Tag Archives: CPM

A RETROSPECTIVE AS-BUILT SCHEDULE ANALYSIS CAN BE USED TO SUPPORT DELAY

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Delay claims are part of construction.   There should be no surprise why.  Time is money.  A delay claim should be accompanied by expert opinions that bolster evidence that gets introduced.  The party against whom the delay claim is made will also have an expert – a rebuttal expert.  Not surprisingly, each of the experts will rely on a different critical path as to relates to the same project.   The party claiming delay will rely on a critical path that shows the actions of the other party impacted their critical path and proximately caused the delay.  This will be refuted by the opposing expert that will challenge the critical path and the actions claimed had no impact on the critical path (i.e., did not proximately cause the delay). Quintessential finger pointing!

This was the situation in CTA I, LLC v. Department of Veteran Affairs, CBCA 5826, 2022 WL 884710 (CBCA 2022), where the government terminated the contractor for convenience and the contractor claimed equitable adjustments for, among other things, delay.   The contractor’s expert relied on an as-built critical path analysis by “retrospectively creating updates to insert between the contemporaneous updates.”  Id., supra, n.3.  The government’s expert did not do a retrospective as-built analysis and relied on only contemporaneous schedule updates.  Id.

The government’s expert testified he was not a fan of a retrospective (after-the-fact) as-built analysis because this analysis can lead to manipulation.  He testified that he prefers to rely on contemporaneous schedule updates versus an as-built analysis where activities are added.   The contractor’s expert countered by saying the government’s expert wants to ignore as-built facts which would warrant adjustments to contemporaneous project schedules to account for what actually occurred in the field.

Who is right?  Is a retrospective (after-the-fact) as built analysis credible?   YES, it is.  But, in an answering this question, let’s bullet point some key aspects as articulated by the Civilian Board of Contract Appeals, which need to be underscored for importance:

The contractor “has burden of proving the extent of the delay, that the delay was proximately caused by government [owner] action, and the delay harmed” the contractor.  CTA I, supra (citation omitted).

“Only delay on a project’s critical path results in overall delay.”  Id.

 “As as-built critical path that reconstructs schedule updates is an acceptable methodology” “[A] rigorous ‘as-built’ approach- reviewing contemporaneous evidence in hindsight to trace the activities on the actual, longest path to completion-has been endorsed by government contracts tribunals.”  Id.

“Because we must determine why a project lasted as long as it did, we [the Board] want to know the path to the latest work – including the critical work immediately preceding that work, and just before that, and so on.” Id.

“We reject [the government’s] accusation that retrospectively adjusting as-built schedules based on project documentation or other evidence necessarily turns the schedules into ‘fiction.’ There is, to be sure, a heavy presumption that regularly updated, contemporaneous schedules are the best evidence of project progress.”  Id.

“[F]orensic schedule analysis is ‘both a science and an art’ and ‘not a magic wand’ but a set of techniques requiring ‘the application of an expert’s well-considered judgment in evaluating the logic of underlying the various pieces of information that support the analysis.’”  Id.

Even if relying on an as-built analysis, there needs to be persuasive contemporaneous project documents – “[e]xpert opinions offered on certain matters that…are not supported by the record tend[] to cast a shadow on the value of other opinions concerning issues where the underlying factual matters were less clear.” Id. (citation omitted) (discussing aspects of contractor’s experts opinion that relied on an unknown extent of hindsight with interviews of the contractor’s project team which the government and the Board were not privy, and where there was not persuasive contemporaneous evidence).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

STANDARD FOR EVALUATING DELAY – DIRECTLY FROM AN ARMED SERVICES BOARD OF CONTRACT APPEAL’S OPINION

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Sometimes, it is much better to hear it from the horse’s mouth.  That is the case here.  The Armed Services Board of Contract Appeal’s (ASBCA) opinion in Appeals of -GSC Construction, Inc., ASBCA No. 59402, 2020 WL 8148687 (ASBCA November 4, 2020) includes an informative discussion of a contractor’s burden when it encounters excusable delay and, of importance, the standard for evaluating delay.  It’s a long discussion but one that parties in construction need to know, appreciate, and understand.  EVERY WORD IN THIS DISCUSSION MATTERS.

Construction projects get delayed and with a delay comes money because time is money.  Many claims are predicated on delay.  These can be an owner assessing liquidated damages due to a delayed job or a contractor seeking its costs for delay.  Either way, the standard for evaluating delay and the burdens imposed on a party cannot be understated and, certainly, cannot be overlooked.  For this reason, here is the discussion on evaluating delay directly from the horse’s mouth in the Appeal of-GSC Construction, Inc.:

The critical path is the longest path in the schedule on which any delay or disruption would cause a day-for-day delay to the project itself; those activities must be performed as they are scheduled and timely in order for the project to finish on time. Wilner v. United States, 23 Cl. Ct. 241, 245 (1991). In Yates-Desbuild Joint Venture, CBCA No. 3350 et al., 17-1 BCA ¶ 36,870, our sister board compiled an excellent and very helpful synopsis of the standards for evaluating delay claims, which I adopt nearly verbatim among the discussion that follows.

To the extent that the government that delays a contractor’s work and increases its costs, the contractor may seek compensation for its damages. Yet, the mere fact that there is some delay to some aspect of planned contract work is not enough to establish that the contractor’s ultimate contract performance costs or time increased. In evaluating the effect of government-caused delays on the contractor’s ultimate performance time and cost, tribunals generally look to the critical path of contract performance, a method of delay analysis that the United States Court of Claims explained as follows:

Essentially, the critical path method is an efficient way of organizing and scheduling a complex project which consists of numerous interrelated separate small projects. Each subproject is identified and classified as to the duration and precedence of the work. (E.g., one could not carpet an area until the flooring is down and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.) The data is then analyzed, usually by computer, to determine the most efficient schedule for the entire project. Many subprojects may be performed at any time within a given period without any effect on the completion of the entire project. However, some items of work are given no leeway and must be performed on schedule; otherwise, the entire project will be delayed.

Yates-Desbuild, 17-1 BCA ¶ 36870 at 179,684-85 (quoting Haney v. United States, 676 F.2d 584, 595 (Ct. Cl. 1982)).

Where the time frame for performance of an activity, set by the earliest possible start time and the latest possible finish time, establishes a time interval equal to the expected activity duration, the activity is termed ““critical,” and no discretion or flexibility exists in the scheduling of that activity. Items of work for which there is no timing leeway are on the critical path, and a delay, or acceleration, of work along the critical path will affect the entire project. Specifically, then, to prevail on its claims for the additional costs incurred because of the late completion of a fixed-price government construction contract, a contractor must show that the government’s actions affected activities on the critical path. Typically, if work on the critical path is delayed, then the eventual completion date of the project is delayed. Conversely, a government delay that affects only those activities not on the critical path does not delay the completion of the project. As a result, the determination of the critical path is crucial to the calculation of delay damages. Id. at 179,685.

To satisfy its burden, the contractor must establish what the critical path of the project actually was and then demonstrate how excusable delays, by affecting activities on the contract’s critical path, actually impacted the contractor’s ability to finish the contract on time. This is done through an analysis to show the interdependence of any one or more of the work items with any other work items as the project progressed. One established way to document delay is through the use of contemporaneous Critical Path Method (CPM) schedules and an analysis of the effects, if any, of government-caused events. In fact, in situations where the contractor utilized Primavera scheduling software to create schedules throughout the life of the project, it would be folly to utilize some other method of critical path analysis. Id.

Because the critical path of construction can change as a project progresses, activities that were not on the original critical path subsequently may be added, and, to preclude post hoc rationalization and speculation, it is important that the contemporaneous schedules that the contractor uses to show critical path delay are updated throughout contract performance to reflect changes as they happened. Accurate, informed assessments of the effect of delays upon critical path activities are possible only if up-to-date CPM schedules are faithfully maintained throughout the course of construction. Id.

Nevertheless, the existence of contemporaneous schedules does not permit a tribunal to ignore, or fail to consider, logic errors in those schedules. A CPM schedule, even if maintained contemporaneously with events occurring during contract performance, is only as good as the logic and information upon which it is based. CPM is not a “magic wand,” and not every schedule presented will or should be automatically accepted merely because CPM technique is employed. To be a reliable basis for determining delay damages, a CPM schedule must reflect actual performance and must comport with the events actually occurring on the job. Tribunals may need to inquire into the accuracy and reliability of the data and logic underlying the CPM evaluation in appropriate circumstances and reject CPM analyses if the logic was not credible or was suspect. Id. at 179,685-86.

Even if the contractor shows delay by the government that affects the critical path, the contractor must also establish that it was not concurrently responsible for delays. Tribunals will deny recovery where the delays of the government and the contractor are concurrent and the contractor has not established its delay apart from that attributable to the government. Nevertheless, any contractor-caused delays must affect the critical path of contract performance to be considered “concurrent” — contractor delays that, absent the Government-caused delay, would have had no negative impact upon the ultimate contract completion date do not affect the government’s monetary liability. For the same reasons discussed above, because concurrent delays that do not affect the critical path of contract work do not delay project completion, an accurate critical path analysis is essential to determine whether concurrent delays have caused delay damages related to the delayed completion of a complex construction project. Id. at 179,686.

In establishing excusable delay, the contractor may point to causes outside the Government’s control. FAR 52.249-10(b)(1), Default, provides a non-exhaustive list of excusable delays that includes acts of God, acts of a host country government in its sovereign capacity, fires, floods, epidemics, strikes, and unusually severe weather. Obviously, a contractor has no control over whether it rains, whether there is a flash flood, or whether there are forest fires. Nevertheless, the mere fact that a delay is caused by a type of activity listed in the contract as generally excusable does not give the contractor carte blanche to rely upon such excuses. The purpose of the proviso, which is to protect the contractor against the unexpected, and its grammatical sense both militate against holding that the listed events are always to be regarded as unforeseeable, no matter what the attendant circumstances are. A quarantine, or freight embargo, may have been in effect for many years as a permanent policy of the controlling government and, if so, may not meet the definition of a cause “unforeseeable” at the time of contract award, even if quarantines and freight embargoes are listed in the contract as examples of possible excusable causes of delay. Id. at 179,686-87.

Further, even if an unforeseeable cause of delay occurs, the contractor cannot sit back and fail to take reasonable steps in response to it — once such an unforeseeable event occurs, the contractor affected by it has an obligation to attempt to mitigate the resulting damage to the extent that it can. If the contractor fails to do so, it may not recover those damages which could have been avoided by reasonable precautionary action on its part. Id. at 179,687.

To establish entitlement to an extension based on excusable delay, a contractor must show that the delay resulted from “unforeseeable causes beyond the control and without the fault or negligence of the Contractor,” and the unforeseeable cause must delay the overall contract completion; i.e., it must affect the critical path of performance. Sauer Inc. v. Danzig, 224 F.3d 1340, 1345 (Fed. Cir. 2000). Similarly, a contractor’s default is excused only to the extent that there were no additional delays for which the contractor was responsible (beyond those caused by the government) and that “there is in the proof a clear apportionment of the delay and the expense attributable to each party.” See Blinderman Constr. Co. v. United States, 695 F.2d 552, 559 (Fed. Cir. 1982) (quoting Coath & Goss, Inc., 101 Ct.Cl. 702, 714-15 (1944).

However, in order to prove that it is entitled to delay damages in the form of time or money, a contractor must prove that the government was responsible for specific delays, overall project completion was delayed as a result of the government-caused delays, and any government-caused delays were not concurrent with delays within the contractor’s control. L.C. Gaskins Constr. Co., ASBCA No. 58550 et al., 18-1 BCA ¶ 36,978 at 180,121-22. If an event that would constitute an excusable cause of delay in fact occurs, and if that event in fact delays the progress of the work as a whole, the contractor is entitled to an extension of time for so much of the ultimate delay in completion as was the result or consequence of that event, notwithstanding that the progress of the work may also have been slowed down or halted by a want of diligence, lack of planning, or some other inexcusable omission on the part of the contractor. Chas. I. Cunningham Co., IBCA No. 60, 57-2 BCA ¶ 1,541 at 5,843.

A contractor is entitled to time extensions for government-caused delays and excusable delays, even when they are concurrent with contractor-caused delay. When a contractor is seeking extensions of contract time, for changes and excusable delay, which will relieve it from the consequences of having failed to complete the work within the time allowed for performance, it has the burden of establishing by a preponderance of the evidence not only the existence of an excusable cause of delay but also the extent to which completion of the contract work as a whole was delayed thereby. The contractor must prove that the excusable event proximately caused a delay to the overall completion of the contract, i.e., that the delay affected activities on the critical path. And it must also establish the extent to which completion of the work was delayed—it is entitled to only so much time extension as the excusable cause actually delayed performance. R.P. Wallace, Inc. v. United States, 63 Fed. Cl. 402, 409-10 (2004).

Thornier issues are posed by concurrent or sequential delays—the first occurring where both parties are responsible for the same period of delay, the second, where one party and then the other cause different delays seriatim or intermittently. Concurrent delay is not fatal to a contractor’s claim for additional time due to excusable delay, but precludes the recovery of delay damages. If a period of delay can be attributed simultaneously to the actions of both the Government and the contractor, there are said to be concurrent delays, and the result is an excusable but not a compensable delay. A contractor generally cannot recover for concurrent delays for the simple reason that no causal link can be shown: A government act that delays part of the contract performance does not delay the general progress of the work when the prosecution of the work as a whole would have been delayed regardless of the government’s act. Id.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

CONSTRUCTION DELAYS: WHICH METHOD SHOULD BE USED TO CALCULATE DELAY?

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If you need to prove and allocate construction project delays, you should engage a scheduling consultant qualified with CPM (critical path method) analysis.  You should also engage counsel to assist in preserving your rights, as well as presenting and maximing your arguments for delay.

There are numerous methodologies used to quantify and allocate delay. You want to discuss the most effective analysis for your case and facts including whether you want/should use a forward-looking prospective analysis or a backward-looking retrospective analysis that factors in as-built data.  In doing so, you want to make sure you understand the pros and cons of each methodology including the bases to attack the methodology that will be subject to cross-examination.  The five primary CPM methodologies are as follows:

 

 

 

 

  1. As-Planned Versus As-Built. This methodology compares the as-planned baseline schedule to an as-built schedule reflecting progress to assign delay.  An as-built schedule that reflects progress includes actual start dates, finish dates, and durations.  The actual dates and durations are compared with the as-planned dates and durations on the baseline schedule to determine delay.  Under this methodology, the delay impact is determined retrospectively.

 

  1. Windows Analysis. This methodology divides the project into windows of period of time and focuses on an as-built critical path analysis that relies on progress schedule updates and as-built data.  The as-built critical path is then quantified for each of the periods (or windows).   The methodology compares the as-planned baseline schedule’s critical path to the as-built schedule (and as-built conditions) during the window to quantify delay. Under this methodology, the delay impact is determined retrospectively.

 

  1. Collapsed As-Built. This methodology is the “but for” methodology as it analyzes the earliest date the project would have been completed “but for” identified delays.  This methodology removes delay events from the as-built schedule to determine when the project would have been completed “but for” the delay event(s).  Under this methodology, the delay impact is determined retrospectively.

 

  1. Impacted As-Planned. This methodology inserts potential delay events/activities into the as-planned baseline schedule to determine impacts.  By inputting new delay activities into the baseline as-planned schedule, new logic and a new critical path is created to result in a new completion date (i.e., an impacted, as-planned schedule).  The difference between the completion date in the impacted, as-planned schedule and the (unimpacted) as-planned baseline schedule represents the delay.  This methodology does not rely on as-built data and prospectively determines delay.

 

  1. Time Impact Analysis. This methodology analyzes delay events individually based on the schedule update immediately prior to the delay event.  The difference between the project’s completion date before and after the delay event quantifies the delay.  Under this methodology, the delay event is added into the updated schedule closest to the event to see if the project completion date changes based on the event’s impact to the completion date.  This methodology does not rely on as-built data and prospectively determines delay based on when the event occurred.

 

It is not uncommon for parties to use different methodologies to quantify and assign delay.  It is also not uncommon for the parties to attack the other methodology as unreliable– whether not focusing on what actually occurred or not focusing on an event the moment it occurred based on the schedule or plan in-place as of the delaying event(s).  As an example only, in K-Con Building Systems, Inc. v. U.S., 131 Fed.Cl. 275 (Fed.Cl. 2017), a contractor asserted claims relative to the government’s delay. The contractor claimed the critical path should be analyzed with a prospective analysis predicated on its as-planned performance.  The government disagreed claiming the critical path should be analyzed based on a retrospective as-built analysis.  The Court of Federal Claims agreed with the government “that the proper way to determine what activities were on the critical path of performance in this case is to examine what actually occurred during contract performance.”  K-Con Building Systems, supra, at 329.  The Court reached this conclusion because: (1) “a critical path schedule that relies solely on the [baseline] schedule set forth in the contract specifications does not account for subsequent changes to the schedule authorized by the contracting agency” and (2) “the use of a contractually based critical path schedule does not reflect that the [contractor] did not actually perform in accordance with the [baseline] schedule set forth in the contract specifications.”  Id. at 329-330.  Stated differently, the as-planned approach that the contractor employed did not “fully reflect the reality of what occurred on the project.”  Id.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

DOES A SUB NEED TO USE AN EXPERT OR PRESENT CPM ANALYSIS TO SUPPORT A DELAY CLAIM?

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Does a subcontractor need to prove its delay claim (including its lost productivity claim) with expert testimony or a CPM analysis?  A federal decision out of the District Court of Maryland proposes that maybe a subcontractor does not need to go this route. See Baker DC, LLC v. Baggette Construction, Inc., 378 F.Supp.3d 399 (D.Md. 2019). If you are a subcontractor presenting a delay or lost productivity claim, you should work with counsel and ideally an expert to best present, package, and support the claim with expert analysis.   However, this case, discussed below, creates an argument that the use of an expert or even CPM analysis may not be required as a matter of law to support a subcontractor’s delay-type of claim. This is good news for a subcontractor to hear, especially when the subcontractor was not the one that prepared the CPM schedule that included activities unrelated to the subcontractor’s work; and, using an expert and preparing a CPM analysis can be a costly endeavor.

In this case, a concrete subcontractor’s work on a federal project dragged on much longer than anticipated.   The subcontractor sued the prime contractor claiming the contractor delayed and disrupted its work causing its work to be extended and inefficient and costing it more to perform.  The prime contractor moved for summary judgment arguing that the subcontractor cannot demonstrate claims or damages for delay because the subcontractor will not be using an expert or presenting a critical path method (CPM) analysis.  The trial court refused to grant summary judgment on this issue maintaining it is “unwilling to declare as a matter of law [the subcontractor] cannot prove its claim for delay damages without expert testimony or evidence of a CPM analysis.” Baker DC, supra, at 412.

In reaching this decision, the trial court analyzed the purpose and function of a CPM schedule which is to allow “contractors performing complex projects to identify a critical path of tasks that must each be completed before work on other tasks can proceed.” Baker DC, supra, at 411 (quotation and citation omitted).

As one federal court long ago explained, contractors conduct a critical path analysis on a complex construction project by analyzing each of the various separate, but interrelated, small projects within the larger whole, considering the work involved and the expected duration of each subproject. The analysis seeks “to determine the most efficient schedule for the entire project,” recognizing that some subprojects cannot proceed until another has finished its course – for example, “one could not carpet an area until the flooring is down[,] and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.” Subprojects that must be performed on schedule, lest they delay the entire project, are said to be on the “critical path.”

The U.S. Court of Claims has explained:

The reason that the determination of the critical path is crucial to the calculation of delay damages is that only construction work on the critical path had an impact upon the time in which the project was completed. If work on the critical path was delayed, then the eventual completion date of the project was delayed. Delay involving work not on the critical path generally had no impact on the eventual completion date of the project.

Baker DC, supra, at 411-12 (internal citations omitted).

However, while CPM analysis through the use of expert analysis is clearly the preferred or established method, the court noted that this “is not the same as declaring that a plaintiff must provide such evidence, as a matter of law, to prove damages of this variety.” Id. at 412 (explaining that the prime contractor has not produced any cases where a court required a subcontractor to present CPM analysis evidence in its dispute against a general contractor).  This is precisely what the subcontractor wanted to hear!

 

Another noteworthy issue raised in this case dealt with whether the subcontractor’s bid was part of the subcontract.  The subcontractor wanted to argue it was part of its subcontract because the subcontractor included qualifications in its bid that would be used to support its delay and inefficiency claim.  The prime contractor also moved for summary judgment arguing that the bid was not part of the subcontract because the subcontract contained an integration clause and, naturally, the subcontract contained provisions that would render moot the subcontractor’s qualifications in its bid.  (The integration clause read: “This Agreement constitutes the entire agreement between the parties hereto.  No oral representations or other agreements have been by [the prime contractor] except as stated in the Agreement.”  There is a reason lawyers include such language in contracts!  This is important language that should be used and should not be dismissed as unimportant.)  The court agreed with the prime contractor on this issue stating “the parties reasonably understood the written agreement would supersede any prior negotiations or agreements.”  Baker DC, supra, at 409.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

CONSTRUCTION SCHEDULING IS AN IMPORTANT TOOL

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Construction scheduling is an important tool for planning, managing, and forecasting the performance of work on construction projects.   Generally CPM (critical path method) schedules, or schedules depicting the project’s critical path, are prepared beginning with the baseline schedule (the initial as-planned schedule) followed by schedule updates (perhaps monthly updates) as the work progresses.  Schedules identify milestone dates (such as the substantial completion date) as well as the dates and durations of construction activities / tasks.

Check out this chart for understanding key terms and meanings when it comes to CPM (critical path method) scheduling. 

Besides scheduling being a tool used for project management, schedules are helpful in assessing and measuring delays to the critical path, the acceleration of activities, and inefficiencies. 

Finally, check out this article for more information on the importance of understanding construction scheduling for strong project management.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

“CRITICAL PATH” AND “CONCURRENT DELAY” BASICS AS INTERPRETED BY COURTS

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The terms “critical path” or “critical path method (CPM)” are frequently used terms in construction contracts and, importantly, delay-related claims.  These terms refer to the construction schedule and the method to establish delays to the substantial completion date.  To the construction participant,  specifically project management, these terms are must-know terms and are vital to the proper planning and management of the project!  A project is composed of many individual construction activities that are all interrelated.  Each activity has a scheduled duration or the number of days for the activity to be performed.  And, many activities cannot begin until predecessor activities are completed.  Project management needs to understand and appreciate all of this in order to successfully manage a project by the milestone substantial completion date that is agreed upon on the front-end.

 

 

Now, to the non-construction participant or lay person, the terms “critical path” or “critical path method (CPM)” do not mean much because they are not used in everyday language.  However, technical terms that are not part of everyday vocabulary need to be explained so that a lay person that is not a construction participant can understand and appreciate the significance of the terms–think judge or jury!   Oftentimes, the best way to explain the critical path is to analyze  court decisions that have interpreted this term in connection with a construction dispute.  The following are construction cases that have defined or interpreted the critical path:

 

CRITICAL PATH 

 

 

“The critical path is the longest series of the work activities through the performance of a whole project. If an activity on the critical path exceeds its scheduled duration, the termination of the project will be delayed unless some other activity on the critical path is performed in less than its scheduled time. A work activity not on the critical path may be completed later than its scheduled time without affecting the termination of the project unless the non-critical activity exceeds its “float” and thereby becomes an activity on the critical path.”

U.S. Fidelity & Guar. Co. v. Orlando Utilities Com’n, 564 F.Supp. 962, 968 (M.D.Fla. 1983)

 

“The project can be represented by a network of discrete paths that sequence interdependent tasks or milestones leading to project completion. The critical path, the longest path at any point in time, determines the project’s expected completion date.” 

Gulf Contracting, Inc. v. U.S., 23 Cl.Ct. 525, 529, n.2 (Cl.Ct. 1991)

 

 

“Essentially, the critical path method is an efficient way of organizing and scheduling a complex project which consists of numerous interrelated separate small projects. Each subproject is identified and classified as to the duration and precedence of the work. (E.g., one could not carpet an area until the flooring is down and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.) The data is then analyzed, usually by computer, to determine the most efficient schedule for the entire project. Many subprojects may be performed at any time within a given period without any effect on the completion of the entire project. However, some items of work are given no leeway and must be performed on schedule; otherwise, the entire project will be delayed. These latter items of work are on the critical path. A delay, or acceleration, of work along the critical path will affect the entire project.”

Haney v. United States, 676 F.2d 584, 595 (Ct.Cl. 1982)

 

“Critical Path Methodology” (CPM) is a term of art for a method of scheduling and administering construction contracts. The Court of Claims has explained that CPM enables contractors performing complex projects to identify a critical path of tasks that must each be completed before work on other tasks can proceed. A delay on the critical path will thus delay the entire project: Essentially, the critical path method is an efficient way of organizing and scheduling a complex project which consists of numerous interrelated separate small projects. Each subproject is identified and classified as to the duration and precedence of the work. (E.g., one could not carpet an area until the flooring is down and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.) The data is then analyzed, usually by computer, to determine the most efficient schedule for the entire project. Many subprojects may be performed at any time within a given period without any effect on the completion of the entire project. However, some items of work are given no leeway and must be performed on schedule; otherwise, the entire project will be delayed. These latter items of work are on the “critical path.” A delay, or acceleration, of work along the critical path will affect the entire project.”

Morrison Knudsen Corp. v. Fireman’s Fund Ins. Co., 175 F.3d 1221, 1232-1233 (10th Cir. 1999)  (internal citations and quotations omitted)

 

 

As explained, construction schedules contain numerous activities that are interdependent on one another and are required to complete the project.  Each activity contains a duration required to complete the given activity.  Schedules typically identify the milestone of substantial completion.  Most schedules identify the critical path by tracking the longest duration path  through the activities to achieve completion.  If an activity on the critical path is not completed on time, it will delay the completion date.  Sophisticated scheduling software allows contractors to identify each activity’s early start date (earliest time an activity can start provided its predecessor activities are performed), early finish date (simply taking the early start time plus the scheduled duration), late start date (the latest time an activity can start without delaying the completion date by factoring in the scheduled duration), and late finish date (simply taking the late start time plus the scheduled duration).  By showing the early start date and late start date, project management is able to determine the float time with the activity.  In other words, if an activity has both an early start and late start date, the float allows an activity to be delayed from its early start date to its late start date without actually delaying the completion date of the project.  Naturally, there is much more to construction scheduling and determining the critical path (or revising the critical path during the course of construction) than this!  The point is that the critical path, as interpreted in the cases above, is critical because this is really how delays are proven on a construction project (whether the delays are used to offset liquidated damages, establish an entitlement to extended general conditions, or flow down extended general conditions and liquidated damages to the trade subcontractor responsible for the delay):

 

CRITICAL PATH USED TO PROVE DELAYS 

 

 

“Contractors have the burden of proving delays attributable to the Government. It may be impossible to establish government-caused [owner-caused] delays without a means of showing the critical path.”

Daewoo Engineering and Const. Co., Ltd. v. U.S., 73 Fed.Cl. 547 (Fed.Cl. 2006)

 

“In order to prevail on its claims for the additional costs incurred because of the late completion of a fixed-price government construction contract [owner contract], the contractor must show that the government’s [owner’s] actions affected activities on the critical path  of the contractor’s performance of the contract.  The reason that the determination of the critical path is crucial to the calculation of delay damages is that only construction work on the critical path had an impact upon the time in which the project was completed.  One established way to document delay is through the use of Critical Path Method (CPM) schedules and an analysis of the effects, if any, of government-caused events upon the critical path of the project.”

George Sollitt Const. Co. v. U.S., 64 Fed.Cl. 229, 240 (Fed.Cl. 2005) (internal citations and quotations omitted)

 

Sometimes, there are concurrent delays to the project occurring at the same time that both impact / delay the completion date.   Concurrent delays have been defined by courts as:

 

CONCURRENT DELAYS AND APPORTIONMENT 

 

 

 “The doctrine of concurrent delay involves the premise that where both parties to the litigation caused delays then neither party can recover damages for that period of time when both parties were at fault.”

Broward County v. Russell, Inc., 589 So.2d 983, 984 (Fla. 4th DCA 1991)

 

 

“Where both parties contribute to the delay neither can recover damage, unless there is in the proof a clear apportionment of the delay and the expense attributable to each party.”

Blinderman Const. Co., Inc. v. U.S., 695 F.2d 552, 559 (Fed.Cir. 1982) (internal citation and quotation omitted)

 

 

“Courts will deny recovery where the delays are concurrent and the contractor has not established its delay apart from that attributable to the government.”

William F. Klingensmith, Inc. v. U.S., 731 F.2d 805, 809 (Fed.Cir. 1984)

 

 

“[C]ontractor may not collect damages from the government due to delay where that contractor was itself in a state of concurrent delay. Generally, courts will deny recovery where the delays are concurrent or intertwined.  Even where both parties are responsible for delay, a contractor may not recover unless it is able to apportion the delay and expense attributable to each party.The burden of apportioning delay falls on the plaintiff. Courts will deny recovery where delays are concurrent and the contractor has not established its delay apart from that attributable to the government.”

Smith v. U.S., 34 Fed.Cl. 313, 325 (Fed.Cl. 1995) (internal citations and quotations omitted)

 

 

“The general rule barring recovery for government-caused unreasonable delay when there has been concurrent delay caused by the contractor does permit recovery, however, when clear apportionment of the delay attributable to each party has been established. Because the equitable adjustment claim for compensable delay is the contractor’s claim, the burden is on the contractor to apportion the delay between the parties. Generally, courts will deny recovery where the delays  are concurrent or intertwined and the contractor has not met its burden of separating its delays from those chargeable to the Government.”

George Sollitt Const. Co. v. U.S., 64 Fed.Cl. 229, 238-39 (Fed.Cl. 2005) (internal citations and quotations omitted)

 

 

This articles covers just the basic elements of critical path and concurrent delay based on interpretations from Florida and federal courts.  Understanding these terms and how courts have interpreted these terms is important so parties know what they need to do to prove a delay (and how they need to prove the delay and sustain their burden of proof) based on the factual dynamics and circumstances of their dispute.  Without this understanding, parties are not in the best position regarding developing strategy and themes associated with their case to assist is persuasively presenting testimony / evidence to support their position.

 

For more information on substantial completion, please see: https://floridaconstru.wpengine.com/what-is-substantial-completion/

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

CONSULTANT’S CORNER: FIVE TIPS FOR BETTER CONSTRUCTION PROJECT DOCUMENTATION

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don carlowConsultant’s Corner: In addition to providing perspectives and analysis from a lawyer, it is beneficial to hear from industry professionals and consultants. These are the folks that serve as expert witnesses during litigation / trial and consult with owners and contractors preconstruction and during construction. Consultant’s Corner is dedicated towards hearing from those experienced and respected professionals.

 

Don Carlow (photo) is the owner of Florida Construction and Scheduling Consultants, LLC and has over twenty-five years of experience in CPM planning and scheduling, cost engineering, construction claims analysis, and program and construction management. He serves as both an expert witness and as a consultant preconstruction and during construction in scheduling, forensic delay analysis, cost and damages analysis, and litigation support on construction projects ranging in size and scope.  His project experience includes heavy civil; transportation; pipelines/underground utilities; government/military; mixed-use commercial; airports; hospitals; high-rise; theme parks; hospitality; schools/ universities; and single/multi-family residential.   Mr. Carlow has taken the time to share with us a very important article on maintaining organized and good project documentation based on his experience.

 

FIVE TIPS FOR BETTER CONSTRUCTION PROJECT DOCUMENTATION

 


When it comes to claims and disputes, I have often heard the proverbial advice that “you should document everything.” However, in reality this is rarely done and it is often impossible to accomplish. Normally, the folks on a construction project simply don’t have the time to write down everything that’s going on at the site and at every project meeting and then respond to every email and phone call. In fact, I would not advise you to try! Doing so would be frustrating at best and counterproductive at worst. Your management team should be focused on managing the project. This is especially true on a troubled project, where you have to put out one fire after another. Your team’s efforts should be focused on using their time in the office wisely and making sure that the important items are documented. So, how are they supposed to know which of the items are the most important to document? This article attempts to answer that question by establishing some rules and by providing an objective framework that can be used when deciding how and what to document.

 

1. SUPPORT YOUR POSITION

 

For each contractual disagreement or issue, spend the time to write the letters or emails that support your position and explain why your position is correct. This should be the overall framework from which you are focusing your documentation efforts. Document the issues and events as they occur; take a photo, write an email, or put an extra note in the daily report that explains the event or occurrence from your perspective. Make sure there is evidence in the file that supports and explains your position. You’d be surprised how the resolution of an issue was changed by a single photo or a couple of sentences included in a daily report.

 

2. RESPOND TO EVERY LETTER

 

When is it necessary to write a letter? When someone writes one to you. It is not necessary to engage in a letter-writing campaign (it is simply not true that the person with the highest stack of letters automatically “wins”). But, for each letter that’s written to you make sure there is a written response in the file. One solid letter for each issue is a good rule of thumb. Get your points documented, keeping in mind tip #1, above.

 

3. BE PROFESSIONAL

 

In your written correspondence, always be professional and stick to the facts. Be objective, rational and unemotional. There is no need to tell the owner’s rep that he’s an idiot (even if he is). Many people may be involved in the resolution of the dispute after the project is over and they may never meet you. People are going to form their opinions of you based on what you say and how you say it.

 

4. GIVE NOTICE

 

Notice provisions are written into contracts for a reason. Their purpose is to give the other party time to investigate, mitigate expenses, and track costs. Read your contract and make sure you are complying with the notice requirements. To make giving notice easier, we recommend that our clients develop form notices. At a minimum, we suggest having form notices available for each of the following situations: (a) Excusable Delay/Request for Time Extension, (b) Differing Site Condition, (c) Conflicting Specifications, (d) Acceleration (Directed or Constructive), (e) Disruption of Work Force, and (f) A/E Change. Have your lawyer review the notices before using them in the field.

 

5. RESERVE YOUR RIGHTS

 

I have been involved in several lawsuits in which the judge upheld signed releases on payment applications and change orders, and barred recovery for damages. Have your lawyer review the release language on any document before you sign it. At a minimum, cross out the offending language, or simply write that you are reserving your right to additional money or time for the impact encountered on the project or as a result of the change.

 

Knowing how and what to document will keep your team focused on managing the project and put your company in a much better position when it comes to resolving disputes when they arise.
Please contact Don Carlow for more information regarding the value he can provide to your construction project or litigation team. He can be reached at the following contact information:
Website: http://florida-consultants.com/
Email: don@florida-consultants.com
Phone: (407) 603-6165

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.