Download - Delay analysis ... wise after the event
Delay Analysis
……. wise after the Event?
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Extension of time
The purpose of granting an extension of time is to fix the period by which the completion date ought to be extended
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Rationale
Unless there is an express provision in the contract allowing an extended completion date to be fixed that takes into account a delay caused by the Employer, the delaying event would be deemed as an act of prevention by the Employer that invalidates the contract completion date and extinguishes the Employer’s rights to liquidated damages for late completion.
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Time at large
The contractor is obliged only to complete the works within a reasonable period of time
Time of the essence
Permits the aggrieved party to repudiate the entire contract if the contract completion date is not met.
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Peniffan Management Ltd
Relevant Event
An event that is not at the contractor’s risk as to time
Excusable delay
A delay to the contract completion date caused by a relevant event. May be distinguished from a mere delay to progress.
Culpable delay
Any delay caused by an irrelevant event
Conditions for granting an extension of time
1) delay must be caused by a relevant event
2) delay must affect the completion date
- the activity affected by the relevant event must be on the programme’s critical path
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Revised completion date
The revised date is the end of the total number of working days, starting from the date of possession, within which the contractor ought fairly and reasonably to have completed the works
The revised date is not the actual (calendar) date by which the contractor ought to have completed the works
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Net extension method
Assesses an extension of time caused by a relevant event that occurs after the completion date and during a period of culpable delay
The period (measured in working days) of excusable delay is separately assessed and added to the current completion date.
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Gross extension method
The extension of time is fixed at the end date of the excusable delay, including the period of culpable delay.
This approach is incorrect!
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Concurrent delays
True concurrent delay is the occurrence of two or more delay events at the same time, one an excusable delay and the other a culpable delay.
… term often used to describe the situation where two or more delay events arise at different times, but the effects of them (in whole or in part) are felt at the same time.
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Concurrent delays / extensions of time
In the case of concurrent delays the contractor is entitled to an extension of time for the period of delay caused by the relevant event, notwithstanding the concurrent effect of the irrelevant event.
The Contract Administrator cannot refuse to grant an extension of time merely because the delay would have occurred anyhow.
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Contract period
Relevant event
Irrelevant event
Extension of time granted
Extension of time witheld
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Net extension method
Gross extension method
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Concurrent delays / extensions of time
In the second example, the previous occurrence of culpable delay and its persistence beyond the excusable delay should lead the Contract Administrator to inquire whether the relevant event did in fact affect the critical path
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An extension of time may be awarded on the basis of whether
•in the light of what was planned to happen, the relevant event was likely to cause delay to completion, or
•in the light of what actually happened, the relevant event actually did cause delay to completion.
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Likely delay to completion
… can only be computed by reference to a base-line derived from the planned programme of work, generally updated to the date when the event occurred.
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Planned programmes are rarely followed:
•uncertainty
•changes
•bias
… at best an educated guess, must be updated
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Actual delay to completion
… is calculated by reference to the as-built programme of when the work was actually done.
… a hypothetical model of how the contractor would have gone about the work if the relevant event had not happened
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Delay analysis
A forensic investigation into the issue of what has caused a project to run late
Distinguishes between:
•critical delay - affects the completion date
•non-critical delay - affects progress but not the overall completion date
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Methods of delay analysis
Two types:
•Theoretical based models - predict the impact of the delaying events in terms of a theoretical result, rather than showing what in fact occurred
•Actual based models - measure how actual progress differed from what was planned before attempting to determine the cause of delay Note: either method may be applied contemporaneously or retrospectively
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Limits to delay analysis models
•accuracy / completeness of base information
•assumptions made to model real situations
•subjective decision-making by analyst
•outputs guide rather than define conclusions
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Theoretical-based methods
•Global impact method
•Net impact method
•As-planned impacted method
•As planned but for method
•As-built but for / collapsed as-built method
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Global impact method
Quick, simple method favoured by contractors to demonstrate their case!
Fails to link cause and effect
Fails to distinguish between critical and non-critical delays
Often fails to distinguish between excusable and culpable delay
Criticised / rejected by the Courts as grounds for assessing an extension of time
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Net impact method
The same as the global method, but with the refinement that the issue of concurrency is considered.
For example, two concurrent delays each of five days are considered to be a delay of five, rather than ten days.
Otherwise, the same advantages / drawbacks as the global method
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As-planned impacted method
Determines the theoretical effect of impacting delay events onto the planned programme and projecting the completion date using the original sequence and timing of remaining activities.
•The original programme may not be a realistic model on which to base the whole analysis
•Does not consider actual progress and therefore does not demonstrate what actually delayed the works.
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As planned but for method
Analyst impacts the planned programme with the assessed implications of the delay events
The impacted completion date is compared with the actual completion date. Difference is said to be how much earlier the project could have finished ‘but for’ all the other delay events that have not yet been analysed. Cycle is repeated.
The total period is said to represent either the contractor’s entitlement to EOT or the employer’s right to deduct liquidated damages.
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As-built but for / collapsed as-built method
Similar to the as-planned impacted emthod but in reverse.
The as-built programme is constructed and linked into a critical path network. A schedule of delaying events is created and the last delaying event on the critical path is removed and the model is re-analysed. The difference between the completion dates before and after the event is removed is said to represent the period of critical delay. Process is repeated until the model is fully collapsed.
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Actual based methods
•As planned vs. as-built method
•Critical Path Method (CPM)
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As planned vs. as-built method
Probably the most common method, favoured by adjudicators / lawyers. Overlays the as-built programme on the original programme to highlight where the main delays occurred.
•Quick, simple, no manipulation involved
•Not suitable for large, complex projects (over 50 activities), except as an initial pass
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Critical Path Method (CPM)
Recreates the life of the project by considering the programme in incremental stages (‘windows’ or ‘snap-shots’) in order to demonstrate:
•the actual state of progress at the time the delaying event occurred
•the changing nature of the critical path as a result of the delaying events
•the effects of action taken, or which should reasonably been taken, to mitigate / avoid delay
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Network Analysis Steps
1) Establish required level of detail
2) Construct list of activities (WBS)
3) Apply logic / links between activities
4) Prepare network diagram
5) Estimate activity durations
6) Calculate completion date
7) Determine the critical path
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Critical Path
The critical path is the path through the network that joins all the activities (critical activities) that must happen on time if the project is to finish on time.
Paradoxically it is the longest path that achieves the shortest completion date.
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Float
Float is a measure of how long the activity’s start or completion may be delayed without changing subsequent activities. Critical activities have no float, that is the Late Finish Time less the Early Start Time less the duration of the activity is zero.
Free float the time by which an activity may be delayed or extended without affecting the start of any succeeding activity
Total float the time by which an activity may be delayed or extended without affecting the project completion date / time
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60 31 31
70 34 34
F
15
G 3
20 4 4
10 0 0
A 4
30 10 12
B 6
C
12
50 16 16
28 31
D 4
E
12
H
Early Event Time
Late Event Time
Event label
LEGEND
Activity on Arrow network
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Activity on Arrow network
10 0 0
A 4
C
12
20 4 4
30 13 13
B 9
40 17 17
D 4
E
12
F
15
60 32 32
70 35 35
G 3
50 29 32
H
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Activities on the node networks
A network in which the nodes (rather than the arrows) symbolise the activities. Also called a Precedence Diagram.
Latest start
Activity label
Total float
Earliest start
Duration
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Logic
1) Finish-to-start
2) Start-to-start
3) Finish-to finish
4) Start-to-finish
3
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Dealing with uncertainty
Programme evaluation & review technique (PERT)
Uses three, rather than a single estimate of time for the duration of each activity:
•Optimistic
•Most probable
•Pessimistic
Expected time = (O +4xM + P) / 6
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CPM scheduling - important reservations
CPM would show the project duration to be 10 weeks + 4 weeks = 24 weeks as shown below
10
14
However, 24 weeks is not the most likely date for project completion - adding together the estimated duration of all activities almost never produces the likely project completion date.
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CPM scheduling
The average (mean) time to completion is 12 weeks + 16 weeks = 28 weeks, not 24 weeks.
8 10 12 14 16 Time (weeks)
Probability
mean
mode
12 14 16 18 20 Time (weeks)
Probability
mean
mode
CPM provides accurate forecasts for completion dates only if everything goes according to plan!
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CPM - Pitfalls
•Use start-to-finish relationships / dependencies as far as possible,
•Avoid excessive lag / lead times and show clearly as separate activities (e.g. Curing concrete) when they are necessary
•Avoid artificial constraints such as ‘must start on’ or ‘must finish by’ which inhibit the programme from reacting dynamically to change
•Adopt an appropriate level of detail
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The as-planned programme
Starting point for any analysis of a contractor’s progress and the effect of delay and disruption but no more than a statement of future intention
Discrepancies include:
•may use wrong assumptions of the work required
•contractor may work slower or faster than shown
•materials may arrive earlier or later than shown
•plant may break down or become unavailable
•a Relevant Event may occur
•inclement weather
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Contractor’s bar charts
Can be used to prove excusable delay provided:
The planned programme •has no float •accurately estimates the duration of activities •shows start-to-finish relationships
All events giving rise to the delay •can be clearly identified •are excusable events
There is no need to take account of: •consequential delays •concurrent delays •accelerated or inefficient working
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Contractor’s responsibilities (JCT80)
To give in writing:
•the material circumstances giving rise to the delay to progress
•the cause of the delay to progress
•the contractor’s opinion of whether the cause of the delay to progress is a relevant event
•the expected effects of the delay to progress
•the likely effect of the event on the completion date, when taken in isolation from any other casue of delay
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Suggested evidence to support any notice of delay
•A network programme accurately illustrating how he intended to complete the works if the event had not occurred - a competent Master Programme
•An updated network programme showing what had actually been achieved in relation to the proposed programme before the event occurred
•An impacted network programme demonstrating, with supporting descriptions, the duration of new or delayed activities and their logical interface with the remaining contract works
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Protocol for determining extensions of time and compensation for delay and disruption
Society of Construction Law
Consultation copy November 2001 available on-line http://www.eotprotocol.com
Provides guidance to all parties in the construction process when dealing with time / delay matters
Recognises that transparency of information and methodology is central to both dispute prevention and dispute resolution
Emphasis on ‘real time’ programming
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Mitigation
Ascon Contracting Ltd. vs. Alfred McAlpine Construction / Judge Hicks considered that the contractor’s obligation to avoid or reduce delay could never be referable to delay caused by a relevant event.
JCT 98 expresses the contractor’s obligation as a duty to ‘constantly use his best endeavours to prevent delay in the progress of the works howsoever caused’.
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Useful links
www.pickavance.co.uk
www.aerberli.co.uk
www.scl.org.uk
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