Delay, productivity losses and disruption are three intrinsically related concepts that may significantly affect the outcome of a construction project.
Disruption may result from acceleration or from site or other conditions which were unforeseen by the contractor. Productivity losses may result from acceleration, disruption or from mitigated delay. Claims involving these concepts are generally more difficult to prepare and quantify than those based on "pure delay."
When the theoretical and practical aspects of these claims are considered, the following becomes apparent:
Construction contractors tend to have insufficient comprehension of the information systems required for effective claim preparation — this includes site diaries, other site documentation, and programming and progress reporting systems. It is preferable if productivity analyses are conducted with reference to actual field data rather than relying on initial estimates.
The party preparing a construction claim should not lose sight of the basic elements required to prove damages in common law.
For a more detailed discussion, refer to: Delay and Disruption in Construction Contracts (Keith Pickavance); Construction Delay Claims (Barry B. Bramble and Michael T. Callihan); and Construction Scheduling; Preparation, Liability, and Claims (Wickwire, Driscoll and Hurlbut).
In construction claims, a delay can be two things. It can be the time during which some part of the construction project has been extended beyond what was originally planned due to an unanticipated circumstance. A delay can also be the incident that affects the performance of a particular activity without affecting project completion.
An incident of delay can originate from within the Contractor's organisation or from any of the other factors interacting on the construction project. Incidences of delay from within the Contractor's organisation are those occurrences the Contractor itself has caused. Incidences outside of the Contractor's organisation may be caused by the Owner, the designer, other prime contractors, subcontractors, suppliers, labour unions, nature, or any number of other entities that participate in the construction process.
In the retrospective longest path analysis approach, the focus lies on determining the critical path as it actually unfolded during the project, distinct from the contemporaneous critical path identified through other methods.
This methodology involves several steps to unveil insights into project performance. Initially, the delay analyst establishes or verifies a detailed as-built schedule, capturing the project's actual timeline accurately.
Subsequently, tracing back from the project's completion date, the delay analyst identifies the longest continuous path — the retrospective as-built critical path. This path showcases the sequence of activities that significantly influenced the project's overall duration and completion.
This approach has a relatively constrained ability to accommodate shifts in the critical path during project execution. While effective in pinpointing key delays and their causes, it may not fully capture instances where the critical path changed during the project's progression.
In order to understand and assess productivity and disruption, it is important to understand the basic terms and logic the industry uses when describing such events.
Those within the Contractor's control (resource levels, material procurement program) or imposed upon them by contract conditions (e.g. inclement weather).
Owner changes, ground conditions, industrial action, changes to legislation, safety issues, acts of god and the like.
Any claim relating to lost productivity, disruption, acceleration, or delay.
A means of mitigating a delay by allocating more resources so that critical activities are performed in less time. Acceleration should be viewed as the alternative to delay — giving both the Owner and the Contractor the option to accept delay (possibly with costs) or acceleration (most likely with costs).
Contingency in programmed duration, either built in to the programmed duration or identified within the programme of works.
A material alteration, uncontemplated by the Contractor, of the performance conditions expected at the time of bidding. Encompasses interference (prevented from proceeding as planned, e.g. variations ordered by the Principal) and interruption (forced to temporarily stop, e.g. industrial action). When disruption occurs, the Contractor is unable to proceed at the rate planned and incurs inefficiencies and costs.
May occur as a result of acceleration or disruption of the Contractor's workforce, resulting in extra costs. A Contractor plans to allocate resources in the most efficient and cost-effective manner — any deviation from the planned programme may incur lost productivity and therefore additional costs.
A delay on the critical path that will extend the date of completion unless mitigated. Progress is also resource dependent — even if float exists, a delay in a critical trade may still affect the end date.
The standard tool for assessing the impact of delaying and disrupting events is the CPM schedule. It has become accepted practice that CPM scheduling forms the basis of such assessment. Any schedule errors, scope omissions, or missing logic must be corrected before proper assessment of delays can commence.
In the US, the general view is that the Project owns the float. In practice, this incentivises contractors to produce programmes with many critical or near-critical paths — effectively removing float entirely — so that any Owner delay is immediately a critical delay. The difficulties in determining criticality are exacerbated when the Contractor's programme is unsatisfactory.
Problems commonly found in Contractor programmes that undermine delay analysis:
Concurrent delays is the term given to the situation where a Contractor is delayed by an Owner-caused event (an excusable delay, which may entitle the Contractor to an Extension of Time) and also delayed by an event within the Contractor's control (a non-excusable delay, which would not on its own be grounds for an Extension of Time).
Is the Contractor entitled to an Extension of Time and the costs of that delay — or simply an Extension of Time?
The answer depends on the specific contract terms and the jurisdiction's legal framework. This is one of the most contested areas in construction law.
It is essential for a Contractor to implement adequate site controls to enable timely presentation of delay and disruption claims, accurate assessment of their impact, and adequate documentation. This includes site diaries and other contemporaneous site documentation, as well as programming and progress reporting systems.