To go retrospective, or to go prospective
by Chris Larkin
Delay analysis is a widely debated construction law subject due to the number of projects that are not completed on time, the financial implications of late completion and the often quite different conclusions that can result depending upon the method of analysis used.
Given the size of the construction market in the region, it is no surprise that the topic has featured in this column before and it will likely continue to be a source of much discussion.
This is first of two articles in which I will describe commonly used delay analysis techniques, what is needed for each and their advantages and drawbacks.
Delay analysis is the technique used to identify causes of delay and the impact they have on the progress and completion of a project. It is necessary in some form for claims for extensions of time and cost of prolongation. Without it a contractor will fail to demonstrate any entitlement.
It is crucial to any claim that the most appropriate method of delay analysis is adopted. If you choose a method that fails to deal with issues such as culpable delays, concurrent delays and changes in logic then the claim might be easily rebutted. Whereas, using a sophisticated method for a simple issue can be a waste of time and money. A number of factors influence the selection of approach including the requirements of the contract, quality of the contractor’s planned programme, quality and extent of records and the complexity of the issue.
Each method of delay analysis falls into one of two categories: either prospective or retrospective. Prospective techniques are those that predict the likely impact on the progress of the works. Retrospective techniques are those that seek to demonstrate the actual impact on the works. The latter can only be used after the works have been completed or after the impact of the delay event has ceased. Prospective analysis can be used both before and after the delay effect has taken place.
The first method I will describe is called “As-planned v As-built”. This is a retrospective method that involves a simple comparison of the contractor’s planned programme as to how it intended to execute the works with the actual events. This is done by drawing bars and/or lines on the planned programme that show when the activities actually started and finished. The argument put forward when this technique is used is that the difference between the two programmes is the entitlement to an extension of time.
This technique obviously requires the contractor’s planned programme and good as-built records of when work was undertaken. Since it is a simple graphical comparison, there is no need to have a properly logic linked programme or to use planning software. Its other advantages are that it is quick and simple to prepare and it is easily understood.
This method does have a number of significant drawbacks. It does not identify who is at fault, it does not demonstrate cause and effect, it takes no account of the contractor’s culpable delays and it can only be used retrospectively. As a result, claims for extensions of time based solely on this method might not be successful. Nevertheless, it is often the first step in analysing delays as it can quickly highlight those activities that did not proceed as planned.
Another method is called “Impacted As-planned”. This technique is the one most commonly used by contractors in claims for extensions of time. It involves inserting activities and/or constraints to represent periods of excusable delay into the contractor’s planned programme. The periods of delay are logic linked to activities in the programme to determine the impact on progress and completion. This is a prospective form of analysis as it predicts the likely impact. The argument used with this technique is that the entitlement to an extension of time is the difference between the As-Planned programme and the Impacted As-Planned programme.
The Impacted As-planned technique relies upon having a good baseline programme that accurately reflects the intended method of construction. It does not require as-built records but where possible it is good practice to cross check the results against as-built milestones. It is contractors’ preferred method as it is relatively quick and simple to undertake, easily understood and often gives results more in the contractor’s favour.
For very simple claims for extensions of time, this approach might suffice. Where, however, the circumstances are more complex, such as where there are multiple causes of delay with wide ranging impact, this technique may fail. This is because it takes no account of the progress of the works, contractor’s own delays, adjustments in levels of resources and changes to programme logic.
The two techniques described above are perhaps the easiest and most commonly used in claims for extensions of time. In my next
article, I will describe two more sophisticated methods that address many of the defects of the “As-Planned v As-Built” and “Impacted As-Planned” approaches.
ARTICLE No. 2
The sophisticted methods of delay analysis available
by Chris Larkin
In my first article on delay analysis, I described two simple methods that can be used to assess the delays on a project. The methods I described were as-planned v as-built and impacted as-planned”. This second article describes two further more sophisticated methods: as-built but-for and time impact analysis.
In brief, as-built but-for involves removing the effects of delay events from the as-built programme in order to assess how the work would have progressed in the absence of the delays.
First, a dynamic as-built programme is produced using planning software to create a model of the timing and sequence of actual events. The model must precisely replicate how the works were executed using as-built start dates, finish dates and activity durations with appropriate logic links between activities.
The second stage involves identifying the delay events in the as-built programme and apportioning them to the party responsible for them. The delay events are shown in the as-built programme either as activities or constraints. Their impact is modeled by creating logic links between the delay events and subsequent activities.
The third stage involves removing the delays from the as-built programme to produce an as-built but-for programme to show how the works would have been constructed but for the delays. When used in claims for extensions of time, only delays for which the contractor is not responsible are removed. It can then be argued that the extension of time due is the difference between the respective completion dates of the full as-built programme and the as-built but-for programme.
In practice, several iterations are required to ensure that the model represents what would have happened but for the delays. This involves adjusting the level of detail, logic and durations of activities.
As this approach relies upon having an accurate as-built programme, good as-built records are essential. It is also vital that the construction team is consulted in order to gain an understanding of the methods of construction, relationships between activities and practical impact of delays.
This approach has a number of advantages: it is fact-based and less theoretical than other methods; the basic principle is easily understood; and it can be easily presented and explained. It does, however, come with a health warning: care is needed to ensure that the model addresses concurrent culpable delays, re-sequencing, redistribution of resources and acceleration. If such matters are not accounted for then the results will be misleading.
The final method of delay analysis I will describe is called time impact analysis. This method attempts to determine the impact of delay events on the contractor’s intentions for the remaining works, taking into account the actual progress at the time the delay event occurred.
The first step is to verify the contractor’s planned programme and correct any errors. The second step is to identify delay events and periods. Next, the actual progress of the works at the start of the first delay event is input into the contractor’s programme to check whether the completion would have been delayed by the contractor’s rate of progress. Activities representing the delay are then added to the program, which is then re-analysed, and any further delay is recorded. It is then argued that the further delay is the contractor’s entitlement to an extension of time at the time the delay event occurred. The process is then repeated for each delay event.
Time impact analysis requires a suitable planned program that truly reflects the contractor’s intentions for executing the work. This method also requires reliable and consistent progress data at small enough intervals to make the analysis meaningful.
When undertaken properly, this method of analysis addresses the complex issues of concurrent delays, acceleration and resequencing of activities. It is often used by expert witnesses when giving opinions in arbitration or litigation. It is also the method recommended by the Society of Construction Law’s Delay and Disruption Protocol.
Due to its complexity, Time Impact Analysis has two significant disadvantages: it can be slow and so expensive to carry out; and can be difficult to communicate the approach and results.
In my view, there is no single method of delay analysis that will suit all situations. The choice of method depends upon the requirements of the contract, nature of the delay events, quality of the planned programme, records to hand, time available, value of the dispute and target audience.
For many of the major projects in the region, speed to market is critical and so any delay can have significant implications. Consequently, the analysis of delays is an important matter and is vital for resolving time-related disputes.
If there were a single method of analysis that yielded only one result from a given set of facts then there would be little doubt as to the party responsible for the delay. Until such a method is found, however, delay analysis will continue to be a subject of much debate.
Source: Construction Week
- Retrospective Delay Analysis Techniques
- Problems with using critical path analysis for proving delay claims
- Who owns the float period?
- Concurrent delays
- The TIA route to resolving disputes
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