| Compensable D ims my él f Ph feay Formula) ’ ass 4 4 - i i g Y Van. i 3 “aN fiji 0 App Ai. a! Schedule Float (Who Owns 12) I ‘ = elay Clai i: i 4| aTABLE OF CONTENTS 1. Introduction... IL. Establishing Causation Utilizing CPM Scheduling. IIL. Application of Critical Path Methodologies. A. “Total Time” Approach B. “Impacted As-planned” Approach .. “But-for” Approach.. “Like-time” Approach. . “Chronological Impact” Approac! szmoo “Window Analysis” Approach... Miscellaneous “No-Name” Approaches... IV. Schedule Float... a Float: Where Does It Come From and What Is It? A B. Types of Float. C. Float: A Scheduling Tool... D. Float Ownership: Where We Stand Today... V. Key Issues Relative to Concurrent Delay and Compensable Delay Claims .. A. Concurrency: A Definition 39) . Categories of Delay... B C. Apportioning Concurrent Delays... D. The “But-For” Test for Compensable Delay Claims... VI. Recovery of Extended Home Office Overhead... A. Extended Home Office Overhead... B. The Eichleay Formula VII. Conclusion . Copyright 1996 by Barba-Arkhon International IncTABLE OF CONTENTS (continued) Appendices A. Court Commentary on Expert Witness Delay Analysis ;ouree Control: Manpower Forecasting and Leveling. ‘Manpower Forecasting... ‘Manpower Leveling. Multi-Resource Manpower Leveling, Resi A. Overview B. c. D. E, Manpower Leveling Through Network Crew Sequencing .. C. Summary Biographies of Presenters. D. Index of Legal References.. Copyright 1996 by [Barba-Arkdhon Intemational IneNOTE DUE TO THE GENERALITY OF THIS PAPER, THE INFORMATION. PROVIDED HEREIN MAY NOT BE ‘APPLICABLE IN ALL SITUATIONS AND SHOULD NOT BE ACTED UPON WITHOUT SPECIFIC LEGAL ADVICE ‘BASED ON PARTICULAR CIRCUMSTANCES. SESS I. Introduction In order to deal successfully with a construction delay, disruption or acceleration claim, you must determine causation — the link between liability asserted and damages claimed. One of the primary ways to accomplish this is through the performance of a schedule delay analysis which utilizes the critical path method of scheduling as a tool to evaluate cause and effect. The utilization of critical path method (CPM) scheduling techniques to plan, schedule, monitor and control work has become the accepted standard in the construction industry. Likewise, Boards, Courts and arbitration panels have shown their willingness and desire to utilize network-based scheduling techniques in terms of evaluating and apportioning responsibility between parties for delay and disruption in the work. Central to the apportionment of responsibility for delay and determination as to the compensability of same, are the issues of float ownership and utilization, and the evaluation of alleged concurrent delay. This paper discusses various legal decisions in which parties utilized various types of “critical path scheduling techniques/methods” in their efforts to establish causation, and other cases in which Courts and Boards have dealt with float utilization, as well as apportioning concurrent delay and compensability related thereto, In addition, it discusses the utilization of the Eichleay Formula for purposes of calculating the extended (underabsorbed) home office overhead portion of a contractor's delay claim, With respect to the various approaches to delay analysis discussed herein, the presenters will, in their oral presentation, critique the various approaches. The presenters will also set forth Copyright 1996 by: ‘Barba-Arkhon International In, suggested guidelines which should be adhered to in the analysis of delay/disruption claims. Float utilization and concurrent delay concepts will also be discussed and graphically illustrated. In reviewing this paper you will note the delay analysis approaches/methods and loss of productivity calculations used by appellants and respondents alike are as varied as the facts which comprise the cases. Moreover, the manner in which Courts and Boards have apportioned concurrent delays has varied depending upon the facts and method of delay analysis utilized by the parties to the dispute in attempting to establish causation, Additionally, a review of relevant case law reveals that in many instances both parties failed — in the eyes of the Court or Board — to establish causation, thus leaving the Courts or Boards to their own devices in terms of apportioning responsibility for delay or loss of productivity between the parties on a “jury verdict” basis. However, with regard to util the Bichleay Formula for purposes of calculating the extended (underabsorbed) home office overhead portion of a contractor's claim, it is evident that the criteria which a contractor must meet in order to apply this formula has been clearly established by the Courts, leaving little question as when and how to apply the formula in a given situation.IL. Establishing Causation Utilizing CPM Scheduling CPM schedule analysis is now regularly employed before judicial bodies in the establishment of causation for project delays. To establish causation, the following considerations are relevant under most circumstances. First, establishing causation requires that the delay be linked to the project's critical path. [Fortec Constructors v. United States, 8 Cl. Ct. 490, 504- 05 (1985); see also Williams Enterprises v. Strait Mfg. & Welding, 728 F. Supp. 12 (D.D.C. 1990); Haney v. United States, 230 CCl. 148, 167-169, 676 F.2d 584, 595 (1982); Gulf Contracting, Inc., infra. The critical path within any CPM schedule is not static and may change over time based upon actual events. [/d.] Activities not originally on the critical path can become critical. [Fortec, 8 Cl. Ct. at 505 (citing G.M. Shupe, Inc. v. United States, 5 Cl. Ct. 728 (1984)).] Therefore, a CPM schedule must be updated regularly. (Jd.] Second, a contractor typically will not recover damages if an owner-caused delay runs concurrent with delays for which the contractor is, responsible, unless the delays and their effect on the project can be apportioned. (Eg, Spirit Leveling Contractors ¥. United States, 19 Cl. Ct. 84, 96 (1989); Beaucamp Constr. v. United States, 14 Cl. Ct. 430, 437 (1988); Norair Engineering Corp., ENG BCA No. 3804, 90-1 BCA 4 22,327 (1989).] “[W]here both parties contribute to a delay neither can recover damage(s], unless there is in the proof a clear apportionment of the delay and expense attributable to each party.” Blinderman Const. Co,, Inc. v. U.S., 695 F.2d 552 at $59 (Fed. Cir. 1982), quoting Coath & Goss, Inc. v. United States, 101 Ct.Cl. 702, 714-715 (1944).] Thus, Judicial bodies may —_grant_—_ recovery, notwithstanding the existence of concurrent delay, when a contractor can establish the Copyright 1996 by 'Barba-Arkhon International Inc compensable delay impact as existing separate and apart from delays caused by other reasons. [Klingensmith, Inc. v. United States, 731 F.2d 805, 809 (Fed. Cir. 1984); Norair, infra] Judicial bodies recognize the importance of the “critical path” in establishing legal harm or causation, The United States Claims Court, in Fortec Constructors v. United States, 8 Cl. Ct. 490, 504-08 (1985) stated: The reason that the determination of the critical path is crucial to the calculation of delay damages is that only construction work on the critical path ‘had an impact upon the time in which the project was completed. If work on the critical path was delayed, then the eventual completion date of the project was delayed. Delay involving work not on the critical path generally had no impact ‘on the eventual completion date of the Project. {8 CL. Ct. at 505 (quoting from G.M. Shupe, Inc. ¥, United States, 5 Cl. Ct. 662, 728 (1984)).] However, a CPM schedule will not automatically establish legal causation if not correctly applied to a particular claim situation. [See Georgia Power Co. Georgia Public Service Conservation et al, 196 Ga. App. 572, 396 S.E.2d 562 (1990) (contractor prevails where CPM schedule establishes causation); Building Maintenance Specialist, Inc., 85-1 BCA. 17,932 (1985) (contractor not entitled to time extensions for delay because CPM analysis did not establish causation). Fortec, Id.]a Ii. Application of Critical Path Methodologies A. “Total Time” Approach In its purest form, a total time approach compares the as-planned CPM to an as-built schedule and claims the total amount of delay as recoverable. This approach presumes causation in that there is a fundamental assumption inherent in this approach that the total delay time is recoverable; that the claimant is entirely correct and is not responsible for any delay; and that the respondent is liable for all the delay. The total time approach typically does not consider whether liability for any delay should be apportioned among the parties. The total time approach is generally not favorably viewed by judicial bodies. [See C & D Lumber, Inc., VABCA No. 2877, 91-1 BCA 4 23,544 (1990); Norair, infra; Miles Construction, VABCA No. 1674, 84-1 BCA 116,967 (1983); Blackhawk Heating & Plumbing Co, Inc., GSBCA No. 2432, 75-1 BCA § 11,261 (1975).] However, as discussed below, it may be appropriate for use in certain limited circumstances. [See Norair, infra.] Case Study No. 1 Norair Engineering Corporation ENG BCA No. 3804, 90-1 BCA § 22,327 (1989) 0 Factual Background On March 27, 1972, Norair Engineering Corporation (Norair) was selected by the Washington Metropolitan Area Transit Authority (WMATA) to construct a 13.2 million dollar subway station and related facilities in Washington, D.C. (the “project”). The contract established a two-phase completion schedule for the project, and Norair received the notice to proceed on April 20, 1972. Under the contract, Norair was obligated to complete all Copyright 1996 by Barba-Arkhon International Ine. work within 576 days after receipt of notice to proceed (Phase B) which was November 17, 1973. However, sixteen particular features (Phase A) were to be completed earlier (within 400 days). Pursuant to the contract’s requirements, Norair submitted an as-planned CPM schedule to WMATA. © The Dispute During performance, numerous design changes and defects in the specifications and drawings were encountered by Norair. Additionally, access and use privileges at various parts of the site were frequently revised or denied. The foregoing created additional work and created sequence changes throughout performance. ‘The originally stipulated contract completion dates were thereafter extended to January 4, 1974 for Phase A and June 29, 1974 for Phase B. However, Norair and WMATA disagreed as to the scope of the Phase A work as subsequently revised, The project was also completed late, but the parties disagreed as to the date, Norair claimed that Phase A was substantially completed on December 4, 1974, and that Phase B, except public street restoration after construction, was completed on March 1, 1976, Norair further claimed that Phase B substantial completion occurred on May 26, 1976, when the street restoration was finished. WMATA claimed that both phases, excluding street restoration were substantially completed on March 4, 1976; but agreed that if street restoration was necessary for Phase B completion that the substantial completion date for Phase B was May 26, 1976. ‘Norair filed an omnibus claim for both excusable and compensable delays which was litigated at the Corps of Engineers Board of Contract Appeals (ENGBCA),© Contractor's Claim Norair argued that, due to WMATA’s ‘maladministration of the project, the work had to be scheduled and performed as the work became available. Norair further maintained that WMATA established time requirements that it knew were not achievable. In presenting its claim, Norair utilized a total-time approach. It computed the length and extent of the delay by taking the total difference between the scheduled and actual start dates for critical activities. These total time differences were then added to the completion dates of Phases A and B to calculate the requested revised completion date, Norair sought recovery for the total delay time. 0 WMATA’s Response/Position WMATA opposed Norair’s total time approach. In rebuttal, WMATA prepared five charts which summarized (1) Norair’s as-planned work schedule at the beginning of the job; (2) the above schedule adjusted to correct alleged errors and omissions by Norair; (3) the above adjusted schedule further modified by the inclusion of a 224 day time extension previously granted by WMATA; (4) an as-built schedule demonstrating how the project was actually constructed; and (5) a time entitlement chart identifying and quantifying the delays that WMATA conceded. Based upon the above, WMATA argued that Norair had failed to properly plan the work and that almost all of the resultant delays (which it acknowledged) were Norair’s responsibility. © The Board's Decision ‘The ENGBCA rejected WMATA’s analysis, because it deviated from the as-planned and as- built information. First, WMATA’s CPM analysis altered Norait’s initial logic as- planned schedule to conform to the way WMATA believed the work should have been planned. Second, the WMATA schedule excluded, without explanation, sequences of Copyright 1996 by Barba-Arkhon International Inc activities which supported Norair’s allegations regarding performance of the work. Finally, the over-all CPM analysis contained unsupported assumptions as to Norair’s responsibilities. With regard to Norair’s total time approach, the Board stated: “It is inexact and lends itself to abuse ... Certainly, the fragmented analysis in Norair’s ... exhibits .. though superficially reasonable, defies all logic. Moreover there is no central theme of over-all delay that can be traced through its separate narratives.” However, the ENGBCA also noted that the circumstances that Norair encountered at the job site were indeed exceptional ‘The Board found that Norair was subjected from day one to almost insurmountable obstacles and unreasonable demands. Letters to the resident engineer requesting guidance or approvals were answered slowly, if at all. Letters from the resident engineer to the contractor were ecriminatory in tone, reflecting litle understanding of the problems at hand. Notices of delay, submitted by Norair as required by the contract, were usually either ignored or denied. ‘The Board further found that so many delays occurred with concurrent or overlapping or consecutive time spans, that neither the Board nor Norair could begin to quantify these delays many of which were attributable to WMATA. Thus, the Board concluded that the claim should be decided utilizing the total time method. The Board concluded that Norair caused 58 days of delay, and that the impact of this delay to the critical path was 91 days. WMATA was held liable for all other delays. Thus, Norair prevailed on its delay claim. © Current Application ‘As demonstrated by the above case study, the total time theory is not favored unless, inter alia, the evidence establishes that the contractor incurred so many delays that the only method of computing delay is by way of a jury verdict.‘Thus, a contractor is not precluded from recovery simply because the time extension due cannot be established with precision, so long as the record provides some reasonable basis for the approximate amount of time due, [See New York Shipyard Corp. DOT BCA No, 2070, 91-1 BCA $ 23,365 (1990); Lenoir Contractors, Inc., DOT BCA No. 78-7, 80-2 BCA § 14,459 (1978); Bruno Law et al. v. The United States, 195 Ct. Cl. 370, 382 (1971); Bell v. United States, 186 CLCL 189, 205 (1969), WRB Corporation v, United States, 183 CtCl. 409, 427 (1968).] In WRB Corporation, the Court struck down the contractor's total time argument due to lack of proof of owner-caused delay coupled with the unreliability of both the contractor's initial bid ‘estimate and its overhead cost figures. The Court stated: The total time approach is no less susceptible to inaccuracies than the total cost theory. The contractor's presentation does not support its dependability here.... We are not persuaded that the quantum of delay arrived at through this mode of computation is attributable to the owner rather than the builder or its subcontractors. [1d As set forth above, the total time approach is generally not favored by judicial bodies. Thus, the Norair decision should be viewed as exception and not the rule, However, the unique circumstances present in Norair justified the use of the total time approach, and the contractor prevailed. B, “Impacted As-planned” Approach The impacted as-planned approach begins with the presentation of a “reasonable” as-planned schedule, Based on a comparison of the reasonable as-planned to an as-built schedule, delays are identified and quantified. The alleged delaying events are then added, or “injected,” into Copyright 1996 by ‘Barba-Arkhon International In. the reasonable as-planned schedule to demonstrate the effect of the alleged delays on the contractor's planned performance of the work. The case study set forth below illustrates the usage of the impacted as-planned approach. Case Study No. 2 Ballenger Corporation DOT BCA Nos. 74-32, 84-1 BCA § 16,973 (1983) 0 Factual Background On June 2, 1992, Ballenger Corporation (Ballenger) (formerly the Ranger Construction Company) entered into a contract for the construction of 15 buildings designated as the Federal Center for Correctional Research (FCCR) with the Federal Bureau of Prisons (Bureau). The original performance period was 600 days from the date of the Notice to Proceed, which was June 12, 1972, making the original completion date February 2, 1974. This completion date was extended by bilateral change orders to April 12, 1974 ‘As a result of the contractor's alleged failure to perform and to accelerate the work pursuant to some eight directives, the contracting officer terminated the contractor for default. © The Dispute During performance, Ballenger encountered delays due to extensive changes, unanticipated site conditions, numerous design defects and late delivery of certain Government-furnished equipment. The contract was terminated for default by the Bureau based on Ballenger’s failure to make progress and its alleged failure to accelerate pursuant to approximately eight directives. Ballenger filed several claims which were the subject of nine decisions by the contracting officer. Ballenger appealed to the Department of Transportation’s Board of Contract Appeals(Board) from final decisions Nos. 2 and 3 denying, inter alia, Ballenger’s claim for an equitable adjustment for time and money because of differing site conditions, delays in delivery of Government materials and a multitude of design defects encountered during performance. These appeals also challenged the Bureau’s default termination of the contract. © Contractor's Claim Ballenger’s claim utilized an impacted as- planned CPM approach. First, Ballenger presented an as-planned CPM schedule developed from its various plans of operations submitted in 1972 and 1973, and also utilized an as-planned schedule prepared by the Bureau in January 1974, Second, Ballenger developed an adjusted or impacted schedule by incorporating the alleged impact of change orders, late equipment delivery and two change orders issued to the completing contractor into the as-planned schedule. In other words, Ballenger took the major impacting events which it had identified and quantified, and incorporated these delays into the affected activity(ies) in the as-planned schedule in order to calculate a revised project completion date. This adjusted as-planned schedule established that Ballenger was entitled to a minimum time extension of 21 months in addition to time already granted by the Bureau. Ballenger further asserted that if certain other delays not incorporated into the adjusted as- planned schedule were taken into account, it would be entitled to a total time extension of approximately 30 months. Ballenger argued that even if there were some concurrency in adjusted as-planned calculation, it was entitled to significant time extensions and that the default termination was invalid. Copyright 1996 by ‘Barba-Arkhon International Ine. © Bureau's Response/Position ‘The Bureau did not present a CPM analysis. In fact, the Board’s decision does not discuss whether a CPM schedule was either required or ized by the contractor during construction. However, Ballenger did submit a tentative plan of operation and building schedule setting forth a general sequence of construction which was accepted by the Bureau. However, in any event, ‘the Bureau alleged, inter alia, that it was not responsible for the claimed delays because (1) Ballenger failed to give proper notice of its claims, and (2) the site conditions were adequately disclosed in the specifications and other bid documents. © The Board's Decision First, the Board rejected the Bureau’s defenses, holding that the Bureau was on notice of Ballenger’s claim and that the site conditions were not disclosed to Ballenger. The Board found Ballenger entitled to 302 days of delay and overturmed the default termination. In doing so, however, the Board did not agree with Ballenger’s position as to certain change order delays and alleged late delivery of Government- furnished equipment. ‘The Board held that the delay associated with several change orders was concurrent with other previously recognized and granted delay periods, and that the record was entirely devoid of proof, that progress of the work was delayed, suspended for interrupted in whole or in part for an unreasonable period of time as a result of, or in relation to, the issuance of change orders. As to the late delivery of Government equipment, the Board stated that although it took an inordinate amount of time to deliver the equipment to Ballenger, Ballenger had not progressed to the point where it in fact needed the ‘material. Thus, Ballenger could not have been delayed by late delivery, and Ballenger’s adjustedasplanned schedule failed to take as-built conditions into consideration. Of key importance in this decision was the Board’s finding that the contractor had failed in its analysis to establish the link between the alleged harm and the delay in the work. Notwithstanding the foregoing, the Board did hold that there was “clear evidence” in the record to substantiate 302 days of excusable delay with respect to design errors, differing site conditions and other causes. The Board also granted an equitable adjustment to the contract price because some of the delays were compensable. The Board overturned the default termination and held that the Government failed to show that at the time of termination Ballenger was failing to make timely progress in performing the work so as to insure project completion by the contract completion date. © Current Application Although the impacted as-planned approach may be persuasive under certain circumstances, the Ballenger case highlights the importance of using as-built performance information in substantiating alleged delay in the work, as well as establishing causation at the activity level when performing a delay analysis. [See Preston— Brady Co. Inc., VABCA No. 1892, 87-1 BCA 4 19,649 at 99,520 (1987) (project logs when contrasted with as-planned schedule shows minimal delay); Ballenger, supra.] For example, Ballenger, as to the late delivery of Government equipment, the Board noted that Ballenger had not progressed to the point in the ‘work where it needed the equipment. Thus, there was in fact no delay impact. C, “But-for” Approach ‘The but-for approach is less of a CPM technique than a legal standard for evaluating delay claims. [See Montgomery-Ross-Fisher, Inc., infra; Copyright 1996 by [Barba-Arkthon International In. Fischbach & Moore, International Corp., ASBCA No. 18146, 77-1 BCA § 12,300 (1976); Canon infra.| In such a claim a contractor may allege entitlement to compensation from a date earlier than the required contract completion date. In determining the merit of such a claim the “but for” approach compares the actual date of project completion with the point in time at which the work would have been completed but for delays caused by other factors or parties. This approach requires the determination of (i) when the work would have been completed but for delay(s), (ii) the net aggregate effect of owner delays, and (iii) the actual date of the completion. This information is then used to establish the extended period of performance for recovery of time related costs. The case study below demonstrates the application of but-for reasoning as applied to claim of extended performance. Case Study No. 3 ‘Canon Construction Corporation, ASBCA No. 16,142, 72-1 BCA 4 9404 (1972) © Factual Background In early 1969, Canon Construction Corporation (Canon) entered into a contract with the Corps of Engineers (Corps) for the construction of 102 family housing units in 29 buildings at the Presideo in San Francisco, CA. Canon was obligated to commence the work within 10 days after receipt of the Notice to Proceed, which was received on April 16, 1969. The contract called for a CPM schedule which was submitted by Canon and approved by the Government. Canon's schedule for the work showed a completion date of February 24, 1970, some fifty days earlier than the required contract completion date of April 15, 1970. © The Dispute During performance, Canon's work was delayed, inter alia, by drawing revisions and differing site conditions. Some of these changes wereincorporated into three contract modifications (umbers: PO16, PO20, PO28) relating to drain inlets, ash removal and added tree removal which added 61 calendar days to Canon’s time for performance and adjusted the contract completion date to June 16, 1970. No impact costs or extended overhead compensation was included in these modifications. The project was actually completed on May 22, 1970. By June 10, 1970, Canon submitted a claim to the Corps seeking a compensable time extension of 36 days beyond its original construction contract. After receiving the final decision denying the claim, Canon appealed to the Armed Services Board of Contract Appeals seeking an unspecified time extension which exceeded its original 36 day delay claim, © Contractor's Claim Canon argued that but-for the delays caused by the Corps (i.e., design changes and differing site conditions) Canon could have finished the work by its planned early completion date of February 20, 1970 or earlier. In this regard, however, Canon did not present a detailed schedule delay analysis, © Corps Response/Position The Corps did not present any contradictory testimony. Instead it contended, inter alia, that any period of compensable extended performance should be measured from the contract completion date, or from the new completion date established by the three contract modifications as. these modifications constituted an accord and satisfaction of those claims. © The Board's Decision In its decision the Board noted: A proper determination of this appeal required at the outset that the Board determine the date, as precisely as possible, upon which the appellant would Copyright 1996 by ‘Barba-Arkhon Intemational Ine. have completed the contract work but for delays which might have been due either to Government fault or the performance of changed work. The next determination must be the actual date of the completion of the work. The difference between the two dates establishes the extended pet of performance for which appellant would be entitled to be paid for extended fixed overhead costs. However, since the underpinning of these calculations is the amount of time during which delays were due to Government fault or changed work, one additional “testing” calculation must be made, and that is to determine whether the aggregate amount of such delays is equal to or more than the extended period of performance. In other words, appellant's recovery is limited by either the extended period of performance or the aggregate net extent of delays caused by Government fault or changed work, whichever is lesser. The Board rejected the Corps’ arguments and hheld that (1) the contract date set forth in the contract was not controlling if the contractor could have completed the project early, and (2) that the three modifications did not constitute an accord and satisfaction of Canon’s claims. ‘The Board then reviewed Canon’s approved early finish as-planned CPM schedule and decided to utilize it as a base-line for calculating ‘entitlement. In this regard, the Board first added 9 days to the as-planned completion date of February 24, 1970 for what it considered to be a reasonable (excusable/non-compensable) delay relative to drawing revisions for changed conditions. Second, the Board added approximately 10 days for weather delays. Thus, the Board determined that the revised completion date for the work would have been March 15, 1970, some 68 calendar days prior to the actual completion date of May 22, 1970.The Board further concluded, based on a comparison of as-planned and as-built schedule information, that Canon was delayed 155 days, principally in the performance of excavation, paving and curb gutter work, taking into account ‘other concurrent delays. From this number of days of delay the Board subtracted the 19 days of excusable delay discussed above, and a 7-day delay due to the bankruptcy of Canon’s plumbing subcontractor. Consistent with this computation the Board concluded that Canon was delayed in the progress of its work by 129 days of Government-caused delay. However, inasmuch as this amount of delay exceeded the actual extended performance period, the Board concluded that Canon was entitled to compensable time for a period of 68 days. Thus, Canon prevailed on its early completion delay claim, © Current Application ‘The but-for approach objectives discussed above continue to be applied by other judicial bodies. (See Sante Fe, Inc., VABCA NO. 2168, 87-3 BCA § 20,104 (1987); Montgomery-Ross-Fisher, Inc., PSBCA No. 1033, 84-2 BCA 4 17,492 (1984); John Murphy Construction, Co, AGBCA No. 418, 79-1 BCA ] 13,836 (1979) For example, in Montgomery-Ross-Fisher, Inc., the contractor argued that it would have completed the project early but for Government delays. The Postal Service Board granted the claim concluding that changes had impacted on the contractor's right to complete early D. “Like-time” Approach ‘The like-time approach is an example of one of the many and varied types of post-completion analytical techniques which have been used by contractors in “after-the-fact” efforts to establish causation, The “like-time” theory of granting time extensions is one which requires that time Copyright 1996 by Barba-Arkhon Intemational Ine. extensions be granted for times of the year when performance of affected/delayed work is feasible. For example, if there is a delay to an excavating activity and a time extension is thereafter granted for that activity, the extension would be meaningless if it were granted during a season or period of time during which excavation couldn’t be performed. Thus, in a like-time analysis a time extension would be evaluated and granted during a time period when the work could be performed. The case study below illustrates the foregoing. Case Study No. 4 Titan Pacific Construction Corp. v. U.S. 17 CLCt. 630 (1989) © Factual Background On June 11, 1977, Titan Pacific Construction Corporation (Titan) was awarded a contract for the relocation of ordnance facilities at the Naval Underseas Warfare Station Indian Island Annex, Keyport, Washington (the “project”) by the Naval Facilities Engineering Command (Navy), The scope of work included the construction of several new buildings, a reservoir, improvements to nine miles of roads, alterations and additions to existing structures, and clearing of approximately 120 acres of forest. The project was divided into three distinct phases, each with separate completion dates. Phase I was to be completed within 90 calendar days, Phase I within 390 calendar days, and Phase III within 600 calendar days from date of award. The initial completion date for Phase III was February 12, 1979. The sequence of work in Phase III was in two stages. Stage 1 was earthwork and roadwork relative to six designated roads, and stage 2 included all other Phase Ill work Pursuant to the contract’s requirements, Titan submitted an as-planned CPM schedule whichwas accepted by the Navy with modifications on October 17, 1977. During performance, the Navy extended the completion date for Phase I to October 20, 1977. Phase I work was actually accepted on March 27, 1978 (158 days late). The completion date for Phase II was extended to July 21, 1978. Phase IL work was actually accepted on October 30, 1978 (101 days late). The completion date for Phase IIL ‘was extended to May 20, 1979. The overall work was actually accepted as substantially complete on February 7, 1980 (263 days late). Liquidated damages were individually assessed against the contractor for each phase of the project. some © The Dispute Titan appealed the denial of its claim to the Armed Services Board of Contract Appeals (Board), seeking a time extension of 899 days, an equitable adjustment for $6,850,874.32, and the remission of liquidated damages. The Board determined that as to Phase I, there were no excusable delays. As to Phase If, the Board denied claims for time extensions amounting to $16 days but found concurrent delay and therefore set aside all liquidated damages assessed for that phase. As to the Phase III claims, the Board extended the completion date to September 29, 1979. Thus, only a partial assessment of liquidated damages for Phase III work (for the period of May 20, 1979, to September 29, 1979) was set aside. In reaching its findings, the Board applied the schedule delay analysis methodology which had been advanced by the contractor, called the “like- time” time extension methodology, but rejected the contractor’s use — as a baseline schedule — of a modified version of its original as-planned project schedule, For example, the Board noted that differing site conditions and unusually severe weather in 1978 were of such a magnitude as to prevent completion of the earthwork by the end Copyright 1996 by Barba-Arkhon Intemational Inc of summer 1978, The subsequent 97 day time extension granted by the Navy in the winter season, was viewed by the Board as tantamount to no time extension at all since this type of work could not be performed during this time period. ‘To be meaningful, the Board concluded the time extension should have been computed from June 1, 1979, when weather and soil conditions were such that work could proceed. Accordingly, the Board granted a time extension from that period to September 29, 1979. © Contractor's Claim Titan appealed the Board’s decision regarding Phase IIT delay to the United States Claims Court. Titan argued that the Board had failed to meaningfully match all the excusable delays to the time periods in which the work could be performed so that time extensions would be awarded during months when the performance of the delayed work was feasible At the Board proceedings Titan had utilized the like-time approach, Titan’s scheduling consultant presented a revised as-planned schedule that had been adjusted for seasonal considerations and which produced a critical path that was different from that set forth in the contractor's originally approved as-planned schedule. In this regard the critical path had been shifted from building ‘construction to site and roadwork operations, and the projected completion date was reduced to February 3, 1979 (10 calendar days earlier than the contract completion date of February 12, 1979), Titan further presented analyses of how owner-caused and weather-related delays adversely affected its (revised) as-planned schedule, adjusted for wet and dry season restraints, to establish that the revised as-planned schedule placed 1977, 1978 and 1979 earthwork and roadwork into the wet season. This required, Titan argued, that the earthwork and roadwork had to be rescheduled to start during the next dryseason, and that this delay had a corresponding impact on the start on the next phase of work. Additionally, Titan asserted that its schedule contemplated a seasonal shutdown between October 15 and May 31 because of weather and conditions, Titan's “like-time” analysis was based on the premise that any work which was delayed that had been originally scheduled to be complete by October 15 should be rescheduled to start the following June, Consistent with this premise of “rescheduling work that was to have been performed prior to October 15 (1977, 1978 and 1979),” Titan’s consultant calculated a revised contract completion date of February 10, 1980. © Navy's Position Response ‘The Navy did not present a CPM analysis. Instead, the Navy argued that the Board’s decision was supported by substantial evidence and that Titan had caused the delays which formed the basis of its claim. © The Court's Decision ‘The Claims Court denied Titan’s claim. Although the like-time approach was accepted by the Board in analyzing the impact to the earthwork in 1979 (and was also upheld by the Claims Court), the Claims Court rejected the contractor’s expanded like-time application. Specifically, the Court held that the calculations reflected a highly theoretical application of an as- planned CPM schedule and that the calculations istegarded as-built conditions. Thus, Titan’s like-time CPM analysis was found too theoretical The Court also noted that the contractor's lly approved CPM as-planned schedule iid not support a like-time application due to weather conditions since the schedule did not contain seasonal restraints. Although Titan and its earthwork and roadwork subcontractor reasonably assumed that substantially all of the Copyright 1996 by Barba-Arkhon International Inc earthwork had to be performed between June 1 and October 15 because of weather and soil conditions at the site, Titan’s original as-planned CPM schedule did not support the like-time application in that the schedule indicated that the subcontractor planned to perform a number of activities involving the moisture sensitive soil during the wet seasons, Thus, the sequencing of the as-planned schedule did not correspond to Titan’s theory of how the work would have been performed if like-time extensions had been granted by the Navy. With regard to the contractor's application of the “like-time” theory, the Board had previously concluded that: Plaintiff's “like-time” argument assumed that the approved as-planned CPM network delineates procedures that are fixed and contractually binding without regard to actual field operations on the project. The approved CPM network diagram is an administrative tool that is useful in organizing and directing work, reporting progress and requesting progress payments. for work accomplishments. Analyses made after project completion, however, that make adjustments to attain a new and revised projected schedule depend on theoretical contingencies. They are of limited value. Plaintiff's delay/impact claims expert did not present a comparison of either the October 17, 1977, as-planned schedule, or his as-planned schedule adjusted for wet and dry season restraints with actual activities on the project — the as-built schedule Consistent with the Board’s findings and conclusions, the Claims Court found that: ‘The Board’s conclusion to apply the 121 calendar days of excusable delay to Phase III earthwork and roadwork to the period commencing June 1, 1979 and ending September 29, 1979, on the facts of thiscase was an appropriate application of “like-time” methodology for determining the completion date. The as-planned CPM schedule as adjusted by Titan had little resemblance to the facts of plaintiff's actual earthwork and roadwork operations, Furthermore, the Claims Court found that the Board had correctly utilized the as-planned schedule originally submitted by the contractor (and approved by the Navy) with regard to evaluating excusable delay during construction, as opposed to using Titan’s consultant-prepared “revised” as-planned schedule. The Court upheld the Board's decision, and Titan's appeal for additional delay recovery was E. “Chronological Impact” Approach The chronological impact approach is a CPM technique which adjusts a “reasonable” as- planned — schedule by —_ chronologically incorporating into the schedule impacts which ‘occurred during performance of the work. Once a delay is identified, the original as-planned schedule is revised to create an adjusted schedule incorporating the time impact. This adjusted schedule is then revised to incorporate the next chronological time impact. In this manner, time impacts are incorporated into the schedule as they occur. The case study below illustrates a successful application of the chronological impact approach. Case Study No. $ Gulf Contracting, Inc., 23 CLCt. $25 (1991) © Factual Background ‘On May 19, 1975, Gulf Contracting Inc. (Gulf) ‘was awarded a 6.7 million dollar contract for the construction of seven barracks and seven related Copyright 1996 by [Barba-Arkhon International Inc 2 support buildings, including a gymnasium, at Fort, Gordon, Georgia (the project) under the administration of the U.S. Army Corps of Engineers (Corps). The project was scheduled to be performed between June 16, 1975 and November 7, 1976, Ten contract modifications extended the completion date a total of 195 calendar days to May 21, 1977. Gulf finished the project 147 days beyond the extended contract completion date, completing the gymnasium on October 15, 1977, ‘The Corps assessed liquidated damages as a result of the delayed completion. Pursuant to the contract’s requirements, Gulf submitted a CPM schedule which was approved by the Corps. Gulf’s as-planned CPM schedule showed that work on the support buildings was to take place concurrently with the construction of the barracks. The original as-planned schedule identified the critical path as running through the support buildings. In erecting the barracks, Gulf had to lay large planks of pre-cast, pre-stressed concrete, known as Quad-Ts, to form the second and third level barracks floors. To anchor the Quad-Ts, Gulf had to weld the Quad-T stems to imbeds in the exterior and intetior masonry walls. Gulf initially planned to weld the Quad-Ts to both the exterior and interior walls prior to pouring the concrete topping. However, the Corps instead directed Gulf to weld the exterior ends, pour topping in the bedroom areas, load the Quad-Ts, allow the topping to cure, and then weld the remaining interior ends — thereafter pouring topping on the corridor ends and corridor floot areas. © The Dispute Gulf litigated its delay claim before the Armed Services Board of Contract Appeals (Board) alleging that the Quad-T directive resulted in additional direct costs and caused delays toproject completion. The Board awarded $24,362 to Gulf for direct costs. However, the Board concluded that Gulf was not entitled to compensation for delay to the project, or to a refund of the assessed liquidated damages. Gulf appealed to the United States Claims Court. © Contractor's Claim Before the Board, Gulf’s delay claim was based, essentially, upon a total-time approach. Gulf compared a reconstructed as-planned barracks schedule with an as-built barracks schedule and concluded that the Quad-T directive delayed completion of the concrete deck and masonry work from May, 1976 until October, 1976. In this regard, Gulf argued that it was entitled to a contract time extension of 178 calendar days as well as 218 calendar days for delays experienced by its masonry subcontractor. Gulf’s comparison of the two schedules showed that the critical path shifted from the support buildings to the barracks from March, 1976 through the Spring of 1977. However, the schedules focused only on the impact of the Quad-T directive, and no other delays or disruptions were included in the delay analysis. Based upon Gulf’s analysis, Gulf asserted that it took 31 calendar days per floor to complete the ‘welding and topping operation. © Corps’ Response/Position ‘The Corps’ consultant utilized a chronological schedule impact approach and argued that the contractor was not due the time extension claimed. It presented the contractor's original schedule, with some minor logical corrections, and utilized it as a baseline reasonable as-planned schedule. This schedule showed the gymnasium with 64 calendar days of float and the pertinent barracks with 138 calendar days of float. ‘The Corps’ consultant then adjusted the CPM schedule by chronologically incorporating the impact of five other delays it had identified as Copyright 1996 by Barba-Arkhon International In, B affecting the critical path. These delays included: ( late start of structural steel erection; (ii) late finish of the gymnasium roofing; (iii) late start of barracks prefabricated shower units; (iv) late finish of gymnasium architectural, mechanical and electrical systems; and (v) late completion of the punchlist for the gymnasium. The original schedule dates were then revised to create an adjusted schedule incorporating the time impacts of the delays. In al, five controlling time impacts were incorporated into the adjusted schedule. ‘The Corps’ consultant summarized this chronological schedule delay analysis approach as follows: The adjusted schedules were prepared by starting with the reasonable as-planned schedule and —_—_ chronologically incorporating into the schedule the time impacts which occurred during the project. Once a time impact was identified, the original schedule dates were revised to create an adjusted schedule incorporating the time impact. The adjusted schedule was then revised fo incorporate the next chronological time impact. In this way each of the five controlling time impacts has been incorporated into the schedule as it occurred. Regarding the Quad-T directive, the consultant stated the change simply increased the floor plank, topping, and stair activity on each floor from 10 to 15 calendar days. The change added a total of 10 calendar days (two floors in each barracks) to the affected activity for each barracks. Thus, the original duration was adjusted from 10 to 15 calendar days, and given the amount of float in the schedule, there was no corresponding delay to the critical path.© The Court's Decision ‘The Claims Court affirmed the Board’s denial of Gulf’s claim. The Court held that Gulf had failed to prove that the additional time required for the change exceeded the available float in the CPM schedule, The Court further held that Gulf's schedule analysis was unreliable and biased “because it excluded all disruptions except for those allegedly caused by the Government.” Lastly, the Court found the Corps’ use of the chronological impact approach tobe straightforward and supported by factual records. Relevant quotes in this regard from the Board's decision are as follows: The Government considered the project completed on 15 October 1977, 147 calendar days beyond the extended completion date (finding 9). For this delay, the Government has assessed $29,106 in liquidated damages (finding 10). to + We have found that [the contractor's} analysis systematically excluded all delays and disruptions except those allegedly caused by the Government (finding 92). We conclude that [this] analysis was inherently biased, and could lead to but one predictable outcome. For ‘our purposes therefore, we deem [the contractor's} analysis to be totally unreliable, To be credible, a contractor's CPM analysis ought to take into account, and give appropriate credit for all of the delays which were alleged to have occurred. oo We have found that the Quad-T directive essentially required the “conerete plank, topping, stairs” activities of the barracks to be performed in two stages instead of one. Copyright 1996 by ‘Barba-Arkhon International Inc eo + ‘The Government expert expressed the view that the final stage work could simply be treated as a pre-change operation on a reduced scale. Thus, ten calendar days would be more than sufficient to do this work. He suggested that the second stage work on each floor would take an additional five calendar days. ee After weighing the opinions of the experts, we conclude that the welding change, if properly executed, would simply cause Gulf to consume the available float of each barracks. We conclude that Gulf has failed to prove that the additional time required for the welding change exceeded the “float or slack along the channels involved” so that a compensable time extension is due. to + The Government expert's _ analysis identified five causes of delay which impacted the critical path of the project. eee The Government analysis took into account all of the time extensions granted by modifications. We have found the Government analysis to be straight- forward and supported by the extensive record before us. (Findings 93-101) seo ‘The Government analysis found that the last barracks was completed on 27 May 1977 (finding 99). The gymnasium — the critical support building — was completed on 15 October 1977 (finding 100). These expert findings were supported by the contemporaneous correspondence the parties exchanged in 1977 (see findings 8 and 9).Gulf has not shown that the delay between the Government extended contract completion date of 21 May 1977 (finding 7) and 15 October 1977 (finding, 9) was excusable. We therefore hold that the Government properly assessed liquidated damages ($29,106) for this 147 calendar day period (finding 10). © Current Application ‘The Gulf case study demonstrates (among other things) not only the importance of CPM scheduling in establishing causation, but also the application of “float” in evaluating critical path impact. Furthermore, the case highlights the importance of performing “complete,” “non- biased” analyses which (i) are reflective of actual/as-built project performance; (ii) include an analysis of all delays in the work, and (iii) factor into the analysis time extensions actually granted during project performance. The above decision was affirmed by the United States Court of Appeals for the Federal Circuit. [See Gulf Contracting, Inc. v. United States, 972 F.2d 1353 (Fed Cir. 1992)] F. “Window Analysis” Approach The “window analysis” approach utilizes, inter alia, fragnets and “windows” to isolate and analyze specific impact(s) to individual segments of a project’s schedule. Fragnets are logic diagram subnetworks (which may be comprised of a single activity or numerous activities) which. focus on one or more work related activities, Windows are selected time periods which are broken out from the overall as-planned and as- built schedule in order to focus on delay impacts within specific time periods. is useful in demonstrating the ship and effect of specific events on specific work activities. “Windows” are useful terms of facilitating the analysis of given events Copyright 1996 by [Barba-Ackhon International Ine. during a particular time period. The use of a series of windows can highlight the impact to the “as-built critical path” activities over time and thereby provide a basis for identifying and segregating owner-caused, contractor-caused and/or excusable delay, as well as for evaluating overall schedule loss or gain in each window. ‘The “window analysis” approach per se has not been the subject of discussion in recent published decisions emanating from the Federal Court of Claims or ASBCA, although the principles related to utilizing “windows-based” approach have. Writings on the use of fragnets and windows also demonstrate the recognition of this approach. [See J. Wickwire, S. Hurlbut and L. Lerman, “Use of Critical Path Method Techniques in Contract Claims: Issue and Developments, 1974 to 1978”, Pub. Contract L.J. 338, 384-385 (1989); K. Nielson and P. Galloway, “Proof Development for Construction Litigation” 7 Am. J. Trial Adv, 433, 444-48 (1984),] Additionally, although not an ASBCA or Federal Court of Claims case, the case study below demonstrates the effectiveness of a “windows” approach to delay analysis. Case Study No. 6 Appeal of Kora & Williams Corporation and Insurance Company of North America Under Contract No. 0680-AA-02-0-03-KA Union Station Bus/Parking Garage and Rail Access Facilities District of Columbia Contract Appeals Board, CAB No, D-839 © Factual Background On September 28, 1983, The District of Columbia, Department of Public Works published an Invitation for Bids for the Union Station Bus/Parking Garage and Rail Access Facilities in Washington, DC (the “Project”). The Project required completion of a Bus and ParkingGarage, and construction of a Main Level Extension (MLE) between the Garage and H Street, a Lower Track Access Facility, a Southeast Garage Ramp and a Link Structure connecting the historic Union Station with the Garage and Lower Track Access Facility. The Project also required renovation of existing portions of the Garage and an elevated walkway to lower level tracks. The contract documents d for completion of the Link Structure within 550 calendar days of notice to proceed and for the overall Project within 900 calendar days. On December 15, 1983, bids were submitted. Kora & Williams Corporation (K&W) was the low bidder. On March 20, 1984, K&W received notice of acceptance of its bid and award of contract from the District for the fixed price amount of $24,845,000. Insurance Company of North America (INA) was the surety for K&W and provided performance and payment bonds as required by the contract. On May 10, 1984, the District issued a notice to proceed to K&W, effective that date, thus establishing November 11, 1985 (550 calendar days) as the completion date for the Link Structure and October 27, 1986 (900 calendar days) as the completion date for all remaining contract work, The contract required the contractor to develop a CPM schedule for the Project, and to comply with a prescribed sequence of construction and certain constraints on the contractor's performance. 0 The Dispute ‘After the award of the Union Station contract to K&W in March 1984, K&W worked on developing a construction plan for the Project as a first step toward preparation of the required Project CPM schedule. K&W's schedule analysis revealed major errors and omissions in the contract design specifications. By letter dated May 29, 1984, Copytight 1996 by Barba-Arkhon Intemational Ine. K&W explained the errors and omissions in the specifications to the District, and identified two impossibilities of performance. Specifically, the “Special Provisions” section of the contract, at SP-28 and SP-29, “Construction Sequence” and “Construction Limitation,” mandated: (1) the maintenance of pedestrian traffic to the lower track level at all times; (2) a limitation of track closing, or outages, to two tracks at any one time; and (3) construction of that portion of the project known as the “inbound Passageway” (the majority of the Lower Level Access) prior to the commencement of construction of the lower Link Structure. K&W asserted that these contractual restrictions proved to be incompatible with the 550 and 900-day completion periods. K&W notified the District that because “[t]he procurement and installation time for escalating, stairs is a minimum of one year,” using escalators to maintain traffic through the Inbound Passageway meant that the Inbound Passageway would not be complete for over a year into the contract, pushing the sequential construction of the Link far beyond the 550-day completion time. ‘The contractor's first CPM incorporated the 550- and 900-calendar-day completion dates in the contract, but was based necessarily on the construction sequencing contained in K&W’s prior letters to the District regarding scheduling problems. Specifically, the CPM schedule integrated concurrent sequencing of the Link and Inbound Passageway by relocating the temporary pedestrian walkway to north of the Inbound Passageway. K&W's first CPM submittal was disapproved by the District because of “regnant nonconformances to the specified contract requirements” — namely, construction area access restrictions. K&W was notified, “resubmittal is required and ied requirements are to beOn October 19, 1984 K&W submitted a revised CPM schedule incorporating scheduled activities sequenced around the “unalterable constraints” of a two-track outage limitation and maintenance of escalator access to the lower track level as had been dictated by the contracting officer. Adherence to these restraints pushed the completion dates well beyond the contract completion dates. ‘The District rejected K&W’s second CPM schedule submission because it did not incorporate the 550 and 900-calendar-day contract completion dates; and the two track outage limitation was not strictly obeyed. On December 13, 1984 K&W submitted its second revised CPM schedule. This CPM incorporated an 806-day completion date for the Link Structure and a 900-day completion date for both the Link and the overall contract. The 900- day contract completion time was predicted to be accomplished principally through the use of track fouling techniques and night shift work. The schedule also met the directive of sequential construction of the Inbound Passageway and then the lower level Link Structure. It was this sequence which necessarily forced the Link completion date out to 806 days. By letter dated January 23, 1985, the District approved K&W’s second revised CPM schedule “as noted,” despite its “non-conformances.” During K&W’s performance, both the District and the District's Engineer (S&P) used the approved-as-noted CPM schedule to monitor K&W’s progress. © The Dispute During performance, K&W’s work was delayed, inter alia, by delays to pile driving operations, skylight support structural steel design defects, sill support assembly design defects, structural steel defects related to a barrel-vault fascia frame (which was a substantial steel structure related to Copyright 1996 by Barba-Arkhon Intemational Ine the construction of the Link area of the Project), change orders related to redesign of the structural steel, defective design of pre-cast planks, defective owner-supplied material, defective HVAC duct design, and requested changes to ductwork in the Link Structure. The contractor also experienced numerous problems in the other areas of the Project including a shoring design defect and lack of timely access to areas in which work was to be performed. As a result of all these problems the contractor’s overall work on the Project was substantially delayed. However, the District did not award any time extensions to the contractor for any of these problems. Ultimately, as a result of the contractor's alleged ‘lure to timely perform, the District default terminated the contractor on June 19, 1987. © The Contractor's CPM Analysis: At trial, in support of its contention that K&W ‘was improperly terminated for default, the contractor presented an expert who had performed an extensive critical path schedule delay analysis. In this regard, the expert utilized a “windows-type” approach to performing a comprehensive analysis of the various problems, changes and delays alleged by the contractor. He also evaluated K&W’s performance throughout the course of its work on the Project. The objective of these analyses was to determine the extent of K&W’s entitlement, if any, to time extensions because of excusable delays in the work, and the extent to which — at the time of termination for default — the contractor was “on schedule,” “behind schedule” or “ahead of schedule” (in light of the time extensions it should have been granted by the District as of that time). ‘The contractor's CPM expert was qualified before the Board as an expert in the areas of construction management, construction scheduling, CPM scheduling analysis, design and construction engineering, and construction delayanalysis. The expert was a licensed professional engineer, a licensed attorney, and a licensed contractor. Additionally, he had extensive experience in the construction industry, managing, projects with scheduling responsibilities. His experience and projects included monitoring schedules for over 500 miles of railroad; overseeing the design and construction management of a coal transportation facilities project valued at $350 million to $380 million; serving as vice president of operations for two railroad construction firms; and past chief capital construction officer of the Long Island Railroad, heading a $2 billion capital program which included Pennsylvania Station and Jamaica Station in New York. The expert evaluated K&W’s December 1984 CPM schedule for reasonableness of its logic and reasonableness of its durations. In his opinion, the logic reflected in K&W’s approved-as-noted CPM complied with the sequencing constraints in the contract and successfully met the basic requirements of the contract. ‘The expert also testified that the durations reflected in K&W's approved CPM were reasonable. The expert concluded that K&W’s —approved-as-noted schedule contained a reasonable duration for building the Link Structure, He also evaluated the feasibility of constructing, the Link Structure in 550 days. According to the expert, the two-track outage limitation, combined with the sequencing constraint that the Inbound Passageway and a temporary connecting corridor bee built prior to beginning work on the Link east of column line Fee, rendered the 50-day duration unachievable. It was the expert’s opinion that 806 days, as reflected in K&W’s approved CPM, was a reasonable and feasible duration for the Link. The expert provided a working definition of “critical path” as the longest duration through the project, which is developed through necessarily related activities that are Copyright 1996 by Barba-Arkhon Intemational Inc. dependent upon one another to be performed before another one can be started. ‘According to the expert, the two-track outage requirement in the contract created a dependent relationship between the Link and MLE because ‘two tracks were being taken out of service in the lower level Link. Until those two tracks could be released, tracks could not be taken out of service in order to construct the MLE. The two-track outage requirement also required that K&W stage its work so that the pile driving could be done on ‘two tracks, In his opinion, a second constraint which affected the sequencing of the as-planned critical path was the requirement that the lower track access be completed, with completion of the Inbound Passageway and the passengers being relocated into the existing railroad station, prior to beginning work on the lower Link. On the same exhibit which demonstrated K&W’s approved CPM as-planned critical path, the expert plotted the as-built critical path depicting the time durations and the activities on the as- built critical path to completion of the Link and the MLE, In this regard the expert noted that the most important conclusion which should be draym from a comparison of the as-planned critical path with the as-built critical path was that the contractor had constructed the Project in the sequence it had planned. He also testified that K&W did not deviate from the as-planned sequence when constructing the Project; the only difference was that the durations were impacted by changes and delays to the Project. Two as-built schedules which depicted the expert’s analysis of the causes of delay and quantification of the impact of each delay to the critical path of the Project were developed. One schedule depicted the history of the Link and the lower track access; the other schedule depicted the history of the Main Level Extension and the remainder of the Project. The causes and responsibilities for specific delays wereoverlayed by the expert atop the two historical timelines of each phase of the Project. ‘The expert described the development of the as- built summaries as an iterative process of creating sketch drawings from a detailed day-by- day analysis of what actually occurred on the Project during every single day that K&W performed work. He examined K&W’s construction daily logs, S&P's daily inspectors’ reports, project documentation, change orders and correspondence, and all of the hundreds of thousands of documents provided by K&W and the District in discovery. The as-built schedule was accompanied with exhibit books containing an annotation or description of a key document relied upon in reaching an opinion about each particular dela Each of the documents referenced in the exhil books became part of a separate exhibit entered into evidence, The expert's critical path analysis — which illustrated the effect of delays as they had cecurred in various time windows — showed that the extent of the excusable delay to the Link Structure as of December 22, 1986, was 388 calendar days. This calculation took into account 39 days that K&W regained during the project by resequencing and acceleration of activiti Although the Link was 388 days behind, on December 22, 1986, K&W was owed a time extension at that time of 427 calendar days Additionally, as of December 22, 1986, the date of July 15, 1987 was also not a reasonable ‘completion date for the Link. The 427-calendar- day extension to which K&W was actually entitled should have resulted in a completion date approximating September 25, 1987. The expert's critical path analysis showed that the extent of the excusable delay to the Link Structure as of June 19, 1987, was 553 calendar days. His calculations took into account the 39 days that K&W regained during the project by Copyright 1996 by Barba-Arkhon International Ine resequencing and acceleration of activities. Although the Link was 553 days behind on June 19, 1987, K&W was entitled to a time extension of 392 calendar days. The expert noted that by adding the 592-calendar-day extension to the 806-day as-planned duration for construction of the Link the appropriate completion date, adjusted for delay, would be in March 1988 The expert calculated the projected completion date for the Link by merging the as-built schedule for the last six months of the Link with the work remaining to be performed on the Link as- planned schedule. The as-built portion of the analysis was a duplication of the prior Link as- built schedule for the period December 22, 1986, through June 19, 1987, except that some of the work, such as steel and concrete, showed more detail. The as-planned portion of the analysis depicted as-planned activities from June 19, 1987, through January 29, 1988. The as-planned durations for the work remaining as of June 19, 1987, were taken directly from the contractor's as-planned schedule; but the expert resequenced and accelerated the activities to comply with a District acceleration order. The purpose of creating this analysis was to show that during the last six months of the Project there was very little as-planned work completed due to unresolved design and access issues, and to show how much time it would take K&W to complete the Project at the time of termination, Based on this analysis, the expert determined that when K&W was terminated, it would have required until January 29, 1988, to complete the Link. © The Board's Decision In its decision the Board rejected the District's various positions on liability for the various causes of delay in the work and noted that the evidence had shown that K&W was wrongfully terminated on June 19, 1987, because the delays to the critical path of the Project were attributable to the acts of the District and to otherunforeseeable causes beyond K&W's control and without _K&W's negligence. [Note:The District’s witnesses and lead counsel agreed with the expert’s testimony that the only relevant delays that could impact or extend completion of the Project were those delays to activities on the actual critical path.] The Board further noted that the CPM expert’s detailed critical path analyses hhad demonstrated that the extent of the excusable delay to the Link Structure, as of June 19, 1987, was 553 calendar days. Taking into account K&W’s acceleration of activities, K&W was entitled to a time extension of 592 calendar days for completion of the Link as of the date of termination, Adding that 592 calendar-day extension to the 806-day as-planned duration for the Link the Board concluded that, as of June 19, 1987, the appropriate Link completion date, properly adjusted for excusable delays, would be March 8, 1988. In addition, the Board found that — as the CPM. expert had opined — at the date of termination, K&W would have required until January 29, 1988 to complete the Link. This determination ‘was based on a comparison of the actual status of the Link Structure at termination with the as- planned durations for the remaining work activities. Accordingly, as of June 19, 1987, K&W would have completed the Link Structure more than one month earlier than the properly adjusted Link completion date. Likewise, the CPM expert’s critical path analysis showed that the extent of excusable delay to the MLE as of June 19, 1987, was 476 calendar days. ‘Adding 476 days to the original contract duration, of 900 days, the Board found that as of June 19, 1987, an appropriate project completion date, properly adjusted for excusable delays, would have been February 15, 1988. In this regard the expert had also determined that when K&W was terminated, it could have completed the remaining work on the Project by February 15, 1988. This determination was also made by Copyright 1996 by Barba-Arkhon International In. 20 comparing the actual status of work in the MLE at the time of termination with the as-planned durations for the remaining work activities. Accordingly, as of June 19, 1987, K&W would have completed the MLE within a properly adjusted completion date for the overall Project. ‘The Board noted that there could be no serious dispute that the MLE was the critical path for completion of the overall project throughout 1987. Based on the above, the Board ruled that the District wrongfully terminated K8W on June 19, 1987, for “failure to make progress” toward the July 15 and November 1987 completion dates, which were unilaterally imposed for the Link and the overall Project, respectively. The Board found the delays to the critical activities in the Link and the MLE to be excusable, and that K&W could have finished the Project by a completion date properly adjusted for the excusable delays. As a result, under the TERMINATION-DELAYS Clause, K&W’s default termination was converted into a termination for convenience. © Current Application ‘The above case study discusses the utilization of a “windows-type” schedule delay analysis approach which can be extremely effective when properly applied. This case highlights the importance of performing a complete schedule delay analysis which is based, among other things, on establishing a “reasonable” as-planned schedule, developing a proper as-built schedule, establishing the as-built critical path of, performance for the Project, evaluating the various causes of delay against the as-built path of performance, properly documenting the analytical effort and presenting the analyses in a clear, understandable manner. criticalG. Miscellaneous “No-Name” Approaches In each of the three following case studies (Coffey, Weaver-Bailey and Youngdale) the triers of fact were presented with a different type of after-the-fact schedule delay analysis approach by one of the parties involved in the dispute. Each of these approaches are, in a sense, variations (or hybrids) of the various methods previously discussed in this paper. As you will note in reviewing these case studies, in the first case (Coffey) the contractor's schedule delay analysis was rejected by the Board; in the second case (Weaver-Bailey) the Government's delay analysis was rejected by the Court; and in the third case (Woungdale) the Court found the appellant's delay analysis to be neither reliable nor credible. Case Study No. 7 Coffey Construction Company, Inc. VABCA No. 3361 (1993) © Factual Background On September 29, 1988 Coffey Construction Company, Inc. (Coffey), a small business, was awarded a 7.9 million dollar contract by the Department of Veterans Affairs (VA) for the construction of the first phase of a hospital in Pittsburgh, Pennsylvania. ‘The contract required completion within 365 calendar days of receipt of the notice to proceed, which was issued October 31, 1988. The contract provided for assessment of liquidated damages. Substantial completion occurred on June 29, 1990, 241 days after the scheduled October 31, 1989 completion date, The VA never granted a single day of contract extension and withheld liquidated damages in the total amount of $282,452, based on an applicable rate of $1,172 per day for 241 days. Pursuant to the contract, the contractor developed a network analysis system using a conventional critical path method (CPM) technique. Coffey hired a critical path method consultant to prepare Copyright 1996 by ‘Barba-Arkhon International Inc. 2 a complete project diagram submittal or Day 1 Schedule in accordance with contract requirements. Coffey had exceeded all contract phasing constraints since the beginning of the contract due to a number of alleged problems encountered in demolition and construction. Thus, the schedule was not reflective of the actual prosecution and progress of the project. The schedule was used only for payment purposes and not for monitoring or coordinating the project. 0 The Dispute By letter dated April 23, 1990, the contractor wrote the Contracting Officer requesting an extension of 177 calendar days, based on a March. 1990 CPM analysis it had had prepared. That analysis concluded that such extension was warranted due to delays in asphalt paving. The contractor amended or otherwise added additional claims against the VA, which ultimately attributed 228 of the 241 days of delay to the project to VA suspensions. The contractor sought a 228-day time extension and compensation for delays in the amount of $1,656,857 and the release of $282,452 withheld by the VA as liquidated damages, plus interest. In April of 1991, the Contracting Officer issued a final decision denying Coffey’s claim. The Contracting Officer concluded that the conditions cited by Coffey, specifically a change in the thickness of the asphalt on the Phase II drive-in, and problems associated with the demolition of Building 2, were not the causes that delayed the project. This conclusion was based on the Contracting Officer's determination that the critical path of the project did not run through the items claimed by Coffey, but ran solely through the construction of Building 52, the boiler plant, and ended with the installation and testing of the boilers. Coffey appealed the Contracting Officer’s final decision to the VABCA.© Contractor's Claim Appellant argued before the VA Board, that the Government delayed contract completion by refusing to accept the gravel service drive, delaying the demolition of Building 2, and failing to have another contractor perform in a timely fashion. ‘The contractor asserted that these Government-caused delays forced the contractor into a second season when asphalt could not be placed, as well as into unserviceable weather, and aan equipment operators” strike. As part of its claim presentation at the hearing, Coffey’s CPM expert presented computer data (and charts derived therefrom) by which he sought to establish the number of days of delay attributable to specific Government actions. Essentially, the various computer runs consisted of the original Day 1 Schedule taken at various “data dates” and incorporating different combinations of activities, such as the asphalt delay, Building 2 demolition delay, delays related to various RFI’s, and so forth, © Government Response/Position The VA offered no persuasive analysis to support its position that the critical path flowed solely through Building 52, the boiler plant, and no other construction — although this was in fact the position taken by VA in opposition to Coffey’s claims. The Government opposed Coffey’s delay claims and asked that the VA Board uphold the assessment of liquidated damages, with the exception of one day’s liquidated damages in the amount of $1,172 and the payment of $2,477 as damages for delay. 0 The Board's Decision ‘The VA Board of Contract Appeals concluded that both parties had essentially proven their respective cases regarding delay causation. ‘That is, the Government was responsible for delays to the final paving and electrical service portions of the project; and the contractor was responsible for Copyright 1996 by [Barba-Arkhon International Ine 2 the delay and completion of the boiler plant. Notwithstanding, the Board found that both parties had failed with regard to their attempts to establish that one or the other delays was solely on the critical path, and therefore was the sole cause of delay to the contract. While each of these components may have been delayed individually by one party or the other, the Board stated the fact is that, in the broader view, delays of the project as a whole, were inextricably intertwined and were caused jointly and concurrently by both parties. Given the intertwining causes of delay to the project, the VA Board left the parties where it had found them. Accordingly, the contractor was not entitled to compensation for delay damages; however, the Government was not entitled to withhold liquidated damages. Relevant quotes from the Board's decision are as follows: oo % A key component of establishing that the Government is the sole proximate cause of the delay is for the Contractor to show the absence of concurrent delay which would have equally delayed the contract, Merritt-Chapman & Scott Corp. v. United States, 528 F.2d 1392, 1397 (CLCL —1976)...[MJajor obstacles confronting Appellant’s claim are the existence of various concurrent delays which contributed to its later than planned completion date. eo 4% ‘The general rule is that, where both parties contribute to the delay, neither can recover damages, unless there is in the proof a clear apportionment of the delay and expense attributable to each party. Courts will deny recovery where the delays are concurrent and the contractor has not established its delayapart from that attributable to the government +o As part of its claim presentation at the hearing, Coffey’s CPM analyst presented a significant amount of computer data and charts derived therefrom by which he sought to determine the number of days of delay attributable to specific Government actions. Essentially, the various computer runs consisted of the original Day I Schedule, or a rephased or revised Day 1 schedule, taken at various “data dates” and incorporating different combinations of activities, such as the asphalt delay, Building 2 demolition delay, delays related to various RFI’s, and so forth. The runs were not complete as they included some but not all events affecting the overall project and actual progress to date. Nor did the runs prepared for Coffey’s claim represent actual on-the-job updates, month by month, reflecting progress to date. None of the runs presented by Appellant represented an “as-built” schedule. Coffey’s expert indicated that he had not put together an as-built CPM or chart because in his opinion it was “an impossibility. There is not enough wall space in the room to put it up....t would take pages and pages of documentation, if your taking everything that is considered into a job... have yet to see anybody do it” oo Our task would be easier if we were aided by the existence of reliable CPM analyses that evolved during the course of the project. However, this was not done in the instant case. The Appellant's CPM consultant did provide, as part of the claim presentation, CPM analyses which sought to demonstrate the effects Copyright 1996 by [Barba-Arkhoa International Inc. 2 of specific delays on the project. However, we are not confident in such a piecemeal, after-the-fact approach. We have considerable doubts regarding the completeness and nature of the underlying assumptions, and the relationships considered in setting up the ‘computer runs. In this case, we have little faith in any schedule beyond that which the Contractor originally submitted and the VA approved, the original Day 1 Schedule. ++ + The CPM must reflect actual performance to be a reliable basis for evaluating time extensions, $$ If the CPM is to be used to evaluate delay on the project, it must be kept current and must reflect delays as they occur. Case Study No. 8 Weaver-Bailey Contractors, Inc. 19 CLCT. 474 (1990) © Factual Background Weaver-Bailey Contractors, Inc. (Weaver-Bailey) was awarded a contract by the United States ‘Army Corps of Engineers (the Corps) on July 5, 1984, for a firm fixed price of $1,434,024. The contract required Weaver-Bailey to build beaches, breakwaters, parking areas, boat ramps, and other items relating to the improvement of the recreation areas surrounding Arcadia Lake in Edmond, Oklahoma, Most of the work required was earthwork, specifically, cutting slopes in some areas and filling in other areas, followed by grading and finishing. Areas which did not immediately border on the lake were to be created by placing material known as rip-rap (loose rock of a specified size) on the finished slopes bordering the lake.Work began on the project on August 8, 1984, and progressed smoothly through the late summer, early fall. However, by early October, 1984, it became evident that the Corps had substantially underestimated the amount of unclassified excavation. In actuality, the excavation was nearly 41% more than had been estimated. A modification was issued and the contractor was paid approximately $180,000.00 for the additional excavation. This extra excavation carried the project into the winter ‘months. Once winter weather had set in, it was too late to do final grading and finishing the slopes, because of the changes in the soil density and moisture. The winter also delayed placement of the rip-rap, as placement on frozen ground would provide an unsatisfactory result. Although Weaver-Bailey kept its people and equipment on the job throughout the winter, it was unable to accomplish much due to the severity of the winter weather. The Government refused to allow Weaver-Bailey to demobilize and return to the job site in the spring. The original contract had called for completion by February 13, 1985, but the Government had extended the time for performance by 68 days pursuant to terms in the contract. 0 The Dispute As a result of delays encountered in completing the contract, Weaver-Bailey sought an equitable adjustment from the Corps. This case was a direct access appeal from the Contracting Officer's denial of the contractor's request for an equitable adjustment. The central issue presented was whether the delay in completing the contract was caused in whole, or in part, by Weaver-Bailey, thus precluding recovery, or whether the Government was the sole cause of delay, in which case Weaver-Bailey was entitled to compensation. Copyright 1996 by TBarba-Arkthon International Inc © Contractor's Claim Weaver-Bailey stated at the trial that it fully expected to complete the contract ahead of schedule and before the onset of winter weather, and that it would have done so, but for the Government's underestimate of unclassified excavation. Weaver-Bailey claimed that the additional excavation work was unforeseeable and forced it into working through the winter, which in tum created delays in contract performance for which Weaver-Bailey was entitled to an equitable adjustment. Specifically, the contractor claimed entitlement to an equitable adjustment under subsection (a)(1) of the Differing Site Conditions clause. Weaver- Bailey’s position was that the $180,000 fication for excavating the extra amount of soil in no way took into account the cost effect of the delays resulting from the extra earthwork. ‘The contractor argued that these delays were the result of unforeseeable causes which were beyond the control and without the fault or negligence of the contractor. © Government's Response/Position The Government argued that this was not a delay case. The argument presented was that (1) Weaver-Bailey had projected that it would use the entire time allowed under the contract, i.e., until February 13, 1985, to complete performance; (2) the time for performance was extended due to inclement weather; and (3) that Weaver-Bailey completed the required work within the extended time period. Therefore, from the Government's standpoint, the contract was completed on time. At trial, the Government presented the contractor's proposed construction progress charts, submitted at the inception of the contract, in which the contractor had projected it would use the entire time allotted. The Government also presented the testimony of a claims analyst with the United States Army Corps of Engineers. Thisanalyst, who testified as an expert, had no experience in earthwork, nor was he an engineer. In any event, the analyst testified, giving his view of the validity of Weaver-Bailey’s claim, based solely on documents obtained from the Corps and from Weaver-Bailey, and his training in claims analysis, In this regard, several worksheets which were prepared by the analyst were introduced into evidence. These worksheets purported to. show the start and finish dates of various tasks on the project. The analyst used a computer to perform two critical path analyses of the Weaver-Bailey contract. One was called a “planned schedule,” the other, “actual durations/sequences.” ‘The “planned schedule” critical path ran through all of the unclassified excavation and most of the rip- rap placement, and contained fourteen activities. By contrast, the “actual durations/sequences” critical path ran through only four activities, and most of the activities identified as critical in the “planned schedule” contained float time in the “actual durations/sequences” chart The expert’s ultimate conclusion was that since most of the activities involving unclassified excavation were not on (what the expert determined to be) the critical path, the 41% increase in unclassified excavation did not delay the contractor’s completion of the project. Since ‘there was no delay, it was the Corps’ position that there was no basis for Weaver-Bailey’s request for equitable adjustment. 0 The Court's Decision ‘The United States Claims Court determined that Weaver-Bailey had met its burden and approved an equitable adjustment in the amount of $469,041.00 with interest under the contract’s, dispute’s clause. The Court held that the contractor was entitled to changes costs of $8,731, standby equipment charges of Copyright 1996 by Barba-Arkhon International Inc. $199,450.00, extended field office overhead of $151,110, extended home office overhead of $65,412.00, profit of $42,470 and bond costs of $1,868.00. The Court’s decision was based in part upon Weaver-Bailey’s persuasive presentation of the facts, and the Government's failure to adequately address Weaver-Bailey’s analysis, the failure on the part of the Corps to persuade the Court to accept its critical path method schedule analysis. On this final point, the Court was quite adamant that the Government's expert had reflected a misunderstanding of the concept of float time in CPM analysis, if not CPM analysis, in general. In this regard the Court stated that the Corps’ expert had produced documents which were of dubious value, considering that they were prepared by someone with no personal knowledge of the project and were summaries of lence. documents which were not in ‘The Court noted that it had serious doubts as to the validity of the data utilized by the analyst to create his “actual durations/sequences” schedule, Further the Court noted that the analyst's assumptions were based upon re-hashings and interpretations of a collection of documents not even in evidence, and that the plaintiff had demonstrated persuasively that at least some of [the analyst's} data were either unverified or simply wrong, As a result, the Court did not feel it could rely on the defendant’s analysis as accurately reflecting the time and cost effect of the increase in unclassified excavation. Relevant quotes in this regard from the Court’s decision are as follows: ++ % While the Court appreciates the value of computers and making complex tasks simpler, it must be remembered that a computer generated analysis is no better than the data which is entered into the computer. eeeTo reiterate, a critical path activity is one which, if allowed to grow in duration at all, will cause the overall time required to complete the project to increase. By ‘contrast, an activity, with float time, may grow in duration up to a certain point without an adverse impact on the time required to complete the project. oo % Float time is never regardless of whether an act critical path of a project, required to complete the activity is greater than the time remaining to complete the project, then project ‘completion will be delayed. unlimited... Case Study 9 Youngdale & Sons Construction Company, Inc. 27 Fed. CL. 516 © Factual Background On February 24, 1983, Youngdale & Sons Construction Company, Inc. (Youngdale) was awarded a 2.7 million dollar contract for the construction of apartments at Vandenburg Air Force Base, California. The contract req Youngdale complete the project wi calendar days. However, this date was later extended by the Government to 456 calendar days, Immediately upon beginning performance on the contract, Youngdale encountered unexpected amounts of ground water throughout the construction site, and advised the Government of the condition at the preconstruction conference. ‘The Government took the position that the water should have reasonably been anticipated by the contractor. Subsequently, in August 1983, ‘Youngdale encountered what it considered to be a second differing site condition. In this case, the site condition was the discovery of hard rock ground formations, in areas where the Copyright 1996 by Barba-Arkhon International Inc. 6 Government contract documents had referenced soil conditions. The Government again denied that this was a differing site condition, ‘Thereafter, the parties continued to disagree over the impact of the ground water and subterranean rock formations on construction. The Government accepted the project as substantially complete on December 19, 1984, and forwarded a punchlist to Youngdale on January 2, 1985. Youngdale left the jobsite on January 19, 1985. Youngdale was paid the contract price on June 17, 1988, less $46,750 in liquidated damages for 187 days of alleged contractor delay. 0 The Dispute Youngdale filed an action with the Court of Federal Claims on September 19, 1988, pursuant to the Contracts Disputes Act of 1978. It sought to recover damages of $875,205.00 based on a claim of differing site conditions, as well as a claim for the release and payment of the liquidated damages withheld by the Government. © Contractor's Claims Youngdale submitted seven separate claims, claiming differing site conditions, and requesting the retum of withheld liquidated damages. In total, Youngdale attributed 290 days of delay to the excess water and rock formation differing site conditions. In the view of Youngdale and the ‘experts which it produced at the hearing, the full 290 days of construction delay was directly attributable to the Government. ‘Youngdale argued that because its entire schedule had been off from the beginning, the work which had been scheduled to be completed before the 1983/1984 winter was not fully complete. Thus, when the rainy season came upon the area sometime in November, it was often impossible to move around the project with the heavy ‘equipment required to perform the earthwork operations, particularly in those areas where there‘were water pockets and overly muddy conditions. ‘Youngdale’s witnesses alleged that these muddy conditions continued through the end of the project. Youngdale notified the Government in writing whenever such conditions were encountered. Youngdale’s employees testified, and the record substantiated, that Youngdale sent approximately 26 such letters over the period of construction, and that the Government had failed to acknowledge the excess water condition for over seven months. It was this failure to provide timely aid to Youngdale which the plaintiff alleged was the underlying reason for much of the 290 days of construction delay, Youngdale’s CPM expert testified that he developed three work product schedules for the plaintiff. The first was the As-Planned Schedule, then the As-Built Schedule, and finally, the As- Built No Delays Schedule. All three schedules disclose a report date of October 10, 1991, with 8 runs for the As-Planned, 153 runs for the As- Built, and 61 runs for the As-Built No Delays ‘The expert's report states that the as-built schedule was prepared from the daily reports, project correspondence, interviews with persons responsible for managing the contract, as well as other sources. Although the daily reports were (according to the expert) excellent through May 1984, they became less so after that date. The expert also noted that the correspondence initiated after that date was also less useful, as the contractor made a decision about that time to complete the job as expeditiously as. possible, without regard to the conditions or the amount of cost. Thus, after June, activities from the approved as-planned schedule were used instead of actual activities. Activities prior to June 19, 1984 were actual and those following were as- planned. Youngdale indicated to the Court that it was entitled to 206 Government-caused delay days Copyright 1996 by [Barba-Ackkhon International In. 2 from the beginning of the project until June 19, 1984; and that it was entitled to an additional 84 Government-caused delay days after June 19, 1984, until the completion of the project. © Government's Response/Position ‘The Government declined to put on its case-in- chief during the trial on the merits. Instead, the Government chose to simply attack the plaintiff on its alleged failure to meet its burden of proof. Although the Government admitted on July 25, 1990 that Youngdale was entitled to an equitable adjustment with respect to the “excess water” condition, it contended that with regard to damages Youngdale had failed to establish that (@ it actually incurred the costs alleged, (ii) its added costs were solely due to Government delay, and (iii) its bid was realistic. The Government contended that Youngdale was not entitled to utilize the total-cost method in proving damages; but rather, it was only entitled on the record established to utilize the direct or specific cost method. Finally, the Government contended that was entitled to retain the 187 days worth of liquidated damages because the delay was essentially caused by Youngdale not the Government. © The Court's Decision The Court found that Youngdale was entitled to recover certain additional costs, plus interest, stemming from the excess water differing site condition only. With regard to Youngdale’s cl of an alleged rock differing site condition, the Court found that Youngdale had failed to prove the requisite quantum that said condition constituted a differing site condition. Moreover, the Court found that any damages from the excess water differing site condition must be calculated pursuant to the direct cost method, and not the total cost method, inasmuch as Youngdale failed to establish the necessary elements required under that method of calculating damages. Finally, since Youngdale was awardeddamages with respect to the excess water differing site condition, the Court held that the Government was not entitled to liquidated damages. In reaching its decision in this case, the Court paid special attention to Youngdale’s critical path method (CPM) schedule and the testimony of its CPM expert. Citing the Court of Claims in Haney v. United States, 230 Ct.Cl. 148, 167-68, 676 F.2d 584 (1982), the Court described CPM in the following manner: Essentially, the critical path method is an efficient way of organizing and scheduling a complex project which consists of numerous _ interrelated separate small projects. Each subproject is identified and classified as to the duration and precedence of the work. (Eg., one could not carpet an area until the flooring is down and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.) The data is then analyzed, usually by computer, to determine the most efficient schedule for the entire project. Many subprojects may be performed at any time within a given period without any effect on the completion of the entire project. However, some items of work are given no leeway and must be performed on schedule; otherwise, the entire project will be delayed. These latter items of work are on the “critical path.” A delay, or acceleration, of work along the critical path will affect the entire project. The Court noted further, in Shupe the Claims Court held that: In order to calculate delay damages, it necessary to determine which work items on the... project were in the critical path and the time period that these work items remained on the critical path. The reason that the determination of the critical path Copyright 1996 by ‘Barba-Arkhon International In. 28 is crucial to the calculation of delay damages is that only construction work ‘on the critical path has an impact upon the time in which the project was completed. Delay involving work not on the critical path generally has no impact ‘on the eventual completion of the proje Based on the above, the Court stated that the proof must show that a delay item or activity was con the critical path in order for that particular delay to impact the completion of the project. This being true, the plaintiff must, by a preponderance of the evidence: (1) quantify the number of delay days attributable to the defendant, and (2) provide proof that said delay days were in fact on the critical path, With respect to the latter period, the Court ‘concluded that said contention was not supported by credible evidence, let alone by a preponderance of the evidence. Therefore, the Board denied that aspect of the plaintiff's claimed delay days because admittedly they were not determined from “As-Built” activities. Tha to say, that according to Youngdale’s expert's testimony, that portion of the As-Built Schedule delineating the delays which occurred after June 19, 1984, was based upon the As-Planned Schedule, which was a mere projection of what might occur with respect to construction of the project and not historical fact. In reviewing the expert's three detailed CPM schedules, against this background, the Court observed that there were numerous nebulous discrepancies, which were irreconcilable to the testimony adduced at trial. The Court delineated those errors which it deemed to be undeniable obstacles to crediting the plaintiff's expert's opinion report with respect to the alleged 206 delay days. First, and according to the expert's testimony, the “As-Built with Delay” Schedule depicted the project as it would have occurred for” the Government-caused delays. However, following extensive cross-examinationby the defendant, the expert essentially admitted that the As-Built No Delay Schedule contained ‘numerous errors and was questionable as a tool to prove plaintiff's entitlement In this connection the expert testified: 1 did not put a lot of care into this As- Built [No Delays] — it was done swiftly, very quickly. I don’t put a lot of store into compressed As But For schedules. They are simply one more way of testing the results of the information that we found by the very careful analysis in the As-Built, Once I got the first pass through and showed that it was in the ballpark, I didn’t evaluate it, I didn’t look at it. I just took a very rough approach to it T just threw out all things that were delays [and said]..‘computer take out all the delays.” The result is that we have errors. I apologize. Since I submitted this, to the Court, I should have double checked for these errors. Based upon the above disparaging testimony of Youngdale’s expert witness, the Court found that the As-Built No Delay Schedule was neither liable nor credible with respect to the plaintif?’s delay claim. Consequently, the only ostensibly credible schedule which remained as to plaintiff's claimed delay days attributable tothe Government was the As-Built Schedule. In this regard, based upon the plaintiff's contentions, the Court should have been able to review the As- Built Schedule and the expert’s testimony, and determine therefrom the number of delay days solely, and not concurrently attributable to Government-caused activities that were deemed to be on the critical path. Unfortunately, however, for Youngdale, the Court determined that on the record available, this was not true. ‘According to the evidence in the record, and the testimony of the expert, the As-Built Schedule purported to depict the various activities which took place throughout the project in the manner Copyright 1996 by Barba-Askhon Intemational Inc. 29 in which they actually occurred. Presumably, such information came from the daily logs, as well as other evidence in the record, including discussions with various employees. However, the Court found, on the record, that many of the plaintiff's major premises were not true because, when the Court attempted to cross-check a particular alleged task or delay as to its time frame with the daily logs, said items were not depicted as referenced in the schedule. As a result, the Court had no way of determining exactly what particular activities made up a task as it was labeled by the plaintiff's expert. Nor ‘was there any probative evidence in the record as to how the expert specifically determined the duration of each particular task and the related delays, nor was there any testimony explicating such facts. As a result of the failure of the plaintiff to point to any probative corroborating evidence in the record specifically explicating activities on the critical path, and how the duration of each was established, the Court was completely unable to verify any of the expert's assertions as to the alleged number of delay days solely attributable to the Government, or whether said alleged delays related to the defendant's actions or the plaintiff's actions. Furthermore, the expert was unable to clarify for the Court how the errors in his report affected the overall accuracy of the As-Built report. Based upon the record as a whole, the Court concluded that the plaintiff's expert's report was not sufficiently credible to carry its burden by the requisite quantum of proof in light of (i) the manner in which the various aspects of the report were prepared, (ii) the inability of the Court to determine the precise effect the errors in plaintiff's report had on the overall delay claim of 206 days, and (ii) the lack of probative evidence as to what delays were specifically attributable to Youngdale and the Government, given that ‘Youngdale’s but-for schedule was discredited by ‘Youngdale’s own expert witness‘Notwithstanding the foregoing grave deficiencies, the Court did find that Youngdale in fact suffered 4 significant number of delay days stemming from the excess water differing site condition. Whether or not there were 206 days of delay specifically attributable to the Government is indeterminable, as explained above. Nonetheless, the Court deemed it appropriate, in light of record as a whole, that Youngdale was clearly entitled to some substantive recovery given the Government's judicial admission as to liability to the costs, and the delay days implicitly attributable to said admitted additional costs. Consequently, to the extent that the plaintiff had Proven any portion of its additional costs, the Court allowed said admitted costs and all related delay days sub silento attributable to said conceded additional costs. Relevant quotes from the Board’s decision are as, follows: oo It is incumbent upon plaintiff to show the nature and extent of the various delays for which damages are claimed and to connect them to some act of commission or omission on defendant's part. eo % The general rule is that where both parties contribute to the delay neither can recover damages, unless there is in the proof a clear apportionment of the delay and expense attributable to each party. +e o It is well established that the government is relieved of liability irrespective of its faulty specifications, where the actual delays were occasioned by factors outside the Government's control. In its decision on this case, the Court deemed its analysis of Youngdale’s CPM schedule analysis to be of sufficient importance to include Copyright 1996 by ‘Barba-Arkhon International Ine. 30 additional detailed comments on discrepancies discovered in the course of its review of said analysis. These comments are sufficiently detailed so as to constitute a “tutorial” on problems which may be encountered when presenting CPM testimony before Courts or Boards. As a convenience to the readers of this paper, the Court’s “comments” in this regard have been set forth under Appendix A to this Paper.— IV. Schedule Float Since the development of the critical path method of scheduling in the late 1950’s, an issue which has spawned significant debate, as well as created significant confusion among those who utilize critical path method scheduling techniques, is “who owns the float?” A review of early decisions emanating out of Courts and Federal Agency Boards of Contract Appeal(s) reveals that (carly on) these entities viewed the contractor as owning the float. However, as the use of CPM ‘has matured in both the industry, as well as in terms of its acceptance by Courts and Boards as the standard methodology with respect to evaluating delay claims, these entities have increasingly focused on the causes of delay(s) and the effect of said delay(s) on the project end date, rather than on the issue of float ownership per se ‘Another factor which has impacted significantly upon the question of float ownership has been the inclusion in contracts by owners of “float- sharing” clauses which provide that float is not for the exclusive use or benefit of either party and that extensions of time will only be granted to the extent that equitable time adjustments for affected activities exceed the total float along the activity path affected by changes or delays in the work, Such clauses have resulted in the view that “the project owns the float” and that the benefit of float is derived by the party who first consumes it, Notwithstanding the fact that contractors (still) most often-times maintain that they own the float, a reading of decisions interpreting these float-sharing clauses reveals that they have been applied consistent with their plain meaning. As a result, owners have been placed in the position of being able to use float (for purposes of “absorbing” changes or owner- caused delays in the work) without having to “compensate” contractors (in terms of either time Copyright 1996 by [Barba-Arkhon International Inc 31 ‘or money) for the owner’s use of float, From the contractor’s perspective, however, the owner’s right to use float impinges directly upon the contractor’s ability to level its resources and use float (without “interference” from the owner) for purposes of “absorbing” the contractor’s own problems. The owner's early use of “project” float may also directly impact (without compensation) the contractor's schedule if an as-planned non- critical activity contains float which is used by the owner and then this same activity is delayed by the contractor and subsequently becomes critical. A. Float: Where Does It Come From and What Is It? 0 Establishing the Critical Path In order to understand float ownership, it is necessary to have a general understanding of CPM theory. In 1957, the U.S. Engineering Department of E. DuPont de Nemours, Inc., along with Remington Rand, undertook a study which culminated in the establishment of a new system for developing and coordinating information relative to planning and scheduling of an engineering project. Their goal was to attempt to optimize time and money. The net result of that study was the development of the technique which has become known as the critical path method (CPM). By way of definition, CPM can basically be described as a graphic presentation of a planned sequence of activities which illustrates the interrelationships and interdependencies of the various elements which comprise a project. ‘The Corps of Engineers Board of Contract Appeals, in the case of Continental Consolidated Corporation, ENG BCA 2743, 2766, 67-2 BCA 16624; 68-1 BCA 7003, provided a more detailed definition as follows:The CPM scheduling technique is one which requires a breakdown of the entire work into individual tasks and an analysis of the number of days required to perform each task. The analysis is then programmed into a computer which produces a chart showing the tasks and a line which controls the completion of the overall work. The line through the nodes, the junction points for completion of essential tasks, is known as the critical path. In addition there are numerous side paths for subordinate tasks which normally can be performed without affecting the critical paths. However, these subordinate tasks if improperly scheduled or unduly delayed in performance, can on occasions become critical and thus change the critical path for the entire work The ctitical path method of scheduling requires the logical analysis of all the individual tasks entering into. the complete job and the periodic review and re-analysis of progress during the performance period. It is essential that any changes in the work and the time extensions due to the contractor be incorporated into the progress analysis concurrently with the performance of the changes or immediately after the delay and thus integrated into the periodic ‘computer runs to reflect the effect of the critical path. Otherwise, the critical path chart produced by the computer will not reflect the current status of work performed or the actual progress being, attained. The development of a project schedule using the critical path method includes two phases (or steps) — the planning phase and the scheduling phase. The planning phase involves breaking a project down into its component parts and developing a listing of all activities anticipated to be performed Copyright 1996 by Barba-Arkhon International nc. 2 and arranging those activities in their logical sequence with respect to execution. This step is best accomplished by having the scheduler meet with the project team personnel in order to review the project contract documents and procedures to be utilized by the parties to the contract in administering the construction. Based upon this review, (and discussion with project personnel) the project can be broken down into discrete work areas, or sub-project categories. These categories or tasks can similarly be broken down into sub- tasks to provide a greater level of detail, and activity listing can then be accomplished. ‘The activities so identified are then used to construct the logic diagram or “arrow diagram.” [Note: CPM schedules can be prepared utilizing either the “arrow” (activity on arrow) or “precedence” (activity on node) method of, scheduling. For purposes of this discussion, reference will be made to utilizing the arrow diagramming method] When one constructs a bar chart schedule, the funetions of planning and scheduling have to be considered together because of the time-scale characteristics of the chart. In developing a CPM logic diagram, however, these functions are treated separately. It is said “first plan and then schedule,” which represents a radical departure from bar chart schedule preparation thinking. In effect, we first consider the work as a series of items assembled strictly on the basis of logic of assembly. No consideration need be given to time when planning. A wall, for example, cannot be built until the foundation is installed. Time has nothing to do with the sequence. You cannot plastet masonry walls until the masonry walls are erected. Here again, time has nothing to do with the logical sequence of the work. This point is emphasized because it is one of the single most important aspects of CPM schedule planning and development.Once activity listing is complete, the logic diagram is constructed. There are three basic considerations which must be employed in order to assemble a logic (or network) diagram. CPM planning is an interrogation-type technique ‘wherein one is asked the following questions with respect to each of the activities set forth on the activity listing: i. What other activity(s) must be completed before this activity can start? ii, What other activity(s) can be going on while this activity is underway? What activity(s) cannot start until after this activity is completed or at least underway? As a result of answering these questions, the logic diagram, which illustrates the interrelationships diagram and thereafter computing the event times for each of the activities in the network. The assignment of durations of time for the various activities is obviously a key element of schedule development and must be carefully undertaken by a contractor. Activity durations are a function of numerous factors including, among thers, the quantity of work to be performed relative to a given activity, the size and make-up of the crew(s) to be utilized by the contractor in performing the work, the productivity anticipated to be realized by the contractor in performing its work, the time of year and geographic location of the work in question, ete. Once the schedule logic and activity durations are established, the critical path may then be determined. In this regard, the basic computations in CPM to determine a time schedule consist of and interdependencies between the activities iple addition and subtraction. These required to complete the project, is established. ‘computations are known as the forward pass and (Refer to Figure 1 below.) backward pass. These two computations establish the time Figure 1 boundaries for each activity Maayan within the network (these “time ef boundaries” are referred to as an activity’s early start, early finish, late start and late finish). Only after these time boundaries are set ‘ “ can a schedule be established. 0 The Forward Pass Starting at “time zero” a forward pass through the network is made wherein an activity’s duration is added to its starting time to The development of the logic diagram marks the completion of the planning phase. The next phase, the scheduling phase, involves determining a time duration for each of the activities (except dummies) set forth in the logic Copyright 1996 by 33 Barba-Arkhon International Ine determine its completion. This process is continued sequentially through the entire network. When this pass is completed all carly start and early finish times are established. When there are multiple predecessors, the predecessor with the largest finish time is the one selected to establish the starting time of theFigure 2 © The Backward Pass ‘The backward pass reverses the above process, starting from the final event of the network using the calculated total project duration as the starting point. This calculation is made to determine the late start and late completion time for each activity. Starting at the last activity in the network, the late finish time of the final activity is set equal to its early finish time, The final activity’s duration is then follower. Only numbers are used at this point and the numerical assignment of days is referred to as “project time.” Since zero is assumed to be the beginning of the first day, the tail of the first arrow in the network is at zero. The duration of the first activity is then added to its early start of zero to produce its early finish. If only one activity follows the initial activity, then the early start of the second activity is equal to the early finish of the first activity. Note in the above diagram that activity durations are shown as bold numbers under the activity arrow; early event start times are enclosed in a box above the event circle; and early finish times for each activity are shown as small subtracted from its late finish time to determine its late start time. In the network below, note that the three activities immediately preceding the final activity will all now have a late finish time equal to the late start of the final activity. Again, for each of these three activities, their activity duration is subtracted from their late finish time to determine their late start time, This same process is repeated from the back end of the network to the front (or beginning) of the network. The late start time is shown in a circle immediately adjacent to the early start time box. Note that there is a check on the arithmetic since unenclosed numbers generally at the “head” Figure 3 of the activity arrow. This process of adding the activity duration to its early start time (to compute its early finish time) and the comparison of this time (at merge events) to determine the early start time of the follower, is repeated through the balance of the network. The result of the calculation is the early start and completion time for all activities within the network, as well as the establishment of the total project duration. Copyright 1996 by Barba-Askhhon Intemational Ine‘on the backward pass the latest starting time for the initial activity must be equal to its early starting time of “0.” By making a forward pass and a backward pass through the network, early start and late start times, early finish and late finish times, and the critical path are established. Each can be defined as follows: Early Start Time — the highest lapsed time cumulative count of all the pass of activities converging at an event on a forward pass Early Finish Time — the early start time plus the duration of that activity Late Finish Time — the lowest lapsed time cumulative count of all the pass of activities converging at an event on a backward pass Late Start Time —the late finish less the duration of that activity Critical Path — a group of necessarily related schedule activities, which together create the longest duration through the schedule to project completion (necessarily related by construction logic or resource allocation). © Critical Path In the above sample network, there is a continuous path of activities and events wherein the early start time is equal to the late start time. This is one further check on your arithmetic. ‘There must be at least one path through the network where the early start time equals the late start time. This is the so called “Critical Path” (as indicated by the striped line). It is the longest path through the network and it is the path which determines the project duration. All. activities which are not on the critical path are said to have “float.” Copyright 1996 by 35 Barba-Arkhon Intemational In. B. Types of Float By completing the forward and backward passes, event times are established which define the time limits within which an activity must start if the project duration is to be realized. These limits, or boundaries, are the early start and late finish of an activity. The difference between the maximum time available within which to perform an activity and the duration of an activity is known as total float. It is important to recognize that float exists by virtue of the contractor’s planned approach to the performance of its work. It is as a result of the contractor's activity definition and breakdown, logic development (including the establishment of the interrelationships and interdependencies that exist between the various activities) and duration development, that activity event times are established. In essence, float is contingency time associated with a path or chain of activities, and represents the amount of time by which the early finish date of an activity may be delayed without impacting upon the critical path and thereby delaying overall completion of a project. In the first instance, float represents a resource to the contractor in that it provides some degree of flexibility in terms of resolving problems and assigning resources. There are several types of float which are recognized: total float, free float, independent float and interfering “float. The difference between these types of float is the manner in which they affect other activities in the network. A definition of each of these terms is as follows: + Total Float: the time by which an activity may be delayed or lengthened without impacting the project completion date. + Free Float: the time by which an activity may be lengthened or delayed without impacting upon the carly start date of any following activity in the chain. + Independent Float: the time by which an activity may be lengthened or delayed ‘without impacting upon the early start date ofany following activity in the chain nor affecting the latest start time of any preceding. activity in the chain, + Interfering Float: the time that, if used, would decrease the float available to follow- on activities in the chain; thus, the difference between total float and free float. Figure 4 DURES | EF [IS io [FTF Peet [0] 1} o] 10, oo B Oss [20s [5 [10 [10-29-3030 10-0 D_[_15_]10-[-33-[10- [33-00 E_|_3_ [0 [1s] 25 [30-15-10 F_[ 0 [2s [33-30] | s |S C833 [apa [1035 3030-90109 ‘TF = Difference between an activity’s LS and ES, Figure 5 7 3a a= OR Tati? Copyright 1996 by ‘Barba-Arkhon International Ine, 36 Total float is the most commonly used and recognized type of schedule float. Free float, independent float and interfering float are rarely used in practice. (See Figures 4 and 5 for a graphic depiction of total float and free float.) Courts and Boards of Contract Appeals have typically equated “float” with “total float.” In this regard, the General Services Administration Board of Contract Appeals (GSBCA), in the case of Joseph B. Bennett Co., GSBCA 2362, 72-1 BCA 49364, defined “float time” as follows: Those paths which do not lie on the critical path have a certain flexibility in that there is a difference between the earliest and latest expected times for a particular event. This difference, called “total float” in CPM, allows the manager latitude in the scheduling of non-critical activities that originate or terminate at that event, and to effect tradeoffs of resources to shorten or control his project. Total float is the time any given activity may be delayed before it will affect the project completion time. It is the difference between the latest start time and earliest start time. It is also the ference between the latest finish and the earliest finish. The above definition of float is consistent with the view other Courts and Boards have taken in which they have viewed “float” to mean “total float.” C. Float: In viewing the utility of total float in construction, it is important to recognize that float is a scheduling tool — for by judicious allocation of float, the peaks of manpower and equipment required to execute a project can be reduced while still completing the project on schedule. Contractors often times utilize float to optimize, or “level,” resources over the course of A Scheduling Toolwork on a project. Additionally, in situations where resources may be limited, a resource leveling procedure can help to identify any specific resource limit(s) which, if imposed on the project, might exceed available float in given areas and thereby impact overall project completion. In an effort to framework this situation. A discussion on Resource Control: Manpower Forecasting and Leveling, has been included as Appendix B to this paper. D. Float Ownership: Where We Stand Today Early decisions held that the contractor, not the owner, owned schedule float. In this regard, the ‘Armed Services Board of Contract Appeals held that a contractor's original “cushion of time not necessary to performance” should be preserved when granting a time extension related to Government-caused design defects. Heat Exchangers, ASBCA 8705, 1963 BCA 3881. While in its decision the Board did not speak in terms of float in coming to its conclusion in this, regard, it did note in clear terms that the contractor “[was] entitled to retain this cushion.” In Continental Consolidated Corp., ENG BCA 2743 et al., 67-2 BCA $6624, Affd. in part, 200 Ct. Cl. 737 (1972). The Board recognized the contractor's right to rearrange its construction schedule — which thereby gave the contractor the benefit of float (recognizing, that when schedule logic and/or durations are rearranged, both critical and non-critical paths of performance are affected). As critical path method delay analysis began to grow in terms of its acceptance by Courts and Boards, these entities departed from their traditional view and approach to float ownership issues, focusing not on “who owned the float” per se but on whether the delay(s) in question affected the project's, ctitical path, Two cases which were decided by the GSBCA marked the shift in focus from float Copyright 1996 by Barba-Arkhon International Inc. ownership to whether delay impacted the project critical path. In the first case (Blackhawk Heating & Plumbing Co., GSBCA 2432, 75-1 BCA 11261), the GSBCA defined the issue to be whether the delay alleged by the contractor “caused any delay in project completion.” On reconsideration the GSBCA affirmed its decision stating that although Government delay did exist, it was of no consequence since that delay did not affect the project’s critical path (Blackhawk Heating & Plumbing Co., GSBCA 2432, 76-1 BCA {1 1649). In the second case (Dawson Construction Co., GSBCA 3998, 75-2 BCA 11563), the Board denied the contractor a time extension in a situation where the Government had caused delays to certain activities on the project. In this case the Board found that the contractor was not entitled to a time extension for alleged Government delay in the completion of a vehicle maintenance facility even though a Government delay settling a dispute over who should pay for hydraulic lift pit construction caused delay beyond the allowed slack time because there was no showing that the project’s critical path was actually affected by the alleged delay, or that any project delay was actually caused by the alleged Government conduct. These cases and numerous others confirm the Court’s and Board’s current approach to dealing with delay and time extension analysis. In order to clarify the owner's position with respect to the manner in which float is viewed and to be used in the context of managing a project and evaluating time extensions, owners often times include float-sharing clauses in their scheduling provisions which address float ownership. Examples of such clauses are as follows: Activity delays shall not automatically mean that an extension of the Contract Completion Date is warranted or due the 37Contractor. A Contract Modification or delay may not affect existing critical activities or cause non-critical activities to become critical. A Contract Modification or delay may result in only absorbing a part of the available total float that may exist within an activity chain on the Network, thereby not causing any effect on any interim milestone date or the — Contract Completion Date, Total float is defined as the amount of time between the early start date and the late start date, or the early finish date and the late finish date, for each and every activity in the schedule. Float is not for the exclusive use or benefit of either the Owner or the Contractor. Extensions of time to interim milestone dates or the Contract Completion Date under the Contract will be granted only to the extent that the equitable time adjustments to the activity or activities affected by the Contract Modification or delay exceeds the total float of the affected activity or subsequent paths and extends any interim milestone date or the Contract, ‘Completion Date. Such a clause which has been used in Department of Defense Contracts is as follows: Float available in the schedule at any time shall not be considered as for the exclusive use by either the contractor or the Government. Extensions of time for performance of work required under Contract Clauses entitled, “CHANGES,” ‘DIFFERING SITE CONDITIONS, ‘DEFAULT (FIXED PRICE CON- STRUCTION),’ or ‘SUSPENSION OF WORK’ will be granted only to the extent that equitable time adjustments for affected activities exceed the total float along their paths. Copyright 1996 by Barba-Arkhon Intemational Inc 38 A similar clause which has been utilized by the Veterans Administration provides in part as follows: Actual delays in activities which, according to the computer-produced calendar-dated schedule, do not affect the extended and predicted contract completion dates shown by the critical path in the network will not be the basis for a change to the contract completion date. Cases which have interpreted these and similar float-sharing clauses have applied these clauses consistent with their plain meaning. Gulf Contracting, Inc., ASBCA 30194 et al., 89-2 BCA §21812; Santa Fe, Inc., VABCA 2168, 87-3 BCA 20104; Titan Pacific Const. Corp. ASBCA 24148 et al, 87-1 BCA 19626; Montgomery-Ross-Fisher, Inc., PSBCA 1033 et al,, 84-2 BCA 917492, Based on the above it is clear that the test ‘employed by Courts and Boards with respect to the right of a contractor to time extensions for delays is the traditional test of causation of delay. Under this test, a contractor is only entitled to a time extension to the extent that the owner- caused delay exceeds available float and actually impacts the project completion date.a V. Key Issues Relative to Concurrent Delay and Compensable Delay Claims A. Concurrency: A Definition Black’s Law Dictionary (West, Sth Addition) defines concurrent as: Running together; having the same authority; acting in conjunction; pursuit of same course; contributing to the same ‘event; contemporaneous. Cooperating, accompanying, conjoined, associated, concomitant, joint and equal, existing together, and operating on the same subject. Additionally, Black’ concurrent causes as: Law Dictionary defines ‘Two distinct causes operating at the same time to produce a given result, which might be produced by either, are “concurrent causes.” B, Categories of Delay Delay may be regarded from two viewpoints. One relates to the concept of time, The contract will normally provide when the work is to be completed. Any performance not within the stated time period may subject the contractor to liability for breach if the delay is not excused. However, if the delay is in fact excusable, the contractor may be entitled to an extension of the contract time accordingly. The second view of delay concems money; that is, whether or not extra expenses incurred by the contractor as a result of the delay are compensable. A delay may entitle the contractor to both a time extension and compensation, to just the time extension or to no adjustment in Copyright 1996 by ‘Barba-Arkhon International In. 39 either the contract time or price. Whether a delay excusable or compensable depends upon the foreseeability, fault and the language of the ‘contract. Delay events fall into one of four categories: excusable, compensable, non excusable and concurrent. The granting of an extension of time for excusable delay is contingent upon a finding that the cause of delay is one which is beyond the control and without the fault or negligence of the contractor and owner, and is unforeseeable. In this case a contractor is entitled to an extension of the contract time, although not to money damages. Compensable delay is that which is attributable to causes deemed to be within the control or due to the fault or negligence of the owner or its agents. For compensable delay a contractor is entitled to both an extension of contract time and an increase in the contract price. ‘Nonexcusable delay is that which is caused by events attributable solely to contractor fault or deficiency. In this case the contractor is entitled to neither an extension of time nor an increase in the contract price, and may in fact be exposed to the assessment of liquidated damages by the owner. Concurrent delay exists when two or more separate delay events occur during the same time period. The traditional view of the Courts and Boards has been that when Government delay is concurrent or intertwined with contractor or excusable delays, neither party should be able to recover from the other for that period of delay. Thus, the Government cannot recover liquidated damages and the contractor cannot recover costs of delay. Morrison-Knudsen Co., ENG BCA Nos. 3856, 3857, 79-1 BCA 13,798; Framlau Corp., ASBCA No. 14479, 71-2 BCA 9082; Hardeman-Monier-Hutcherson, ASBCA No. 11869, 67-2 BCA $6522.This traditional view, however, was satisfying neither to the contractor, the Government, nor the adjudicative body: [W]here each party delays the other, it follows that each should be able to recover to the extent of the injury caused by the other’s delay. Such a rule protects each party from losses due to the delay of the other throughout the period of performance. It also induces each party to avoid imposing such losses on the other at any time during the period of performance. In contrast, a rule precluding a party from recovering damages for delay, once the party itself delays, would leave the parties to a contract unnecessarily vulnerable to delay by the other. We see no wisdom in, nor authority for, such a rule of preclusion, Therefore, when both parties to a contract breach their contractual obligations by delaying performance, a Court must assess the losses attributable to each party’s delay and apportion damages accordingly. United States ex rel. Heller Electric Co. v. William F. Klingensmith, Inc., 610 F.2d 1227, 1231 (D.C. Cir. 1982) (footnote omitted). In order to apportion damages a Court or Board must be in the position to apportion concurrent delays between the parties. This point is made taking into account the possible outcomes when it is impossible to apportion delays: Where contractor-caused delay is concurrent with owner-caused delay, the contractor may not recover its increased costs resulting from delay. See, eg., Blinderman Constr. Co. v. US., 695 F.2d 552 (Fed. Cir. 1982). Where noncompensable delays are concurrent with Government-caused delays, a contractor may not recover its increased costs resulting from the delay. Beckman Constr. Co, ASBCA No. 24725, 83-1 Copyright 1996 by Barba-Arkhon International In. 40 BCA 4 16,326. Where the owner has contributed to project delay and such contribution cannot be separated from other causes of delay, liquidated damages may not be enforced by the owner. Aetna Casualty & Sur. Co. v. Butte-Meade Sanitary Water Dist, 500 F. Supp. 193 (DS.D. 1980). John Cibinic, Jr., et al., Construction Contracting 670 (The George Washington —_Univ., ‘National Law Center, 1991), C. Apportioning Concurrent Delays Although the traditional view of concurrent delay apportionment has, generally, passed from favor, a party asserting entitlement to a delay-based claim must still offer proof reflecting a clear apportionment of the delay. In this regard, there are two questions which are central to the issue of concurrent delays. First: Is a contractor obligated to satisfy the same standard to establish its right to time extensions (entitling it to relief from the assessment of liquidated damages) as that required to establish entitlement to a claim for delay costs? And, second, as relates to the evaluation of concurrent delays: How are Courts and Boards apportioning concurrent delays taking into account critical path method scheduling principals and techniques. ‘There are numerous decisions which address the differences and proof; and these decisions reveal that there is a difference in the proof required. In Cline Construction Co., ASBCA No. 28,600, 84-3 BCA § 17,594 (1984), the Board, in sussing the effect of concurrent delays, noted: Concurrent delay does not bar extensions of time, but it does bar monetary compensation for daily fixed overhead costs of the type claimed by Cline because such costs would be incurred on account of the concurrent delay even if the Government-responsible delay hadnot occurred. Commerce International Co. v. United States [9 CCF § 72,781}, 167 Ct. Cl. $29, 338 F.2d 81 (1964 Cline has presented no evidence that those segments of the work which were delayed by the Government-responsible causes cost more to perform in a later period than they would have cost if performed at the time originally schedule... In Titan Pacific Construction Corp. v. U.S., 17 CLCt. 630 (1989), the Board, in evaluating the record regarding various delays, stated: Although our findings establish that appellant incurred many delays through its own fault and that of its subcontractors which prevented it from completing Phase I until 30 October 1978... they also establish that the Government contributed to the delays by issuing change orders, modifying Phase HI requirements, as late as 20 July 1978... 31 August, 1978,... 20 September 1978,... and 19 October 1978. Under those circumstances, the delays are not compensable so as to entitle appellant to delay damages therefore, but the Government's actions relieve appellant from liability for liquidated damages. Myers-Laine Corporation, ASBCA No. 18234, 74-1 BCA § 10,467 Consequently, the Government's assessment of liquidated damages amounting to $8,787 for Phase Il was improper and must be set aside. Likewise, in Utley-James, Inc., GSBCA No. 5370, 85-1 BCA {| 17,816 (1984), the Board stated: ‘A delay for which the Government is responsible is excusable by definition, and it may also be compensable. The rule is that for a delay to be compensable under either the Changes clause or the Copyright 1996 by Barba-Arkhon Intemational Inc. 41 Suspension of Work clause, it must result solely from the Government's action... If a petiod of delay can be attributed simultaneously to the actions of both the Government and the contractor, there are said to be concurrent delays, and the result is an excusable but not a compensable delay... Based on the above, it is evident that in terms of establishing entitlement to a time extension alone, a contractor need only demonstrate that concurrent causes of delay resulted in a specific amount of delay to completion of the work. In Freeman-Darling, Inc., GSBCA No. 7112, 89- 2 BCA § 21,882 (1989), the Board addressed the issues of a contractor's compensable delay claim and the owner's assessment of liquidated damages. In denying the contractor's entitlement to the recovery of delay costs, while at the same time finding that the contractor should not be assessed liquidated damages, the Board stated: ‘That delay was concurrent with delays due to changes and strikes. The law is well settled that where both parties contribute to the delay neither can recover damages, unless there is clear evidence by which we can apportion the delay and the expense attributable to each part. Blinderman Construction Co. . United States, [30 CCF ¥ 70,619}, 695 F.2d 552, 559 (Fed. Cir. 1982); Active Fire Sprinkler Corp., GSBCA No. 5461, 85-1 BCA § 17,868, at 89,484 (1984). Since no method is apparent for apportioning the delays, appellant may not recover increased costs for the period of June 25 to August 2, 1982, Correspondingly, for purposes of, liquidated damages, appellant must be credited with an extension equal to the delay that occurred during that period. In terms of the utilization and application of critical path method scheduling techniques to theapportionment or —_non-apportionment of concurrent delays, a number of cases provide insight and guidance as to how Courts and Boards view and use CPM techniques and principles. The following case studies are relevant to this discussion: Case Study No. 10 Blackhawk Heating & Plumbing Co., Inc. GSBCA No. 2432, 76-1 BCA § 11,649 (1975) © Procedural Background ‘The Contractor (Blackhawk) moved — for reconsideration of the Board’s decision in Blackhawk Heating & Plumbing Co, Inc., GSBCA No. 2432, 75-1 BCA 411,261 (1975), granting the Government liquidated damages, © The Dispute ‘The Contractor sought reconsideration and remission of the Board’s earlier award of liquidated damages to the Government. In addition to attacking the Board’s earlier decision as erroneously utilizing the “total time” approach, Blackhawk also argued that the Government- caused concurrent delays precluded its recovery from the Contractor of liquidated damages. © The Board's Decision In addressing what can be seen as a reversal of the traditional concurrency context, the Board agreed that liquidated damages could not be assessed where the Government had caused concurrent delays, but found that the Government-caused delays did not affect activities on the critical path and thus, did not constitute concurrent delays. Appellant contends that where both parties delayed performance of the electrical fixture work and — the Government contributed a delay to the ductwork, that in the time period Copyright 1996 by Barba-Arkhon Intemational Inc a2 concerned, liquidated damages provisions should be annulled under the principle that where two parties are delayed in the accomplishment of the construction objective neither party should be able to profit from the delays of the other. This contention must be examined carefully to avoid confusion in the legal principles involved. For the purpose of assessing liquidated damages the rule generally states that the contractor will not be charged for its delays which are concurrent with Government-caused delays. Acme Process Equipment Company, 171 Ct. Cl. 324, 367; Acme Missiles and Construction Corporation, ASBCA 11786, 69-2 BCA 48057, at page 37,445. The rule has been applied by this Board in situations where it was difficult to apportion responsibilities for delay as between the parties; and, too, the record did not disclose whether or not the delays were critical to project completion. Minmar Builders, Inc., GSBCA 3430, 72- 2 BCA 49599, at page 44,859, and cases cited therein. Since liquidated damages are only imposed for delays in project completion, it is manifest that only those delays should be considered which actually affect project completion. By their nature the delayed activities involved must necessarily lie on the critical path of the project as it was actually completed. In terms of the concurrent delay rule then, the concurrent delay must pertain to activities whose completion was critical to completion of the project itself. Appellant cannot successfully urge, as it apparently seeks to do, that because critical contractor- caused delays in furnishing shop drawings or electrical fixture data were concurrent with noncritical Government delays due to defective air-conditioning duct drawings, the imposition ofliquidated damages may be avoided Relief from the imposition of liquidated damages must depend upon showing concurrent delay in respect to activities on the critical path. These, of course, are activities on the electrical fixture path; particularly, those dealing with the air- handling fixtures. Id. at 35,578-9. Case Study No. 11 H&S Corporation ASBCA No, 29688, 89-3 BCA § 22,209 (1989) © Factual Background On September 18, 1981, H&S Corporation (H&S) was awarded a Navy contract to construct a 5 million dollar project, called the Container Operations Facility, which consisted of a pre- engineered warehouse-type building and related facilities at the Naval Supply Center in Norfolk, Virginia, The contract called for the pre- engineered building to rest on a slab-on-grade atop earth-filled perimeter foundation walls, which, in turn, were to be built on steel reinforced concrete footings. The Navy directed the Contractor to perform additional earth work and memorialized that direction in a bilateral modification containing an express reservation of the contractor's right to: request additional compensation for other work and further time extensions which, in the future, may be justified as the + result of this modification. Jd at 11,717. © The Contractor's Claim H&S sought its extended overhead, materials costs increases, and other costs resulting from the delay caused by the additional work. Copyright 1996 by 48 ‘Barba-Arkhon International Inc. © The Government's Response/Position ‘The Government did not dispute that the additional earth work delayed H&S"s performance. Instead, the Navy asserted that an error by one of H&S’s subcontractors regarding, building load calculations resulted in a concurrent delay which precluded H&S’s entitlement to recovery. © The Board's Decision In rejecting the Government’s concurrency argument, the Board found that it had failed to ‘establish that the Contractor's actions resulted in adelay: ‘The disputed delays begin with the earth work delay, claimed by appellant to be 118 days. ‘The Government asserts, however, that a concurrent delay of unspecified duration nullifies appellant's claim. In response, appellant asserts that the collateral load confusion added to the Government-caused delay. Turning first to the concurrent delay issue, we agree with the Government that a contractor-caused delay affecting the construction of the footings would have a significant effect on this contract's critical path. The overwhelming flaw in ‘the Government's concurrent delay argument, however, resides in the premise that appellant's failure to gain approval of the building system caused the delay. ‘The Government initially chose to return submittal 62 rather than review it (finding 20). When the Government later returned the submittal package, including submittal 80, the Government directed appellant to redesign the foundation to accommodate the apparently heavier building loads (finding 23). However, appellant's earth work subcontractor performed earth work throughout theduration of the alleged concurrent delay and completed the earth work on 30 August (findings 11-13), appellant did not wait for the 7 October approval before proceeding with the footings but started footing work on 9 September (findings 12, 27), and the footings were finally poured in the manner and size appellant proposed in the submittal (finding 25). Further, the building load mistake resulted only in confusion — no work was delayed or changed (finding 27). Finally, nothing in the contract required Government approval of the building system before pouring the footings. The Government cannot, from these facts, construct a scenario in which the very real delay caused by the unsuitable soil and additional earth work is nullified by the time it took to resolve the building load error. This failure proves fatal to the Government's defense. “The defense of concurrent delay is valid only when applied to an actually established delay, not merely an alleged delay.” Essential Construction Company, Inc. and Himount Constructors, Ltd, a Joint Venture, ASBCA No. 18706, 83-2 BCA $16,906 at 84,114, Ta, at 111,720-1 Case Study No. 12 Uttey-James, Inc. GSBCA No. 5370, 85-1 BCA § 17,816 (1984) © Factual Background The Contractor (Utley-James) was awarded a contract to construct a complex consisting of a garage, plaza, and office building. Substantial completion followed the extended contract completion date by 163 calendar days, yet the Government failed to assess liquidated damages as provided under the contract. Copyright 1996 by Barba-Arkhon International Inc. “4 © The Contractor's Claim Utley-James alleged various claims, including that the Government caused delays and additional costs to performance by its failure to give the Contractor information (the layout drawings) necessary to do the interior finish work. ©The Government's Response/Position ‘The Government denied that it caused delays or failed to provide the layout drawings in a timely fashion, attributing all delays to the inability of the Contractor and its subs to keep to the schedule. © The Board's Decision The Board found that the Contractor had established that the Government had contributed to the delays experienced in performing the contract, but Utley-James had failed to demonstrate how the Government-caused delays had led to damage. Accordingly, Utley-James was granted an excusable but noncompensable time extension to the substantial completion date: At the risk of appearing inconsistent, we will grant appellant an excusable — but not a compensable — delay through the date of substantial completion. Our holding is that substantial completion ‘occurred on April 16, 1976, just as the Government said, but we wish to make clear that if subsequent review of this case should lead to the conclusion that substantial completion occurred on some earlier date, the extension of time is only good through whatever that date is unless there is some independent reason for letting it go beyond that date. ‘The reasons for granting the extension are several. For openers, the Government is every bit as culpable as appellant for the lack of a firm delivery date for the tenant layout drawings. In the course of this litigation, neither party has anything much better than surmiswhich to determine what the correct date should have been. It does not suffice to say that this element of appellant's case therefore founders for lack of proof; the Government had the responsibility of supplying the drawings and ought to have done a better job of explaining why it did not meet even its own date of June 1, 1974, Our conclusion that even appellant's backward look did not show the Government was late with the drawings had as its tacit premise the actual accomplishment of —_ substantial completion on April 16, 1976. From that we were able to conclude that the actual delivery of the first drawings, even if it occurred as late as August 27, 1974, when appellant, which had already received preliminary drawings, got the “official drawings,” was not so late as to have caused an acceleration. Had appellant finished much earlier, the result might have been different, but we have enough assumptions and hypotheticals in this case without adding still more, The point is, however, that if we do accept arguendo appellant's figure of 517 days from receipt of the second floor layout drawings to completion of the interior finish work on the top floor, some sort of time extension is required by the fact that the “official” second floor drawings arrived in late August 1974 and the last questions about the last revisions were not resolved until the very end of the year. We have explained at length why we are unwilling to find appellant entitled to a compensable delay. We think it has failed to carry its burden of showing how and why it was hurt because the drawings were delivered when they were. But we also think the Government, which has yet to attempt to assess any liquidated Copyright 1996 by Barba-Arkhon Intemational In. 45 damages against appellant, ought to be disabled from ever making the attempt. To that extent at least it must answer for its inability both to reach any sort of agreement with appellant in the course of contract performance on the delivery date for the layout drawings and to establish in the course of this litigation what that date ought to have been. It is already obvious that the imprecision in the record prevents us from assigning any precise number of days to the excusable delay we grant on account of the tenant layout drawings. We do have some observations that go along with this grant: (1) As noted, it is through substantial completion and not through any particular calendar date. (2) We are aware that the contracting officer granted appellant a time extension in 1975 for a concurrent event (the _pipefitters” walkout) and that in the absence of this extension for another concurrent event (the artesian water constructive change). All this has been taken into account. (3) It has nothing to do with the quality of the tenant layout drawings or any allegations that they were, or led to, constructive changes. (4) It is not to be taken as establishing an acceleration by appellant; we are satisfied that no such acceleration occurred. Id. at 89,116. The will Utley-James decision also reflects the lingness of Boards to apportion concurrent delays, noting at page 89,109: strictly speaking, there can be but a single delay over a given period of time, and when that delay has multiple, indivisible causes, itis attributable not to either party but to both. Hence it would probably be more accurate to speak not of concurrent delays but of a single delay with concurrent causes. We note thiseven though, for convenience, we will use the standard terminology for the most part, When venturing into this area, we must be wary of deciding too readily that there was a concurrent delay. We considered this issue in Warwick Construction, Inc., GSBCA Nos. 5070, 5387, 5388, 5457, 5543, 82-2 BCA $16,091, at 79,854-55, and concluded that, at the very least, we ‘would not require a contractor claiming a compensable delay to prove that in the absence of the Government's delaying actions it would have completed the job ‘on schedule. However, we also adverted in Warwick, id., to the basic principle of Wunderlich Contracting Co. v. United ‘States [11 CCF 80,069}, 173 CtCL. 180, 199, 351 F.2d 956, 968-69 (1965), which requires that a contractor seeking compensation establish ‘the fundamental facts of liability, causation, and resulting injury.’ That, we said, ‘has always been the law,’ and we adhere to it in this appeal as we have in the past. The lesson of Warwick is that certain kinds of second-guessing are proscribed. To take an easy example, if the job schedule was originally such that the contractor needed certain widgets on hand by January 1, but because of a six- month delay attributable to the Government, the contractor rescheduled the delivery for July 1, the Government cannot be heard to say the delays were concurrent because the contractor would have had to wait six months for the widgets anyway. In such a situation there is no reason to doubt that the contractor could have had the widgets on January 1 and proceeded on schedule absent the Government-caused delay. Such a simplistic example poses no problem at all. The problem lies not in reaching the right conclusion, given such an example, Copyright 1996 by Barba-Arkhon Intemational Ine 46 but in determining whether a given fact situation is an example of such an occurrence or is instead an example of a true concurrent delay. Case Study No. 13 Fischbach & Moore International Corp. ASBCA No, 18146, 77-1 BCA § 12,300 (1976) 0 Factual Background ‘The Contractor (Fischbach) was awarded a 16.5 million dollar contract to erect a complex of 104 steel radio towers with substantial related work. ‘The Government issued several stop work orders and additional directives during contract performance, which on the Board’s first review in Fischbach & Moore International Corporation, ASBCA No. 14216, 71-1 BCA ¥ 9081 (1971), were found to entitle Fischbach to a compensable time extension. When on remand the parties were unable to negotiate a settlement as to quantum, Fischbach again appealed, whereupon the Government affirmatively defended on the grounds of Contractor-caused concurrent delays. © The Board's Decision In rejecting the Government's position, the Board found that the intertwining delays of the parties could be segregated and that upon doing so, the Contractor-caused delays did not affect activities on the critical path: ‘The principal theme of the Government's defense against appellant's claim is that appellant has failed to prove a causal connection between the Government's suspension of work relating to the steel seam problem and the delays, disruption of work, and acceleration for which it incurred the costs it claims here. This issue, in turn, is affected by concurrent delays which the Government alleges were an intervening cause of the delay, disruption and acceleration of appellant's work, and for which either appellant orits first tier subcontractors are responsible or for which the Government granted adequate time extensions in due course On this point, the Government contends that any delays caused by it in relation to the steel seam problem were inextricably intertwined with other delays, such as those caused by the inefficiencies and poor performance of appellant's subcontractor, PECI, which appellant ‘would have suffered even in the absence of the steel seam problem. When Government-caused delays. are concurrent or intertwined with other delays for which the Government is not responsible, the argument continues, a contractor cannot recover delay damages. Commerce International Co. v. United States (9 CCF $72,781}, 167 Ct.Cl. 529; 338 F.2d 81 (1964); Hardeman-Monier- Hutcherson, A Joint Venture, ASBCA No. 11869, 67-2 BCA § 6522. We take no issue with the application of the Commerce rule to the facts of this case insofar as the concurrent delays for which appellant is responsible affected work in the critical path to timely completion of the contract. If the concurrent delays affected only work that ‘was not in the critical path, however, they are not delays within the meaning of the rule since timely completion of the contract was not thereby prevented, With regard to the alleged intertwining of Government-caused and concurrent delays in this case, we have found, in the critical path analysis offered by appellant, a ready and reasonable basis, for segregating the delays. If the delays can be segregated, responsibility therefor may be allocated to the parties. Chaney & James Construction Co., Inc. v. United States [14 CCF 483,407}, 190 Ct.Cl. 699; 421 F.2d 728 (1970). And if there is no basis in the record on which to make a Copyright 1996 by Barba-Arkhon International Inc. a7 precise allocation of responsibility, an estimated allocation may be made in the nature of a jury verdict. Raymond Constructors of Africa, Ltd. v. United States [13 CCF 482,155), 188 Ct.Cl. 147; 411 F.2d 1227 (1969). The seemingly contrary result in Commerce is explained by the fact that the Court was unable, on the record in that case, to separate delays for which the Government was not responsible from those for which it was. Commerce International Co., supra, 167 CLCI, at $43, 338 F.2d at 89, 90. As will be seen in the discussion that follows, we have no such difficulty in the present case Although it is true, as the Government observes, that the critical path analysis made by appellant’s expert is abstract, in the sense that a critical path method of scheduling was not called out in the contract, the validity of the analysis was not challenged in any way. We accept it as credible, based as it is on apy of the construction experience of an expert to depict the orderly sequence of events that must be followed to accomplish a complex project such as Project Bamboo. It is axiomatic that a contractor asserting claim against the Government must prove not only that it incurred the additional costs making up its claim but also that such costs would not have been incurred but for Guvernment action. The Government contends that appellant’s proof is lacking in both respects. We shall consider, in our decision on the measure of the Government's liability, whether appellant’s proof of costs. is adequate. The existence of the necessary causal connection is the central subject of our decision on the Government's liability. Id, at 59,224-5.In presenting its delay claim, appellant contends thatthe Government's suspension of work relating to the steel seam problem caused a delay in work that was on the critical path toward timely project completion, which in turn caused it to incur time-related overhead costs during the delay period, We have decided that of the 161 days in the delay period, that is, the period from 12 May to 20 October 1967, 114 days or 70.8% are attributable to Government action and are compensable. (Part One, Sec. ILB.) To establish the second part of its proposition, appellant relies on our decision in Hardeman, supra, to the effect that time-related delay costs during a delay period are recoverable, subject to adjustment for productive work. In other words, appellant assumes that the facts in this case are like those in Hardeman, and that to the extent it experienced delays caused by the Government it is entitled to recover its unabsorbed, time-related overhead costs. The difficulty we have with appellant's contention is that the facts in this case are significantly different from those in Hardeman, In that case, the contractor suffered an extended period of performance as a result of Government- caused delays, during which it incurred time-related costs. Here, on the other hand, appellant experienced delay and disruption of its work, caused in part by the Government, which it was able to offset by performing noncritical work and thereby mitigating damages during the delay period and by accelerating its work after I March 1968. Inasmuch as the project was substantially completed by 31 March 1969, the extended contract, completion date, and inasmuch as appellant has been fully compensated for all extensions to that date (Finding 45), Copyright 1996 by Barba-Arkhon Intemational Ine 48 wwe conclude that the offset was complete and appellant in fact suffered no extended period of performance during which it incurred unabsorbed, _time-related overhead costs. The facts of this case are, to our knowledge, novel. Neither party has met the issue which they frame. Thus, appellant claims time-related costs for an extended period of performance which it successfully avoided; andthe Government defends on the ground that none of appellant's delays were proved to have been caused by Government action — a defense which we have already partly overruled in Part One. We think that the issue presented by the facts of this appeal can be most equitably resolved by limiting appellant’s delay claim recovery to those extra costs which it incurred during the delay period and which it would not have incurred but for Government action, Id, at $9,233-4, Case Study No. 14 John Driggs Company, Inc. ENG BCA No, 4926, et al, 87-2 BCA § 19,833 (1987) 0 The Dispute The Contractor (Driggs) brought several claims for additional compensation and a time extension to its Washington Metropolitan Area Transit Authority (WMATA) contract to construct a subway station in the median strip of a major Washington highway, 1-66. Driggs established delays attributable to defective specifications (the RW 11 construction). WMATA sought to avoid liability by alleging concurrent contractor-caused delays, specifically due to its subcontractors’ design problems related to the excay: system’s support.© The Board's Decision Upon concluding that the contract drawings and specifications were defective with respect to the RW 1 construction, the Board tumed its attention to the Government’s argument that concurrent delays precluded Driggs’ recovery: A common thread running through all of these alleged “delays” is that Driggs did not complete these particular tasks on the originally-planned and scheduled date. From this, WMATA concludes that they represent concurrent, contractor-caused delays insulating WMATA from liability for the RW Il design conflict. We disagree. More proof is required to establish | WMATA’s defense of concurrent delay. When a significant owner-caused construction delay such as the RW II design conflict occurs, the contractor is not necessarily required to conduct all of his other construction activities exactly according to his pre- delay schedule, and without regard to the changed circumstances resulting from the delay. For example, in this case, WMATA’s theory would require Driggs to have purchased the soldier piles in accordance with its As-Planned Schedule and have them delivered to the site, even though it was obvious that because of the RW 11 design conflict they could not be installed for weeks. ‘The occurrence of a significant delay generally will affect related work, as the contractor’s attention tums to overcoming the delay rather than slavishly following its now meaningless schedule. WMATA is required to demonstrate that, but for the delay caused by WMATA, the contractor could not have performed the project in less time, and would necessarily have been delayed to the same extent in any case. Respondent has failed to meet this burden. Merely speculative or theoretical Copyright 1996 by Barba-Arkehon International Inc. 9 contractor-caused delays are not adequate to establish a concurrent delay defense. See, €.g., J.D. Hedin Construction Co. v. United States (10 CCF $73,076], 171 Ct. CL. 70, 347 F.2d 235 (1965) (contractor sought damages. for delays caused by defective Government specifications. The Government defended by arguing that even if the specifications had not been defective, the project would have been delayed by a nationwide steel strike; the Court rejected this argument, because there was no evidence that there necessarily would have been a project delay because of the strike; the Court noted that while the Government-caused delays were actual, the strike delay was “theoretical at best.” 171 Ct. Cl, at 88.) Other than through speculation, there is no sound basis in the record for us to conclude that Appellant could not have accomplished its material purchases, expedited required submittals, and resolved its subcontract negotiations at an. earlier date had they affected progress. cf. Warwick Construction Co., GSBCA No. 5070, 82-2 BCA 416,091; Utley~James, GSBCA No. 5370, 85-1 BCA $17,816. To the contrary, subcontract negotiations with Schnabel, submission of ordinary insurance certificates, and procurement and delivery of piles could, in our view, easily and expeditiously have been concluded. But for the RW 11 design conflict, only minor problems existed with Appellant’s initial, early-August, support of excavation submittals, Moreover, need for installation of the ticbacks did not delay driving of the first and second tier piles, nor delay Appellant's progress through the period in issue in connection with this claim event, £e., through November 16, 1981 Id. at 100,388 (emphasis original)Case Study No. 15 John Murphy Construction Company ASBCA No. 418, 79-1 BCA 4 13,836 (1979) © The Dispute ‘The Contractor (Murphy) was awarded a Soil Conservation Service Contract for the construction of a floodwater retarding structure which, with modifications, was priced at just under $800,000. Contract. completion was extended to reflect the modifications and performance met the extended completion date. © The Contractor's Claim Murphy made claims, including one for owner- caused delays and additional costs attributable to the Government's failure to reveal in a timely ‘manner an available source of water. © The Government's Response/Position ‘The Government unsuccessfully disputed that it had delayed Murphy, but argued also that Murphy’s initial delays were attributable to the Contractor's own failure to obtain an adequate supply of water until it was too late. Moreover, Murphy chose to change its original plan of operation due to its own failings in this regard, resulting in contractor-caused delays, inefficiencies, and extra work. Finally, the Contractor was alleged to have performed in a less efficient sequence so as to front end its recovery of double-pay items, at a cost of time and money. © The Board's Decision In agreeing with the Governments description of the contractor-caused delays, the Board set forth instructive factual findings as well as a useful summary of the law regarding concurrence: If Appellant had begun performance at the time and in accordance with the sequence of work set forth in the planned Copyright 1996 by Barba-Arkhon Intemational Ine 50 construction schedule and completed each segment of the dam as he moved along the structure, it is possible that the earth fill work could have been completed by December 13, 1972, as planned (Finding of Fact 78), despite the ‘eross-hauls and over-hauls resulting from the improper release of borrow in the carly stages of the project and the extra ‘work which resulted from the excessive wetting of an approximate 2,300 foot area. Conversely, it does not appear from the record that but for the Government caused delays Appellant could have completed the work by December 13. It is concluded, therefore, that despite the delays caused by the Government the record establishes that from the time scheduled for commencement of the project, Appellant was at _ least concurrently responsible for the delay in the progress of the work. Appellant must bear the responsibility for the consequences of his search for a less costly source of water and the manner in which he chose to sequence and perform the work. It is well established that where Government-caused delays are concurrent or intertwined with other delays for which the Government is not responsible, the contractor cannot recover delay damages. Acme Missiles & Construction Corporation, ASBCA. No. 11794, 68-1 BCA 6737; Hardeman. Monier-Flutcherson, A Joint Venture, ASBCA No. 11869, 67-2 BCA 46522, citing Commerce International Co., Inc. ¥, United States [9 CCF $72,781], 167 Ct. Cl. 529, 543 (1964), among other cases. “Even where fault for the delay is substantially shared, apportionment of the responsibility is not to be made. Vogt Brothers Mfg. Co. v. United States [9 CCF 471,991}, 160 Ct. Cl. 687, 709(1963)....” Frank L. Marino Corporation, ASBCA No. 16104, 73-2 BCA $10,244. In this case, the concurrent delays for which Appellant was responsible affected work in the orderly sequence of events necessary to timely completion of the contract. Although no critical path method of scheduling was called out in the contract, decisions involving such critical path scheduling would appear to be analogous and therefore applicable. Fischback [sic] & Moore International Corp., ASBCA No. 18146, 77-1 BCA J 12,300. The Board there said: “It is axiomatic that a contractor asserting a claim against the Government must prove not only that it incurred the additional costs making up its claim but also that such costs would not have been incurred but for Government action.” The Court of Claims in Commerce International Co., Inc. v. United States, supra, pointed out that: “There is an affirmative showing that other causes, for which the defendent was not responsible, contributed most materially to the delay in production, Plaintiff has not separated these delays from that charged to the defendant, and, on this record, the Commissioner has been unable to do 50... We must apply the rule that there can be no recovery where the defendant's delay is concurrent or intertwined with other delays.” This Board too has been unable to find any basis in the record on which to separate delays for which the Government was not responsible from those for which it was, and therefore we Copyright 1996 by Barba-Arkhon Intemational Ine st are unable to determine that delays causing extra costs for the work performed in the winter were solely attributable tothe Government. Accordingly, the Board concludes that Appellant has not carried his burden of proof that he is entitled to an equitable adjustment for extra costs resulting from the extension of the project into winter. Id. at 67,874. Case Study No. 16 ‘Tyger Construction Company, Incorporated v. United States U.S. Court of Federal Claims, Nos. 468-88C, 526-88C, and 90-134C. (1994) © Factual Background ‘Tyger Construction was the primary construction contractor for an animal testing facility for the Food and Drug Administration in Beltsville, MD. The construction project was a four-story building of approximately 220,000 sq. ft. The main portions of the building included animal office holding quarters, laboratories, loading docks, support faci areas. The pertinent portion of the project in controversy, involved the heating, ventilation and air conditioning (HVAC) system. This system basically included an air flow control system, an air distribution system, air handing units (AHU's) and exhaust fans. The air flow control system was required to achieve three basic control functions: constant static pressure control, constant volume control, and airflow synchronization. Specifications for this system were issued by the Government in 1983. The disputed work, the subject of this controversy, was performed in the time period 1984-1986, and the key problems were not resolved until 1989. The contract itself ‘was finally completed in 1991.© The Dispute The claims that were tried before the U.S. Court of Federal Claims involved the mechanical portion of the construction contract between ‘Tyger Construction Company, Inc. and the Food and Drug Administration (FDA) for the animal testing facility in Beltsville. The Plaintiff, Tyger, sought recovery on behalf of itself and one of its subcontractors, John J. Kirlin. The Plaintiff claimed defective specifications, while the Government counterclaimed regarding defective performance. A large part of the Plaintiff's damages arose from the delays and resulting disruption encountered as the parties spent years trying to resolve problems related to the mechanical specifications. © The Court's Decision In addressing the Government-caused delay, the Court concluded that both parties had in essence contributed to the delay in this case, The Court noted that the Plaintiff had furnished defective HVAC equipment, which failed to comply with the contract specifications while the FDA in turn, had failed to troubleshoot the airflow problems properly. In this regard, the Court found that instead of pursuing obvious avenues of, resolution, the FDA had ignored Plaintifi's proposed approach that required the least amount of time to fix and instead had focused on the delivery and installation of new fans. All this had been done before sufficient testing data had been received. In evaluating the compensability aspect of the ‘contractor's claim, the Court noted that generally, the Government will not be held liable for delay unless the contractor can show that the delay was caused by the Government. William A. Smith Contracting Company v. United States, 155 Ct. Cl. 1, 9-19, 292 F.2D 847, 852 (1961). Where the actions of both parties contribute to the delay; however, “*Neither can recover damage, unless there is in the proof of a clear apportionment of Copyright 1996 by Barba-Arkhon International Inc 32 the delay and the expense attributable to each arty.”” Blinderman Construction Company Inc. ¥. United States, 695 F.2D 552,559 (Fed. Cir. 1982) (quoting Coath & Goss, Inc. v. United States, 101 Ct. Cl. 702,714-15, 1944 WL 3694 (1944)). Ifthe causes of delay are concurrent, the contractor cannot recover unless its delay is shown to be separate from that caused by the Government. William F. Klingensmith, Inc. v. United States, 731 F.2d 805, 809 (Fed. Cir. 1984); see, e.g, Connell Rice and Sugar Company, Inc. v. United States, 837 F.2d 1068, 1071 (Fed. Cir, 1988) (allowing contractor to present proof that Government rice purchasing activities caused delayed performance). In the instant case, the Court concluded that the contracting officer was not justified in replacing the fans based on the contracting officer's consultants “tentative conclusion”. The documented reprocurement history demonstrated that although the FDA had initially required strict adherence to the specifications, the FDA changed to a more relaxed performance-based approach as the FDA's desire to occupy the project grew. The Court further held that the FDA not only prevented the Plaintiff from implementing its ‘troubleshooting recommendations, but also the FDA itself failed to adequately perform its own troubleshooting responsibilities. In addition, the FDA acted contrary to the advice of its own experts and the test data they had prepared. The Court noted, that while a contracting officer was not expected to possess technical expertise, he or she was expected to make rational decisions based on available information. ‘The Court stated further that “compensable delays, including apportionable delays, must occur on the critical path of a construction project. Broome Construction inc. v. United States, 203 Ct. Cl. 521, 528, 492 F.2d 829, 833 (1974). The critical path isolates work elements that drive the completion date. See generally Wilner v. United States, 23 Cl. Ct. 241, 245 (1991) (iting cases).”Both the Contractor and the Government relied on scheduling experts to present this portion of their claim and counterclaim. The Contractor's ‘expert divided the critical path of the mechanical portion of the project into three critical periods fan replacement, CVR replacement, and ductwork repair. According to this expert’s analysis, delay began on April 11, 1986, a date when the project would have been substantially completed except for remaining remedial work. ‘This delay ended on October 30, 1991 when the building was partially occupied by the FDA. The fan replacement period continued for 699 calendar days from April 11, 1986 until March 10, 1988 when the FDA issued the request for proposals for new HVAC equipment, He then found a second period of equipment replacement delay which lasted 812 days beginning in March 1988 and ending in May of 1990. Finally this expert testified that the third period, the ductwork repair period, lasted 517 days from May 31, 1990 until October 30, 1991. The total delay on the critical path according to Plaintiff's expert totaled 2,028 calendar days. These delays were then followed by a period of additional remedial work which was not related to the mechanical work, The Court adopted the Plaintiff's experts analysis, determining that the critical path ran as follows: the fan delay period began on August 28, 1986, after the contractor had completed its DPT respanning and the date of the test when the FDA excluded the CVR’s from affecting the low air flow problem. The critical path then shifted to the CVR’s when the CVR delay period began, as found by the Plaintif’s expert, on March 10, 1988. On that date, the FDA issued the request for proposals for six CVR’s each from another company. The Court did not rely on the Plaintiff's expert for purposes of establishing the critical path after this date, noting that at that point in time, the critical path shifted once again ‘when the ductwork repair period began on March 20, 1990, on which date the FDA directed Copyright 1996 by Barba-Arkhion International Inc. 3 replacement of all turning according to their (the FDA’s) expert’s delay analysis. The ductwork delay ended on October 30, 1991, when the HVAC project was substantially completed. It was these dates which the Court used in calculating the amounts of delay damages. In apportioning responsibility between the parties for concurrent delay, the Court noted that where both parties contribute significantly to a delay period by separate and distinct actions, justice requires that the cost of the delay be allocated between the two parties proportionally. The Court of Claims in Dynalectron Corp. (Pac. Div.) v. United States, 207 CT. Cl. 349, 518 F.2d 594 (1975), addressed a dispute similar to this one. ‘The contractor there had attempted to ‘manufacture jamming antennas for the Air Force under specifications which later turned out to be impossible. The contractor however failed to te to the Air Force knowledge of the 'y, thereby compounding the delay. ‘The Court in that case had allocated the cost of the delay equally between the two parties, the effect of which was to force the Government to “retain its liability for issuing defective specifications,” while allowing the Government to carry “only a share of the damage assessment because of Plaintiff's contributory errors.” 207, CT. Cl. at 367, 518 F.2d at 605. ‘The Court went on to note that apportioning liability when delay is caused by separate and independent actions of the Government and the contractor is supported by abundant precedent. If the delays can be segregated, responsibility can be allocated between the parties. Fieshbach and Moore International Corp., ASBCA No. 18146, 77-1 BCA 12,300 at 59,224 (1976), aff'd, 223 Ct. Cl. 119, 617 F.2d 223 (1980). In Commerce International Company v. United States, 167 Ct. Cl. 529, 338 F.2d 81 (1964), the court of claims explained that the basis of this policy is the Government's “ever present obligation” to act reasonably and in good faith:It would be intolerable if the Government could disregard that responsibility, or were free to stretch its tardiness’ for however long it fancied, without sterner control then the mere prolongation of the completion date of the contract. The rule is, rather, that, when the Government's delay in furnishing work or material stems from its failure to do what it should under the particular contract, it will have to respond in damages for the resulting additional outlays which are proved to have been caused the contractor. In applying this rationale, the Court stated that the FDA’s failure to at least consider the Plaintiff's proposed approach in this matter was unreasonable--especially in light of the fact that both parties provided expert testimony that the fans should have been the last piece of equipment ‘examined. Thus, the contracting officers directive to install new and different units, based upon the tentative findings of a consultant was not only unreasonable but also in the view of the Court, precipitous. In this regard, it was noted that the testimony of the Plaintiff's lead witness in this matter was given great weight by the Court, based upon the conviction, professionalism and sincerity of his testimony. His testimony, coupled with the documented history of the project, clearly demonstrated to the Court that the FDA did not act reasonably in addressing the problems that beset the mechanical work of Plaintiff's subcontractor. Specifically, it was noted that in this case, the FDA “mindlessly ignored the design engineers documented lapses; did not take reasonable steps to obtain a grasp of the problem; and ran the subcontractor and Plaintiff into the ground with demands for information that the FDA sought in a disorganized, repetitive fashion and without a reasonable plan on how to put the information to use.” In large part it was this unreasonableness on the part of the FDA that led to the resulting lack of cooperation from the Plaintiff and its subcontractors. Copyright 1996 by Barba-Arkhon International In, 4 As previously noted, delay damages are apportioned or allocated according to both parties contribution to the delay period. In this instance, the Court stated that the defendant was responsible for the delay caused by the FDA's failure to take reasonable actions in investigating the airflow problems and in implementing a solution, The Defendant was held responsible for the delay caused by requiring the Plaintiff to pursue false lead items concerning the HVAC system. The Plaintiff, on the other hand, was held responsible for a reasonable time period involved in remedying the equipment problems that it had created by providing non-spec. equipment, The Plaintiff was additionally held responsible for its subcontractors growing reealcitrance in failing to provide complete data for equipment performance. As a result, the Court allocated the responsibility for delay at 60% for the FDA and 40% for the Plaintiff. The Plaintiff's subcontractor also claimed extended overhead costs based on the Eichleay Formula. In order to apply the formula, it was hheld that the contractor must show that compensable delay occurred and that the contractor could not have taken on any other jobs during the contract period. CBC Enterprises, Inc. ¥. United States, 978 F.2d 669, 673-74 (Fed. Cir. 1992). To the extent the former is established, the contractor must show specifically that it was on standby for the delay period and it was unable to take on other work. Interstate General Government Contractors v. West, 12 F.3d 1053, 1056 (Fed. Cir. 1993). Based on the documented history and the Plaintiff's lead _witness"s testimony, it was established that the subcontractor was in a state of uncertainty because it could not foresee how long the project would remain uncompleted. In addition, it was determined that as a result of its vast financial and resource commitment to the FDA project the subcontractor could not have accepted additional work, The subcontractor therefore was held to be alsoentitled to receive 100% of the extended home office overhead for the period involving work on the fans and 60% for the period during which other problems were encountered. D. The “But-For” Test For Compensable Delay Claims As previously discussed in this paper, Canon Construction provides a clear and logical exposition of the methods and objectives used to prove the compensable delay claim. In Canon, the Board established the date upon which the contractor would have completed the contract ‘work but for delays which might have been due cither to Government fault or the performance of changed work. The next determination was the actual date of completion of the work. The difference between those two dates established the extended period of performance for which the contractor would be entitled to be paid for extended fixed overhead costs. However, since the underpinning of those calculations was the amount of time during which delays were due to Government fault or changed work, an additional “testing” calculation was made in order to determine whether the aggregate amount of such delays was equal to or more than the extended period of performance. As noted by the Board, “in other words, appellants recovery is limited by either the extended period of performance or the aggregate net extent of delays caused by Government fault or changed work, whichever is lesser.” Since the Canon decision, other decisions have indicated that a concurrent delay will not preclude a contractor from recovering delay costs when the concurrent contractor delay does not affect the project’s actual critical path. In this regard, in Fischbach & Moore the Board stated: “With regard to the alleged intertwining of Government-caused and concurrent delays in this case, we have found, in the Copyright 1996 by 5s [Barba-Arkkhon International Ine. critical path analysis offered by appellant, a ready and reasonable basis for segregating the delays. If the delays can be segregated, responsibility therefore may be allocated to the parties. Chaney & James Construction Co., Inc. v. United States [14 CCF $83,407], 190 LCI. 699; 421 F.2d 728 (1970). And if there is no basis in the record on which to make a precise allocation of, responsibility, an estimated allocation may be made in the nature of a jury verdict. Raymond Constructors of Africa, Ltd. v. United States (13 CCF 482,155), 188 CLCI 147; 411 F.2d 1227 (1969). The seemingly contrary result in Commerce is explained by the fact that the Court was unable, in the record in that case, to separate delays for which the Government was not responsible from those for which it was. Commerce International Co., supra. 167 Ct.Cl. at 543, 338 F.2d at 89, 90. As will be seen in the discussion that follows, we have no such difficulty in the present case.” However, in the same reasoning, the Board in Fischbach recognized the key finding of the Canon decision; namely, that the contractor had ‘no entitlement to recover delay costs unless it proved as a part of its claim that such costs would not have been incurred but for Government action. In this regard the Board stated: Itis axiomatic that a contractor asserting a claim against the Government must prove not only that it incurred the additional costs making up its claim but also that such costs would not have been incurred but for Government action. Consistent with this but for test the Board stated: In addition to the foregoing, by 10 May 1967, PECI was experiencing severe financial difficulties which threatened its capability to continue its performance of the contract work and which led to thetakeover agreement of 28 June 1967, by which appellant agreed to fund its operations and to provide management and other assistance. (Finding 11b and c) Although the action taken by appellant was swift and effective in eliminating PECT’s financial problems, we consider that before the takeover, PECI would have been unable to perform any effective work, whether on the critical path or not, even if the Government's stop work order had not been issued. Accordingly, the 28 days from 12 May to 9 June, as well as the 19 days between 9 June and 28 June 1967, represent a concurrent delay for which no compensation is allowable. [Emphasis added] Additionally, consistent with the above, the Board in Canon stated: After hearing some argument by both counsel during the opening of the hearing concerning the methods by which they would seek to prove the number of days of extended performance, or the absence thereof (Tr. 26-36), the Hearing Member informed counsel of the method he would propose to the Board for calculating the extent of extended overhead, in the following terms: “You will have to show the date that you, in your opinion, could have finished and waiked away from this job but for the delays caused by the government changes” (Tr.36). By and large, the parties concentrated upon their previously conceived methods of showing the amount of compensable extended overhead. The Board disagrees and will follow the method described in the preceding paragraph. Fortunately, appellant offered some evidence of both time period factors and of the date of completion of the work but for the delays. Copyright 1996 by Barba-Arkhon International Ine 56 We have found that, but for the delays due to revision of drawings because of changed conditions, Canon could have completed the contract work on or about March 18, 1970, or 68 days prior to the actual completion date of May 22, 1970, Since we had before us a CPM chart, submitted by appellant and approved by the Army, showing a planned completion date of February 24, 1970, we determined under the circumstances that the latter was a more reliable estimate. However, there was no evidence that the chart completion date took into consideration such matters as 9 days of reasonable time within which to consider drawing revisions because of changed conditions and about 10 days of excusable, but non- compensable delays, such as rain, blow- down trees, ete.; we therefore added these days to the calculation resulting in our finding that Canon could have completed the job by approximately March 15, 1970, Thus the actual completion date of the ‘work has been determined; the date upon which appellant could have completed the work but for the Government-caused delays has been determined; and the period of compensable extended performance (68 days) has been determined. In arriving at our determination of the period of, compensable extended performance, we have considered contentions by the Army that this period should be measured (1) from the original contract completion date or (2) from the contract completion date as extended by contract modifications (which would totally obliterate appellant's claims). In the Board's opinion, it is well-settled that if faulty specifications prevent or delay completion of the contract, the increased cost thereof cannot be compensated bythe simple expedient of extending the time of performance (J. D. Hedin Construction Co., Inc. v. United States [10 CCF 473,076}, 171 Ct. Cl. 70 (1965); Litchfield Mfg. Corp. v. United States [CCF 472,778}, 167 Ct. Cl. 604 (1964), and that the Government may not hinder and prevent a contractor's early completion without incurring liability (Metropolitan Paving Company v. United States (9 CCF $72,357}, 163 Ct. Cl. 420 (1963). ‘The “test” calculation, to determine whether the extent of delays to performance equals or exceeds the extended performance period, starts with our finding of fact that Canon was delayed 155 days, principally in the performance of excavation, paving and curb and gutter work, taking into account other concurrent delays. The same subtraction is applicable to this. calculation, ie. the number of days attributable to a reasonable time for the Government to revise drawings and other delays not connected with Government fault or excusable causes. That figure is 19 days plus a 7-day delay due to the bankruptcy ofthe ~—_plumbing subcontractor. With respect to the Board’s subtraction of the seven-day delay due to the bankruptey of the plumbing subcontractor, the following Board statement is noted: The bankruptcy of a plumbing subcontractor caused about a seven-day delay in plumbing work until Canon was able to hire the —subcontractor’s employees and complete the plumbing work (Tr. 203). However, plumbing was not on the critical path of other operations and this delay did not affect ultimate completion of the buildings (Tr. 226). [Emphasis added.] Copyright 1996 by Barba-Arkhon International In. el In John Driggs Company, the Board, within the context of the Government's assertion of concurrent delay as an affirmative defense to a contractor's delay claim, utilized an approach which required the Government to demonstrate that, but for Government delay, the contractor could not have performed the project in less time, In this regard the Board stated: A common thread running through all of these alleged “delays” is that Driggs did not complete these particular tasks on the originally-planned and scheduled date. From this, WMATA concludes that they represent concurrent, contractor-caused delays insulating WMATA from liability for the RW II design conflict. We disagree. More proof is required to establish WMATA’s defense of concurrent delay. When a significant ‘owner-caused, construction delay such as the RW 11 design conflict occurs, the contractor is not necessarily required to conduct all of his other construction activities exactly according to his pre- delay schedule, and without regard to the changed circumstances resulting from the delay. ‘The occurrence of a significant delay generally will affect related work, as the contractor’s attention tums to overcoming the delay rather than slavishly following its now meaningless schedule. WMATA is required to demonstrate that, but for the delay caused by WMATA, the contractor could not have performed the project in fess time, and would necessarily have been delayed to the same extent in any case. Respondent has failed to meet this burden. Merely speculative or theoretical contractor-caused delays are not adequate to establish a concurrent delay defense.The but for principle recognized by Canon and Fischbach was again reaffirmed in John Murphy Construction Co. in which the Board stated: Conversely, it does not appear from the record that but for the Government. caused delays Appellant could have completed the work by December 13. It is concluded, therefore, that despite the delays caused by the Government the record establishes that from the time scheduled for commencement of the Project, Appellant was at least concurrently responsible for the delay in the process of the work. Appellant must bear the responsibility for the consequences of his search for a less costly source of water and the manner in which he chose to sequence and perform the work... In this case, the concurrent delays for which Appellant was responsible affected the work in the orderly sequence of events necessary to timely completion of the contract. Although no critical path method of scheduling was called out in the contract, decisions involving such critical path scheduling would appear to be analogous and therefore applicable. Fischbach d& Moore International Corp., ASBCA No. 18146, 77-1 BCA 4 12,300. The Board there said: It is axiomatic that a contractor asserting a claim against the Government must prove not only that it incurred the additional costs making up its claim but also that such costs would not have been incurred but for Government action. Copyright 1996 by Barba-Arkhon International Inc. 38NR VI. Recovery of Extended Home Office Overhead AL Once a contractor has successfully established entitlement for a compensable delay, the next most important step is the identification and calculation of the increased costs which resulted from the delay. One of the most common additional costs associated with delay is extended home office overhead. Unfortunately, it is also one of the most difficult to prove. Extended Home Office Overhead Extended home office overhead is typically defined to include those costs incurred by the home office which cannot be identified with a particular project, but which by their very nature, are incurred for the benefit of all the contracts being performed at the time by the contractor. Logic and case law dictate that if a cost can be specifically identified to a particular project, itis, by definition, not overhead and must be treated as, a direct expense. Generally, home office overhead includes accounting and payroll services, general insurance, salaries of upper level management, heat, electricity, taxes and depreciation. Capital Electric Company v. United States, 729 F.2d 743, at 746 (USCA, Feb. 1984). Other expenses typically included in home office overhead are: rent, licenses and fees, utilities and telephone, auto and travel, data processing, insurance, legal and accounting expenses, interest and other costs, which would be necessary for the day to day administration of a company. In order to properly calculate the cost of extended home office overhead related to a particular project, home office overhead expenses are allocated among all on-going income producing projects undertaken by the contractor during the Copyright 1996 by Barba-Arkhon International Ine 39 time period for which the overhead expenses are incurred or accrued. This means that if a contractor has only one contract, then that one contract picks up all of the overhead expenses; on the other hand, if the contractor has ten on-going contracts, then those ten contracts each pick up a share of the overhead expense. Generally the magnitude of each project will determine the amount of overhead allocated against that project. ‘A. confusing factor often encountered when dealing with extended home office overhead, is the use of different terminology to describe ‘overhead expenses. Capital Electric explained that “extended home office overhead” and “unabsorbed overhead” are separate and distinct concepts; “that underabsorbed overhead is particularly involved in manufacturing cost accounting; that extended overhead is a concept unique to construction contracting; that it has, as its premise, that extending the performance period will increase overhead costs and is calculated by “a daily rate method.” On the other hand, it explained that underabsorbed overhead occurs when direct costs are diminished as a result of delay; that the contract's share of overhead is diminished, while the overhead share of all other contract work is increased; and that underabsorbed overhead is calculated by determining an allocation rate differential.” Capital Electric Company, supra, at 745. Although the concepts of extended home office overhead and unabsorbed overhead are separate and distinct, they are sufficiently similar that the Bichleay Formula is typically used to calculate both, and cases citing either type of overhead theory are routinely cited in support of the other. Capital Electric Company (a construction case) is cited as precedent for use of the Bichleay Formula in the recent cases of CBC Enterprises Inc. v. United States, 978 F.2d 669 (Fed. Cir. 1992), (@ construction case) and Daly Construction Inc, v. Garrett, Ill, 5 F.3d 520 (Fed, Cir, 1993), (a production case).The actual distinction between these two concepts is further confused by the fact that various courts and boards tend to view the terms “extended home overhead” and “unabsorbed overhead” as being interchangeable, As an example, consider the recent case Wickham Contracting Company, Inc. v. Fischer, 12 F3d 1574 (Fed. Cir. 1994), wherein the Court of Appeals refers to “unabsorbed home office overhead”. For our purposes we will refer to only “extended home office overhead,” and will allow the courts and boards to make reference to it as, they see fit. The following case studies (Capital and Interstate General) illustrate threshold criteria for entitlement to the recovery of extended home office overhead once a compensable delay has been established. Case Study No. 17 Capital Electric Company v. United States 729 F.2d 743 (1984) © Factual Background On October 12, 1976, Capital was awarded a contract to furnish and install mechanical, electrical and plumbing work for the construction of the Federal Building and U.S. Courthouse in Ft. Lauderdale, Florida. Capital’s contract was one of a series of prime contracts for the Ft. Lauderdale project awarded under a phase design and construction technique. Phase construction contemplated the overlapping of design and construction tasks as well as sequential or concurrent scheduling segments of the work. As a result of the structural concrete contractors slow and erratic progress, the work of Capital and its subcontractors was unreasonably delayed and disrupted. Capital’s work was also delayed and disrupted due to the Governments failure to act upon submittals for the electrical panels, main switchboard and emergency generator while the Copyright 1996 by Barba-Arkhon International In, oo Government contemplated a contract change that was never issued. 0 The Contractor's Claim ‘The prime contractor sought to recover damages for extended overhead as a result of the delay caused by the Government. Capital argued this case before the General Services Board of Contract Appeals; however, the GSBCA ruled against Capital on the basis that, consistent with the Armed Services Board of Contract Appeals, it would not permit recovery of extended home office overhead for periods of performance delay, suspension or extensions of the contract work, citing Savoy Construction Company, 80-1 BCAP 14, 392. The Board was also concerned that the Eichleay Formula was not the proper method of calculating underabsorbed overhead. Capital Electric appealed the Board’s decision to United States Court of Appeals, arguing that the Board had no authority to ignore existing precedent authorizing and validating the concept of extended home office overhead. In this case, compensable delay had already been stipulated before the Board. Moreover, Capital had introduced unrebutted evidence that it could not have taken on any large construction jobs during the various delay periods due to the uncertainty of delays and due to the limitation on its bonding capacity. © The Court's Decision ‘The Court of Appeals concluded that under these circumstances it would not have been prudent or practical for appellant to either risk layoff of home office personnel or on the other hand to absorb personnel and facilities made idle, by taking on new commitments, and therefore remanded the case back to the Board with instructions to recognize Capital’s entitlement to extended home office overhead, and use the Bichleay Formula for calculating the amount of damages.Case Study No. 18 Interstate General Government Contractors, Inc. v. West 12 F.3d 1053 (1993) © Factual Background Interstate General Government Contractors, Inc. (IGGC) entered into a contract to repair and replace heating, ventilation and air conditioning piping in Pinwheel Barracks at Hunter Army Airfield, Georgia. The contract specified that “the contractor shall begin performance within ten calendar days and complete within 472 calendar days after the receipt of the notice to proceed (NTP).” IGGC was notified by letter from the contracting officer on October 13, 1989 that due to a bid protest, the NTP would be withheld pending the final decision thereon. The bid protest was dismissed on February 16, 1990 and the NTP was issued on March 1, 1990 with instructions for IGGC to begin performance within ten calendar days and to complete the work within 472 calendar days of issuance of the NTP. IGGC completed the performance in 323 calendar days after issuance of the NTP. ‘Therefore the contract was completed in 459 days after the October 16, 1989 date that the NTP would have been issued on had there not been a bid protest. Consequently completion occurred within the original agreed on performance period which would have applied had no delay occurred. 0 The Contractor's Claim On January 23, 1991, IGGC filed a claim with the contracting officer for $24,749.11 in unabsorbed home office overhead. It alleged that it was caused by the Government delay, arguing that the notice of October 13, 1989 constituted a constructive stop work order under the protest clause of the contract. Unabsorbed overhead was calculated according to the Bichleay Formula, but direct costs were not. IGGC submitted letters from its bonding company indicating that it had reached its bonding capacity with the Copyright 1996 by Barba-Arkhon International Inc. 6 performance and payment bonds on the various contracts and that the bonding company refused to increase IGGC’s bonding capacity. The C.O. issued a final decision denying IGGC’s claim and IGGC appealed the denial to the Board. The Board found that IGGC had failed to make a prima facia showing that it was on standby due to the Government delay, noting that IGGC's work force was gainfully working at other jobs and not standing by awaiting the NTP. The Board held that the record did not support IGGC’s contention that it was incurring unabsorbed overhead during the period of the stop work order. IGGC appealed the Board’s decision to United States Court of Appeals Fed. Cir. pursuant to the Disputes Act of 1978. © The Court's Decision ‘The Court concluded that the Board had applied an improper legal test by focusing primarily on the fact that there were no idle contract workers during the delay period when it concluded that IGGC was not on standby. The proper standby test, according to the Court, was one which focused on the delay or suspension of the contract performance for an uncertain duration, during which a contractor was required to remain ready to perform. Standby combined with an inability to take on additional work are the two prerequisites for application of the ichleay Formula, because taken together “they prevent ‘the contractor from mitigating unabsorbed overhead when it is incurred.” Applying the correct tests the Board’s findings could legally support a conclusion that IGGC was on standby. ‘The Court went on to state however that simply determining that IGGC was on standby did not in and of itself entitle IGGC to prevail. “IGGC must still prove that despite finishing early, it actually incurred compensable unabsorbed overhead costs due to the delay”. Since the delay was admittedly caused by the Government, not the contractor, the overhead costs would be compensable iffunabsorbed. To prove unabsorbed overhead, the contractor must show that the Government caused delay disrupted the relationship between the contractor's revenue and its overhead costs. Citing CBC Enterprises, Inc., 978 F.2d at 671 (Fed. Cir. 1992). Where a contractor is able to meet the original contract deadline or as here to finish early despite a Government caused delay, the originally bargained for time period for absorbing home office overhead through contract, performance payments has not been extended. ‘Therefore, in order to show that any portion of the overhead was unabsorbed, such a contractor must prove that the bargained for ratio of performance revenue to fixed overhead costs during the stipulated performance period, not just the delay period as the Board erroneously stated, had been adversely affected by the delay. This can only be established if such a contractor shows that from the outset of the contract it: 1) intended to complete the contract early; 2) had the capability to do so; and 3) actually would have completed early, but for the Government’s actions. The Court determined that on the evidence on the case, IGGC had failed to carry the burden of proving these three factors. Having failed to establish its intent to complete early, IGGC was not entitled to recover its claimed unabsorbed overhead, B. The Kichleay Formula Having established entitlement to extended home office overhead, the amount of recoverable overhead must then be calculated. It is almost impossible to trace home office overhead on a dollar to dollar basis against any particular contract. If it could be tracked to a particular contract, then it wouldn’t be overhead. It is therefore necessary to use a formula to calculate recoverable overhead. Although such formulas are subject to some criticism (usually by those in the accounting profession, due to a lack of Copyright 1996 by Barba-Arkhon International Inc. a exactness), the courts have repeatedly sanctioned the use of formulas as legally sufficient for the calculation of extended home office overhead. The most common and widely accepted formula for calculating extended home office overhead (and unabsorbed overhead) is referred to as the Eichleay Formula, named after the precedent setting Armed Services Board of Contract Appeals Decision in the Bichleay Case. As described in Wickham Contracting Company, Inc. v. Fischer, 12 F.3d 1574 (Fed. Cir. 1994), the ‘Armed Services Board of Contract Appeals devised the Bichleay Formula to provide a fair method for allocating home office overhead costs, otherwise inallocable to specific contracts. See Eichleay Corp, ASBCA No. 5183, 60-2 BCA 2688, 1960 WL 538 (July 29, 1960), aff'd on reconsideration, 61-1 BCA 2894, 1960 WL 684 (1960). In Kichleay, the Board found it necessary to allocate overhead costs pro rata, because they “cannot ordinarily be charged to a particular contract. They represent the cost of general facilities and administration necessary to the performance of all contracts.” Thus the Eichleay Formula seeks to equitably determine allocation of unabsorbed overhead to allow fair ‘compensation of a contractor for Government delay. Allocation based on a pro rata share is necessary because overhead cannot be traced to any particular contract, since overhead consists of expenses which benefit and are necessary to every contract, ‘The Bichleay Formula has survived for more than 30 years as the primary formula for calculating unrecovered overhead costs resulting from delay. This may be explained both by its simplicity, and by the failure of any other formula to gain widespread acceptance. The exact history of the Eichleay Formula and its application to extended overhead cases was discussed by the court in some detail in CBC Enterprises, Inc. v. United States 978 F.2d 669 (Fed. Cir. 1992).“The Eichleay method of calculating extended home office overhead has a long history. As we shall see, contractors have been permitted to use this method to calculate extended home office overhead in situations where disruption, delay or outright suspension have caused a cloud of uncertainty over the length of the performance period of the contract. Judicial approval for using a daily overhead rate to calculate extended home office overhead during periods of Government caused delay first appeared sometime ago in Herbert M. Baruch Corp. v. United States, 93 Ct. Cl. 107 (1941). In that case, the Court of Claims awarded the contractor a portion of general office overhead for a period of “unforeseen and uncontemplated delay” that resulted from the stop order issued by the Government... The following year the Court discussed the issue of proportional overhead recovery at length in the case of Fred R. Comb Company v. United States, 103 Ct. Cl. 174 (1945). In that case, the court awarded the contractor two months of proportional overhead after the Government suspended operations on the contract for ‘an indefinite period while it perfected title to land involved in the contractor's performance. In 1960, the Armed Services Board of Contract Appeals devised a similar daily rate formula to estimate extended home office overhead. Bichleay Corp, 60-2 BCA (CCH) 2688 (1960), affd on reconsideration, 61-1 BCA (CCH) 2894 (ASBCA 1961). Citing Fred R. Comb, the Board stated that the contractor need not prove a specific amount of extended overhead, but instead need only assert a fair allocation to compensate for the Government delays which caused suspension of approximately one half the work under the contract. The Board Copyright 1996 by 'Barba-Arkhon International In. 6 ultimately concluded that its formula, destined to be titled “Eichleay” Formula was the best way to “allocate home office expenses incurred during a period of suspension of work “when” it was ... not practical for the contractor to undertake the performance of other work which ‘might absorb them.” The Board reasoned that overhead costs, including the main office expenses involved in this case, can not ordinarily be charged to a particular contract. They represent the cost of general facilities and administration necessary to the performance of all contracts. It is therefore necessary to allocate them to specific contracts on some fair basis of proration. Following the Eichleay Corp. decision, the court approved award of overhead costs prorated on a daily basis in cases where the Government caused disruption, suspension or delay during performance of the contract. ... then in 1984, this court (The United States Court of Appeals, Fed. Cir.) refused to accede to the Government's request to jettison use of the Eichleay Formula to calculate such delay damages. Capital Electric Company, 729 F.2d at 747. Instead this court approved the use of the Eichleay Formula to calculate extended home office overhead under the suspension of work clause provided that compensable delay occurred, and that the contractor could not have taken on any other jobs during the contract period. "The contractor, having met this burden, the Government may only preclude use of the Eichleay Formula if it can show somehow that the contractor would suffer no loss by using a fixed percentage mark- up formula,total overhead for contract period total billings for contract period allocable overhead overhead allocable to the contract daily contract overhead days of performance [Step 3] .. In all of these cases, when disruption, suspension or delay caused by the Government has reduced the stream of direct costs in the contract, it appropriate to use the Bichleay Formula to calculate extended home office overhead instead of the fixed percentage rate formula because the latter would not adequately compensate the contractor for extended home office overhead.” In recent years the use of the Bichleay Formula has been refined. In October of 1992, The CBC Enterprises Inc. decision established that the Bichleay Formula cannot be applied to change order extensions. In the case of Daly Construction Inc. v. Garrett Il, 5 F.3d 520, (Fed Cir 1993), the Board determined and held that in order to use the Bichleay Formula as a measure of damages, the contractor must show that it was required to reasonably standby during the period of delay without staff reduction and that it was impractical to take on additional jobs during this period. The Board further clarified that the Eichleay Formula is not applicable, unless the contractor reasonably incurred extended overhead costs attributable to the delay. Copysight 1996 by 4 Barba-Arkhon International Inc daily contract overhead X days of delay = amount recoverable Finally, in the case of Wickham Contracting Inc. v. Fischer, 12 F.3d 1574 (Fed, Cir. 1994), the Court of Appeals held that the Bichleay Formula is the exclusive means for compensating a contractor for unabsorbed overhead when it otherwise meets the Bichleay prerequisites which are (1) that the contractor be on standby and (2) that the contractor be unable to take on other work. Wickham also states that “It fis] the contractor’s burden to show that it could have finished the contract work .. and would have done so but for the delay by the Government.”—Saaass VU. Conclusion The use of critical path method scheduling techniques as an analytical tool for evaluating cause and effect and establishing causation has grown and matured in the Federal arena over the past two decades. A review of the case studies discussed in this paper reveals that Courts and Boards have shown not only their willingness, but their desire, to utilize CPM principles and schedule delay analyses in terms of adjudicating delay claims. It is also evident that in terms of ruling on the acceptability of schedule delay analyses offered by appellants and respondents alike, these entities look for (and require) complete, accurate, non-biased, understandable analyses which “properly” take into account actual/as-built criticality (or non-criticality) of delay, float utilization and concurrency of delays. With respect to the approach utilized in performing schedule delay —_analysis, theoretical/hypothetical approaches should be avoided. In addition, it is essential that the analyses take into account all critical delays (owner-caused, contractor-caused and excusable) alleged to have occurred on the project which affected the actual/as-built critical path of performance throughout a given project. And, in apportioning concurrent delays and the damages related thereto, it is important to take into account the critical path, CPM principles, float ownership, and but for test criteria discussed herein. Copyright 1996 by Barba-Arkhon Internationa Inc. 6sSSS Appendix A. Court Commentary on Expert Witness Delay Analysis From Case Study No. 9 Youngdale & Sons Construction Company, Inc. 27 Fed. CL. 516 svgiven the significant discrepancies contained in plaintiff's CPM report, infra, the Court cannot justifiably rely upon a summary schedule of an expert report which the foundational information contained therein is inaccurate and unreliable, given the testimony and evidence adduced on the record as a whole. In any event, in the interests of completeness, we have provided a list of illustrative errors with respect to plaintiff's schedules where we have found certain underlying data to be unreliable. A (1) There is absolutely no specific cross- reference tying in the data in the As-Built schedule to any of the daily reports from which the schedule is allegedly predominately derived. In fact, the activities as described within sai schedule are, for the most part, completely ambiguous given the comprehensive and generic ‘manner in which they are labeled and listed therein. As a result, the Court is unable to determine with any degree of certainty what particular “tasks” make up an activity as it is referenced therein (2) [The CPM expert] testified that he used calendar days, and not work days, in scheduling the As-Built report. Tr. 100-05. He also testified that, because of this fact, he had to “adjust” the time durations of the various activities delineated in the daily reports to compensate for the added weekend days in order to run his program under a Problems in the As-Built Schedule Copyright 1996 by Barba-Arkhon International Ine. Al system of continuous calendar days, with start and finish dates, reflecting a seven-day work week instead of five. Tr. 1101-02. Accordingly, many of the individual start and finish dates are not accurate. Tr. 1113-14. [The CPM expert] also testified that actual performance times could vary as much as four days, Tr, 1113-14, and that the computer software which he utilized to schedule this project was incapable of producing precise dates; thus, error margins of several days could exist as to each activity. Tr. 1113. Consequently, in the majority of instances, the actual dates of an activity cannot bbe determined from the As-Built schedule which, in the Court’s mind, calls into question the validity of the report’s indications. Likewise, [the expert's] testimony that holidays were not accounted for accurately in his computer- generated schedule also demonstrates the lack of accuracy and reliability of his report. Tr. 1101 @) In cross-checking the As-Built report with the As-Planned report, the Court observed that [the expert] renamed or recharacterized almost all of the activities in the As-Built report. As a result, a significant number of individual activities in the As-Built report are not traceable to the As-Planned report. In addition to this labeling problem, the activity code numbers on the As-Built chart were also almost completely renumbered. Therefore, even the few activities whose labels are initially traceable from the As- Built to the As-Planned are subsequently lost within the new renumbering system. Thus, no meaningful or reliable conclusion can be reached by comparing anticipated production with actual performance. (4) Finally, as previously referenced, supra, even the data imputed into the As-Built report after June of 1984 was not actual data. (The CPM expert] testified at trial that he used the date contained on the As-Planned report to complete the As-Built report, because after June of 1984,there were large gaps in the dates of the “daily” reports, and the information provided thereafter was, in essence, unreliable. Tr. 1034-35. As a result, after June of 1984, the As-Built report to provide any relevant information as to what actually occurred during construction of the project. On cross-examination, the following colloquy is probative: Q. From June 1984 to the end of the project, [December 1984], is it correct that anything that ‘you have identified as As-Built is not, in fact, As- Built? A Tr. 1035. B. Problems in the As-Built No Delay Schedule (1) [The CPM expert] admits that the activity code numbers in the As-Built schedule do not correlate to the numbers contained in the As-Built No Delay schedule. Tr. 1074, 1117. Further, [the expert] testified, “[when] I tell the computer [to] take [a group of] activities and move them over to another project...it renumbers them for me. I'm not really happy with it. It makes it so that the cross referencing is very difficult. I'm not really happy with that part of it.” Tr. 1074, More importantly, neither [the expert] nor the plaintiff provided the Court with a mechanism by which it could cross-reference the activities from the As- Built to the As-Built No Delay in light of the foregoing proof problems. This is true, despite [the expert’s] testimony that—he too saw a distinct need for cross-referencing the items on the various schedules; it makes cross-referencing very difficult, and he deemed this to be an error. ‘Tr. 1057, 1074. (2) On the As-Built report, we observed that, there were 12 critical items, ie., numbered 550, 554, 558, 560, $98, 600, 602, 604, 610, 650, 658, and 1423, which were omitted from the As-Built No Delay schedule. Tr. 1058. No satisfactory ‘That's correct, Copyright 1996 by ‘Barba-Arkhon International Ine Aa explanation was given for such an occurrence. In fact, [the expert] admitted that “...itis difficult to say what they would do.” [He] also testified that said omission was an error. Tr. 1061. @) In comparing the As-Built and the As- Built No Delay schedules, we further observed that the time durations noted for a particular activity on the As-Built schedule, ic., the number of days which it actually took to complete a particular activity, often do not agree with the time durations noted on the As-Built No Delay for the same activity. For example, at trial [the CPM expert] admitted that, with respect to the As-Built schedule, activity code number 1422, entitled “B RI PLUMB/MECH UNISTRUT” indicated that said activity took three days to complete; however, on the As-Built No Delay schedule, that very same activity took 45 days to complete. PX 165. Although [the expert] admitted that the two activities were one and the same, he was unable to explain the reason for the extreme variation in the time durations between the two schedules. Tr. 1143-44, cc, D. Miscellaneous Problems Re Plaintiff's Exhibit 165 (2) In reviewing [the CPM expert's] testimony, itis clear that he even failed to explain the meanings of the captions to the columns on the three reports, ie., the As-Planned, the As- Built, or the As-Built No Delay. Although some column headings were blandly mentioned at one point, they were never explicitly defined so as to facilitate the Court’s use of PX 165 in its deliberations. Tr. 1062. In fact, the record shows that even the defendant had to inquire on cross- examination as to the meaning of various columns contained in the As-Built report. Tr. 1062-63, (2) In PX 165, the As-Built schedule indicates that the project took 657 days to intentionally omitted)complete, with a start date of March 15, 1983, and a finish date of December 30, 1984. According to [the expert's] testimony at trial, however, the actual start date was April 14, 1983, and the actual completion date was December 19, 1984. Tr. 1160-63. He then testified that, in using those dates to calculate the amount of time it took to complete the project, said period would be 615 calendar days. Tr. 1164. [The expert] later corrected himself to indicate that the April 14, 1983 date was the scheduled start date, and that the actual start date was March 15, 1983. Id. [He], therefore, recalculated the construction period to be 645 days, from March 15, 1983 to December 19, 1983. Tr. 1165-67. Notwith- standing the foregoing inconsistencies, [he] again corrected himself in his testimony as to the correct actual start date. This time, [the expert] testified that the April 14, 1983 date was in fact the correct actual start date, not March 15, 1983, and, therefore, the additional 30-day period which he had previously added to his 615-day calculation was erroneous. Tr. 1212-13 Jn any event, the As-Built report in PX 165 clearly indicates that the project took 657 calendar days to complete, not 615 days, as well as depicts the start and finish dates for the project as March 15, 1983 and December 30, 1984, not April 14, 1983 and December 19, 1984. In reviewing the parties’ “Stipulated Joint ‘Memorandum of Contentions of Fact,” filed on July 25, 1990, the Court notes, however, that the parties stipulated that construction began on April 14, 1983, and ended on December 19, 1984. Clearly, the parties’ stipulations and the plaintiff's expert report are inconsistent as to this extremely important factor. 3) According to the As-Built schedule, Youngdale completed the project 206 days beyond the contract completion date, ie, from June 7, 1984 to December 30, 1984. [The CPM expert} testified, however, that the actual construction period beyond the contract, Copyright 1996 by Barba-Arkhon International Ine. AS completion date was 195 days, ie., from June 7, 1984 to December 19, 1984. Tr. 1167. Obviously, the extra 11 days (206-195) are a result of the report’s erroneous use of December 30, 1984 as its completion date, when in actuality said stipulated date was December 19, 1984.SSS Appendix B. Resource Control: Manpower Forecasting and Leveling A. Overview All engineering and/or construction projects re- quire a multitude of resources, the most important of which is people. Distributing the number of persons on a project so as to optimize perform- ance is known as manpower leveling. Schedules (network or other) which do not consider man- power leveling may be overly optimistic as, like it or not, there are staffing limits on almost all work. ‘The time required for completion of all projects is dependent, among other things, upon the re- sources (normally labor, equipment and material) which are available to execute the project, as well as detailed planning and schedule control. Labor allocation or manpower leveling is accomplished by comparing the early start date of an activity and its required resources with the availability of those resources at that time. If the resources are available at the activity’s early start, then thi where the activity can be scheduled for execu- tion. If the resources are not available at the early start, then the execution of work should be de- layed until such time as the resources are avai able, presumably not later than the late start date. To understand manpower leveling in conjunction with CPM scheduling, it is necessary to under- stand that an activity with float time is permitted to start somewhere between its early and late start dates. Float is the wherewithal of resource level- ing, since to reduce the peaks and achieve a rela- tively even plateau of resource usage requires that some activities be shifted down stream in time. B. Manpower Forecasting Prior to leveling the manpower on a project, it must first be determined what the manpower re- quirements are at the activity level. In this regard, it is useful to determine the total number by dis- cipline or trade for each project day, week and month based on all activities being performed at their early start-finish dates. Then, it is possible to estimate total reasonable levels. By imposing total limits, we are able to determine the schedule impact caused by this limiting of staff levels. In estimating the duration for an activity, we considered the optimum conditions of resources and time. Now, consider the summary effect of these individual resources in the network (see Figure | below). The manpower required to exe- cute each of the activities has been added in pa- rentheses next to the activity duration and Figure 1 Ore Ber 3a Copyright 1996 by Barba-Arkhon Intemational Inc.assumes that only one trade or discipline is in- volved for all the activities. From a review of the network, we can see that the longest duration is fourteen days. Redrawing the network on a time scale using all early start times results in the following: Figure 2 Now, redrawing the same network and showing all activities starting on a late start basis, the re- sults are as follows: Figure 3 roma. nen ee[a[a[r she ‘And, summing up the manpower in Figure 3, we see that we have a low of three and a high of eleven; however, the low and highs occur on differ- ent days from those on the previous chart, The re- sult of having all activities start at their latest start time is again a rather uneven resource usage, and of course, all of the float has been used up. Figure 4 is, Copyright 1996 by Bs ‘Barba-Arkhon International Inc. a summarization of the resource usage on an early start and late start basis: Figure 4 Resource Forecast ‘Number of Men Dy ES LS. 1 4 3 2 5 4 3 6 5 4 " 6 5 1 " 6 1" 1 7 8 " 8 1 7 9 8 8 10 8 8 it 8 8 12 8 8 13 8 8 14 8 8 This tabulation of the manpower or other resource required is called a resource forecast. Manpower requirements have not been optimized at the proj- ect level although they have been at the activity level. Obviously, neither of the above solutions is optimal; therefore, the solution must be some- where in between. To determine the best level of Utilization of resources it is necessary to perform the repetitious process of manpower leveling. C. Manpower Leveling Ifa limit of available manpower in Figure | was set at eight personnel then it would, in effect, re- duce the peaks of both the early and late start re- quirements. The resulting tabulation of this arbitrary leveling is shown in Figure 5. 2Figure § 62 | 62 | a2 | «2 w ro crue nomameTo ve sneoueD NO-Gr MeN cekeonED to keep track of the remaining resource availabil- ity as well as the network sequencing. In the ex- ample depicted in Figures 6 and 7 on the following page, X, Y and Z have been assigned to cach activity. If the manpower limits are as be- low, has the project been delayed? If so, what is the new project duration? At the start of day No. 1, there are eight people available, and three are required for Activity A. Therefore, five people will be available for the next activity. The first number in the above chart, then, is the usage and the second number (5) is ‘the remaining availability. ‘As may be noted above, the arbitrary limitation of eight people has not been exceeded, but by the Craft Availability: same token, all eight have not been utilized. Also, X-3 people the introduction of the limit has extended the Y -2 people project duration by three days (from 14 to 17 Z-3 people days). This network is too small to do an efficient leveling job, but it does illustrate the goal use of total resources most efficiently by allocating the fost, Activities may be split (started, stopped, re- started); team or craft splitting not allowed; must have full complement of each required crew to schedule activity) (see Figure 6). D. Malti-Resouree Manpower Leveling 1... tae the project has been delayed (from a ‘Many activities require more than one critical re- Planned 7 days, to 8 days) because the necessary source to complete. The solution of the limiting ™™aapower was not available to complete it within ‘of resources and the schedule impact is the same the project early finish duration, a not uncom- for multiple resources per activity as for a single on real life occurrence (see Figure 7), resource per activity. It is more complex for mul- tiple resources, though, as it becomes necessary Copyright 1996 by B3 [Barba-Arkhon International Inc.a5 aT @——_2. 5 Copyright 1996 by Barba-Arkhon International Inc Be ‘Manual resource leveling with single or multiple resources for a single project or among multiple projects is limited to the most simple applica- tions. As with the basic CPM schedule computa- tions, computers are normally utilized to perform many, if not most resource leveling applications. ‘The writer is not aware, however, of any com- puter programs which automatically provide an optimum selection. Instead, the user must per- form a trial and error iteration of setting limits, reviewing results and repeating until a minimal delay occurs, Portions of the process which are available in software packages allow the user to prioritize considerations such as float, duration, craft importance and the possibility of temporary increases in availability. E. Manpower Leveling Through Network Crew Sequencing An alternative method of manpower leveling is the sequencing of key resources through the ad- dition of crew movement restraints to the net- work; i.¢., 3rd floor plastering follows 2nd floor, 4th floor follows 3rd, etc. If two crews are de- termined to be necessary, then crew restraints would be added between 2-4-6, etc. and 3-5-7, te. to achieve manpower leveling without requir- ing activity level, individual crew size estimates or computerized leveling. Sequencing of key re- sources has, in practice, produced man level schedules on many projects with little effort Therefore, selection of the key resources is most important, Selection of these resources will vary from project to project. In one case, it may be sets of concrete forms which are to be purchased for the project; in another, it may be the masonry or pipefitting crew.In selecting the key resources, consideration must be given to the different phases of the project: structure, rough-ins, and/or interior finish work. For example, if the sheet metal subcontractor was selected as the key resource and his work was scheduled in series from floor to floor, this se~ ‘quencing might have the effect of also staggering the work which follows ductwork, such as ce- ramic tile, ceiling suspension, or electrical rough- in. Again, selecting the plasterer as a key re- source to be sequenced would result in the dry finish work following the plaster to be staggered in like amount. ‘Taking an example, assume that you have just completed planning the construction of a 9-story hospital building, and that you have selected the plastering as one of the key resources within the project. Figure 8 (below) is the excerpted list of plastering operations from the schedule (dates are the end of the day). ‘The first step in analyzing crew requirements would be to sum up the total crew days required for plastering the 9 floors (105 crew days), then make a check to see how many total work days were available between the “earliest” early start and the “latest” late finish. (Note dates of May ‘29th and September Ist.) Consulting the calendar Copyright 1996 by 'Barba-Arkhon International Ine Bs shows 63 working days available to accomplish 105 crew days worth of work. It therefore be- comes immediately obvious that it is impossible to sequence the plastering from floor to floor in strict series, but rather that two crews will be re- quired to meet the schedule requirements. The next step in determining the number of crews re~ quired would be to prepare a bar chart which in- dicates the early start, early finish and late finish for each of the 9 floors of plastering. (See Figure 9) Figure 9 ae In addition to attempting to provide a schedule which does not exceed the use of ‘two separate crews of plasterers, you are also interested in providing continuous work for the two crews (not to bring the plasterer in for a period of time, send him back and recall him again). Now, by trial and error and intuitive process, slide the arrows in their time slots to produce @ continuous work force. One method which achieves these goals is shown on the next page (Figure 10). It may be noted in Figure 10 that the first crew starts to work on the morning of June 8th, on the first floor, followed by the second, fourth, sixth and eighth floors. The second erew starts in onthe morning of July Ist, on the third floor, fol- lowed by the fifth, seventh and ninth floors. It may also be noted that while some of the float hhas been used up on each floor, there is still a fair amount remaining, the exception being the ninth floor which had no float initially. In many instances, of course, the leveling out of resources will not result in such an orderly schedule, However, the results are usually worth the effort. The next step after scheduling, in view Figure 10 of the key resources, would be to add scheduling restraints on the diagram itself, labeling these re- straints resource or scheduling restraints, in order to distinguish them from logic restraints. A new forward and backward pass would then be made to adjust the start and finish dates of all following activities. Manpower sequencing or “crew flow” ‘often determines the critical path to project com- pletion and can take precedence over construction logic. Schedules constructed using crew flow re- straints should usually be set forth in greater de- tail so as to clearly depict specific activity relationships. Copyright 1996 by Be Barba-Arkhon Intemational Inc.SOON Appendix C. Summary Biograp s of Presenters Evans M. Barba, P.E., Chairman and Chief Executive Officer, Barba-Arkhon International Inc., where he specializes in the planning and control of construction programs, the analysis of claims, and support of litigation and ADR. Mr. Barba has served as an expert witness (in mediation, arbitration and at litigation) relative to delay and disruption claim analyses. He is a Registered Professional Engineer and Professional Planner, and has lectured throughout the United States, Canada and overseas for universities, and professional associations on a wide range of program management, claims mitigation and claims resolution topics. He has also authored numerous works on CPM scheduling, schedule delay analysis, program — management contro! techniques, and the avoidance and resolution of claims, Mr. Barba holds a Bachelor’s Degree in Civil Engineering from the Cooper Union and a Master’s Degree in Civil Engineering from the Polytechnic Institute of New York. business Thomas C. Caruso, P.E., Principal, Barba- Arkhon International Ine., has over 18 years of experience in the design, construction and construction management of rail, prison, heavy highway and industrial projects throughout the country. His experience includes extensive involvement in construction management and contract administration, and the analysis of claims. He has testified as an expert witness regarding schedule delay analysis, technical issues, loss of productivity, cost analysis, construction and consultant standards of practice and has been qualified as an expert in delay and disruption analysis before Federal and State Copyright 1996 by Barba-Arkhon Intemational Inc Courts, and the Contract Board of Appeals. He holds a Bachelor's Degree in Construction Engineering/Management from Colorado State University, a Master’s Degree in Civil Engineering from the University of Illinois, and a Juris Doctor Degree which he received from Touro College. Mr. Caruso is also a Registered Professional Engineer, is admitted to the bar in Colorado and New York, and holds a Class A Contractor's license. Barba-Arkhon International Ine. specializes in the planning and control of large-scale construction and acquisition programs, the analysis of claims, and support of litigation or ADR. With offices located in Mount Laurel, New Jersey; Denver, Colorado; and San Francisco, California, the firm serves clients in the construction, shipbuilding, manufacturing and aerospace industries.[Ss Appendix D. Index of Legal References Acme Process Equipment Company, 171 Ct. Cl 324, 367 Acme Missiles and Construction Corporation, ASBCA 11786, 69-2 BCA 48057 Acme Missiles and Construction Corporation, ASBCA 11794, 68-1 BCA 16737 Active Fire Sprinkler Corp., GSBCA No. 5461, 85-1 BCA 417,868, at 89,484 (1984) Aetna Casualty & Sur. Co. v. Butte-Meade Sanitary Water Dist., 500 F. Supp. 193 (D.S.D. 1980) Ballenger Corporation, DOT BCA Nos. 74- 32, 84-1 BCA 416,973 (1983) Beaucamp Constr. v. United States, 14 CLCt. 430 (1988) Beckman Constr. Co., ASBCA No. 24725, 83-1 BCA $16,326 Bell v. United States, 186 Ct.Cl. 189 (1969) Blackhawk Heating & Plumbing Co., Inc., GSBCA No. 2432, 75-1 BCA. §11,261 (1975) Blackhawk Heating & Plumbing Co., Inc., GSBCA No. 2432, 76-1 BCA {11,649 1982) Broome Construction Inc. v. United States, 203 Ct. Cl, 521, 528, 492 F.2d 829, 833 (1974) Bruno Law et al. v. The United States, 195 Ct. C1. 370 382 (1971) Building Maintenance Specialist, Inc., 85-1 BCA $17,932 (1985) C&D Lumber, Inc., VABCA No. 2877, 91-1 BCA $23,544 (1990) Canon Construction Corporation, ASBCA No. 16,142, 72-1 BCA §9404 (1972) Capital Electric Company v. United States 729 F.2d 743 (1984) CBC Enterprises, Inc. v. United States, 978 F.2d 669, 673-74 (Fed. Cir. 1992) Copyright 1996 by Da [Barba-Arkhon International In. Chaney & James Construction Co., Inc. v. United States {14 CCF 483,407), 190 Ct.Cl. 699; 421 F.2d 728 (1970) Clark Baridon, Inc. v. Merritt Chapman & Scott Corp., 311 F.2d 389,394-395 (4th Cir. 1962) Cline Construction Co., ASBCA No. 28,600, 84-3 BCA 417,594 (1984) Coath & Goss, Inc. v. United States, 101 CCI, 702 (1944) Coffey Construction Company, Inc., VABCA ‘Nos. 3361, 3432, 3473, 93-2 BCA 25, 788 (1993) Commerce International Co. v. United States (9 CCF $72,781], 167 Ct. Cl. 529, 338 F.2d 81 (1964) Connell Rice and Sugar Company, Inc. v. United States, 837 F.2d 1068, 1071 (Fed. Cir. 1988) Continental Consolidated Corporation, ENG BCA 2743, 2766, 67-2 BCA $6624; 68-1 BCA $7003 Daly Construction Inc. v. Garrett, Ill, 5 F.3d 520 (Fed. Cir. 1993) Dawson Construction Co, GSBCA 3998, 75-2 BCA 11,563, Dravo Corp. Eng. BCA 3800, 79-1, BCA 13,575 Dynalectron Corp. (Pac. Div.) v. United States, 207 CT. Cl. 349, 518 F.2d 594 (1975) Eichleay Corp., ASBCA No. 5183, 60-2 BCA 2688, 1960 WL 538 (July 29, 1960) Essential Construction Company, Inc. and Himount Constructors, Ltd., a Joint Venture, ASBCA No. 18706, 83-2 BCA {16,906 Fischbach & Moore, International Corp., ASBCA No. 14216, 71-1 BCA 9,081 «ag71) Fischbach & Moore, International Corp., ASBCA No. 18146, 77-1 BCA 412,300 (1976) Fortec Constructors v. United States, 8 CI.Ct. 490 (1985) Framlau Corp, ASBCA No. 14479, 71-2 BCA $9,082 Frank L. Marino Corporation, ASBCA No. 16104, 73-2 BCA 410,244 Fred R. Comb Company v. United States, 103 Ct. Cl. 174 (1945)Freeman-Darling, Inc., GSBCA No. 7112, 89-2 BCA 421,882 (1989) GM. Shupe, Inc. v. United States, 5 C1.Ct. 662 (1984) Georgia Power Co. v. Georgia Public Service Conservation et al., 196 Ga. App. 572, 396 S.B.2d 562 (1990) Gulf Contracting, Inc v. United States, 972 F.2d 1953 (1992) Gulf Contracting, Inc., 23 C1.Ct. 525 (1991) Gulf Contracting, Inc., ASBCA 30194 et al., 89-2 BCA 21,812 H&S Corporation, ASBCA No. 29688, 89-3 BCA 422,209 (1989) Haney v. United States, 230 Ct.Cl. 148, 676 F.2d 584 (1982) Hardeman-Monier-Hutcherson, ASBCA No. 11,869, 67-2 BCA 6522 Heat Exchangers, ASBCA 8705, 1963 BCA. 13881 Herbert M. Baruch Corp. v. United States, 93 Ct. Cl. 107 (1941) Interstate General Government Contractors, Inc. v. West 12 F:3d 1053 (1993) J.D. Hedin Construction Co., Inc. v. United States [10 CCF $73,076], 171 Ct. Cl. 70 (1965) Jokn Driggs Company, Inc., ENG BCA No 4926, et al., 87-2 BCA 419,833 (1987) John Murphy Construction, Co., AGBCA No. 418, 79-1 BCA 913,836 (1979) Joseph E. Bennett Co., GSBCA 2362, 72-1 BCA 49364 Klingensmith, Inc. v. United States, 731 F.24 805,809 (Fed. Cir. 1984) Kora & Williams Corporation and Insurance Company of North America, DC CAB, D-839 (1994) L.O. Brayton & Co., IBCA 641-5-67, 70-2 BCA. 78510 13. Lenoir Contractors, Inc, DOT BCA No. 78-7, 80-2 BCA 414,459 (1978) Litchfield Mfg. Corp. v. United States (CCF 172,778}, 167 Ct. Cl. 604 (1964) Merritt-Chapman & Scott Corp. v. United States, 528 F.2d 1392 Ct.Cl. (1976) Copyright 1996 by ‘Barba-Arkhon International Inc Metropolitan Paving Company v. United States [9 CCF 472,357], 163 Ct. Cl. 420 (1963) Miles Construction, VABCA No. 1674, 84-1 BCA 416,967 (1983) Minmar Builders, Inc., GSBCA 3430, 72-2 BCA 49599 Montgomery-Ross-Fisher, Inc., PSBCA No. 1033, 84-2 BCA 417,492 (1984) Morrison-Knudsen Co. ENG BCA Nos. 3856, 3857, 79-1 BCA 413,798 ‘Myers-Laine Corporation, ASBCA No. 18234, 74-1 BCA $10,467 New York Shipyard Corp., DOT BCA No. 2070, 91-1 BCA $23,365 (1990) Norair Engineering Corp., ENG BCA No. 3804, 90-1 BCA 922,327 (1989) Preston-Brady Co,, Inc., VABCA No. 1892, 87-1 BCA 419,649 (1987) Raymond Constructors of Africa, Ltd. v. United States (13 CCF 482,155], 188 CL.Cl. 147; 411 F.2d 1227 (1969) Sante Fe, Inc., VABCA NO. 2168, 87-3 BCA 120,104 (1987) ‘Savoy Construction Company, 80-1 BCAP 14, 392 Spirit Leveling Contractors v. United States, 19 CL.Ct. 84 (1989) Time Contractors, J.V., BCA 1669, 87-1, BCA 119,582 at page 99,052 Titan Pacific Construction Corp. v. US. 17 CL.Ct, 630 (1989) Titan Pacifie Construction Corp., et al. 87-1 BCA 419,626 Tyger Construction Company, Incorporated ¥. United States Nos. 468-88C, 526-88C and 90-134C_Fed. Cl_ (1994) United States ex rel. Heller Electric Co. ¥. William F. Klingensmith, Inc., 670 F.2d 1227, 1231 (D.C. Cir. 1982) Utley-James, Inc., GSBCA No. 5370, 85-1 BCA 417,816 (1984) Vogt Brothers Mfg. Co. v. United States (9 CCF 471,991}, 160 Ct. Cl. 687, 709 (1963)Warwick Construction, Inc., GSBCA Nos. 5070, 5387, 5388, 5457, 5543, 82-2 BCA 116,091 Weaver-Bailey Contractors, Inc. v. United States, No. 137-87C, 19 CILCt. 474 (1990) Wickham Contracting Company, Inc. v. Fischer, 12 F.3d 1574 (Fed. Cir. 1994) William A. Smith Contracting Company v. United States, 155Ct.CL1, 9-19, 292F.2D 847, 852 (1961) William F. Klingensmith, Inc. v. United States, 731 F.2d 805, 809 (Fed. Cir. 1984) Williams Enterprises v. Strait Mfg. & Welding, 728 F. Supp. 12 (D.D.C. 1990) Wilner v. United States, 23 Cl. Ct. 241, 245 (1991) WRB Corporation v. United States, 183 CCI. 409 (1968) Youngdale & Sons Construction Co., Inc. v. United States., No. $53-88C, 27 Fed.Cl. 516 (1993) Copyright 1996 by Barba-Arkhon Intemational Inc. D3