Lesson 1: Delay Overview & Terminology
Delays on construction projects are one of the most contested and costly issues in the industry. Understanding what constitutes a delay, how delays are analysed, and the terminology used by analysts, lawyers, and courts is the foundation for any serious engagement with delay claims. This lesson covers the evolution of delay analysis, the key terms used in practice, and how schedule observations translate into formal analysis.
How Delay Analysis Has Evolved
Historical Approach
In the past, a delay was measured by taking the Tender, Contract, or Agreed Construction schedule and considering the cumulative effects of known Events on that schedule. This approach had significant shortcomings:
Does not consider the effect of the delay at the time the delay actually occurred
The critical path of a project constantly changes — a single baseline path becomes redundant
Initial schedule methodologies become redundant as the project evolves
Cannot assign liability for delay to Practical Completion where there are both Principal and Contractor caused events
What Changed
Modern delay analysis practice has advanced significantly, driven by four key developments:
- The advent of more detailed and powerful computer-based CPM schedules
- Increased awareness of the benefits of project controls by contractors
- More onerous requirements from Principals for project reporting
Increased requirements in courts and arbitration to demonstrate delay, concurrency, and responsibility.
These advances allow analysts to consider the effect of any Event at the time at which that Event arose, so that:
- We can establish the effect of any one Event independently from any other event on the project
- The cumulative effect of any number of Critical Delaying Events is additive, since each event is mutually exclusive
- To establish an entitlement, we need to "add up" the effect of applicable Critical Delaying Events across the project
Timing of Analysis
Performed in real-time, prior to the delay event, or while the delay event is occurring. Consists of the analyst's best estimate of future events. Occurs while the project is still underway and may not evolve into a forensic context.
Performed after the delay event has occurred and the impacts are known. May occur soon after the delay event but prior to project completion, or after the entire project has been completed.
Under many contracts the term "delay" is not defined and is used with a variety of different meanings. This lack of a clear definition often leads to confusion when addressing concurrency and typically results in the involvement of Third parties — delay specialists on both the Owner's side and the Contractor's side. A clearer definition of how delays will be recorded and assessed would be a logical, cost-efficient way to resolve delay claims with minimal Third party involvement.
Key Terminology
To simplify the discussion of delay, the following consistent terminology should be adopted:
Any issue under consideration — an occurrence or incident on the project, whether it causes delay or not. The cause of an Event may be in a different time period to the Event itself. For example, in the case of a variation involving additional work, the Cause would be the direction to vary and the Event would be the actual additional work performed.
An Event that did (or may have) delayed one or more activities on the project — but which has not yet been proven to have delayed project completion.
A Delaying Event that has been found, by analysis, to have caused a delay to the completion of the Project or the Works. Not every Delaying Event is a Critical Delay — many activities can be delayed without affecting project completion if they have sufficient float.
Additional Terminology
The amount of time an activity may be delayed without delaying the project end date.
The amount of time an activity may be delayed without delaying the start date of its successor activity.
An amount of time allocated to an activity to allow for risk factors such as inclement weather or industrial disputes. Typically represented as a separate bar in the programme.
Where two or more events are thought to be incurred at the same time — either overlapping or partly overlapping. Concurrency of delay is one of the most complex issues in claims analysis.
Schedule Observations & Analysis
Schedule Observations
Before formal analysis begins, the reviewer conducts schedule observations by examining updates between two subsequent schedules:
- Review activities that were delayed or critically delayed during the period in question
- Review any mitigation the Contractor has undertaken to overcome critical delays
- Once critical delays and mitigation are observed, establish reasons for each delay
This is also a good first step in establishing a maximum entitlement across the project.
Schedule Analysis
Once observations are complete, formal schedule analysis proceeds in chronological order:
- Impact one or a number of events on the schedule in chronological order to determine whether each event is a Delaying Event, a Critical Delay, or has no effect
- Compare the theoretical (impacted) analysis against the known progress of the works for that period
- Where variances exist, ask: Are the particulars of the events correct? Were there other delaying events not captured? Was there mitigation of the delay?
If the impacted schedule reasonably conforms with the subsequent actual schedule, this supports the delay analysis.
In the next period, the previous comparison schedule becomes the new baseline — there is no need to re-examine the previous period's analysis.