Delay Analysis in Construction Utilizing CPM Schedules

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Delay Analysis in Construction Utilizing CPM Schedules BACKGROUND    All construction projects consist of detailed scope of work that must be performed within a specified duration for an agreed amount of compensation. Failure to complete the project in the mandated time period can result in financial losses and penalties. Hence, the use of a properly prepared construction schedule is a necessity to satisfactorily complete projects and maintain profitability.     If a project is delayed, the co
  Delay Analysis in ConstructionUtilizing CPM Schedules BACKGROUND   All construction projects consist of detailed scope of work that must be performedwithin a specified duration for an agreed amount of compensation. Failure to completethe project in the mandated time period can result in financial losses and penalties.Hence, the use of a properly prepared construction schedule is a necessity tosatisfactorily complete projects and maintain profitability.If a project is delayed, the construction schedule can be utilized to quantify the impactby comparing planned performance with actual execution. The majority of projectowners as well as the legal system now require the use of properly preparedconstruction schedules to prove liability and entitlement of delay damages inconstruction projects.   The Critical Path Method (CPM) of developing a construction schedule consists of separating the entire project into individual tasks with associated durations and thenassigning relationships between the various tasks such that all the tasks are completedwithin the permitted project duration. The project's critical path is the sequence of activities with the longest overall duration from the start of construction to the requiredcompletion date. Any activity delay on the critical path will result in a day-to-dayextension to the completion date. A properly prepared CPM schedule is invaluable forthe efficient use of available resources and advance warning of events that could delaythe project's completion.   DELAY CLASSIFICATION   Project delays can be classified as an excusable delay or a non-excusable delay.Excusable delays are those where the contractor is entitled to receive a scheduleextension due to events that are out of his control. Typical examples include inter alia  weather delays, unforeseen subsurface conditions or design changes.Non-excusable delays are solely caused by the contractor and no good reason exists forgranting an extension of contract time.Excusable delays can be further classified as compensable or non-compensable delays.Compensable-excusable delays are those where the claimant is entitled to recoverremuneration for expenses incurred as a result of the delay. Typical examples include inter alia schedule extensions associated with scope changes, design changes, ownerinterference.Non-compensable-excusable delays are those where the contract is extended but thecontractor is not entitled to additional compensation. The contract often times definesthe events that are non-compensable-excusable delays. A common example is a delayassociated with unusual or severe weather.    DELAY CLAIM ANALYSIS   Schedule Analysis During Construction     Schedule delay analysis can be contemporaneously performed while the project is stillunderway and makes use of the best estimate of the future events. Many contractsrequire the contractor to utilize CPM schedule analysis to quantify the delay based onthe information known at that time. To perform the contemporaneous analysis and toquantify the delay, the contractor should utilize the most recent schedule update andinsert new activities into the schedule that reflect the changed condition. The resultantextension to the project's completion date is the delay associated with the changedcondition.   Schedule Analysis After Construction     In a claim situation schedule delay analysis are performed after the project hascompleted and all of the impacts are known or recorded in the project record. There aremany techniques used by consultants to quantify a delay claim.One such analysis is the Total Time Approach which simply requests an extension forevery day the contract is late. This technique is analogous to the Total Cost Claim inthat the contractor assumes that it is perfect and that all delays are caused by others.The Total Time Approach is not favored by the courts.   Another technique is the Impacted As-Planned Method where the baseline schedule isadjusted to reflect delays that occurred during the project. This technique has somesignificant benefits in that it is easy and inexpensive to perform and is readilyunderstood by a jury. However, there are many technical problems with this approach.For example, one could bias the result by only inserting favorable delaying events.Further, this technique ignores what actually happened during the project; such ascontractor caused delays, change orders, etc. which could have impacted the schedule.Moreover, this technique improperly assumes the project's critical path in the baselineschedule does not change for the duration of construction. For these and other reasons,the As-Planned Approach many times is not favored by courts. However, there aresituations where project records are so poor or where there are not any monthlyschedule updates that one has no choice but to use the Impacted As-Planned Method.Prior to adopting the Impacted As-Planned Method one must carefully consider the risksassociated with this technique. A qualified expert and counsel should be retained toassist in the decision and to make sure the technique is performed in such a manner thatit will be accepted in court.   The most accepted approach to analyze schedule delays is commonly referred to as the Windows Analysis (or the Time Impact Analysis ). This technique analyzes the delaysexperienced by the project between specific periods of time when the delaying eventoccurred.  To perform the Windows Analysis the srcinal as-planned schedule is compared againstthe as-built schedule to identify differences in the planned performance and actualperformance. The causes and effects of the variances between the schedules are thenevaluated to determine which delay(s) are excusable or non-excusable as well ascompensable or non-compensable. In a claim situation it is common that there aremultiple delays to the project that must be deciphered to determine which event iscontrolling the delayed completion date. In this situation, the Windows Analysis is veryuseful because it quantifies the experienced delay at various project stages and allowsone to segregate the impacts for different events. For example, in a college construction project, it was alleged that the designerrors and omissions was the cause of the delay in the fabrication and erectionof structural steel. Schedule delay analysis showed there was a delay withconstruction of the foundations that was caused by the contractor which delayed the start of steel erection. Both independent events delayed the start of steelerection. As a result, the contractor was entitled to receive a non-compensableextension of time; the owner could not collect liquidated damages and thecontractor could not collect delay damages because the delays were concurrent.   To perform the above schedule analysis, an as-built schedule was prepared and compared to the as-planned schedule. A Windows Analysis confirmed that bothdelays were concurrent and that each independently delayed the project'scompletion date.   VERIFICATION OF THE AS-PLANNED SCHEDULE   Regardless of which schedule analysis method that is used, the first step is validation of the as-planned schedule to confirm that it includes the proper contract term, the properstart/finish dates, milestone dates and the entire scope of work. More importantly whenperforming Window Analysis the schedule's logic must be reviewed to validate that it isreasonable and that the schedule dates are not artificially constrained.   It is important to determine whether the as-planned schedule has been approved oragreed to by the various parties involved in the project. Occasionally we have beeninvolved in claim analysis situations where the schedule was not officially approved bythe owner. In these situations it is important to determine what schedule was used bythe parties to track progress; this schedule could then be used as the as-plannedschedule. The key in this situation is to be fair and reasonable in the determination of the as-planned schedule and to fully document/explain the basis for selecting thespecific schedule.   It also is important to confirm the schedule used in the analysis actually is the as-planned schedule. Some schedulers may be sloppy and not properly change the name of the computerized CPM schedules to reflect revisions made prior to its approval. Wehave observed some consultants base their analysis on a schedule that they incorrectlythought was the baseline schedule. Obviously this error resulted in improperconclusions and an unhappy client.  It is also essential that any incorrect logic or unrealistic activity durations contained inthe baseline schedule are corrected before the baseline schedule is used for proving adelay claim. We have observed many as-planned schedules approved by the owner withpatent errors in the schedule sequence/logic and with improperly constrained dates. If the as-planned schedule contains errors, then any analysis/conclusion based on a faultyschedule could be rejected in court. VERIFICATION OF MONTHLY SCHEDULE UPDATES   Further, we have occasionally observed updated schedules that incorporated significantlogic changes to mask delays. Computer software exists that allows a consultant tolocate these improper schedule changes.   For a school construction project, one of the periodic schedule updatesintroduced a winter shutdown calendar for the exterior masonry work. Thecontractor alleged that the rectification of structural steel design errors pushed the installation of exterior masonry into the shutdown period and delayed the project completion. Schedule analysis indicated that the exterior masonryinstallation work had already been pushed into the shutdown period prior to thestart of the rectification of structural steel design errors due to contractor caused delay. The contractor was not entitled to receive additionalcompensation for winter masonry work.   PREPARATION OF THE AS-BUILT SCHEDULE   An as-built schedule can be created from scratch using the project's daily history of events. Periodic updates of the baseline schedule can also be used to generate the as-built schedule provided that:   ã   The schedule logic is corrected to reflect the actual sequence followedin the field   ã   The activity durations are revised to replicate actual durations ã   The activity relationships are appropriately revised to addressout-of-sequence work    ã   Actual start and finish dates for all activities are reproduced   Schedule updates should be specifically checked to identify manipulation of theschedule logic to disguise delays by the claimant.  During the construction of a sewerage treatment plant, one of the periodicschedule updates reported a critical construction activity was 100% completewhich obviously removed it from the critical path of remaining work to be performed. In a subsequent schedule update the activity was reported to be only80% complete, but the logic was changed to remove it from the critical path.The owner did not realize the change made to the schedule which hid the criticaldelay caused by the contractor.
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