Evaluating Schedule Impacts. By: Wendy Kaszycki, PE Randa Jarjour, CCE 12/06/06
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1 Evaluating Schedule Impacts By: Wendy Kaszycki, PE Randa Jarjour, CCE 12/06/06
2 Overview Definitions Methods of Evaluating Delays Best Practices 2
3 Classification of Project Delays (Risk Point of View) Non-excusable Excusable Compensable Non-compensable 3
4 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
5 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
6 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
7 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
8 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
9 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
10 Concurrent Delays: Concurrent delay by owner and contractor is excusable but not compensable Contractor Delay: 5 days lost in fabrication Delay events occur during the same time period They impacted the critical path Critical Path Activity Owner Delay: 5 days lost in reviewing the installation procedure Concurrent cause of Critical Path Delay of 5 Days In the absence of one delay event, the other delay event will govern. Result: 5 excusable (non-compensable) days to contractor 10
11 Concurrent Delays: Concurrent delay by contractor and an uncontrollable event is excusable but not compensable Contractor Delay: 5 days lost due to productivity issues Critical Path Activity 5 Days of CP Slippage Critical Path Activity 3 days of Rain Delay events occur during the same time period They impacted the critical path In the absence of one delay event, the other delay event will govern. Concurrent cause of Critical Path Delay of 3 Days Result: 3 excusable (non-compensable) days 2 non-excusable days 11
12 Concurrent Delays: Concurrent delay by owner and an uncontrollable event is excusable but not compensable Critical Path Activity Owner Delay: 15 days lost resolving a design issue 15 Days of CP Slippage 10 days of Rain Critical Path Activity Delay events occur during the same time period They impacted the critical path In the absence of one 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
13 Example: Delays Concurrent Owner Delay Impacting Framing Activity (12 days) 12 WF L1 WF L2 TF=5 days 5 Submittal/Fabrication L2 7 Contractor Delay Impacting Fabrication (7 days) Delay events occur during the same time period They impacted the critical path WF L1 5 7 WF L2 In the absence of one delay event, the other delay event will govern. Submittal/Fabrication L2 Result: 7 days of Concurrent Delay (Excusable, Non-compensable) WF L1 5 7 WF L2 7 CP Delay Non-critical Delay 5 7 Submittal/Fabrication L2 7 13
14 Example: Delays not Concurrent Owner Delay Impacting Foundation Activity 15 TF=5 Foundation Steel Erection Delay events occur during the same time period Steel Fabrication Delay not during same time frame: 10 7 Contractor Delay Impacting Steel Fabrication 5 Foundation Steel Erection 1 st CP Slippage 5 They impacted the critical path In the absence of one delay event, the other delay event will govern. Steel Fabrication 7 5 Added Float Contractor has the right to use the added float Delay during same time frame: 10 Steel Fabrication 5 7 Foundation 3 5 Steel Erection Added Float 2 nd CP Slippage 14 Result: Total Critical Path Slippage of 10 days is Compensable.
15 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
16 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
17 Methodology for Delay Quantification Total-Time Schedule Approach Adjusted As-Planned Schedule Approach Adjusted As-Built Schedule Approach Contemporaneous Time Frame Analysis 17
18 Total-Time Approach As-planned Duration Ownercaused 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
19 Adjusted As-Planned Approach As-planned Ownercaused Project Delay Adjusted As-planned Ownercaused Delay Ownercaused Delay As-planned duration and logic unchanged (Too hypothetical) Baseline Critical Path is the basis for the analysis Ignores Concurrency of delays 19
20 Collapsed As-Built But For Approach As-planned As-Built Owner Delay Contractor Delay Collapsed As-built Contractor Delay Owner-caused Project 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
21 Contemporaneous Approach 2 Delays As-planned 1 st Delay Update Date Contractorcaused Delay Contractor-caused Project Delay 2 nd Delay Contractorcaused Delay Ownercaused Delay Owner-caused Project Delay Update Date 21
22 Contemporaneous Approach Same but Owner Delay Happened First As-planned 1 st Delay Update Date Ownercaused Delay Owner-caused Project Delay 2 nd Delay Ownercaused Delay No Project Delay Update Date Contractorcaused Delay 22
23 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
24 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
25 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
26 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
27 Projected Delays 27
28 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
29 Risk!!!! What if the District wrongfully rejects the Contractor s request for time extension and/or compensation? 29
30 Risk!!!! What if the Contractor does not provide the specified backup to support the time extension/compensation request? 30
31 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
32 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
33 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
34 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
35 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
36 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
37 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
38 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
39 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
40 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
41 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
42 Key Points to Remember Negotiate time impacts on a monthly basis Demonstrate good faith even if the Contractor is not cooperating 42
43 QUESTIONS? 43
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