To go retrospective, or to go prospective
In the first of two articles on the subject, Chris Larkin, associate director, Brewer Consulting looks at Delay Analysis, and the importance of choosing the correct technique for any given situation.
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.