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Project Delay Schedule

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Project Delay Schedule Powered By Docstoc
					Evaluating Schedule
      Impacts


 By: Wendy Kaszycki, PE
     Randa Jarjour, CCE
        12/06/06
             Overview

• Definitions
• Methods of Evaluating Delays
• Best Practices




                    2
Classification of Project Delays
(Risk Point of View)


•Non-excusable

•Excusable
   –Compensable
   –Non-compensable


                       3
 Non-excusable Delays
• Contractor problems result in schedule
  impacts

• Contractor not entitled to either time
  extension or compensation
• Examples:
  – Late Submittals
  – Late Material Delivery
  – Insufficient Manpower…..
                        4
Excusable Non-compensable
Delays
• Uncontrollable events such as weather,
  strikes, etc. sometimes referred to as
  “Force Majeure”
• Contractor is eligible for time extension
• Contractor not eligible for extended
  “General Conditions” costs
• Contractor has to meet burden of proof

                      5
Excusable Compensable
Delays
• Owner or owner’s agent problems result
  in schedule impacts
• Contractor eligible for time extension
• Contractor eligible for extended
  “General Conditions” cost
• Contractor has to meet burden of proof



                    6
Concurrent Delays
Definition:
• “Concurrent Delay” is experienced on a
  construction project when two or more
  separate delay events occur during the same
  time period.
• Multiple causes to a critical path delay with
  both contract parties involved. In the
  absence of one party’s cause, the other
  party’s cause will govern.
• The schedule has more than one critical path
  with a separate delay affecting each at the
  same time (very rare)
                        7
Concurrent Delays
• Significance
  Determines compensability
• Apportionment:
  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 party
                     8
Concurrent Delays
    Elements:
•    Two or more delays occur during the same time period
•    Both delays impact the critical path
•    Delays may be caused by either or both parties, or
     unforeseen events
•    In the absence of one delay event, the other delay
     event will govern.
  Governing Rules:
• The float belongs to the project
• Both parties have the right to use any additional float
• The Critical Path with respect to a specific milestone is
  the path with the least total float
                              9
Concurrent Delays:

• Concurrent delay by owner and contractor is
  excusable but not compensable          Delay events occur
                                                                                    during the same time
                                                                                    period
  Contractor Delay: 5 days lost in
  fabrication                                                                       They impacted the critical
                                                                                    path

                                        Critical Path Activity                      In the absence of one
                                                                                    delay event, the other
                                                                                    delay event will govern.
                 Owner Delay: 5 days lost in reviewing the installation procedure

 Concurrent cause of Critical Path Delay of 5 Days

 Result:
 5 excusable (non-compensable) days to contractor



                                                     10
         Concurrent Delays:
          • Concurrent delay by contractor and an uncontrollable
            event is excusable but not compensable
                              Critical Path Activity
                                                                        Delay events occur
                                                                        during the same time
Contractor                                                              period
                               5 Days of CP Slippage
Delay: 5
days lost                                                               They impacted the critical
due to                                                                  path
productivity                                   Critical Path Activity
issues                                                                  In the absence of one
                                                                        delay event, the other
                      3 days of Rain                                    delay event will govern.

               Concurrent cause of Critical Path Delay of 3 Days

               Result:
               3 excusable (non-compensable) days
               2 non-excusable days


                                                                 11
          Concurrent Delays:
          •Concurrent delay by owner and an uncontrollable event
          is excusable but not compensable
                            Critical Path Activity

                                                                              Delay events occur
                                                                              during the same time
                                                                              period
                           15 Days of CP Slippage
Owner Delay:
15 days lost                                                                  They impacted the critical
                                                     Critical Path Activity   path
resolving a
design issue
                                                                              In the absence of one
                       10 days of Rain                                        delay event, the other
                                                                              delay event will govern.


           Concurrent cause of Critical Path Delay of 10 Days

           Result:
           10 excusable non-compensable days
           5 excusable compensable days


                                                               12
     Example: Delays Concurrent
        Owner Delay Impacting
        Framing Activity (12 days)
             12
 WF L1                         WF L2
                    5
       TF=5 days
Submittal/Fabrication L2                                                   Delay events occur
                                                                           during the same time
             7                                                             period
                       Contractor Delay Impacting
                       Fabrication (7 days)
                                                                           They impacted the critical
                                                                           path

                 7                                                         In the absence of one
     WF L1                  WF L2
                                                                           delay event, the other
             5                                                             delay event will govern.
 Submittal/Fabrication L2

                                                            Result:
                                                                                     7 days of Concurrent Delay
                                                                                     (Excusable, Non-compensable)

                                                                                 5     7
                                                            Non-critical Delay
                                          7 CP Delay
     WF L1                  WF L2
             5   7

 Submittal/Fabrication L2

                 7
                                                       13
     Example: Delays not Concurrent
       Owner Delay Impacting
       Foundation Activity
            15                                                                        Delay events occur
                       TF=5                                                           during the same time
        Foundation          Steel Erection
                                                                                      period

         Steel Fabrication                                                        × They impacted the critical
                                                                                    path
                             Contractor Delay
                     7       Impacting Steel
                                                                                  ×   In the absence of one
                             Fabrication
                                                                                      delay event, the other
Delay not during same time frame:                                                     delay event will govern.
                                                   1st CP Slippage
                                                       5
                    5
          10         Foundation        Steel Erection

        Steel Fabrication
                                                           Contractor has the right to
                                 5
                                         Added Float       use the added float
                    7

Delay during same time frame:                                   2nd CP Slippage
                                                            5

          10        5       Foundation       Steel Erection           Result:
                                                                      Total Critical Path Slippage of 10 days is
Steel                                                                 Compensable.
Fabrication         7                    3
                                                Added Float
                                                                 14
Delay Mitigation
• Contractor has an implied obligation to
  accelerate to mitigate delays, when
  possible.
• Further or additional acceleration might
  be possible, but might also have a price
  tag.
• The cost of further or additional
  mitigation needs to be evaluated
  against the cost of time extension.
                     15
Recovery Schedules &
Proposals
• Requesting a Recovery Proposal to
  recover from an Owner-caused delay
  limits the Contractor’s right to the added
  Float in non critical paths created by the
  owner-caused delay.
• Unrealistic Recovery Schedules can be
  used to hide Contractor delays and
  delay concurrency.

                      16
 Methodology for Delay
 Quantification
• Total-Time Schedule Approach

• Adjusted As-Planned Schedule Approach

• Adjusted As-Built Schedule Approach

• Contemporaneous Time Frame Analysis


                      17
Total-Time Approach

                                                     Owner-
As-planned Duration                                  caused
                                                     Project
                                                     Delay

As-built Duration




 To use this approach, the Contractor needs to show:
 (1)    As-planned schedule reasonable and constructible
 (2)    It manned the job as planned and deployed the resources prudently
 (3)    It did not cause any delays
 (4)    There is no other reasonable way to quantify the delay




                                                18
     Adjusted As-Planned Approach
                                                                Owner-
As-planned                                                      caused
                                                                Project
                                                                Delay

                             Owner-
                             caused
                             Delay
Adjusted
As-planned
             Owner-
             caused
             Delay




   As-planned duration and logic unchanged (Too hypothetical)
   Baseline Critical Path is the basis for the analysis
   Ignores Concurrency of delays




                                                19
    Collapsed As-Built “But For”
    Approach
As-planned




                              Owner Delay
As-Built
                               Contractor Delay




                                                                                     Owner-caused
Collapsed                                                                            Project Delay
As-built                     Contractor Delay




As-Built schedule is used as the base for the analysis
Ignores the timing of the delay (what was the critical path at the time of delay?)
Does not evaluate concurrent delays

                                                   20
     Contemporaneous Approach
      2 Delays

As-planned



                                                          Contractor-caused
                          Contractor-
                 Update                                   Project Delay
                          caused
                 Date
                          Delay
1st Delay




                                                             Owner-caused
                                                 Owner-
                          Contractor-                        Project Delay
                                                 caused
                          caused                 Delay
                          Delay
2nd Delay



                                        Update
                                        Date
                                                 21
     Contemporaneous Approach
      Same but Owner Delay Happened First

As-planned



                                                        Owner-caused
                        Owner-
               Update                                   Project Delay
                        caused
               Date     Delay
 1st Delay



                        Owner-
                        caused
                        Delay                                       No Project
                                                                    Delay
 2nd Delay

                                          Contractor-
                                 Update   caused
                                 Date     Delay

                                              22
Contemporaneous Approach
“TIA Event Update Analysis”
“ Fragnet Analysis”
• The importance of timing: When the delay-causing
  events occurred
• What was the Critical Path when the delay-causing
  events occurred
• Using current schedule updates as the basis for
  analysis
• Takes into account the dynamic nature of the
  schedule
• Concurrency and therefore compensability of delays
  can be evaluated.
• The most preferred method

                           23
LAUSD Scheduling Specification
• Calls for contemporaneous Fragnet
  approach
• Requests supporting elements:
  Baseline schedule, weekly and monthly
  schedule updates
• Baseline and monthly schedule
  submittals reviewed/accepted for quality


                     24
LAUSD Scheduling Specification;
Steps
• Contractor recognizes an impact
• Contractor notifies District of actual or
  potential impact in a timely manner
• Pre-delay schedule prepared by Contractor
• Pre-delay schedule approved by District
• Delay Fragnet prepared by Contractor
• Delay Fragnet approved by District
• Net impact calculated/negotiated

                       25
Projected Delays
• Projected delays are delays or portions
  of a delay that extend into the future
• They are time estimates
• They affect the Critical Path
• LAUSD Specifications calls for the
  approval of projected delays (Fragnets)
  before they can be incorporated into the
  schedule
                     26
Projected Delays




              27
              Risk!!!!


What if Contractor and District could not
   reach an agreement regarding the
  amount of time extension and/or the
      compensability of the delay?



                    28
               Risk!!!!


What if the District wrongfully rejects the
 Contractor’s request for time extension
          and/or compensation?




                     29
             Risk!!!!


What if the Contractor does not provide
the specified backup to support the time
   extension/compensation request?




                   30
Elements of Constructive
Acceleration
• Based on the owner’s unjustified
  refusal to grant a time extension or
  failure to act
• Requires that:
  – A cause exists that would justify a time extension
  – A proper request for a time extension
  – Denial of that request
  – Demand (express or implied) that performance be
    completed on time
  – An actual acceleration

                          31
            Best Practice
• Enforce the contract requirement for a
  good baseline schedule and schedule
  updates with a narrative for each as
  required
• Enforce the contract requirement for a
  formal notice announcing a potential delay
• Enforce the contract requirement for a
  Fragnet showing Critical Path impact
• Enforce the contract requirement for
  timely submittal of all the above
                     32
            Best Practice
• Do not waive the contract requirements
  by your act or failure to act
  – Do not give up on sending a letter
    requesting the schedule submittal
  – Do not give up on sending a letter
    requesting a Fragnet as backup for a COP
    requesting time extension
  – In your requests, always explain the
    reasons why you need the schedule or the
    Fragnet.
                      33
            Best Practice
• Use the “Notice of Event” tool to establish
  a track record of communication on
  potential delays. This will reduce
  surprises at the end of the project
  – District has contractual right to know so it
    can make decisions to mitigate and/or
    evaluate options
  – Investigate the criticality of the issue and act
    on it
  – Respond to the notice until closed
                        34
            Best Practice
• When scope is added to the Critical
  Path, shift the risk to the contractor as
  soon as possible
  – District has no control over the execution of
    the added scope and therefore should not
    be assuming the risk




                       35
           Best Practice
• When scope is added to the Critical Path,
  shift the risk to the contractor as soon as
  possible
  – Request the time estimate and schedule
    analysis
  – Negotiate time
  – Contractor has right to reasonable
    contingency, not sandbagging
  – Consider recovery schedules, if applicable
  – Make them commit
                      36
            Best Practice
• Analyze and negotiate delays on a monthly
  basis.
  – Calculate the net monthly Critical Path
    slippage, if any
  – Request Fragnets, if not submitted yet
  – Allocate/proportion delaying factors (owner,
    contractor, concurrent)
  – Schedule a meeting to understand/negotiate
  – Always take the initiative to document/issue
    the results of the meeting even if only partial
    or no agreement is reached
                       37
            Best Practice
• Analyze and negotiate delays on a
  monthly basis.
  – Negotiation meetings must address all
    claimed delays that affected the project
    within a specific time frame
  – The objective is to resolve delays up to the
    end point of the time frame
  – Assumptions on projected portions of a
    delay must be documented as part of the
    agreement
                       38
           Best Practice

• Demonstrate good faith even if the
  Contractor is not cooperating
  – In case the Contractor does not provide the
    appropriate backup/analysis for a delay that
    you recognize, run your own analysis, put it
    on the table for discussion and present the
    Contractor with an offer for resolution.
    Issue a letter documenting your effort


                      39
            Best Practice
• Demonstrate good faith even if the
  Contractor is not cooperating
  – If you’re able to reach only partial resolution
    with the Contractor, isolate the disputed
    portion and issue a separate unilateral CO
    for this portion
  – If you’re unable to reach any resolution with
    the Contractor, issue a unilateral CO for
    time extension
  – Avoid constructive acceleration by
    discussing recovery options
                       40
   Key Points to Remember
• Communicate
• Document
• Enforce the requirements of your
  contract
• Do not waive the requirements by your
  act or lack of action
• Shift the risk to the Contractor, for work
  that you have no control over, as soon
  as possible
                     41
  Key Points to Remember
• Negotiate time impacts on a monthly
  basis
• Demonstrate good faith even if the
  Contractor is not cooperating




                   42
QUESTIONS?




     43

				
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