Claims Preparation Day 3

Table of Contents
1 Preparing Successful Glaims 2
1.1 Research and lnvestigating project Documentation........... 2
1. ObjectivesandMethods............. 2
2. Trends and Trails 3
1.2 Data Basing and Process 4
1. Notes/Comments........ 4
2. Key Words 4
3. Process 5
2 Delay Analysis Using Planning Techniques............... 6
2.1 Common Terms Used in Delay Analysis.... 6
2.2 The programme; in a claim situation I
2.3 Selecting a Delay Analysis Method I
1 As-Planned Vs. As-Built Schedule Analysis Method .11
2 lmpact As-Planned Schedule Analysis Method........ .12
3 Collapsed As-Built .12
4 Time lmpact Analysis .13
2 4 lssues in Delay Analysis .16
1 Concurrent delays .16
2 Float ownership ......... .17
3 Scheduling options .19
3 EOT Assessment and analysis Techniques........... .20
3.1 Extension of time submissions............... .21
4 PRESENTATION ....22
4.1 Structured Documents and Contents.............. ....................22
4.2 House Sty1e......... ............23

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 Claims Preparation Day 3

1 Preparing Successful Claims

1.1 Research and lnvestigating Project Documentation

The most important focus area assisting with analysis is research. lnformation should be
collected, for the purposes of research, from correspondences, cost reports, progress
reports, schedules (including updates), submission and approvals of RFll, minutes of
meetings, procurement documents, sub-contract and contract documents, test reports,
verbal interviews and any other document that the investigator deems relevent.

For the purposes of the site contract managers the items to be researched for collecting
information will include: correspondence, contract agreements, contract documents and
schedules and their updates. The contract documents will include correspondence, General
Conditions of Contract (GCC), Special Conditions of Contract (SCC), Bill of euantities
(BOQ), drawings, specifications and amendments. This research must be primarily focused
on the technical, administrative and contractual record areas.

Ïhe research for commercial review and claims is to be focused all facts, evidences and
records that will be used to analyse the problem areas and risks.

1. Objectives and Methods

The objective and method of the research are to organise the information and data and to
collate the evidence and to analyse the issue by tracking and locating the most relevant
information.
The methods for organising the research are as follows:
1. Locate information via the site office or client
2. Collate and categorise the via the project's codes or folders
3. Access databases and use MS (Microsoft) Excel and/or MS Access to filter
the information
4. Build a chronology of for tracking events including submissions, disrupting
events, approvals and correspondence
5. Separate the issues and collate the evidences
6. Pass on to an analyst

Focus Areas
The issues need to be identified from the client, analyst overview and researcher evidence in
the focus areas. The identified issue links the evidence of each issue and paves the way for

t RFI means the

Request For lnformation

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Claims Preparation Day 3

the analyst to presenting organised data, The each correspondence should be clearly read
by the researcher to identify the issues with its focus areas.

2. Trends and Trails

The correspondence, submissions or approvals, progress reports, schedules, procurement
and meetings are the main threads of the research and contains topic/subject, date,
references, issues, responses, turnaround time, revisions plus tone and language.

Commonly the recurrence of a topic or subject may indicate the key issues while the
particular reference explains the system. The tone and language of the correspondence can
indicate whether an entity is co-operative, informative, adversarial, argumentative or critically
positioned in relation to the issue.

Following table illustrates the trends and trails and its contents:

Quoting contract conditions

lssues emerging
Correspondence Requests, responses and revisions
Tone and language
Particular references
RFls (Request for lnformation)
Submissio ns/Approva ls
Drawings / design data
Requisite notices for acceptance tests (Obligatory Period)
Frequency and extend of revisions
Schedule updates (logged data base)
Problem areas f problem & issues
Progress Reports
Variations / requests
Comments & language
Contract schedule
Basline schedule
Schedule Updates
Revisions
Asbuilt (end of project)
Schedule (dates, order, test & delive rv)
Planned Vs Actual
Procurement
Correlation with construction schedule
Approvals
Topics
Actions
Meetings
Resolution
Dates
Table I- Trends and trials with its contents

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The issue and approval dates are considered in the contract schedule, baseline schedule2,
updates and revisions. The baseline schedule includes the percentage complete and an
estimate of the time remaining until completion. At this point the changes in baseline
schedule can be used to create a new baseline schedule that incorporates agreed revisions.

1.2 Data Basing and Process

The Data Basing is the main organising method to research from the information data.
Microsoft Access is the convenient tool for the data basing and easier filtering for analyse
the issues.

The Data Base has been established with the online system through the link
http://www.proiectquard.net/ which for working with the project including item or reference
number, date of the document, type of the document3, topic or subject, date respond to,
reference, turning around time, issuesa, recipient, sender, copied to, key words and
notes/comments.

1. Notes/Gomments
Notes and comments are categorised as optional information in the document register.
These include a summary of the body of the document (e.g.; correspondence) including
references used, technical and contractual issues along with details and a description, and
advice and information relating to any possible future negative effects and possible
mitigations to offset those negative effects. The keywords are categorised for relevant
subjects, contractual issues and a technical / contractual title is given to each document.
Most of comments are linked with the keywords to help when it comes time to extract or filter
documents to ensure that only those relating to a particular matter are identified for the
matter in hand. This helps avoid spending excessive time in research.

2. Key Words
The keywords linked to a document, or piece of information, indicate the subjects that are
relevant to contractual issues and the technical or contractual title of each ln addition, for
letters keywords can be used to indicate whether an item of correspondence has been
answered and what the related letters are (e.9. a contractor's letter and a reply to it). For
example "Answer to contractor's Letter - 59" means the correspondence is the response to
the contractor's letter reference number 59. There is another keyword for example 'Reply to
contractor's Letter'which can be used to separately filter correspondence that is replying or
responding correspondence from another party.

'Base line schedule should contain details of the contract schedule.

t The type of document categorized as correspondence, drawings, notice, RFl, submittals, minute of
, meetings, reports, and approvals.
" lssues mean a key issue relevant with contractual eligibilities, for e.g.; delay, variation...

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Claims Preparation Day 3

Some keywords describe possible future negative effects and how to mitigate/avoid them.
For example; Extension of Time (will be submitted), Delay, Notice to Avoid progress Delay,
lmpacVClaim (will be submitted) and Guidance to Minimize Negative Effects. The
"lmpacUClaim (will be submitted,)" means that a time and/or cost impact/claim will be assed
and submitted to the party. Generally the key words should be made to easily filter the
particular trends and trials along with the relevant issues & subjects.

Some of keywords state the future negative effects and/or to mitigate/avoid future negative
effects which against the party who has received the correspondence, for example;
Extension of Time (will be submitted), Delay, Notice to Avoid Progress Delay, lmpacyClaim
(will be submitted) and Guidance to Minimize Negative Effects. The "lmpact/Ctaim (will be
submitted)" means that time and/or cost impact/claim will be assed and submitted to the
party. Generally, the key words would be made to easily filter. the particular trends and trials
with the relevant issues & subjects.

3. Process
The following diagrams illustrate the flow chart of process;

GATHER
t OR6ANISE&STOßE
t REAÐ&EXAM INE

PRESENT FOR
+
FITTER& ANALYSE

: :

+
ïrAcK tssuEs &
t WRITE NARRATIVES
Arguments
t DRAFTBEPORT

Figure I- The flow chart of process

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 Claims Preparation Day 3

Draft Report / Claim

EoT Prolongation,
Acceleration,
Additionalwork

Schedule Analysis Quantum Evaluation

Figure 2 - The flow chart of process

2 Delay Analysis Using Planning Techniques

2.1 Common Terms Used in Delay Analysis

Critical Path

A critical path is the sequence of activities starting from the beginning of the Gantt project
network to its end, on which all activities are critical. lf the early and late start dates of an
activity are the same, it is evident that the activity has no flexibility or "float". ln other words, if
the activity starts later then the assigned date or if the activity takes longer to complete than
the assigned duration, the project completion date will be extended by the same amount of
time. Such activities are said to be "critical", meaning that any delay in the start date or
completion date will extend the project duration.

Float

Float is one result of network logic combined with the constraints and activity durations.
Once both fonryard and backward passes through the network have been done, additional
information can be work out by calculating the float values for each activity. The types of
float are free, total and negative float.
The total float of an activity is calculated by looking at the difference between its early finish
and late finish dates, or the difference between the early start and late start dates. When
total float of is zero, we have no flexibility in its scheduling. To avoid delaying project
completion, any activity with zero total float must start no later than on the scheduled date
and must be completed within no more than the stipulated duration.

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Float is an essential and inevitable part of every programme and is used by contractors in
the efficient management of manpower and equipment resources. lt is also vital in
quantifying the impact of delay in extension of time submissions and delay claims. ln these
cases a contractor, or subcontractor, alleges a particular event caused delay and the effect
of the delay may entitle them to an extension of time and ultimately a loss and expense
claim.

Excusable Delay Event

This is a delay event for which the risk lies with the employer and the occurrence of which
would entitle the contractor to an extension of time if it causes delay to project completion.

Excusable and Compensable Delay Event

This is similar to an excusable delay event but with the difference that this delay event will
entitle the contractor to recover costs as well as the time.

These methods are characterised by the fact that they focus on first determining the delay
periods and then assessing which event(s) caused that delay.

Early and Late StarUFinish Times

One of the steps in the development of the network model is calculating early and late
start/finish times. The initial computations that are of particular interest include the early and
late start times of an activity and the early and late finish times. The early start time of an
activity is the earliest time that the activity can begin based on the relationships that exist in
the schedule with other activities scheduled to begin at an earlier time. The late start time is
the latest that an activity can start without adversely impacting other activities that are
scheduled to start later in the plan, and ultimately the date of project completion. Similarly,
the early finish time is the earliest that an activity is expected to be completed and the late
finish time is the latest that an activity can be completed,
lf a late finish date is exceeded, the project duration will be increased by the number of days
that an activity extends beyond its late finish time.
Calculations

One aspect of network models is that they permit the planner/scheduler to calculate the total
time that a project is projected to take and the times at which each activity must start in order
for the project to be completed in that estimated time. Several terms are used to describe
this scheduling information.

Earlv Activitv Start (ES):

The earliest time that an activity can start as calulated by the latest of the early finish times
of all immediately preceding activities.

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 Claims Preparation Day 3

Earlv Activitv Finish (EF):

The earliest time that an activity can complete is determined by adding the duration of the
activity to its early start time (EF = ES + duration)

Late Activitv Start (LS):

The late activity start is the latest time that an activity can start without delaying project
completion. lt is calculated by subtracting duration of the activity from its late finish (LS = LF
- duration). lt is also computed by adding the total float of an activity to the early start or (LS
= ES + TF),

Late Activitv Finish (LF):

The latest time that an activity can be finished without delaying the entire project. This is
equal to the earliest late start of the activities that immediately succeed it. lt is computed by
adding the total float to the early finish date (LF = EF + TF).

Free Float:

The amount of time that an activity can be delayed before it impacts the start of any later
activities. lt is calculated as the smallest link lag value of all link lines that occur after the
activity.

Logic and Relationships

The review of logic and relationships between project activities in the schedule is one of the
important sections in project guard analysis. The forecasting power of a schedule is directly
related to a correct network model for the pro¡ect. For the problems of extension of time,
avoidable delays or unavoidable delays and/or a claim; accurate network logic and set of
activity relationships are crucial to providing an effective and detailed analysis because if the
network logic is in error then any impact assessment that uses it will also be in error.

lf, when researching a claim, the project network is not of a sufficient quality then it will not
be able to support impact analysis. The impacts and causes should be considered after the
network has been corrected. Note that faulty network logic and scheduling can in itself be
the cause of failures in a contractors, or employers, ability to deliver according to the
contact.

2.2 The programme; in a claim situation

Now let's look at the use of the programme in a time-related claim situation. The programme
is an essential document in determining the extent of any extension of time and/or
compensation for delay. lt is both the benchmark and measuring tool in these situations.

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However, to be effective, the programme needs to be able to represent an accurate

prediction of future events and to model the characteristics of the project with activity
relationships, or logic links. This allows the criticality of activities and float cushions to be
taken into account when assessing extensions of time or delays.

The roles of a programme as a reference and measuring tool for both contractors and
employers in delay situations are:
I' For a contractor's entitlement to additional time for completion of the works or for
sections of the works, in accordance with the contract
ll' For a contractor's entitlement to additional payment for delay and/or disruption, in
accordance with the contract
lll' For a contractor's entitlement to additional payment for instructed acceleration, in
accordance with the contract or on the terms agreed
lV. For the employer's right to deduct liquidated damages for the contractor's failure to
complete the works on time
V. For the employer's right to terminate the contractor for his failure to comply with the
obligation to progress the works
To establish items 1, 2 and 3 it is recommended that a network, or critical path analysis be
carried out.

For item 4, it is necessary for a contract administrator to satisfy himself that the contractor is
not entitled to an adjustment of the completion date, i.e. an extension of time, arising from
the occurrence of a relevant delaying event as described in the contract conditions. The
contract administrator is advised to carry out a critical path analysis to satisfy this condition,
otheruvise an employer may receive a constructive acceleration claim from a contractor who
considers himself entitled to, but did not receive, an extension of time during the project.

Our other training programme "Site Contract Management and Change Management" will
cover this in more detail and with exercises.

2.3 Selecting a Delay Analysis Method

A delay caused by one party may or may not affect the project completion date and may or
may not cause damage a second party. A delay could be caused by more than one party;
however, it might also be caused by none of the parties (such as unusually severe weather
conditions). A delay may occur concurrently with other delays and all of them may impact
the project completion date. A delay may sometimes contribute to the formation of other
delays.

ln construction contracts, schedule delay analysis is commonly conducted to demonstrate

cause-and-effect relationships when assessing time-related disputes. Schedule delay
analysis makes use of comparisons of the as-planned schedule, the as-built schedule and
schedule updates, Sometimes, subnetworks or "fragnets", are used to present details about

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delay events. The schedules may be in the form of bar charts or network (Gantt) diagrams
The network diagram is more effective than the bar chart as it shows the logical sequences
between activities. CPM schedules add another dimension to schedule analysis as they
provide schedule analysts with a critical path, float consumption and the opportunity to utilise
what-if methodologies. CPM has long been accepted by courts as an effective tool to
evaluate the impact of delays.

There are several delay analysis methods that are used by . These include the Global
lmpact Technique which plots delays on a bar chart and calculates the overall of delay by
summing up the total duration of all delays. The global impact technique is an easy way to
work out delay when detailed calculations cannot be performed. However, courts and
arbitration panels resist the use of the global impact technique because it incorrec¡y
assumes that all delays have an equal impact on project duration. The results of delay
analysis might be impacted by the method we select and therefore the selection of the most
appropriate method is important to all parties concerned.

There are four methods that are often mentioned in construction industry literature that are
professionally accepted. They are:
L As-planned vs. as-built schedule analysis method
ll. lmpact as-planned schedule analysis method
lll. Collapsed as-built schedule analysis method
lV. Time impact analysis method
The as-planned vs. as-built method is the observation of the difference between an as-
planned schedule and an as-built schedule. The method identifies the as-built critical
activities, compares these activities with the activities on the as-planned schedule, assesses
the impact of delays on the project, identifies the sequences which actually define the
duration of the project, and therefore determines the causation and the responsibility of
delays that impact project completion.

The impact as-planned method uses only an as-planned, or baseline schedule, for delay
analysis. lt is based on the theory that the earliest date by which a project is completed can
be determined by adding the delays into the as-planned schedule. New activities that
represent delays, disruptions, and suspensions are added to the as-planned schedule and
are used to demonstrate the reason why the pro¡ect was completed later than planned.
Contractors who submit claims that involve a time extension, add only owner caused delays
to the as-planned schedule in the appropriate sequence to document the total project delay
caused by the owner. Employers will seek to include delays that are the responsibility of
contractors.

The collapsed as-built method is also referred to as the "but-for" schedule method. This
method is popular in claim presentations because it is easily understood. SCL defines it as a
method where the effects of delays are "subtracted" from an as-built schedule to calculate
what would have occurred if those events hadn't happened. This approach is good to use
when a contractor lacks a programme schedule of sufficient quality, or when no as-planned
schedule was required by the contract.

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Claims Preparation Day 3

The time impact method relies on the assumption that delay impacts to a project can be
assessed by running a series of analyses on schedule updates. Time impact analysis is a
procedure that uses CPM principles. lt assesses the effects of a delay on the project
schedule by analysing the schedule periodically, generally on a day-by-day basis. Window
analysis, a variation of time impact analysis, uses weekly or monthly updates to perform the
analysis. Delay events are inserted into the schedule and delay impacts are accumulated
every time the schedule is recalculated. We can again see the importance of good quality
síte diaries when creating and supporting claims as these will contain day-by-day updates on
the status of work activities in the programme network.

1. As-PIanned Vs. As-Built Schedule Analysis Method

Ïhis method compares the duration of all the activities on the As-Planned programme with
the corresponding activities on the As-Built Programme which are affected bylhe excusable
delay events, especially the critical activities.

Advantages:
. lt is simple to use
. lnexpensive, saving money

Disadvantages:
. Suitable for simple programs only
As Planned lmpacted Approach

Contractor's Delay =
7 days Contractor's Delay
Earth Works
Pavement Contractor's Delay =
Layers 8 days
Contractor's Delay =
1 5 days
Road
Furniture
<r+

Superstruct Employer's Delay =

Employer's Delay = 20 days
ure
15 days
Employer's Delay =
35 days
Finishing

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 Claims Preparation Day 3

Extension of Time = 35 Days

Concurrent Delay = 15 Days
Hence Cost = 20 Days

2. lmpact As-Planned Schedule Analysis Method

This method adds an excusable delay event into the As-planned program.
l. This adding of delay can be done by adding separate activities to the network or by
revising the duration of existing activities

The revised completion date achieved as a result of this impact indicates the
entitlement for an Extension of Time.

ilt The duration considered for the new activities is generally based on the production
rate considered in the original program, unless it is very irrational.

Advantages:
o As-Built lnformation is not required.
. There is no argument over the correctness of programme updates.
. The Extension of Time is determined as per the original intent of the parties, i.e. any
float in the activities comes into effect as per the As-Planned Programme.

Disadvantages:
o This method is very theoretical since it does not take into account that the actual
program can vary a lot when compared to the As-planned programme.
. Any errors in the program creep into the delay analysis.
. Any Extension of Time assessed may not be rational if the actual sequence/progress
is substantially different to the As-Planned programme.

3. Gollapsed As-Built
ln this approach the employer's delays are removed from the As-Built Program. The period
by which it shrinks the As-Built Program shows the overall delay of the employer or the
Extension of Time.

Advantages:
o lt takes into account the actual built programme, hence providing certainty that delay
analysis is based on an actual sequence of work adopted.

Disadvantages:
. The critical path resulting from the removal of employer's delays retrospectively may
not result in the same critical path as existed during the course of the project.
¡ creating an equivalent baseline program involves lot of subjectivity

,)

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Claims Preparation Day 3

a The logic of the program has to be rebuilt once the employer's delays are removed,
which is complex and time consuming

4. Time lmpact Analysis

Time lmpact Analysis can be done by either of the two methods below
l. Snap Shot Analysis
ll. Window Analysis (Or Time Slice Analysis)
Snapshot Analysis

Snapshot analysis is used in contemporary delay analysis. e.g. taking the progress update
on the instance of the occurrence of delay and incorporating the effect of excusable delay in
the progress update. This method is recommended in 'Delay and Disruption Protocol' by UK
SCL

Window Analysis

ln Window Analysis, the entire period of the project is divided into multiple time windows (for
example one month or so depending upon the period for updating the program).

Each progress update is included with the actual progress and any change to the sequence
of work. This will also include the effect of delay due to any excusable events. Each window
is then compared with previous window to analyse the effect of valid delay events.

Advantages:
o This method is most favoured and is most robust for retrospective delay analysis and
has been adopted internationally in many litigation and arbitration cases.
. ln each window, there are few activities (with negative float) that need to be analysed
to calculate and understand the delay and therefore the delay analysis process is
clearer than a global approach.
. lt gives more realistic results, since it takes into account the project status at the time
of the occurrence of delay events. lt also takes into account changes by the
contractor in terms of logic links etc.
¡ Calculation of Concurrent Delays is more practical to do.
Disadvantages:
r Accurate progress information relating to each progress update needs to be
maintained.
o This method is more time consuming than other methods and requires greater
planning skill.

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Recommendation for Selecting delay analysis methods

Selection of the most appropriate analysis method partly depends on the type of schedule
that was used during the project. For example, the impact as-planned analysis can be used
with projects that have only an as-planned schedule but no updates. On the other hand, the
collapsed as-built method is applicable in situations where little scheduling information is
available since it is always possible to create an as-built schedule at the end of the project
by making use of commonly available project records.

While the as-planned vs. as-built approach may be undertaken by making use of basic bar
charts, the other 3 methods require a CPM schedule to be available. While CPM-based
analyses are more detailed, and therefore more reliable, a bar chart based analysis has the
advantage of being simple, practical and easily understandable by all parties. The time
impact method is more complex than other three methods because it requires multiple run
trough's that examine the situation one delay at a time, or from one update to another. The
availability of update information greatly affects the use of this method whereas the
remaining three methods rely on only one run which is based the delay information at hand.

Hindsight analysis isa common practice in construction due to the hesitation of project
parties to take action at the time a delay began. Because of their methodological
characteristics, some delay analysis methods cannot be used to perform foresight or
hindsight analyses at will. For instance, the collapsed as-built method cannot be used to
assess the delay impact caused by a potential future change order because the method
relies on as-built information which does not exist at that time. lmpact as-planned or time
impact analyses may be used in these circumstances.

A preliminary observation of delay situations may help an analyst to select the proper
analysis method, ln a schedule where numerous concurrent delays exist, the analysis
method that incorporates both employer and contractor delays (such as as-planned vs. as-
built) will be better able to show a clear picture of the concurrencies. ln a schedule where
critical paths have shifted back and forth over the course of the project, using a series of
analyses (such as in time impact analysis) can demonstrate the collective cause and effect
of delays and support an accurate assessment. On the other hand, an analyst should avoid
using delay analysis methods that consider delays caused by only one party (e.g. impact as
planned analysis conducted by a contractor to prove the impact of only delays caused by the
employer).

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 Claims Preparation Day 3

Comparison of delay analysis methods

As-planned vs. as- lmpact as- Collapsed as- Time-impact

built analvsis olanned analvsis built analysis analvsis
Avallability of information
Type of Schedule
As-planned schedule X X X
As-built schedule X X
Updated schedules X
Adiusted schedules X X X
Fragnets Depends Depends X
Type of information
No CPM (bar chart X
No CPM but progress record X
CPM approved/not updated X X
CPM approvediupdated X X X X
Time of analysis
Foresight X
Real time X X
Hindsight, during performance
X X X X
period
Hin dsight, after project completion X X X X
Capabilities
Float consumption/critical path )ldepends X X X
Time extension X X X X
Compensation Deoends Depends Depends X
Concurrent delay X X
Resequencino Depends X X
mic nature of X
Acceleration X X
Time-cost-effort
Type of analysis Observative Additive Subtractive Additive
Level of effort Low Low Moderate Hiqh

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 Claims Preparation Day 3

2.4 lssues in Delay Analysis

A number of factors may influence the result of delay analysis regardless of which method is
used.

These factors are often specified in contract clauses and include concurrent delays, float
ownership, theories of critical path and scheduling software options. Sometimes, the way
these factors are presented in the contract favour the employer and contractors are reluctant
to follow them. Fair solutions for both parties have been discussed in the literature.

1. Concurrent delays
The basic concept of concurrency is defined as the situation in which two or more delays
occur at the same time any of which, alone, would have affected the final completion date.

Events are assumed to result in concurrent delay when it is clear that at least one of caused
a delay in the schedule, but even if that event had not occurred, the schedule would have
been delayed anyhow by the other event. lt can be argued whether the two delays have to
occur at the same time to be considered as concurrent. Some delay events may not start
and end exactly at the same time but their effects may coincide,

Any type of delay, excusable non-compensable (a contractor is entitled to an extension of

time only), excusable compensable (a contractor is entitled to an extension of time and
damages) and non-excusable delays (a contractor is responsible for the delay), can occur
concurrently.

The contentious point for discussion is to assess which remedy to apply to which party for
any concurrent delay event. Every delay that affects the overall project duration is the
responsibility of either the contractor or the employer. Even if one party is able to prove the
cause of the delay, the assessment of the damage that arises raises further questions of
how extended time and compensation will be assessed in case of the employers fault, and
how liquidated damages would be issued to the contractor in case of delay caused by the
contractor. ln theory the possible results of delay concurrency can be summarised in table 1.

The question marks in this table indicate that the solution is more not clearly defined. When
concurrent delays exist, the assessment of delay damages and/or time extensions is difficult
and often results in serious disagreements. Research is necessary to develop agreeable
methods that will allow all parties to reach consensus by examining the root causes of the
individual concurrent delay events.

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 Claims Preparation Day 3

Possible remedies for concurrent delays

Delay Concurrency Possible remedies

Excusable Non-
non- excusable ) EOT?
compensable
Excusable Excusable
non- compensable ) EOT? and COMP?
compensable
Non- Excusable
excusable compensable ) EOT? and COMP? or LD?
Excusable Non- Excusable
non- excusable and ) EOT? and COMP? or LD?
compensable compensable

Table No. I
EOT, extension of time to the contractor; Comp, compensation to the contractor; LD,
Iiquidated damages assessed by the owner; NlL, neither contractor, nor owner recover
damages.

2. Floatownersh¡p
Float provides flexibility in a contractor's time and budget management. On the other hand,
the employer also needs float to accommodate the impact of change orders on the project
and some contingency for activities for which they are responsible. Float ownership is
usually specified in the conditions of contract. Contracts typically state that float belongs to
the project or on a "first-come first-served basis". ln other words, if an employer causes the
first delay to occur that uses up the total float, then if later a contractor causes a further
delay that puts off the project completion date, then there is no float remaining and a case of
damages may be applicable. Similarly, when a contractor uses up the entire float at the
beginning of the project, the employer becomes responsible for all delays caused by change
orders, a situation that could have been averted had the contractor not exhausted the total
float.

There ate a number of suggestions to achieving a fair resolution to the float ownership
problem. The UK Delay and Disruption Protocol's position on float ownership is that if the
clause stating the entitlement of float is not specified in the contract then float should belong
to the project. ln other words, the first-come first-served principle should govern the use of
float. On the other hand, a majority of respondents among UK professionals surveyed
believed that the contractor should have exclusive control of float while only few employers
supported the position that float should be allocated on a first-come first-served basis. ln this
case the contractor is entitled to sell the float in case the employer needs to consume some
of the float. The method for converting float into a selling price is provided in their article.

The varied positions concerning who owns float can influence the result of delay analysis.
The sample design/build project presented in Figure 1 is composed of three activities, two of
which involve a contractor providing design and construction, and one is the employers

17
 Claims Preparation Day 3

approval of design. The design needs to be approved by the employer before construction
can start. The contract duration is 12 days while the contractor has planned to execute the
project in only 10 days, which yields two days of total float. Two alternative scenarios of
actual activities are also shown in Figure 1. ln the first scenario, the contractor's design
activity experiences a 2-day delay, followed by a delay of 2 days, caused by the employer.

PROJECT DURAT|ON
ACTIVITY {Party Responsible) I 2 3 4 5 6 7 I I 10 11 12 t3 14 15 16 17 18
Pla I Co nol ltir rd úe
Design (Contractor)
Approval(OwneÐ
Construction tGonlractorl
I
ActualScenariol I ion or ^t,¡
rV

I ( E}fr
t-¡, V
Dasign (Contraclor) /
Apprwãl(Ourner)
ConsFrrclion (Contraclor)

ActualSconario 2
I er lel¡ v
Design (ContraAor) 1 Cor rtra ltor de ay
Àpproval(Owner)
Construction (Conlraslor) ¡

Figure 1 Effect of ownership of float

ln the second scenario, the contractor-caused delay of 2 days occurs after the 2-day delay
caused by the employer. The different position of float ownership would influence the results
of delay analysis significantly as presented in Table 2. lt is therefore imperative that float
ownership be clearly defined in the contract in order to avoid disagreements in delay-related
claims. lf the party that owns float is identified in the contract, both the employer and
contractor can anticipate the outcome of potential actions and can adjust their activities
accordingly.

Scenario I Scenario 2
Extension of Liquidated Extension of Liquidated
Float Ownership time damages time damages
granted to assessed to granted to assessed to
contractor in contractor contractor contractor
days in days in days in days
Contractor exclusively
2 0 2 0
owns float
Owner exclusively
0 2 0 2
owns float

18
 Claims Preparation Day 3

Project owns float (first-

come, first-served 2 0 0 2
basis)
Distribute float to both
parties proportionally 1.6 0.4 1.6 0.4
(duration)
lgnore float 2 2 2 2

3. Scheduling opt¡ons
Scheduling issues influence the result of the analysis as network-based delay analysis
relies heavily on CPM. For example, the critical path can be defined by the longesi path(é) in
the network diagram and by the amount of total float in differing paths.

These two methods become contentious when considered in delay analysis because only
critical delay should be considered when awarding time extensions. The example shown iñ
Figure 2 presents concurrent contractor and employer owned delays in a situation where the
contract time has expired.

Under the longest path theory, the employer is responsible for 2 days of delay that extended
prolect completion because only the delay caused by the employer is on tñe critical path.
However, under the float theory, a concurrent delay is justified on day 14 because the
contractor's activity is also critical since it has one day of negative float caused by the
contractor's delay. The resolution of the issue of negative float has a significant impact on
the entitlement to time extensions, compensation for the extended perfoimance period and
the assessment of liquidated damages.

ACT# PARTY RESPONSIBLE PROJECT DURATION

I 2 3 4 5 I f E o 10 11 12 13 t4 r5 10 t7 I8
I
I Conùeclor'e Activily
2 Orne/sAdivitv

Ori¡¡nd
cooFllüon.ldc
CPM software packages offer various functions that provide flexibility for scheduling tasks,
but some of these functions may sometimes cause problems when used for delay analysis.
For example, some CPM software packages such as 'Primavera Project Planner' allow
users to select between retained logic and progress override. The progress override mode
calculates an updated schedule regardless of the logic relationships of the activities that
have started, in order to avoid creating unrealistically long paths caused by the out-of-
sequence activities that would happen in retained logic mode.

The delay analysis presented the attached figure 3 is part of the activity "Approval" while
"Construction" has started out of sequence. The retained logic mode keeps the relationship
between "Approval" and "Construction". The computed start date of the remaining portion of
"Construction" is still imposed by the finish date of "Approval" even though "Construction"

19
 Claims Preparation Day 3

has actually started. As a result, th e retained log ic mode computes the new completion date
as day 11 and "Approval" moves to the critical path.

On the other hand, the progress override mode ignores network logic that has been out of
sequence and allows "Construction" to be driven without the predetermined logic. As a
result, the progress override mode displays day 10 as the new completion date and
"Approval" is not on the critical path. When delay analysis is conducted, disputes may arise
if the contract does not specify which logic mode is to be used. While the retained logic
mode is preferred by some for updating schedules, others claim that it makes it impossible
to get an accurate update schedule.

3 EOT Assessment and analysis Techniques

A closer examination of the various techniques widely employed for EOT submissions
shows that none of the commonly recognised methods allows for the assessment of three
important issues at the same time, namely:
l. The progress of the project at the time the event occurred
ll. The changing nature of the critical path at the time the delay occurred
lll. The effects of action taken, or that should have been taken, to minimise delays

Problems often arise in unravelling cause-and-effect links because many EOT causes and
entitlement are interrelated and may also be concurrent. Concurrent delays are said to arise
when two or more delays occur at the same time or overlap to some degree. Examples of
scenarios needing careful consideration and evaluation include those where:
I' A contractor, responsible for an event on a non-critical path makes a subsequent
activity critical and this activity is then subjected to an event that the employer is
responsible for.
ll' An event for which the employer is responsible is followed by one that a contractor is
responsible for.
lll' Events for which the employer and contractor are responsible are concurrent and on
parallel critical paths.

Most of the recognised EOT assessment techniques are categorised into the following
groups
L lmpressionistic. Visually impressive, these are only suitable for simple projects.
ll. Simplistic. These are static models and do not provide the insights into impacts and
relationships afforded by critical path analysis methods.
Prospective analysis. These techniques use as-planned programmes and
essentially project the likely delay an event will cause.
IV Retrospective analysrs. These techniques use as-built programmes and establish
the actual delay an event caused.

20
 Claims Preparation Day 3

However, the critical importance of reliable documentation and records in establishing EOT
entitlements cannot be emphasised enough whichever technique is put to use.

3.1 Extension of time submissions

Major obstacles to prompt settlement of submissions for extensions of time include:
l. The erroneous assumption that an extension of time automatically grants entitlement
to monetary compensation.
ll. Late, insufficient or total lack of notice of delay or likely delay on the part of the
contractor.
lll. Failure to maintain contemporary records.
lV. Failure to regularly update the programme so that the effects of delay cannot be
monitored effectively.
V. Poor presentation of the claim to show how the progress of the work has been, or is
likely to be, impacted.
Vl. The probability that the cause of delay will reflect on the performance, or lack of it, on
the part of the employer's professional team.
Vll. Pressure, on the part of the employer, to complete the prolect by the original
completion date, irrespective of delays which occur.
The first obstacle assumes that delay means money, which is understandable. However, it
shouldn't be a consideration when reviewing and resolving extensions of time. lt must be
understood that an extension of time gives the contractor more time to complete work
already committed to while the employer preserves his right to liquidated damages. An
extension of time awarded because of a delay which appears to have financial implications
does not necessarily lead to any extra payment. lf the contractor is also in delay, then the
financial compensation arising out of the extended period to execute the works may, in total
or in part, have to be borne by the contractor.

The next three obstacles, (ii) notice, (iii) contemporary records and (iv) programme, are all
practical matters which can only be addressed by ensuring that adequate contract
administration procedures are followed from the start of the project.

The fifth (v) obstacle concerns presentation of the claim. While the contract administrator
must do his best to estimate the length of any extension of time which may be due,
irrespective of any lack of notice or particulars from the contractor; contractors cannot
complain if the extension made on the basis of inadequate information does not live up to
their expectations.

Good practice

It is recommended that for an EoT submission, the contractor should state:

21
 Claims Preparation Day 3

I The material circumstances giving rise to an extension of time

il ïhe event or cause of entitlement
ilt Whether the cause is a relevant event under the contract
IV The duration of the delay, or likely delay, to the progress of the works
V The likely effect of the event on the completion date of the contract and any
contractual sectional completion dates
Which technique to use may depend on the reasons for preparing the delay analysis. For
example, a contractor who makes a submission to the employer, or the engineer, for an
extension of time as part of final account settlement, may not have the time for an extensive
delay analysis and so will lean towards one of the simpler techniques. At the other extreme,
if the dispute is in arbitration or litigation, one of the prospective analysis or retrospective
analysis techniques should be exploited as the level of sophistication required in these
arenas excludes the impressionistic and simplistic techniques.

The claimant is free to choose any format he wishes when presenting his claim arising from
delay, but should be aware that the courts have rejected some formats. lt may be, however,
that the claimant has other reasons for selecting a particular format (e.g. as a negotiating
tool or because their client has requested a particular type of presentation). Should the
claimant proceed with a claim in a particular format for, say, negotiation purposes and then
find that negotiations break down and a dispute ensues, then the claimant may be put to the
task (and cost) of reworking the delay claim into a format more acceptable to the court.

4 Presentation
4.1 Structured Documents and Gontents
Effective communication is key in successful contract management and ensures sharing the
right messages with the client in a timely manner. A high status report is a great
communication and presentation tool for every aspect of the project. The reports are a
necessity because of the need to constantly keep all parties involved in the project informed.
Therefore attention must be given to ensure communication is readable, clear, adds value
and are generally high quality documents. But, what structures or contents should a high
standard report include? This is a question that every contract manager faces.
A high standard report:
l. ls clearly written report to demonstrate understanding
lnforms the reader what the project is, which means clarity
lil Presents the project status and what still needs to be accomplished

The report should be formatted to a high standard format and clearly communicated with the
reader. The content of the report should clearly indicate its value, clearly present information
and use appropriate forms of communication such as graphics or extracts from project

22
Claims Preparation Day 3

plans. Every high standard report should be written in formal English with appropriate
language interpretation so that others, who are not native English speakers, can understand
it. The reports should be concise and focused on the key pieces of information that the
reader has asked to see.

4.2 House Style

To begin with, make sure that you have included the date, a title and the name of who the
report is for and who produced it. Then each section should start on a fresh page, unless the
requirement is for a short and concise document. The report also needs a front page, a table
of contents, introduction and a conclusion as well as the body of the narrative.
The front page is perhaps not part of this document and could be prepared in a separate file,
though it is necessary to keep headers and footers consistent between files. The
introduction should never be any longer than one page and often rather less. The body of
the report should not have more than forty pages. The introduction consists of the purpose
of the report, the description of that week's activities, an update for objectives and include a
summary of contents. A table of contents is always to be included but shouldn't be too long;
no more than a page. lt is not necessary to include every sub-heading so long as the key
information is referenced.
ln the body, the paragraphs need to be left justified and use 12pt font and single line
spacing. Tables should be titled by caption format and use blue background shading. The
conclusion should contain no new information that isn't in the body of the report. The
conclusion is a summary of what has been stated before and a statement what can be
logically deduced from it. lf there are a lot of ideas for further work, advice or
recommendations, then these can be included with the conclusions.

23
 PROJECT TITLE

NOTTCE NO......

CONTENTS

1.0 Executive Summary

2.0 Statement of Glaim

3.0 Gontractual Conditions and the Law

4.0 Detailed Particulars

5.0 Summary of Delays

6.0 Summary of Costs

APPENDIGES

Appendix I Financial Summary

Appendix 2 Site Overheads

Appendix 3 Site Supervision

Appendix 4 LabourCosts

Appendix 5 Material Price Escalation

Appendix 6 Misscelaneous Gosts

Appendix 7 Head Office Overheads

Appendix I Sub-Gontractors

Appendix 9 Financing

J rl64
 PROJECT TITLE

NOTICE NO.

1.1 EXECUTIVE SUMMARY

1.2 .and ... ..entered into an Agreement on the forconstruction

of the Car Park forming part of the ... ... ..Project ('the Project").

1.3 The agreed Contract Price is US$

1.4 The Commencement Date is 1 December 2OO7 and the Time for Completion is

1.4.1 Section 1 - Superstructure - 80 weeks i.e. by 15 June2009

1.4.2 Section 2 - AÍl works - 108 weeks i.e. by 31 December2O09

1.5 Causes have arisen on the Projectwhich entitles.... to extensions of Timefor

Completion of the Works and reimbursement of additional Costs pursuant tothe
Conditions of Contract and/or the Agreement and/or at law.

1.6 This document sets out ... .'s entitlement to extensions of Time for Completion and
entitlement to reimbursement of additional Costs together with profit and overheads
for causes up to 30 September2009.

1.7 considers it is entitled to extensions of Time forCompletion

1 .7.1 Section 1 - Superstructure - ... weeks

1.7.2 Section 2 - All works - ... weeks

1.8 ..... considers it is entitled to reimbursement of additional Costs together with profit
and overheads in the sum of US$

2164
,)
 PROJEGT TITLE

NOTICE NO.

2. STATEMENT OF CLAIM

2.1 Introduction

2.1.1 causes have arisen on the ....... forming part of the ..... Project which entifles .... to
extensions of Time for Completion of the Works and additional payment pursuant to
the Conditions of Contract and/or the Agreement and/or atlaw.

2.1.2 The Claimant is .... and the Employer is

2.2 The Contract

2.2.1 The project in relation to which this claim relates is the Car Park North ("the Works")
of the .... Project.

2.2.2 on the 14 July 2008 . . . . .. . and ... .. entered into an agreement for the design,
execution and completion of the Works.

2.2.3 The Contract price is US$ and adjustments in accordance with the Contract

2.2.4 ..... carried out additionalwork and was delayed and disrupted in the completionof
its work in the Project giving rise to entitlements to an extension of the Time for
Completion and to additional payment under the express and/or implied terms of the
Contract.

2.3 Extension of the Time for Completion

2.3.1 As set out in this document, ...'s entitlement to an extension of the Timefor
Completion of the Works is based on the following matters:

2.3.1.1 The imposition, addition, alteration or omission of obligations orrestrictions

in regard to:
3/64
)
 PROJEGTTITLE

NOTICE NO

2.3.1.1.1 Access to the Site or use of any specific parts of the Site;
2.3.1.1.2 Limitations of working space;
2.3.1.1.3 The execution or completion of the work in any specific sequence
or order

2.3.1.2 The failure by the Employer to give the Contractor right of access to, and
possession of, the Site with effect from the CommencementDate.

2.3.1.3 An act of prevention on the part of the Employer's Other Contractors on the
Site.

2.4 AdditionalPayment

2.4.1 ln addition to the delays giving rise to an entitlement to an extension of the Time for
Completion of the Works, .... has incurred additional Costs as a result of:

2.4.1.1The imposition, addition, alteration or omission of obligations orrestrictions

in regard to:
2.4.1.1.1 Access to the Site or use of any specific parts of the Site;
2.4.1.1.2 Limitations of working space;
2.4.'1.1.3 The execution or completion of the work in any specificsequence
or order

2.4.1.2 The failure by the Employer to give the Contractor right of access to, and
possession of, the Site with effect from the Commencement Date.

2.4.1.3 An act of prevention on the part of the Employer's Other Contractors onthe
Site.

2.5 Quantum Meruit

4/64
)
 )

PROJECTTITLE

NOTICE NO..

2.5.1 Further or in the alternative, the additional works were carried out by ... outsidethe
terms of the Contract at the Employers request.

2.5.2 ln respect of the additional work the Employer impliedly promised to pay to ... an
amount equal to the sum due assessed in accordance with the principles set out in
the General Conditions of Contract or alternatively a reasonablesum.
)

2.6 The Givil Gode of the United Arab Emirates

2.6.1 Further or in the alternative ... reserves its right to pursue its entitlements in
accordance with and subject to the Civil Code of the United Arab Emirates.

J s/64