This paper reviews The Society of Construction Law, Delay and Disruption Protocol (2nd edition), and contrasts the SCL Protocol with AACE® International Recommended Practice No. 29R-03 Forensic Schedule Analysis (2011 Ed.)
In most respects, the two documents take a very similar approach to assessing delay and disruption on construction projects. The fundamental difference is in the focus of the documents, the objective SCL Protocol is to provide useful guidance on some of the common delay and disruption issues that arise on construction projects, with a view to minimizing disputes, whereas AACEi 29R-03 focuses on forensically analyzing delays after the dispute has arisen.
In preparation for the publication of a new paper Assessing Delay – the SCL Options in the April edition of PM World Journal it has been necessary to review and update several of the existing Mosaic papers focused on forensic analysis. These updated papers are available for immediate download.
The major updates are to:
Assessing Delay and Disruption – Tribunals Beware. This paper, based on the AACE® International Recommended Practice No. 29R-03 Forensic Schedule Analysis. It: – Describes the origins, strengths and weaknesses of ‘Critical Path’ scheduling. – Outlines the current ‘state of play’ with regards to the practice of scheduling. – Describes the primary approaches to delay analysis, their strengths and weaknesses, including: – As-Built v As-Planned – Impacted As-Planned – Collapsed As-Built – Window Analysis and its variant, Time Impact Analysis. – Describes the type of record needed to support the delay analysis.
Delay, Disruption and Acceleration Costs. This paper examines the theoretical underpinnings of ‘delay and disruption’ costs to suggest a realistic basis for their calculation. It is designed to help non-experts see through the ‘smoke and mirrors’ of schedule claims to understand what is likely to be real, what is feasible, and what’s hyperbole.
Independent, Serial and Concurrent Delays. This White Paper provides an overview of the differences between independent, serial, and concurrent delays and the options for assessing the effect of concurrent delays.
New blogs and articles developed as part of the research are:
Concurrent Delays – UK High Court Decision Supports SCL Protocol. This article discusses an English High Court decision supporting the approach to concurrent delays advocated in the Society of Construction Law Delay and Disruption Protocol and our White Paper (above). This judgement is likely to be influential in the UK, Australia and most Commonwealth countries, requiring expert assessment and analysis to be founded in common sense
Delivering Expert Evidence is Becoming Harder. This article discusses a number of recent judgements that seem to have re-framed expert evidence, ‘the court is not compelled to choose only between the rival approaches and analyses of the experts. Ultimately it must be for the court to decide as a matter of fact what [occurred]. ‘…there is an overriding objective of ensuring that the conclusions derived from that analysis are sound from a common-sense perspective’.
Costain vs Haswell Revisited. This judgement has a number of important findings relating to schedule delay analysis including:
1. It is necessary to prove the delay event caused a delay to completion (a challenge for a Windows approach to delay assessment).
2. A CPM schedule is unlikely to provide a sound basis for delay assessment in agile and distributed projects.
This work and the publication in April of Assessing Delay – the SCL Options is part of a larger project to develop a controls paradigm for Assessing Delays in Agile & Distributed Projects. The internationally recognized approaches to assessing delay and disruption discussed in the papers above, are based on the premise there is a well-developed critical path schedule that defines the way the work of the project will be accomplished. Therefore, events that delay or disrupt activities in the schedule can be modelled using this schedule, their effect assessed, and responsibility for the assessed delay assigned to the appropriate party. The focus of this paper will be to offer a practical solution to the challenge of assessing delay and disruption in agile and distributed projects where the traditional concept of a ‘critical path’ simply does not exist and the effect of intervening events has to be considered in terms of loss of resource efficiency.
One of our core papers focused on dispute management has been updated as part of a refresh for this part of the Mosaic web resources. Assessing Delay and Disruption – Tribunals Be-Ware was designed to help ADR and legal professionals understand the options available to disputants in assessing ‘delay’ to help them quickly cut through the fog of expertise present in many major disputes to achieve a speedy determination. It has also proved useful for both project and senior managers confronted with the need to defend or make a claim.
This paper is based on the AACE® International Recommended Practice No. 29R-03, Forensic Schedule Analysis (RP29-03), published 25th April 2011. Unfortunately, there seems to be an increasing divergence between this approach to delay claims which seems to be preferred in the USA and jurisdictions that follow US precedent, and the approach embedded in the Society of Construction Law Delay and Disruption Protocol, 2nd edition, which the UK courts and many Commonwealth jurisdictions, including Australia, are increasingly tending to prefer.
The central elements of the dispute arose out of a contract between Blackburn with Darwen Borough Council (Council) and Thomas Barnes & Sons Plc (TB) to construct a new bus terminal in Blackburn (Project). The Project suffered significant cost increases and delays for which TB claimed extensions of time. The Council denied TB’s claims, terminated the construction contract for delay and appointed a replacement contractor to complete the works. TB subsequently commenced proceedings against the Council for monies said to be due under the contract on a proper valuation of the works done at termination (including delay costs due to prolongation) as well as damages for wrongful termination.
The case revolved around two competing causes of delay to the Project. The first, which supported TB’s EOT claim and for which the Council was responsible, was caused by deflection issues within the steelwork that required investigation and remediation which ultimately delayed subsequent activities on the critical path. The second, for which TB was responsible, arose out of delays to TB’s roof covering works, which the Council alleged caused concurrent delay to the critical path at the same time as the steel deflection delay.
Both parties relied on expert delay evidence and each expert adopted methodologies in the Society of Construction Law Delay and Disruption Protocol to undertake their respective analyses. The judge, in assessing the methods of the opposing experts, stated that ‘[109]. ….irrespective of which method of delay analysis is deployed, there is an overriding objective of ensuring that the conclusions derived from that analysis are sound from a common-sense perspective‘. As a consequence of the experts’ diverging opinions, the judge stated that the court would need to come to its own conclusion as to whether the steel deflection delay and the roof covering delay were concurrent.
Despite the fact that the roof covering delay was resolved while the steel deflection delay was ongoing (and did not cause an independent delay to the critical path), the court determined that the delays were in fact concurrent, stating:
‘[140]. In my judgment this is a case where these causes were concurrent over the period of delay caused by the roof coverings. That is because completion of the remedial works to the hub structural steelwork was essential to allow the concrete topping to be poured and the hub SFS to be installed, without which the hub finishes could not be meaningfully started, but completion of the roof coverings was also essential for the hub finishes to be meaningfully started as well. It is not enough for the claimant to say that the works to the roof coverings were irrelevant from a delay perspective because the specification and execution of the remedial works to the hub structural steelwork were continuing both before and after that period of delay. Conversely, it is not enough for the defendant to say that the remedial works to the hub structural steelwork were irrelevant from a delay perspective because the roof coverings were on the critical path. The plain fact is that both of the work items were on the critical path as regards the hub finishes and both were causing delay over the same period.’ Further, the court stated that TB could not seek to use the steel deflection delay as ‘a convenient hook on which to seek to hang all of the delay to the works’. To do so ignored the fact that there was also a problem caused by the delays TB suffered to the roof coverings, which was itself a cause of delay to the critical path.
When considering concurrency, the Society of Construction Law Delay and Disruption Protocol, 2nd edition (SLC Protocol) simply requires the delays and their effects (or parts of the delays and their effects) to be experienced at the same time for concurrency to exist. It has two relevant sections which appear to have been followed by the Judge:
10. Concurrent delay – effect on entitlement to EOT
True concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor Risk Event, and the effects of which are felt at the same time. For concurrent delay to exist, each of the Employer Risk Event and the Contractor Risk Event must be an effective cause of Delay to Completion (i.e. the delays must both affect the critical path). Where Contractor Delay to Completion occurs or has an effect concurrently with Employer Delay to Completion, the Contractor’s concurrent delay should not reduce any EOT due.
14. Concurrent delay – effect on entitlement to compensation for prolongation
Where Employer Delay to Completion and Contractor Delay to Completion are concurrent and, as a result of that delay the Contractor incurs additional costs, then the Contractor should only recover compensation if it is able to separate the additional costs caused by the Employer Delay from those caused by the Contractor Delay. If it would have incurred the additional costs in any event as a result of Contractor Delay, the Contractor will not be entitled to recover those additional costs.
Applying the fundamental principal in the SLC Protocol that separates disruption and delay costs from the consideration of EOTs, the court held that: (n) EOT and prolongation – conclusion [157]. The claimant is entitled to an additional EOT of 119 days (or 17 weeks), but to prolongation of only 27 days. After allowing for the EOTs already granted and agreed, which take the completion date to 13 April 2015, that would entitle the claimant to a revised completion date of 10 August 2015.
The overall period of the roof covering delay included a 31 day delay in starting the roof covering work and an increased duration of the roof works of 26 days compared to the original plan. In considering these contractor delays, the judgement seems to imply ‘pacing’ is not a valid basis for not considering (or reducing) concurrent contractor delays that are in parallel with client delays. TBs expert claimed: “there may have been some works to the externals that could be progressed, however this would not change my opinion that the [steel] works were critical in delay and that it was within TBS’s gift to pace any non-critical works”.
The Judge in considering this opinion stated: ‘[133]. If by this [the expert] meant to suggest that the roof coverings could have been progressed but they were non-critical and could have been performed in a more leisurely manner as a result, this seems to me to ignore the fundamental fact that throughout the crucial period from October 2014 through to January 2015 the claimant could not have known how long the remedial works to the hub steelworks would take and could not therefore reasonably have proceeded on the basis that there was no need to worry about the roof coverings until the hub steel deflection issue was completely resolved’. This part of the judgement clearly sets a high bar for any ‘pacing’ claim to be successful.
Also, implicit in the court’s reasoning is a rejection of the ‘first in time’ approach to assessing concurrent delay in favour of the pragmatic approach in the SCL Protocol that does not allow either party to benefit from a fault on its part.
Preventing or minimising client induced delay is a common issue from small ‘agile’ IT developments through to multi-$billion mega projects. Whilst this type of delay can never be completely eliminated, they can be reduced by applying a pragmatic six stage approach.
Stage 1: Make sure your needs are known and understood by the client.
The best way to minimise delays is to ensure the client understands not only ‘what’ they are expected to contribute but also ‘why’ it is needed – don’t make the mistake of believing ‘they understand’, just because it is their project. Proactive communications is the key to helping your client better understand their role and the consequences of a delay on their part. Some of the questions you need to answer are:
Does the client understand the importance of their involvement?
Does the client really understand the need for timely feedback?
Do they appreciate the impact to the project if they are late / slow?
Do they know the dates that they will need to undertake actions so they can plan their work?
You will be surprised how valuable communicating proactively and raising visibility of the potential problems can be; the key is making sure the client develops an understanding of the requirements and the amount of effort needed for them to meet their obligations. This is a form of ‘directed communication’; see: The three types of stakeholder communication.
Stage 2: Schedule the activity and code it up to make extracting focused reports easy.
A vital tool on the communication lexicon is clearly presented schedule information that is relevant to the client. Make sure their work is defied by activities that can be easily pulled into a focused report. Do not use lags on links to allow time for this work – no one is responsible for the ‘lag’.
Stage 3: Regularly status the schedule and communicate the changes to the client.
Having a plan is only part of the power of scheduling. Create a baseline and show the slippage between any current ‘client owned’ activities and the plan. Using unbiased data to highlight issues will change behaviours – no one likes to be seen to be causing delays, particularly the project’s beneficiaries.
Stage 4: Raise a risk for anticipated future delays – manage the risk.
When you have a sense that the client is not going to meet their deadlines raise a risk and look for ways to manage the risk. If possible ask the client to help with the risk mitigation plan, which will give them some buy-in to help you be successful. This type of engagement also helps from a communication standpoint to better manage expectations. See more on risk management.
Stage 5: Raise an issue for an actual delay – manage the issue.
If the client ends up not meeting their dates, you have an issue that needs to be effectively managed. Issues management (problem identification and resolution) needs to be performed. Get your team, management, and stakeholders involved. Ask your manager for their input in resolving the problem that is now impacting your completion date. Get more accountability from your managers and the client’s managers to help resolve project deadline concerns. Your managers and sponsors are also the ones in a position to manage priorities to get the work done. If the problem cannot be resolved perfectly, at least you are continuing to manage expectations. See more on issue management.
Stage 6: Deal with contract issues contemporaneously.
If there is a need to make a contractual claim for the delay, make the claim immediately whilst the cause and effect are easily defined and keep the claim factual If the earlier steps in the process have been followed there will be no surprises and resolution of the issue can be achieved with the minimum of fuss or delay. See more on contractual dispute management.
Summary
Client induced delays are best avoided:
In commercial contracts, the ‘excusable delay’ (EOT) claim will inevitably damage the relationship and cause ill will – the effect of which can outweigh the benefits of the ‘claim’.
Internal projects don’t have the ‘claims’ option and may appear to be unreasonably held accountable for events and circumstances that are not within their control, but they do have control over the processes used to manage the project.
By utilising disciplined and proactive project management processes, you are more likely to avoid these problems and encourage the client to help you be successful by managing expectations and getting the client to be a part of the solution – not just the problem. It’s really just a case of applied stakeholder management!
In preparation for the IAMA National conference later this week I have just finished developing and updating a short series of papers focused on addressing schedule delay and disruption.
Assessing Delay and Disruption – an overview of the accepted methods of forensic schedule analysis [ view the paper ]
Prolongation, Disruption and Acceleration Costs – an overview of the options for calculating costs associated with approved delays and acceleration [ view the paper ]
Late last year the British High Court delivered a very interesting judgement on the assessment of delay, disruption and prolongation claims.
A delay to an activity may disrupt the work and it may delay the completion of the project. The two factors are independent (this is the fundamental principle in the UK Delay and Disruption Protocol).
In Costain Ltd v Charles Haswell & Partners Ltd [2009] EWHC B25 (TCC) (24 September 2009), the High Court has determined that for prolongation to occur, the actual delay has to flow through to a delay in the completion of the works. The mere fact the delayed activity was on the then critical path when it occurred is not of itself evidence the delay flowed through to the completion of the works. At paragraph 200(ii) the Justice Richard Fernyhough QC stated I find that it has not been shown by Costain that the critical delay caused to the project by the late provision of piled foundations to the RGF and IW buildings necessarily pushed out the contract completion date by that period or at all.
The fundamental issues relate to the definition of the critical path were canvassed inin my 2006 paper ‘Float is it real’.
At page 7 I argued:
Despite the CPM requirement for a single duration estimate, durations are variable; changing the estimate of a planned (future) duration or differences between the actual duration and planned duration on completed activities may change the critical path.
In the example above, at the ‘Initial Claim’ the critical path was running through the top chain of activities and ‘delay x’ was encountered. As no one can predict the future, at the time of the dealay it would be reasonable for everyone involved in the project to assume this is a critical delay and administer the contract accordingly.
Later, changes in the duration of the activities cause the critical path to move (either reduction in the time needed to complete some activities in the top chain or increases in duration in the lower chain, or both). When ‘delay y’ occurs as a ‘Later Claim’, this is also a critical delay based on the schedule at the time of the delay.
However, given the definition of the ‘Critical Path’ is: Generally, it is the longest path through the project. …that determines the duration of the project. The difficult question to answer is what happens to ‘delay x’, it appeared to be critical based on the best information available at the time the delay occurred. But changes over time (and after the time of the initial delay) have shown ‘delay x’ to actually be non-critical.
Certainly based on the Constain’s case, scheduling experts will need to define far more than simply a delay to an activity on the current critical path. As a minimum it will be necessary to show the delay impacted the overall completion and the extent of the impact. It will also be necessary to show the delay caused a general increase in costs for a prolongation claim to be sustained.
Pat Weaver
Lynda Bourne
Aavssitedev's Blog