DELAY CLAIMS/DISPUTES IN CONSTRUCTION

PROJECTS

Rohit Singhal, Founder & CEO-MASIN

OVERVIEW
Overview – Delay Claims/Definition Forensic Schedule Analysis and
Nomenclature

Approach – Delay Analysis Methodologies pro & cons

Findings – Choosing a methodology, Fact is King, Guidance

Conclusions
 Delay Claims
• Contractors frequently assert that they have been delayed due to reasons beyond their control.

• Owners often remain unconvinced that the Contractor is legitimately entitled for time extension or
delay, acceleration and loss of productivity damages.

• Large sums of money may hinge upon the outcome of the dispute over project delays.

• Consequently, a thorough schedule analysis of all project delays is essential for the equitable
resolution of delay and impact related disputes.

• Most construction contracts allow Owner to recover either liquidated damages or actual damages due
to delays caused by the Contractor.

• Contractor may contractually also entitled to following:-

• Extended stay compensation due to Owner caused delays
• Acceleration or disruption costs
• Loss of Productivity for reasons beyond Contractor’s control, change of scope, Owner’s
interference etc.
9
 Delay Claims
As per Society of Construction (SCL) Delay Protocol:-
• …….the Employer Risk Event impacts the critical path of the works and
thus extends the contract completion date. This assessment should be
based upon an appropriate delay analysis, the conclusions derived
from which must be sound from a common sense perspective.
• It is often incorrectly thought that an entitlement to an EOT
automatically carries with it an entitlement to compensation for
prolongation costs during the period of the EOT.
• The main effect of an EOT is that the Contractor is relieved of its
liability for liquidated damages during the period of the extension and
is able to re-programme its works to completion
10
FORENSIC SCHEDULE ANALYSIS
•

“… refers to the study and investigation of events using CPM or

other recognized schedule calculation methods for potential
use in a legal proceeding.”

• “… the study of how actual events interacted in the context

of a complex model for the purpose of understanding the
significance of a specific deviation or series of deviations from
some baseline model and their role in determining the
sequence of tasks within the complex network.”
 Types of Delay
 Excusable Compensable
 Delays that entitles contractor to time and cost and are not attributable to Contractor
 Generally due to delays solely attributable to the Owner

 Excusable Non-compensable
 Delays that allow extention of time to the Contractor with out Liquidated Damages but no
additional cost for extention
 Generally due to concurrent delays of Owner and Contractor, Force Majeure
 Concurrent Delays
 Delays attributable to both Contractor and Owner and taking place concurrently

 Inexcusable Delays
 Contractor to be penalised
 Are primarily Contractor caused delays

12
APPROACH

Overview – Definition Forensic Schedule Analysis and Nomenclature

Approach – Delay Analysis Methodologies pro & cons

Findings – Choosing a methodology, Fact is King, Guidance

Conclusions
APPROACH – DELAY ANALYSIS METHODOLOGIES
Retrospective Analyses Prospective Analyses

LOOKING BACK LOOKING FORWARD

• As‐planned versus As‐built • Time‐Impact Analysis

• As‐Built But For • Impacted As‐planned

TWO
Types

FOUR
Categories*
APPROACH – AS‐PLANNED VS AS‐BUILT (APAB)
• is the most basic method of analysis
• is observational – no changes are made to the programme
• straightforward comparison between the planned vs the actual performance of the
work
• can only be carried out retrospectively (requires as‐built programme/or at least
the overall as‐built completion date)

STRENGTHS WEAKNESS

• is very simple and therefore • Static critical path

easy to understand.
• can be performed with
rudimentary base data (e.g.
when detail and logic of the asplanned
programme is unavailable, and no
detailed progress records other than
the overall as‐built programme are
available).
• fails to fulfil the fundamental
requirement to demonstrate the
causal link between a delay event and
its alleged effect.
• does not deal adequately with
concurrent delay.
APPROACH – AS‐PLANNED VS AS‐BUILT (APAB)
Compare As‐Planned vs As‐Built
APPROACH – IMPACTED AS‐PLANNED (IAP)

• is a prospective methodology
• delay effect is measured by imposing events on a model of the original programme
(Baseline)
• does not rely on any actual progress that has been made
• requires a robust and reliable original programme that reflects the indented sequence
and the Scope of Work

STRENGTHS
• relatively simple to carry out and
to understand.
• No as‐built required (likely choice
when planned programme is available,
no significant changes in the sequence
during the project execution, few
delaying events, and when there is
little or no progress records)
WEAKNESS
• cannot be used for complex projects
• used to quantify potential delays rather and actual
• concurrent delays easily overlooked
• assumes that the baseline was achievable
• does not take actual progress/ resources into
account
• not reliable in dispute resolution
APPROACH – IMPACTED AS‐PLANNED (IAP)
APPROACH – TIME IMPACT ANALYSIS (TIA)
• prospective and dynamic method – but can be applied retrospectively
• takes account of progress and timing of delay events on the Works
• requires reliable as‐built data to update the programme (hence, if detailed and
regular progress data is not available then this method cannot be used)
• a reliable baseline programme is essential (ideally reflects the execution of the planned
project using sound construction logic)
• often undertaken in time slices (windows)

STRENGTHS
• has a proven track‐record in
forensic application
• preferred method of the SCL
Protocol
• based on a dynamic and changing
critical path
• demonstrates cause and effect
WEAKNESS
• time consuming (to determine the factual
background and correct logic associated
with progress records and delay events)
• requires considerable degree of
expertise and technical knowledge
• hence, difficult to communicate, highly
complex
APPROACH – TIME IMPACT ANALYSIS (TIA)
APPROACH – AS‐BUILT BUT FOR (ABBF)
• retrospective method also known as Collapsed As‐built (CAB)
• relies on a detailed reconstruction of the as‐built programme
• normally restricted to after‐the‐event analyses in forensic work
• does have a limited prospective capability (can be used to demonstrate the effect of a delay on the completed
part of an incomplete project)
• has been proven to be reliable in dispute resolution/ claims
• If done properly can demonstrates effect and cause/ takes account of concurrence
STRENGTHS WEAKNESS
• greatest strength for forensic work • complicated method hence, difficult to
execute and to explain
is that it is fact based (based on asbuild)
• not reliant upon an as‐planned • difficult to establish a dynamic as‐built
programme schedule (as complicated to determine and
model logic)

• requires detailed as‐build/ progress

records
APPROACH – AS‐BUILT BUT FOR (ABBF)
• Identify Planned Period & As‐built
APPROACH – AS‐BUILT BUT FOR (ABBF)
• Identify Delays
APPROACH – AS‐BUILT BUT FOR (ABBF)
• ‘Zero’ delays
APPROACH – AS‐BUILT BUT FOR (ABBF)
• Quantify Claim
FINDINGS

Overview – Definition Forensic Schedule Analysis and Nomenclature

Approach – Delay Analysis Methodologies pro & cons

Findings – Choosing a methodology, Fact is King, Guidance

Conclusions
 FINDINGS – CHOOSING A METHODOLOGY
Which Method is appropriate, correct, sustainable?
Legal/Contractual
• What does the jurisdiction/ contract require? (e.g. Concurrency? Likely or Actual delay to
completion? Delay Analysis Method Specified?)

What information is available?

• Planned, progress, as‐built (Does a lack of information preclude the use of any of the methods?)

Time and Money

• Do time/cost constraints eliminate certain options? ((During project/After Project, Record keeping;
Staff available (Engineering/Management),Decision making, Budget)

Other issues:
• Proportionality, Type of project, Which party, at what stage is the dispute?
FINDINGS – FACT IS KING
Key Facts:

At least after an event delay becomes a fact and the Other Party/ the Courts are interested in
what actually happened rather than in what could have happened.

For an event to affect the completion date it must fall on the critical path of the project.

must consider all relevant facts and evidence regardless of a positive or negative impact in
relation to the issues in question

Delay Analysis should be based on a calculated approach it can not be impressionistic

Effect and Cause not Cause and Effect

Are there facts/ evidence available and accessible to verify the cause
CONCLUSIONS

Overview – Definition Forensic Schedule Analysis and Nomenclature

Approach – Delay Analysis Methodologies pro & cons

Findings – Choosing a methodology, Fact is King, Guidance

Conclusions
CONCLUSIONS
Conclusions:

Delay Analysis comes in many guises all with their advantages and
disadvantages

To chose the most suitable method depends on the surrounding

factors

Facts and common sense are KING

 Quantum Analysis-Delay Damages
• Costing of prolongation cost
• Requires back ups and actual evidences to support the costing
• Construction disputes contains extensive documentation
• Prolongation cost
• Big misconception on what should be part of prolongation cost
• Should only contain fixed time related overhead costs
• Direct work related resources cannot be part of prolongation cost unless
evidenced to show that direct resources were impacted/disrupted owing to
delays
• Disruption analysis required to demonstrate loss in direct resources i.e loss of
productivity
• Loss of opportunity
• Loss of Head Office Overheads