METHODS OF PROVING CAUSE-EFFECT and SCHEDULE DELAY
In Holloway Consulting’s experience as a construction schedule delay expert witness, the availability of a detailed network schedule (CPM) provides a great opportunity to establish the cause-effect of individual, or many, delays. While this approach goes far to establish the ultimate compensable damages and total time extensions due the contractor, a corollary issue looms even more important, that of concurrent delays. Simply defined, during the course of construction, work may be proceeding on several activities simultaneously. A compensable delay may occur to one of these activities while at the same time a non-compensable delay may be occurring to a parallel activity. This establishes the issue: concurrence of different delays. This issue is important because damage recovery by the contractor may be precluded when there is such a concurrence of delays.
In establishing a construction schedule delay claim and, for that matter, in analyzing a contractor’s schedule delay claim for an owner, evaluating concurrent delays is important. The initial step in the process is to establish the schedule baseline for use in the cause-effect analysis. Depending on the particular circumstances, either the contractor’s as-planned schedule (preferably the schedule submitted shortly after the notice to proceed), or a logically-premised, as-built network will form the analysis baseline. In addition, a comparison between the as-planned and the as-built schedules should be performed to provide valuable insight into extended activity durations and changes in network logic.
MULTI-MILLION DOLLAR BRIDGE PROJECT
An example of how this process can work is illustrated with an actual example of a recent multi-million dollar bridge construction contract. The low bidder was exceedingly close in price to the other bidders on the project. During the course of construction, the contractor encountered subsurface conditions associated with foundation piers, which differed materially from the conditions represented in the bid documents. Because of these differing site conditions (a compensable condition), substantial delays were sustained by the contractor in completing the piers. Because of this, subsequent related activities were similarly delayed.
During the course of construction, the contractor encountered numerous owner and architect/engineer caused delays. Because of various delays to individual construction activities, the project was completed substantially later than originally planned.
What if, however, the contractor was not granted time extensions during the course of construction and was confronted with the prospect of having liquidated damages imposed. In such an event, the contractor’s work would be constructively accelerated. As a result of such acceleration, the contractor performed work in a different sequence than originally planned. Additionally he may have had to increase his work crew size or ordered overtime resulting in lower productivity.
The affected productivity may be brought about by such causes as stacking of trades, reassignment of manpower, crew size inefficiency, dilution of supervision or concurrent operations, all of which may affect the morale and attitude of the contractor’s forces. How can the lost productivity brought about by such factors be quantified?
CONSTRUCTION SCHEDULING
Today, many contracts require a network analysis schedule or CPM (used interchangeably herein). In general, the specified requirements for a work progress schedule encompass a variety of items and details. This requirement works to the mutual advantage of owner and contractor.
While the means, methods, techniques and sequences of construction traditionally rest with the contractor, the contractually-required detailed network analysis forces logical planning to precede the physical work. This logical planning benefits both parties. By specifying the required use of a CPM schedule, the individual construction activities are integrated within a logic-tied network. Each activity (excavation, light fixtures, etc.) is linked in a network with durations, start/finish dates (early and late) and criticality/float defined. If the parties employed a CPM schedule, the impact of complex delays can be comprehensively analyzed.
The contractor’s preparation of a detailed CPM schedule, followed by the owner’s approval, places on the respective parties several obligations. Over the past few decades, courts have held that parties to a contract have an implied duty to refrain from any action which would impede or hinder the timely execution of the scheduled activities. The owner’s acceptance of the schedule, however, does not necessarily imply affirmation of the schedule’s reasonableness or feasibility on the part of the owner. The contractor usually maintains that responsibility.
Accordingly, the contractor’s CPM submittal should contain any reservations/ qualifications deemed necessary to limit potential exposure. The following letter is an example of a contractor’s transmittal letter from a previous case of such a qualification:
TRANSMITTAL OF CONTRACTOR’S PROJECT SCHEDULE TO OWNER
Re:
Dear Owner:
Enclosed please find our CPM schedule for the project.
Except for contractual completion requirements, the duration times for the various items of work shown on the enclosed CPM schedule are estimates only and not commitments. They are based on presently known or represented conditions and any changes therein will require a change in schedule. Please note specifically those items of work which are placed by or dependent upon actions by the Owner or those under his control, since we are relying on being able to commence and proceed with those activities on the dates shown and any delays of that nature would affect our schedule.
We will assume that this schedule is acceptable to you and in conformance with our contract requirements unless we hear from you to the contrary within the next ten days.
Very truly yours,
Contractor
CLOSING
Whether or not the approved schedule actually becomes binding on all parties is, however, questionable. The owner is affirming that based on parameters within their control, there will be no action to impede or hinder the contractor, rendering the schedule impossible. Based on these qualifications, the approved schedule becomes a goal by both parties to achieve.
