extent of monetary reimbursement, should there be any.
4. PLANNING AND PROGRAMMING ISSUES IN DELAY
From the facts shown in preceding chapter, it could be easily implied that the main part in resolution procedure of DC, is for claimant party to submit sufficient documentary evidence to establish that the opposing party is liable for the additional time and/or cost being sought. At all times, it is the key to the issue, submission of truthful information in respect of two matters i.e. (i) clearly what action the contractor would have taken, had the incident or circumstance complained of not taken place; and (ii) what action did the contractor actually take. The flow of information in finding answers to these queries include the contract documents, Baseline Programme, Progress Reports, Project Correspondence, Site Diaries, Minutes of Meetings, Supervision/inspection Reports, Resource Usage etc. (Thomas, 2001). Vita information can also be had from contractors on a regular basis by way of status/updated and revised programmes. Maintaining this information on a regular basis in an accurate & well-organized method, right through the life span of the Project, will be absolutely crucial in the preparation, analysis and resolution of DC (Kartam, 1999). So much so, a general explanation contains in workbooks and other research papers. Is that the lack of pertinent, employable and concurrent credentials? (Pickavance, 2005) Albeit, most endeavours of research that have attempted to look for remedial measures for issues relating to DC Analysis, have been restricted to making improvements to methodologies for the purpose of analysing. It is worth remarking that such methods have proved less use in practical terms, if vital information needed for its right employment, is inadequate. Examining, problems of Planning and Programming in construction field which is considered to be a vital source of getting information, is, therefore, an all significant deliberation in the attempt of introducing of an acceptable structure, for DD Analysis.
With a view to accomplish a recognisance towards the need and scope of similar probe, this Chapter initially discussed how shortcomings in Programmes of Contractors and their Programming Practices, causative to dilemma of information inflow. It was then able to recognize the likely reasons for such shortcomings and the segments, which needed to be studied at length, in order to promote high standard of preparation, which will strengthen the quality of DC analysis.
4.2 Insufficiencies in Contractors’ Programmes
In almost all constructional agreements, it is imperative upon contractors to submit a program at the beginning of work indicating the sequence and duration of construction process. This programming process serves as not only implements of administering the projects but also as invaluable sources of information in recognizing and shaping delays and its adverse affects on the progress line. The application of computerized CPM for this function is presently the model. (Wickwire, 1989). This faith is due to the fact the program show, the purpose and supply of important & helpful past records enabling the determination of ill-effects of delay incidence and computing damages. If the programme is to be successful for this purpose, it requires being devoid of shortcomings of any nature. (Reams, 1990) However, numerous analysts have commented that a large number of programs of contractors, contain many shortcomings forcing resolution of DC disputes more complex. Socott (Scott, 1991) through his clinical research with regard to Programs of Contractors on UK Construction Projects discovered that many of such programs are of inferior submissions, badly lacking relevant description of activity. Further Keane (Keane, 1994) by his expert workings, also described that most Programs of Contractors are relatively substandard in preparation & formatting based on logical framework. Furthermore, contractors are somewhat disinclined in the submission of details of expected resources in their programming, forcing complexities in the process of evaluating the ill-effects of delays in the employment resources together with their yields in eventualities of delay (Yogeswaran et al., 1998). Winter the expected linkage and are not resourced based and, all in all, not equipped to a show mirror image of what would really take place at site, but are concerned in ensuring the job award to renderer/contractor. The abovementioned, endorses the viewpoint that tangible segment of contractors
merely provide service, limited to wordings in programming, and merely use CPM for external fulfilment conforming specifications (Revay, 1992; Bramble, 2000). It is astonishing to understand that more contractors do not take care to submit proper programs to clients, despite the fact there are clear gains by administering wisely. Various analysts and observers have recognized a series of factors for this unsatisfactory working. A research carried out by (Jaafari, 1984) has noted that scheduling of CPM was ill-performing, for want of experience and motivation on the part of contractors, intricacy in performance administering against the arrangements, owing to general variations, engaging in multiple contracts and nonreceipt of detailed designs prior to launching of projects. Discoveries of same nature were recognised by (Nahapiet, 1985) in their research work on Management of Construction Projects in UK and USA. They did observe the distinct disinclination on the part of contractors to revise their programs despite the fact the nature and the scope of activities had changed over the period of time. In 1990, Mace in an analysis on Practice of Programming recognized a series of problems. Eg:- reckoning of Programming as a recording mechanism than as a forward planning; insufficient information in respect of various periods of procurement on certain activities; and present inclination to keep faith on Computer with lesser respect into mistake checking by parties who handle plans. The end result of this rather regrettable state of things is that the Programs of Contractors are subject to go through various shortfalls in the process. The distinctive weaknesses that would harm their usage for DC analysis comprise; unsatisfactory baseline programs; inability to update programs; and erroneously updated programs. These shortfalls could well subject to problematic situations and disputes, in seeking resolutions to claims, in view of the fact that non-availability of rightly done and nervously updated CPM program, it would be would become an uphill task to conclude as to whether delayed completion is truthfully consequent to precise nature of delays, complain of i.e. normal relation in between breach of terms and damages are not readily evident.
4.2.1 Poor Baseline Programmes The baseline Programme presented by the contractor is the primary as of planned program that indicate the expected plan for carrying out work on project. Its significance in the analysis of DC leaves in its capability to specify the time period inside of which the contractor is called upon complete the project without delays. Deficiencies in baseline programs which always make them unqualified or unrealistic gear in the purpose. as the following... (i) Programmes set in a format other than CPM: Except in case of simple delay claims, CPM format is the broadly recognised weapon for substantiating delays since it paves the way in the determination of critical path and indicates the interaction, in between various reasoning for delay. (Wickwire, 1989) (ii) Incomplete Programmes: This is failure to comprise the totality of workload that must be undertaken. This results, in making it hard to make an assessment as to how all workings and its related delays jointly contribute to delayed completion of project. (Bramble, 2000) (iii) Inadequate description made available for program of work. This factor leads to confront difficulties in taking measurements in the process of gauging progress of work and the ill-effects of delay successfully. Eg:- think of a client requesting a variation in respect of building project that hindered an activity on the critical path explained “construct level I Slab”. Had this particular variation adversely affected the volume of few of the specific workings in the activity, in that case the real delay caused consequent upon the said variation, then the variation cannot be established accurately. (iv) Undue rationale or interactions in between activities: Such interactions never signify the contractor’s sequence of work planned. (Reams, 1990) and thus would cause in flawed delay analysis results. (v) Inadequate provisions for anticipatory hindrances to be confronted: for instance local weather changes; instances of such nature example of such
constraints include local weather conditions; legislative requirements and obstacles; contractual provisions on the order in which the works to be carried out; period required for the client or other agencies to secure sanctions, inspections and information and procuring machineries,
equipment and materials. (Reams, 1990) (vi) Irrationally planned resource allocations. This aspect leads to unrealistic duration and overheads allocations for activities leaving baseline programme defective. (Kartam, 1999) (vii) Irrational durations of key activities: The ill-effect of this factor is formation of unreasonable floats and erroneous date of completion of project in the baseline program. Hence, if the baseline programmes to become a convincing gear in the analysis, it should be devoid of said perils. 4.2.2 Failure to Update Programmes Updating of Program means periodically reassessing of plan and growth of work. This aspect is absolutely vital in view of the fact that indecisive circumstances in which environments construction projects are activated, unavoidably force changes to both planning and estimations. (Laufer et al., 1994). In addition there would also be required to evaluate procedures of work, performances, delays and reasons connected thereto (Kursave, 2003). As a result of inescapable amendments in constructional field, the negligence in updating program would end in losing significant information such as ¾ revisions in critical path; ¾ real commencement and completion dates and percentage of each activity finished; ¾ crucial position and prospective problematic areas; ¾ Logical changes from earlier updates. Information of this nature facilitate to determine the period and the sort of changed
took place in the course progress of project and also allow DC Analysis in “actual time” (i.e. establishing the impacts of each and every delays on project, as it is happening). Thus failure to update the programmes on regular basis can lead to generate complications in DC resolving. 4.2.3 Inadequately Updated Programmes An erroneously updated program which does not clearly indicate the progress being made by the contractor would become extremely hard to make predictions precisely on project delays and its related ill-effects. As such, in order to maintain an up-todate program as a practical gear for assessment of delays, it has be, necessarily, a perfect one. There exist diverse modes of updating that can affect the sufficiency of updated programs. One such mode is updating the program as the person scheduling judge it essential. As for example, updating the program in the event of project lagging behind the schedule and in the event of unforeseen amendments to program become inevitable as required by certain contract documentation. And other significant issues impacting the frequency of updating inclusive of incidence of precise control events, the scope of uncertainty, the enormity of the project, the period of completion and the hindrances confronted (Kursave, 2003). One other method is time-to-time updates decided, in advance. This mode is rich with submission of more precise image as to how the activities advanced than by the first approach. The reason being in the first mode, the person who schedules may not be perfectly knowledgeable of dragging of project, so, at the time he deems an updating is essential, the project may have slithered significantly and contemporary information may not be available at hand. The other factors that affect the capability of updated programmes are the scope of details of the updating. As a medium for each updating process, the following have to be identified: actual dates of commencing, actual dates of completion, and percentage of progress and balance duration for each schedule activity (Kursave, 2003). The exactness and timing of these records are also imperative in the compliance of right updated programmes.
4.3 Reasons of the Deficiencies
The compilation of a realistic baseline programme entails the gathering of information from a variety of sources. A guideline to high-yielding programming practice, shaped by the UK’s Chartered Institute of Building (CIOB, 1991) has classified these sources of information into a variety of forms: ¾ project information (contract, design, site, specialist); ¾ production information (staff experience, previous jobs records, etc); ¾ reference information (industry data, papers, periodicals); ¾ Factual information (weather records, dimensions of equipment, etc) and the planning brief. Explicit proficiency is required in order to collect these information and convert it analytically into a sensible baseline programme and other planning outputs such as method statements, overheads and cash flow predictions, personnel requirements, material requirements, project organisation and site set-up and layout. A series of issues liable to crash on the planning and programming process which can cause shortfalls in the programme preparation and its updates to follow. An analytical study of research-based papers and published interpretations by practitioners, identified the undernoted as the probable reasons for shortfalls in programme and programming practice. ¾ insufficient planning know-how; ¾ inexperienced enforcement of planning obligations; flawed personal liaison of planners with others; want of proper communication; ¾ inadequate planning endeavours; ¾ inefficient provision of construction planning resources; ¾ inadequate contractual provisions for programming; ¾ incompetent handling of field personnel; ¾ inadequate time and information for preparation of tender papers; contract administrator’s programming capability; ¾ and weak programming modes;
programme and programming practice as described above
Figure 4.1 Relationship between probable reasons for shortfalls in programme and programming practice
5. METHODOLOGIES FOR ANALYSING DELAY CLAIMS
The significant theoretical and legitimate principles that govern the resolution of DC were analytically discussed in the preceding chapter. Thanks to this review it was able to establish that DAMs, based on CPM, could be accepted and recognised as a valuable tool, in deciding the authenticity of Delay Claims. It was also established the fact that Law Courts in United Kingdom turning to be more competent in the application of said methods, however it is not apparent which of the methodologies most acceptable to them and as to how each one must be suitably put to use. In a bid to examine these matters more fully, this chapter is devoted review methodologies currently in force i.e. nature of these methods, how they are employed and its plus and minus points.
5.2 Delay and Disruption Disparity
In the perspective of Construction Claims, the phrase “DELAY”, in its fundamental outline, means an expansion of time period required for total execution of a project in excess of time limit agreed at the time signing the Contract Agreement. Damages sought under such claims generally in respect of Base Office and Field Office expenditure, additional financing costs, and other time-related claims. (Haese, 2001). At the same time, the phrase “DISRUPTIION’ is applied to explain any alteration to quality/quantity of materials at the time of performance, which were not anticipated at the time of bidding but became required as the project progressing, causing difficulties and cost escalations (Finke, 1997). Specific modifications result in working conditions include; off-sequence workings, trade stacking, unstable crews, excessive changes to labour force, lengthened working hours, working under 27
unfavourable weather conditions. etc.. (Hanna, 1994). Disruption caused in the progress of work characterises under-performance and productivity loss since additional labour and machinery hours have to be employed for the same identical work. Therefore, it is evident that natures of damages that are recoverable under Delay Claims differ from Disruption. One other disparity in between two claims under two headings is that Disruption Damages can result irrespective of date changes for project completion take place or not, unlike in the case of Delay Damages. Delays in completion of Projects only take place when delays and/or disruption activities lie on the critical path of the projects. Owing to near link in between Delay Claim, that two segments of methodologies are always coupled to create a perfect proof of demonstration. For the purpose of scheduling techniques in the like of CPM, the DAMs are made use of. Its procedure of employment is immensely logical in nature that involves affecting a sort of construction schedule, surrounding the claims in order to determine the scope of project delay by each party responsible. Besides, DSAMs engage in gathering details, with special reference to final output and transmitting them to realise reason-and-impact combination between the said disruption occurrences and the additional time factor and/or overheads borne, consequently. (Boyle, 2007) explains this procedure as “deductive” and that of delay analysis as “inductive” basing the fact that previous one always commences with shifting from the ordinary to the precise and conversely with the latter. (Boyle, 2007) colourfully illustrated this and other distinctive features of the two processes bookends supporting the claims (see Figure 5.1).
Figure 5.1 Delays and Disruption Analysis Depicted as Bookends Supporting a Claims
5.3 Delay Analysis Methodologies (DAMs)
Descriptions and explanations made available by professionals of this field, various DMS are identified by different terminologies. (see Table 5.1). The general purpose of these methods is to examine as to how delays undergone by variety of Project activities do have an impact on others and date of project completion and from there to conclude to what extent the overall project delays could be apportioned to each party. Nevertheless a variety of methods can realize this object at different stages of accuracies owing to their different attributes. The sketch below depicts an overview of the distinction in between the various methodologies and their concise descriptions.
5.3.1 Differences between the Methodologies
The methodologies differ from each other based on the type of schedule techniques they require, the baseline schedule used and the mode of application. Based on these criteria, the various DAMs can be classified as shown in Figure 5.2.
Figure 5.2 DAMs classification With regard to mode of Schedule System engaged, the methods can be classified as (a) CPM-based Techniques & (b) Non-CPM-based Techniques. (a) is much-liked and broadly accepted, for, number of benefits of CPM in DA gained. In contrast Non-CPMBased techniques (b) especially, bar charts are less friendly in confirming the ill-effects of delays since their incapability to indicate a logical picture of delays in completion of projects. (Wickwire & Hurlbut, 1989). Nevertheless, they can be profitably implemented to resolve certain categories of Delay Claim, especially in cases of less activities and easy associations ( (Pickavance, 2005). According to (Wickwire & Hurlbut, 1989) the baseline or reference point employed in Delay Analyses differ from number of methods depending on options among the three points noted below: 30
(i) Forward pricing — Assessment of delay at the commencement by having impact on contractor’s Baseline Program with delay occurrences. Methods depending on similar reviews consist the impact as-planned and as-planned but for methods. (ii) Contemporaneous pricing — .Assessment of delay, as they are being taken place or in the alternative, immediately after it has taken place. Methods for
implementation of this consist Contemporaneous Period Analysis and the Time impact analysis. (iii) Hindsight pricing — Assessment of Delay and its determination at the completion of the project. This form is carried out employing methodologies such as Collapsed asbuilt, As-planned vs. As- built and the Window analysis. The said choices, to a great extent, controlled by the timing of the Review. However, in practical terms, methods appropriate for performing Forward & Contemporaneous Pricing (i.e. prospective analysis) can also be employed for hindsight pricing (retrospective analysis). The system of implementation of the methodologies differs on three different modes: direct analysis, subtractive simulation and additive simulation. Direct Analysis This associates, the Analyst investigating the Schedules on the same without employing any key adjustments or assessments on the schedules. The modes employed for this type of analyses, are somewhat trouble-free, simple and cost-saving in the implementation. Examples include As-planned vs. as-built, net impact and Global impact. Subtractive Simulation This style leads in avoiding delays of either parties from as-built program to establish its impacts on the expected date of completion of project. The avoidance of delay can be achieved by resorting to two main ways (Trauner, 1990). Removal of total delays in 31
one-go from a single as-built schedule (i.e. one- stage simulation) or removal the delays in phases from multiple schedules (multistage simulation). The collapsed as-built method is an example of this type of simulation. Additive Simulation With regard to this particular method, Analysts devise the delays as performances and link them to a schedule (the baseline programme or its updates) in order to determine its impacts on the agreed date of completion of project. As in the above said Subtractive Method, the additions could also be carried out in one-phase of multi-phases. Methods coming under this nature of analyses have the impacts as-planned, as-planned but for, window analysis and time impact analysis. When taking into consideration such diverse methods of operations, it is seen, the required details for analysis varying for different methodologies. Modes being employed for direct analysis are, therefore, always referred as “simplistic Methods” whilst those compel more excessive amendments of the schedules as in the additive and subtractive simulations are always referred as “Sophisticated Methods ( A l k a s s , 1 9 9 6 ) . The latter segments prone to provide more precise results ahead of former, however, they involve additional expenditure, duration, skills, resources and project records to operate (Lovejoy, 2004). These features of methodologies are amply illustrated in Figure 5.3.
Figure 5.3 Features of Methodologies 5.3.2Brief of the Diverse Delay Analysis Whilst having pointed out the numerous disparities in between the methods, this segment discusses in what way each one is implemented incorporating, plus and minus points linked thereto. The S curve This mode or methodology reviews the delay, affiliated to cost and time factors. It associates development of a time/cost S-curve for the original plan together with the S- curve signifying actual income. ....The actual S-curve should leave out any expenditure for additional works so that comparison of the two curves becomes legitimate. The scope of delay at any point along the actual curve is the horizontal distance between these curves at this point (Rubin, 1999).
The limitations of this technique are as follows: ¾ it does not identify and track the activities on the critical path; ¾ the original planned S-curve might not be accurate due to “front end loading” or other factors; ¾ Payments for stored materials and equipment could result in misleading progress of an updated S-curve. Global Impact Technique This is, comparatively, a trouble-free exercise with regard to impact-review on project delays. In the first place all incidents of delay, are given on a Summary Bar Chart having realized the beginning and end dates. Then the entire project delay is computed to arrive at the full amount durations of all delay occurrences, (Alkass, 1996). Despite the fact that this procedure is able offer an easy and accurate account of delay experienced, it possesses a major restriction, that is, it does not take into consideration the parallel delays and real delay types that have taken place, on the presumption that all project delays happened mechanically. Net Impact Technique This is a further development on preceding methodology to deal with problem of concurrency. Under this particular procedure, all delays are designed on an as-built Bar Chart Schedule where real durations, beginning and ending dates of activities are reflected. (Leary and Bramble, 1988). As from this, only the net impact of total delays is reflected and the scope of delay to the whole project is the disparity in between the as-planned and as-built dates of completion. The restriction of the system is that its inability to make a thorough probe to delay types that would result in exaggeration of the amount of delays, causing an impact on the date of completion of project. (Alkass, 1996)
The key restriction is a common feature to foretold three methodologies since CPM network is not employed and float, severity and inter-dependence of activities have not been clearly evident, making it more complicated to compute the real effect of delays. As for this fact, application of these methods is not encouraged by many a professionals. (Anon., 2002). As-planned vs. As-built Said method is simply employed for comparison of activities of basic CPM Baseline Schedule with that of As-built Schedule for comprehensive evaluation of delays that have taken place. The key benefits of this method could be pointed as: it is comparatively less expensive, trouble-free and simple in employment and for comprehension. (Lovejoy, 2004). Its restrictions are, failing to look for amendments in the critical path and incapacity to deal with compound delay conditions (Stumpf, 2000). Impacted As-planned This particular methodology involve in integrating delays confronted such as activities into as-planned CPM Schedule to display as to how a completion date in a project delay caused by those delays. The quantum of project delay owing to each delaying fact is the difference in between schedules of dates of completion prior and after the addition. (Trauner, 1990). Even though this mode does not require as –built schedule to activate, it has key disadvantages likes of failure to take into account any amendments in Critical Path and supposition that scheduled sequence of construction remains further valid (Stumpf, 2000). Collapsed As-built This one, initially forms an as-built CPM Schedule incorporating total delays confronted. Delays are then taken off from the schedule in order to form a ‘collapsed’ as-built schedule, that shows as to how the project should have gone forward without such delays. The benefit through this action includes achieving good accuracy consequences (Lovejoy, 2004). Its, restrictions, however, include; disregarding any 35
amendments in the critical path and enormity of effort to be taken in the identification of as-built critical path. (Zack, 2000). Window Analysis In the course this system, the entire project duration period as indicated in as-built CPM schedule primarily separated into number of times or ‘windows’. The dates describing the limitations of these windows are always decided by key project landmarks, vital amendments in the critical path, key delaying incidents and exact dates for issuance of revisions and/or updates for schedules. The said matters are instrumental in realizing the number of durations of the windows for the entire project period. The delay analysis commences initially by updating the schedule within the first window, using as-built information including all the delays confronted in the ensuing period, whilst maintaining the balance as-planned schedule ahead of this window. The disparity between the Date of Completion as per schedule as a result of this one, and that before the review procedure indicates the scope of project delay consequent to delays within first window. This review is continued repeatedly in respect of each remaining windows in order to realize the impact of all other delays incidents with regard to completion of project. The key force of this procedure is its capacity to oversee the vibrant nature of the critical path. Nevertheless, this is, relatively, a highcost exercise in taking into account the period of time and the effort required to carry out same. (Zack, 2000). Time Impact Analysis The subject method is a deviation from the window system explained above excepting the fact that, in this system, the evaluator deliberates on a specific delay or a delay event but not on period of time depicted in delays or delaying incidents. (Alkass, 1996). In this particular approach the impacts of delay is evaluated date-and- time-wise (chronologically) commencing from first delay event incorporating each delay into an updated CPM Baseline Schedule that represents the status quo of the project before the
delay event took place. The scope of project delay caused by each of delay incidents is sequentially realized by calculating the difference between Project Completion date indicated in schedule resulting from addition of each delay and that of previous to addition. This conception is developed from its primary concern of future analysing, on an ongoing basis, the impacts of changes to the project. Well before 1980s, this conventional application of Time Impact Analysis had been an obligation in certain US Federal Governments contracts (Wickwire & Hurlbut, 1989). The said approach has substantial meritorious features, probably the most dependable instrument. (Anon., 2002). However it has found to be time-wasting and rather high-priced in its operation, principally in conditions, where quite a lot of delaying incidents experienced.
6. SURVEY ON METHODLOGIES FOR ANALYSING DD CLAIMS
During course of this survey two separate of set of questionnaires were directed to Contracting and Consultant Institutions across Oman in order to gather data on engagement of DC Analysis. Even though the context of said questionnaire looked similar, comprehensive information on the design of the questionnaire, the nature of investigative questions it contained and sampling of organizations are indicated in Chapter 2. The queries inserted in the questionnaire are given on the review report in Chapters 3, 4 and 5. This chapter tender the outcome and analyzes the feedback to individual queries in the light of comments made on DCA by researchers and professionals. The remainder of this chapter has been written, making classifications under headings below:
6.2 Survey Response
As from the 80 Questionnaires forwarded, 54 Questionnaires were received back, from which lot only 38 (22 from Contractors & 16 from Consultants) had been properly perfected for purpose of conducting a rational analysis. The remaining 16 parties had indicated that, under the policies of their respective companies, they are debarred to make responses to Surveys or in the alternative indicated that they have only meagre experiences in DC analysis. This figure indicates a response rate of 27% and 20% respectively for Construction and Consulting organizations, which is in the accepted range of (20-40%) typical of similar surveys (Furtrell, 1994).
6.3 Features of the Respondents and their Organisations
The Tables 6.1 and 6.2 respectively indicate the distribution profile of Respondents’
Organizations with regard to nature, size and their designations for the construction and consulting firms Table 6.1 Construction Companies Response Type of Contractor Response rate from the total contraction companies (%) Building Contractor (Civil works only) 56%
Building Contractor (Mechanical & Electrical works 31% Road Contractor Annual Turnover (OMR million) < 10 10 - 20 20 - 50 > 50 7% 21% 45% 27% 13%
Besides, the response from Consultative Firms had been somewhat not moderated distributed in that bigger part coming from Quantity Surveying & Claim Consulting Firms had not been satisfactorily represented. This inadequate response most probably due to their inactivity in the field of Delay Claim Assessments by themselves as discussed in latter segment on this chapter.
Table 6.2 Consulting Companies Response Type of Consultant Response rate from the total consulting companies (%) Project Management Consultant Architecture & Engineering Cost Consulting Annual Turnover (OMR million) < 10 10 - 20 20 - 50 > 50 13% 46% 35% 6% 26% 38% 36%
In terms of magnitude of the organizations, number of 03 groups were identified taken as a base of the annual turnovers whilst that indicates the survey was able cover a wide range of constructional organizations, the division of responses were not consistent. . The average annual turnover of the selected organisations was OMR 30 Million which gives an indication, the constructional organizations from whom views were sought are in the range, medium to large. The designations of the respondents constituted a broader range of professions and they possessed have good relationships in dealing with Delay Claim Analysis. Most of them have been engaged as Commercial Managers or Quantity Surveyor for Client and Contractors holding Senior Management positions. Table 6.3 shows experiences of responded professionals with respect to their responsibilities Experience of respondents
Table 6.3 Experience on Relevant Areas Function Year of Experience 0 1-5 6-10 1115 Construction Companies Tendering & Estimating Project Planning/Scheduling Project/Site Managements Site Measurements Claim Preparation Consulting Companies Tendering & Estimating Project Planning/Scheduling Project/Site Managements Site Measurements Claim Preparation 5 2 5 4 1 3 3 3 4 3 4 5 4 3 4 2 4 3 3 6 1 1 1 1 1 1 1 0 1 1 3 5 3 3 0 5 3 2 4 3 4 6 7 5 5 7 5 4 8 9 2 1 4 1 3 1 2 2 1 2 1620 >20
It is seen that their average period of experience in preparation and assessment of claims is more than 10 years. Hence it is amply evident that most of the respondents have been engaged in the Claim Subject for substantial period of time and they were absolutely qualified to make comments on subject issues discussed in the survey. The vast knowledge and experience they have gained over the years, in the subject of
taking Measurements, were higher than Scheduling & Site Management and it is a clear fact that larger segment of respondents were erudite and professional Quantity Surveyors or Commercial Managers.
6.4Timing of Delay Claims Submissions and Evaluation
Submission of DC, on appropriate time, by the contractors and its assessment without undue delay by the Clients, or their agents, as the project progresses or as close-in time for events of delay is often appreciated as a laudable practice. (Ibbs, 1987). The rationale behind for such a practice is that it ensures less problems in resolving claims as the arguments put forward in the claims would be fresher in the mindset at that juncture and, further parties whose involvement in the actual project is minimal & in case their participation in claim settlement leads for complex situations, those issues could also be sorted out. With a view to examine to what extent this practice is implemented by contracting parties, respondents were requested to positively respond and mark their rank of agreement to the proposition.: “the analysis and resolution of most DC are kept unresolved until near end of the project or after completion before resolving“; using a 5-point scale (where ‘1= disagree’ to ‘5 =agree’). Table 6.4 depicts the results, which suggest that over 65% of the respondents from either construction or consulting firms are in agreement with this proposition.
Table 6.4 The proposition that most DC are determined nearer project completions or after Construction Companies Extent of Agreement Scale % Strongly disagree Disagree Neutral Agree Strongly agree Total 4.1 5.3 10.6 44.2 35.8 100 Cum % % 4.1 9.4 20 64.2 100 6.5 8.6 15.1 48.1 21.7 100 Cum % 6.5 15.1 30.2 78.3 100 Consulting Companies
The results suggest that contracting parties still face considerable difficulties in resolving DC at close in time as possible to the occurrence of the delaying events during the course of projects.
6.5Extent of Disputes on Delay Claims
As mentioned earlier on, claims relating to projects DC are often recognised as a major source of disputes in the construction industry. To confirm the validity of this as a justification (or otherwise) for the need to seek for improvement in current DA practice, respondents were asked to score their level of agreement with the proposition: “the resolution of DC are often attended by considerable difficulties thereby causing disputes“, using a 5-point scale (where “1= disagree” to “5 =agree”). Table 6.5 shows the results, which suggest that over 70 percent of the respondents are of the opinion that DC often result in disputes. This implies that DC resolutions continue to pose great challenge for project employers and contractors. Thus, there is still much to do in 43
this subject area before matters of project DC can be resolved without much dispute. Table 6.5 The proposition that most DC resolutions towards disputes Construction Companies Extent of Agreement Scale % Strongly disagree Disagree Neutral Agree Strongly agree Total 6.2 7.1 10.5 42.3 33.9 100 Cum % % 6.2 13.3 23.8 66.1 100 7.3 9.5 13.6 47.2 22.4 100 Cum % 7.3 16.8 30.4 77.6 100 Consulting Companies
6.6 Level of Awareness of Available DC Methodologies and its Usage
The followings Tables 6.6 and 6.7 show the Construction and Consulting companies awareness and its usage level which was derived from the analysing of survey data. The rank of awareness made “unaware (=1) to “very aware” (=5) and the Usage from “low” (=1) to “high” (=5). Table 6.5 Level of awareness of available DC methods Methodology Unaware % % 1 2 % 3 % 4 5 As planned vs As built Impacted as planned Global Net Impact Collapsed as-built Time impact analysis S-Curve Window analysis 2 2 10 18 22 37 41 75 5 18 27 39 35 40 33 18 10 20 31 30 31 20 18 5 21 35 22 12 10 2 6 1 62 25 2 1 1 1 2 1 Highly aware %
Table 6.7 Level of usage of available DC methods Methodology Low % 1 As planned vs As built Impacted as planned Global Net Impact Collapsed as-built Time impact analysis S-Curve Window analysis 1 1 15 18 22 43 45 72 % 2 4 15 31 39 35 38 34 24 % 3 12 18 35 27 31 16 18 4 % 4 21 35 22 13 10 2 2 0 Highly % 5 62 31 2 3 1 1 1 0
7. INTERVIEWE RESULTS ON PROGRSMMING ISSUES
In this chapter, the interviewed data is furnished in analysing and deriving of the issues effecting for the Delay Claims from the programming and record keeping practices related to the programs of Construction Organizations. These interviewed have been carried out with several construction companies who had responded to the Questionnaire Survey. The key issues were investigated including (i) (ii) (iii) (iv) Baseline programme development Management of the programme Productivity record keeping Progress reporting and promptly updating
Out of 22 construction companies who replied for the questionnaire Survey, 8 companies agreed to have a telephonic interview voluntary. The following Tables No 7.1, 7.2 & 7.3 show the summarised data in different areas.
Table 7.1 Degree of submission of baseline programme Interviewees Never 1 Interviewee-1 Interviewee-2 Interviewee-3 Interviewee-4 Interviewee-5 Interviewee-6 Interviewee-7 Interviewee-8 Percentage (%) 0 12.5 25 37.5 1 1 50 1 1 1 1 1 1 2 3 4 Always 5 1
Table 7.2 Degree of resource loading of programme Interviewees Never 1 Interviewee-1 Interviewee-2 Interviewee-3 Interviewee-4 Interviewee-5 Interviewee-6 Interviewee-7 Interviewee-8 Percentage (%) 1 50 25 12.5 12.5 0 1 1 1 1 1 1 1 2 3 4 Always 5
Table 7.3 Degree of progress updating Interviewees Never 1 Interviewee-1 Interviewee-2 Interviewee-3 Interviewee-4 Interviewee-5 Interviewee-6 Interviewee-7 Interviewee-8 Percentage (%) 0 12.5 25 37.5 1 1 37.5 1 1 1 1 1 1 2 3 4 Always 5
Table 7.4 Degree of recording actual productivity Interviewees Never 1 Interviewee-1 Interviewee-2 Interviewee-3 Interviewee-4 Interviewee-5 Interviewee-6 Interviewee-7 Interviewee-8 Percentage (%) 1 62.5 25 12.5 0 0 1 1 1 1 1 1 1 2 3 4 Always 5
8. CONCLUSIONS AND RECOMMENDATIONS
Documentary evidence is now amply available to conclude that Claims related to Projects DC are, at present, a salient source of dispute in the construction field. As a result it has become a dire necessity to minimise or, for that matter, totally circumvent this issue, and it has become a subject for thorough investigation among researchers and professionals Regardless of endeavours of this nature, the subject of DC Analysis carries on as a major impediment to parties involved in projects. Having severely contemplated this position, research work had been launched in order to probe the process of application of mode of DC Analysis in Oman, now being resorted to. The modus operandi applied to accomplish this object was an industry-wise questionnaire survey from constructional organizations (as shown Chapter 6) and subsequent interviews with contracting firms (as shown in Chapter 7). The objective had been, to investigating the adoption of available DC Analysis methods and to examine problematic situations emerging from Planning and Programming by utilizing the findings from this survey and by reviewing the information gathered. Having studied the facts and particulars, the structure necessitated a specimen in picking out suitable DAM and proposed recommendation for an advanced practice (Presented in this chapter). Key findings and conclusions from earlier chapters too have been inserted in this particular chapter in order to set a stage for the recommendations. The ultimate part of this Chapter provides a series of recommendations for more research work as well.
8.2 Findings of Research and Related Disputes
The primary data collected and depending on achieving in the research aims and objectives came out from the 22 contractors and 16 consultants who replied for the questionnaire survey on use of DC analysis methodologies and its awareness in the Oman construction industry. Out of these responded parties, 8 contractors agreed and participated for the telephonic interview. These 8 contractors were having more than 15 years experience on concern field and it was ideally suited for this research. Enumerated below are the Findings and the Conclusions arrived at, in reference to motives of the research carried out, based on preliminary information gathered and meticulously reviewed. 1. It is an established fact that settling the synchronic delays has been an extremely controversial subject since there has been no generally accepted definition to identify the real sense of “Concurrent Dela y”, even among those who practise same. Notwithstanding, this rather uneasy situation, there have been certain principles accepted to a considerable extent, as to the effect on right to additional time and compensations for that extended period. The application of systems proficient in sorting out Claims on Concurrent Delays is, therefore, a significant thought in the subject of DC Analysis. One another controversial problem that has a bearing on Delay Analysis is the issue is “Entitlement of Float”. 2. A vital topic in relation to Float Ownership has been identified as to whether contractor has the right to time expansions and connected cost compensations for clientresponsible delays that hinder the timely completion scheduled by them despite the fact that completion is not effected further than the completion date in terms of contract. The usually established viewpoint on this, could be put forward, as contractors have right to complete the projects in advance of specified contractual date but the Client is not bound to provide information or connected deliverables in order make sure the former, without intentionally obstructing the contractor.
3. It is a significant issue in the subject of DC Analysis, sorting out Delay Claims pertaining to client-responsible delays that have taken place on expiry of specified date of completion in terms of agreement, when the contractor is at fault. The widely agreed methodology in sorting out this matter has been identified as “Net Effect Method” i .e. amalgamation of period of time consumed by the delay to date on which the contractor should have completed the task, whether it original or amended date of completion, despite this may be , well in advance of date over which delay events took place. 4. It was the feeling of most of the parties responded to the survey, the DCs are always kept unattended till the close-in time for the ending of project or after the completion, conflicting the norm of sorting out same contemporaneously or in the alternatively in close-in time to taking place of delay event/s. It was also their feeling that resolutions are always confronted by untold complications, propping up disputes at all times. The dire necessity to develop a sustainable structure for the improvement of present DC Analysis Process has been further endorsed by the findings of this research work in order to minimise or totally rid the emergence of disputes.. . 5. According to the sentiments expressed by the respondents to the survey, the reasons for emerging disputes could be inability to establish a contributory relationship followed by insufficient documentary evidence to quantify and provide breakdown of claim amounts. Negative response to notice needs by contractors was shown as the least recurrent reason. In the light of facts discussed, if can be safely concluded, that if dissentions in DC resolutions were to be averted or minimised, the modus operandi now applied for proving the contributory factors and record keeping should undergo radical improvement. 6. The compilation and assessment of Delay Claims could be described as a multi-prong assignment that requires contributions at diverse stages from Commercial Managers (Quantity Surveyors), Architects/Engineers, Project Managers, Planning Engineers, Estimators, Construction Lawyers and Claim Consultants. Out of those, Quantity Surveyors’ contribution is enormous in respect either claim compilation for constructional institutions or its assessment for consulting team of clients. This amply 54
supports the impression that Analysis of DC is the realm of Q.Ss. even though with the improvement of user-friendly Project Planning Software, the job seems to be the sphere of programmers or schedulers. In the circumstances, the requirement to pay adequate thought to functions of QSs within the client-organizations in respect of their vital role in the assessment of DC, strategic management of this and their training needs, has become a timely need. 7. A series of modes for the purpose of Delay Analysis have been incorporated in this literature. Researchers and Professionals have cited those using diverse nomenclatures but these not only differ from terminologies but also from its system of application, the style of programming procedure and the baseline programme applied. Therefore, they are subject to provide diverse effects of strategically different ranks of precision when put to use given claims conditions. These differences contribute to the difficulties and disputes associated with DC analysis. 8. Not a single method presently in force in the Delay Analysis, is complete since each system possesses its plus and minus points. Most complicated methods. (Time Impact Analysis, Window Analysis, Collapsed As-built and Impacted as planned) are reported to be more accurate and credible than simple ones. (Global method, Net Impact Technique and As planned vs. As built), even though the earlier segments need more funds, time, expertise resources and project records to put into effect over and above the latter. 9. Furthermore, none of the DAM that is globally admissible in respect of all claim conditions. The majority of pertinent modes for any given condition shall dependant on number of standards or criteria. Nevertheless, in spite of the fact such standards or criteria are subject to vary to reviewer to reviewer, they are rich in quality and subjectwise and electing them as methods to put into use, may open for confrontations and disputes. Having given serious thought to this fact, this particular research developed and stabilized a model for choosing an apposite DAM to aid and accommodate professionals in this hard task of decision-making.