Claims & Responses: The Engineer's Role in Stopping Disputes Before They Start
Claims and Responses: The Engineer's Role
Every claim needs a response and, under most contracts, this responsibility falls to the Engineer.
Under most common international contracts, the Engineer is required to review claims and respond neutrally and impartially, guided by the conditions of contract. In practice, though, Engineers often take a defensive position to protect the Employer's interests.
The problem is that an unfair, defensive response won't persuade the Contractor that their claim lacks merit. Instead, it pushes the Contractor toward raising a formal dispute just to secure what they're entitled to under the contract.
Avoiding Disputes
Disputes are bad news for any project. Rather than focusing on project delivery, the parties become tied up in resolving the dispute, burning significant time and money in the process.
And if the dispute is ultimately resolved in the Contractor's favor, all that time, cost, and effort is wasted. An Engineer who takes an unfair defensive position is the one who sets this chain of events in motion, which means that ultimately, this doesn't protect the Employer's interests at all.
Engineer's Responses
A response may have a number of outcomes:
- The Engineer may need additional particulars to help assess the claim and reach a conclusion
- The claim will be accepted in full
- The claim will be rejected entirely
- The claim will be accepted in principal, but with reduced quantum
The goal of any response should be to lay out the Engineer's findings clearly enough that both parties accept them, and to make both sides confident that pursuing a dispute would fail. This approach allows most claims to be resolved amicably as the project moves forward.
If the Engineer believes a claim has merit but can't reach a final conclusion because something is missing, the response should clearly specify what additional information is needed.
If the Engineer plans to accept a claim, whether fully or at a reduced amount, the response should give the Employer confidence that the award is fair and justified under the contract. Likewise, if the claim is being rejected or reduced, the response should give the Contractor confidence that the Engineer's findings are fair and reasonable.
Finally, the Engineer should meet any response deadlines set out in the contract. Delaying a decision doesn't make the issue disappear, and if a claim is valid, the Contractor should receive a time extension and/or prompt payment to support their cash flow. Both outcomes ultimately benefit the project, and by extension, the Employer.
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How to Claim During Periods of Regional Hostility
I have received several enquiries from Claims Class students citing the current hostilities in the Arabian Gulf and asking whether the situation provides grounds to claim. The answer, as usual, is “it depends”.
Firstly, in order to receive compensation, the contractor must have incurred some sort of damage. In other words, to have either suffered delay or incurred additional cost because of the event. If we think about the current situation, the contractor could be affected by the following:
- actual damage caused to the project as a result of the hostilities
- disruption to the supply chain caused by restrictions in the Straits of Hormuz shipping lane
- disruption to the supply chain caused by disruptions to flights
If hostilities continue or escalate, however, it is likely that the effects on projects will also increase.
What if the Contractor Has Been Affected?
Secondly, if the contractor has been affected, there must be a contractual mechanism to allow the Contractor to receive compensation. Most projects in the Gulf region are governed by the FIDIC contracts. The Red Book, 2017 Edition covers such a situation under Sub-Clause 18.1 (Exceptional Events), which provides the following:
““Exceptional Event” means an event or circumstance which:
(i) is beyond a Party’s control:
(ii) the Party could not reasonably have provided against before entering
(iii) having arisen, such Party could not reasonably have avoided or
(iv) is not substantially attributable to the other Party.
An Exceptional Event may comprise but is not limited to any of the following events or circumstances provided that conditions (i) to (iv) above are satisfied:
(a) war, hostilities (whether war be declared or not), invasion, act of foreign enemies;
(b) rebellion, terrorism, revolution, insurrection, military or usurped power, or civil war; …
(e) encountering munitions of war, explosive materials, ionising radiation or contamination by radio-activity, except as may be attributable to the Contractor’s use of such munitions, explosives, radiation or radio-activity;…”
For the above, it may be concluded that the current situation in the Gulf comprises an exceptional event as defined by FIDIC.
Sub-Clause 18.2 (Notice of an Exceptional Event), provides that:
“If a Party is or will be prevented from performing any obligations under the Contract due to an Exceptional Event (the “affected Party” in this Clause), then the affected Party shall give a Notice to the other Party of such an Exceptional Event, and shall specify the obligations, the performance of which is or will be prevented (the “prevented obligations” in this Clause).
This Notice shall be given within 14 days after the affected Party became aware, or should have become aware, of the Exceptional Event, and the affected Party shall then be excused performance of the prevented obligations from the date such performance is prevented by the Exceptional Event. If this Notice is received by the other Party after this period of 14 days, the affected Party shall be excused performance of the prevented obligations only from the date on which this Notice is received by the other Party.
Thereafter, the affected Party shall be excused performance of the prevented obligations for so long as such Exceptional Event prevents the affected Party from performing them. Other than performance of the prevented obligations, the affected Party shall not be excused performance of all other obligations under the Contract.
However, the obligations of either Party to make payments due to the other Party under the Contract shall not be excused by an Exceptional Event”
The Importance of Notices
Consequently, if either Party is, or will be prevented from performing any obligations because of the current situation, they must give Notice and will thereafter be excused performance of the affected obligation(s), although this does not apply to payments.
Sub-Clause 18.4 (Consequences of an Exceptional Event) provides entitlement to the Contractor to claim compensation as follows:
“If the Contractor is the affected Party and suffers delay and/or incurs Cost by reason of the Exceptional Event of which he/she gave a Notice under Sub-Clause 18.2 [Notice of an Exceptional Event], the Contractor shall be entitled subject to Sub Clause 20.2 [Claims For Payment and/or EOT] to:
(a) EOT; and/or
(b) if the Exceptional Event is of the kind described in sub-paragraphs (a) to (e) of Sub-Clause 18.1 [Exceptional Events] and, in the case of sub-paragraphs (b) to (e) of that Sub-Clause, occurs in the Country, payment of such Cost."
Having given the required Notice, the Contractor may claim for any delay to the Time for Completion caused by the hostilities. Additionally, because items (a) to (e) of Sub-Clause 18.1 (Exceptional Events) includes events such as those that are currently being experienced in the Gulf, the Contractor may also claim for payment of any additional Cost incurred.
I hope that this provides some guidance on the current situation and, if you are located in the Gulf region, I hope that you and your loved ones stay safe.
Understanding your contract and knowing which clauses provide entitlement is critical at the best of times, and especially during time of high risk. Check out our Practical Use of FIDIC 1999 and Practical Use of FIDIC 2017 e-courses and ensure you are best placed to support your project.
10 Point Strategy for Responding to a Claim
You are tasked with reviewing a claim, responding to it and hopefully, reaching agreement with the contractor. So, how do you go about it?
Some forms of contract set out clear provisions that oblige the engineer to act fairly in producing a response. It is, however, true to say that not all responses to claims will be treated in this way. A strategy to deal with the claim should be considered carefully by the engineer and the employer. In this article, we set out ten considerations you should make before responding to a claim.
1. What is your responsibility?
Is your responsibility as the responding party to defend the respondent's interests, minimising the claim as much as possible? Or is it to produce a fair and reasonable determination?
2. Value of the Claim Vs. Cost of Defence
If the defence of the respondent's interests is of primary concern, you should assess the value of the claim. Does it justify the expenditure of significant resources to offer up a rigorous defence? If a claim is likely to result in a significant award, it would probably be worth providing the necessary resources to ensure that a high-quality effort is made.
3. Chance of Success
What are the strengths and merits of the claim and its chances of success? Are the odds of success favourable enough to justify the effort and expense in providing a rigorous defence?
4. Quality of the Claim
What is the quality of the claim submission? Does it provide enough information to enable proper conclusions to be made? Does it satisfy the basic principles necessary to establish entitlement and quantum? Can it be properly understood? If the claim does not fulfil the necessary criteria, should it be rejected on the basis that the case has not been proven? In this situation you might request further particulars. Alternatively you could proceed with a response and attempt to close the matter equitably.
5. How to Respond
The strategy should also consider how the response is to be pitched. Is it felt that the best result would be obtained by minimising any awards and leaving plenty of room for negotiation? Perhaps it would be better to ensure that the value of the award is reasonable. In this case you should assess whether arguments are absolutely sound, and the case for the respondent is bulletproof. The latter usually results in an initially higher award to the claimant but is often harder to refute. A response strategy aimed at minimising the quantum might have a chance of success if received by inexperienced parties, but, if the matter subsequently proceeds to a dispute, such a response is unlikely to succeed when experts get involved.
6. Dispute Procedures
If a strategy of rigorous defence is adopted, what is the dispute procedure and what is likely to be the outcome if the matter does progress to a dispute?
7. Time Scales and Obligations
Would the respondent's interests be best served by protracting the matter or by dealing with it in a timely manner? If the former strategy is adopted, would protraction cause the respondent to be in breach of any contractual obligations and, if so, to what effect?
8. Resource Management
Some claims are complicated in their very nature. If this is the case, they require a certain amount of specialist knowledge and experience to prepare an adequate response. Do the resources available include the required experience and knowledge, or should additional resources be brought in?
9. Relationship Management
Past and future relationships between the parties should be considered, possibly at executive level. Consider the impact before embarking on a course of action that could end in contention.
10. Who Will Receive the Response?
The actual personnel who are likely to receive the response or determination should also be considered. Will they be difficult to persuade? Has animosity crept into the relationship? Is the person responsible likely to have sufficient knowledge to understand the matters in question and the contractual principles relied upon? Is the claimant likely to engage the services of an expert to assist him/her or to deal with the matter on his/her behalf if a negative response is issued?
I hope that this gives you some guidance if you are responsible for responding to claims.
The above is an amended version of a chapter from the Third Edition of Andy Hewitt’s book, Construction Claims and Responses. It is available from Wiley Blackwell.
Responses to claims are covered in detail during the 6th module of our Construction Claims Premium E-Course. To view the full course syllabus or to enrol click here.
How to Manage Delays and Change in Lump Sum Contracts
Lump sum contracts are one of the more common forms of agreements in the construction industry. They provide the client with a degree of price certainty, as the contractor agrees to complete the works for a single, pre-agreed amount. However, while this arrangement may seem straightforward, it often hides complex risks. This is particularly true when delays or variations occur. Understanding how lump sum contracts allocate risk, handle changes, and address extensions of time is critical for managing delays and avoiding disputes.
What is a Lump Sum Contract?
In the construction industry, the term “lump sum” is often used interchangeably with “fixed price,”. However, the two are not entirely synonymous. A true fixed price contract would make no allowance for any fluctuations in costs of labour, plant, materials or overheads throughout the construction period.
A lump sum contract involves the contractor agreeing to complete a defined scope of works for a single, pre-agreed total price. However, there is usually some opportunity for variation under specific conditions. These include issues such as changes to the design or scope, or where the client instructs modifications. Nevertheless, the mechanisms for such adjustments are far more limited than in other contractual arrangements. As a result, lump sum contracts are often viewed as transferring a greater share of risk to the contractor.
Change Management under Lump Sum Contracts
A common source of dispute under lump sum contracts is change management. Even with the best planning, variations are almost inevitable in any construction project. The challenge lies in how these changes are managed and compensated. Under a lump sum arrangement, disagreements often arise over whether a particular change constitutes a variation to the original scope, and if so, how it should be valued.
Such disputes can lead to delays, cost overruns, and strained relationships between parties. The key to avoiding these conflicts lies in the clarity of the contract documentation at the outset. A precisely defined scope of works, clear design details and unambiguous tender documentation are essential to minimising the chance of misunderstandings arising. Although this may result in a longer and more expensive tendering process, it can greatly reduce the potential for disputes during execution.
Extension of Time
Most standard forms of lump sum contracts recognise the need to allow for unforeseen circumstances. These are often dealt with by provisions for an extension of time (EOT). Should the contractor be responsible for this delay, there is very little recourse for them to claim for an EOT. However, variations instructed by the client (such as delays in the provision of information, adverse weather conditions, or other events beyond the contractor’s control) can give rise to an entitlement to an EOT. When granted, an EOT relieves the contractor from liability for liquidated damages for the extended period.
However, whether the contractor is entitled to the prolongation costs depends on the precise terms of the contract. Some contracts provide only for additional time without financial compensation. This leaves the contractor to shoulder the cost of their overheads and extended site presence.
Risks
Understanding these nuances is vital for contractors and clients alike. Lump sum contracts, while offering price certainty to the employer, can impose heavy burdens on contractors. It is vital that risks are properly identified and managed. The key to success lies in a combination of careful planning, clear communication, and sound legal and commercial advice.
Contractors should ensure that they fully understand the contract provisions relating to variations, EOT, and risk allocation before signing. Equally, employers should recognise that an overly rigid approach to scope or change management can undermine project collaboration and ultimately increase costs.
In conclusion, lump sum contracts can be effective tools for delivering projects within a defined budget. However, they demand meticulous preparation and awareness of the risks involved. Parties should seek legal representation or professional consultation to interpret the contract provisions accurately. It is important to understand which mechanisms are available to mitigate potential delays and additional costs.
By taking a proactive, informed approach, contractors and clients can navigate the challenges inherent in lump sum contracting and achieve successful project outcomes.
This article was written by Lydia Garside at DeSimone.
If you are looking to improve your contract administration procedures, and get a better understanding of managing claims under lump sum contracts, check out our Effective Contract Administration E-course.
10 Top Tips for Claim Presentation
You have established that a claimable event has occurred on your project.
You have gathered the evidence and records, completed your delay analysis and/or calculations of the additional payment.
You have decided on the information that you need to include in your claim to establish cause, effect and entitlement.
It’s now time to put all this information in a claim document ready to submit to the employer or engineer. But what’s the best way to do this to ensure your claim is successful?
Here’s 10 top tips to help you write a bullet proof narrative and compile your claim into a solid submission:
- Make it user-friendly: use clear indexing, organisation and cross reference to substantiated documents.
- Use direct quotations: quote directly from the records and contract. This is much more effective than paraphrasing and ensures your position is clear.
- Make the claim a stand-alone document: include everything that the reader may need to verify facts and statements made in the claim.
- Be concise: do not include superfluous or irrelevant information. Information overload will just confuse the reader. If they are uncertain, they will not be confident in making an award.
- Do not assume that the reviewer has prior knowledge: write your clam as though you are explaining the matters to an adjudication or arbitration panel two years after the project has ended…not to your opposite number on the project.
- Lead the reader to a logical conclusion: ensure your claim narrative guides the reader by the hand. Walk them – logically – through all the information they need to establish entitlement to an award.
- Include explanations throughout the narrative: it is necessary to state the facts from the records in a narrative. However, you should expand on the basic facts and explain what they mean in terms of the claim.
- Include summaries and conclusions in the narrative: don’t leave things open to interpretation. Summarise the information and state the conclusions that you want to reader to reach. This is especially important if you have longer narratives as it will help to focus the reader.
- Substantiate facts and statements: by reference to the records and the contract. Include copies of the substantiating documents in the claim.
- Make it look good: ensure that the presentation of the claim document is attractive and to a professional standard. Use suitable fonts and line and paragraph spacing. Number your paragraphs and include headers and footers to good effect. Keep the whole document consistent.
So, there you have it. If you bear these things in mind when you are compiling your claim, it will help its success and show your professionalism.
If you’re looking to strengthen your claims knowledge and achieve better results on your projects, The Perfect Claim e-course will show you exactly how to prepare, present, and succeed with your claims.
E Courses | Laying the Foundations: Inside the Classroom
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Are Your Communications Effective?
In a training workshop that we delivered to one of our Dubai-based clients they asked how they could improve their communications on projects.
Knowing how to write effective letters, the type of language to use, what specifics to include, etc. is a common challenge for many project teams. So, here are my top tips for effective communications.
The advice that I am going to give here does not only apply to letter writing. It works for all forms of communication on a construction project – reports, notices, meeting minutes, etc. and claim narratives. For the sake of clarity, I will lump them all together under the heading “communications”.
Make Your Construction Communications Stand the Test of Time
We must remember that as well as communicating information, a document will become a project record. It may need to be referenced and relied on in years to come and possibly, in dispute proceedings. For this reason, note that you are not writing it to be understood by the project team with intimate knowledge of the project. You are writing it to be understood by someone with no knowledge of the subject, sometime in the future.
It's crucial to explain all matters so that such a person will gain a complete understanding of the matter. The document should contain sufficient information for them to do so without having to refer to other documents.
Using quotations, either from other records, or the contract, as opposed to paraphrasing is a really strong way of making a point or justifying an opinion. If you do use quotations, make sure that you identify them clearly. This way, the reader knows they are not your words or that you have put a ‘spin’ on the original.
Many people do a good job of presenting the bare facts but fail to explain what the facts actually mean in terms of the subject matter. In doing so, they fail to lead the reviewer to the conclusion that is desired. NEVER let the reader draw their own conclusions. One way to help reach the correct conclusion is by including explanations, summaries and conclusions within the narrative of the document.
Simply put, we should state the facts, make sure that they can be understood. Then summarise the facts and explain to the reader their implications in terms of the matter in question, and the conclusion that must be drawn.
Don't Try to Impress
Some people attempt to impress the reader by the use of complicated contractual language, or even legal terms. Ask yourself if this will have the desired effect on a resident engineer. Often they will have spent their professional career on site, amongst mud, steel and concrete rather than in a courtroom.
The use of impressive-sounding language will never replace a well-presented, easily understood ‘story’ that deals with and explains the facts logically. It is therefore better to use the most simple and direct language possible to provide a proper understanding of the points being made.
Be Succinct and Clear
It is essential that a long letter, report or claim should comprise a stand-alone document which provides complete understanding. However, many documents and construction communications actually contain too much information.
The inclusion of irrelevant information serves no purpose at all and will do nothing to bring about a clear understanding of the matters being discussed. In fact, the reverse is true and a reviewer could very well suffer from information overload and become confused.
A person who cannot fully understand the matter, will definitely not be confident in taking the action or reaching the understanding that you are hoping for. Narratives should therefore be as concise as possible whilst still properly illustrating and explaining the points being made. Always remember that quantity is never a substitute for quality in construction communications.
Abbreviate to Complicate?
One of my pet hates is the use of abbreviations and acronyms. I say this because I have often been obliged to read documents that appear to have been written in code. I have just one piece of advice with regard to the use of abbreviations and acronyms. Simply, DO NOT USE THEM. Possibly persons intimately involved on a project would understand that when an abbreviation such as ‘BL2’ is used, it means ‘Basement Level 2’. But would an outside party would understand the meaning?
If a reader does not understand or they become confused, then your communication skills are poor. Therefore, abbreviations and acronyms should be avoided unless they are common in the industry and would be understood by anyone unfamiliar with the project. The small amount of extra effort to type words out in full is definitely worthwhile. It will avoid both confusion and annoyance.
Ambiguities can often be created by the use of such words as ‘them’, ‘they’, ‘him/her’ and ‘it’ when referring to parties, organisations or people. Examination of legal and contractual documents reveals that parties are referred to as ‘the Claimant’, ‘the Respondent’, ‘the Employer’, etc. This ensures that there is no ambiguity or confusion as to which party the writer is referring. This may mean that a little more typing is necessary. But, the small amount of extra effort is worth it if confusion or ambiguity is to be avoided. If you don't like contractual names such as ‘the Employer’, ‘the Contractor’, you can refer to each party by name.
Clarity is King
To make the reader’s job easier, contractual clauses referred to should be named as well as referring to them by number. For example, Sub-Cause 20.1 (Contractor’s Claims) and not just Sub-Cause 20.1. This ensures that a reader who is unfamiliar with the contract will have a better chance of understanding the communication without constantly having to refer to the contract.
Document authors often try to make their job easier by referring to other records or to parts of the document. For example, “As previously explained in Section 3, the Engineer delayed the Contractor and caused the Contractor to incur costs”. This requires the reader to refer back to Section 3 and try to find how, why and by how much the ‘Engineer delayed the Contractor and caused the Contractor to incur costs’. Making the reader refer to other parts of the narrative to understand what you are saying is not good practice. Very often a short explanation or even cutting and pasting the relevant information will achieve this with little effort,
It may be tempting to proofread a document that you have prepared yourself. This is dangerous. Often, when proofreading your own work, you read what you think you have written and not what you have actually written. A review by another person will usually pick up mistakes or items that need additional clarification which you would not have identified when proofreading your own work.
4 Key Points
In closing, one of the principles that we teach on our claims courses are the 4 Key Points. These may equally be applied to other forms of communications and are as follows:
- Key Point 1: Make the reviewer’s job as easy and as pleasant as possible.
- Key Point 2: Ensure that the submission is a stand-alone document.
- Key Point 3: Assume that the reviewer has no prior knowledge of the project.
- Key Point 4: Do not include irrelevant information or content within the claim submission.
I hope this helps you to become more effective in your construction communications. For more help with this and related topics, take a look at our E-courses.
Construction Claims: 8 Important Principles
I recently presented our Construction Claims training course to a government department in Africa. As part of the practical nature of the course, we asked the attendees to complete an assignment to test their knowledge. When grading the assignments, it became clear to me that certain important principles were often misunderstood. I therefore thought it would be worthwhile to replicate them here for the benefit of our Claims Class community.
Principle 1: Incorporating Changes at Tender Stage
Question: How should changes to tender drawings (issued through a tender addendum) be incorporated into the contract documents?
Sometimes, during the tender process new information or errors come to light or the scope of work changes. Often tenderers raise queries which are addressed and clarifications are issued to all the tenderers.
The tenderers then price the work based on the revised information. This information must subsequently be incorporated into the contract documents. The way to do this is not to simply include the tender addendums or responses to requests for information as supplementary documents. to the correct way is to incorporate the information by changing the contract documents to reflect any changes during the tender period. This will avoid confusion, ambiguities and possible contention as the project proceeds.
Principle 2: Measuring Variations on a Remeasurable Contract
Question: On a remeasurable contract, how are variations taken into account?
Under a remeasureable contract the whole of the works are remeasured. The contractor is paid based on the actual quantities provided which are valued at the contract rates and prices. The contractor will be paid on the basis of the remeasured works – whether the quantity of work increases or decreases.
The remeasurement will therefore include any changes brought about by variations.
Principle 3: Measuring Variations on a Lump-Sum Contract
Question: On a lump sum contract, how is the Contractor compensated for variations?
If a variation is instructed on a lump sum contract, the works affected by the variation must be measured and evaluated separately in order to calculate the value of the varied works. This value will them be added to or omitted from the contract price.
Principle 4: Costs Associated with Extension of Time Claims
Question: Should costs associated with an extension of time be based on the resources being used during the time of the delay or the extended period?
A claim for prolongation costs is a claim for actual time-related costs incurred as a result of the delay. This means the costs that have been incurred during the period of the delay and not the costs incurred during the extended period. The following illustrates the principle:
- Contract period 1 January to 31 December
- Period of compensable delay – 30 days during July
- Effect on the critical path and the completion date – 20 days until 20 January, Year 2
- Prolongation costs incurred – 20 days during July.
The costs must be time related costs. Typically they would include site management and admin, time-related labour, site establishment, non-productive plant and equipment, insurances bonds and guarantees and head office overheads,
It is essential to substantiate the claim with detailed records of the resources deployed during the time of delay and cost records.
Principle 5: Preliminaries
Question: May the preliminaries or general items be used to calculate costs?
Most forms of contract allow for payment of ‘cost’ or ‘loss and expense’ for compensable events. Cost is defined as actual cost incurred by the claimant. Therefore, they may not be derived from notional estimates such as those included in the preliminaries or general items sections of the bills of quantities.
Principle 6: Notices
Question: Why are notices usually a contractual requirement?
Notices are a contractual requirement to formally advise parties of events that may affect their rights, obligations, and the contract’s performance. They serve as a trigger point for specific procedures, such as claims or variations. Correctly used, they help prevent disputes by allowing transparency and proper communication.
In most contracts (e.g., FIDIC, JCT, NEC), notices are required to notify the employer or project manager of potential delays, claims, or changes. These notices often include strict timeframes. This allows the affected party sufficient time to investigate, respond to, or mitigate the impact of the event.
Failure to issue a notice within the prescribed period can result in loss of entitlement to claims, even if the contractor has a valid case. This is because there must be a fair opportunity to address the issue, minimise costs, or adjust the project schedule accordingly.
Ultimately, notices promote good project management. They ensure timely communication of key events, preserving contractual rights, and reducing the risk of disputes.
Principle 7: Cause and Effect
Question: What must be linked to the cause of a delay in order to demonstrate entitlement to compensation?
Linking cause and effect in a delay claim is essential to establish entitlement to an extension of time and prolongation costs. A delay claim must demonstrate a clear causal link between the delay event (cause) and its impact on the project’s critical path (effect) and thus the completion date.
Without this link, a contractor’s claim may be rejected on the grounds that the event didn’t actually cause any delay to project completion. Merely stating that a delay event occurred is insufficient; the contractor must demonstrate how the event impacted key activities and prevented progress on critical tasks. This is usually achieved by way of a suitable delay analysis.
Establishing cause and effect establishes the claim is valid, credible, and defensible. It allows the employer to assess liability fairly. Clearly identifying the responsible party and impact on the schedule and will help to avoid or resolve disputes.
Principle 8: Time Impact Analysis
Question: A time impact delay analysis compares two programmes to calculate the effects of a delay event. What are the two programmes used in the comparison?
Time Impact Analysis is a prospective method of delay analysis. It is used to assess the impact of a delay event on a project’s critical path and completion date. The process is as follows:
- Update the current programme for progress for the date immediately before the delay and note the predicted completion date. Progress before the delay may have affected the completion date, but this needs to be allowed for.
- Insert a fragnet to illustrate the delay into the updated programme. Ensure that the appropriate logic links are included and note the predicted completion date including the delay.
- The difference between the two completion dates is the number of days extension of time caused by the delay in question. This should be added to the prevailing completion date to calculated the revised date.
This method is favoured for claims because it takes into account progress before the delay. It only calculates the effect of the delay which is the subject of the claim.
A time impact analysis is most effective when used in real-time, during the project, to assess ongoing delays. It provides objective evidence of whether a delay justifies an extension of time. It will also quantify the duration of the extension based on the actual impact on the project schedule.
Want to learn more about construction claims? Check out our Construction Claims Intermediate E-Course and get the confidence you need to manage claims effectively.
Float & Construction Projects: Understanding "Float" in Scheduling
In this article, we take a look at the subject of 'float' in construction project scheduling. On the most basic level, construction projects are intricate networks of interconnected tasks. When one task experiences delays, it can create a domino effect, disrupting the entire project timeline.
This is where the concept of float becomes invaluable. Let's try and take a look at how it works...
What Exactly is Float?
It represents the amount of time a specific task can be delayed without jeopardising the overall project completion deadline.
Consider the construction project programme as a chain. Each task is a link, and the critical path (used by project managers to schedule activities) is the tightest sequence of links that determines the project’s finish date. Sticking with the metaphor, float is the “slack” in the chain for non-critical links. It provides a buffer or flexibility within the schedule.
Are There Different Types of Float?
Here’s where it begins to get a little complex — there are different types, depending on context. But, for most scenarios, there are two key float concepts to understand:
- Total Float: (TF) is the time a task can be delayed without delaying the project’s completion date. For example, if a task is scheduled to start on Monday and finish on Friday, but the next dependent task does not start until the following Tuesday, the task has a total float of one day.
- Free Float: (FF) measures how much delay the current task can tolerate, without affecting the start of the next sequential task. It’s more localised than total float and applies to individual tasks rather than the project in its entirety.
Why is it Important?
While it might sound like technical jargon, float is a very powerful tool that can help teams learn more about their work. It can help improve the productivity of projects. Moreover, it's crucial for maintaining flexibility in project programmes. This in turn helps project managers allocate resources more effectively, handle unexpected delays, and prioritise tasks to keep a project on track.
As an example, imagine a project which – among a myriad of things – contains two near-term tasks:
- Paint walls
- Install light fixture
Painting has two days total float, whilst the light installation has none, as it is on the critical path. But with limited resources a delay occurs. In this scenario, by prioritising lighting, the the overall project timeline remains on-time. The painting task can be rescheduled by up to two days later without affecting the critical path and completion date.
This is where prioritising activities comes into play. Rescheduling activities allows for the most efficient use of float. Importantly, this will preserve the expected completion date.
As you can begin to see, understanding the concept supports better communication between stakeholders and avoids unnecessary panic over tasks that do not immediately impact deadlines.
The Key to Delivering Projects On Time and Within Budget.
Without a thorough understanding of float, you will struggle to successfully manage projects in the construction industry and will likely be confronted with delays. By incorporating it into project schedules, project managers can enhance efficiency, limit risks, and ultimately deliver projects on time and within budget. For more detail on the 'ownership' of float take a look at this article.
This article was written by Paul Woodley BSc, LLB, MCIArb.
If you'd like to learn more about planning, scheduling and delay analysis, check out our delay analysis courses and get started today.
When Should You Submit Consolidated Claims?
A Claims Class e-course student recently asked me when to use consolidated claims. This is something that I see contractors frequently get wrong, so I thought it would be a good subject for this month’s blog.
Should I submit a claim for each delay event or a consolidated claim for several delays?
A typical scenario is:
A contractually inept contractor gets to the last few months of the project and realises that they will not complete on time. Consequently they will be liable to delay damages and will incur overrun costs. The contractor then concludes that they need an extension of time to protect them against such risks.
This thinking is incorrect for two reasons. Firstly, most contracts provide that you should submit claims within a stipulated time of the occurrence of the event. This way, they may be dealt with as the project progresses. If you leave a claim until the end of the project, this will more than likely be a breach of contract and may even affect entitlement.
Secondly, good contracts management dictates that the time to submit a claim is when the contractor becomes entitled to make a claim. This differs from when the contractor needs more time or money. Again, this ensures that claims are dealt with as the project progresses and when matters are fresh in people’s minds.
If the contractor leaves extension of time claims until the end of the project, it is likely that several delay events will have occurred. The contractor usually then compounds their poor contract management by submitting one claim that includes all the delay events – a consolidated claim. Again, this is a poor strategy and is why, we always recommend that contractors submit separate claims for each delay event.
Our mantra is one event, one claim.
This has several advantages:
- Several small claims are easier to deal with for all parties than one large, complicated claim.
- It’s easier to prepare several small claims than one large, complicated claim.
- It’s easier to respond to several small claims than one large, complicated claim.
- It’s always better to submit claims within the contractual time frames than waiting for other events to have a knock-on effect.
- If one part of a large, complicated claim is questioned or not agreed to, this will hold up the award of the whole claim. This would not prevent other separate claims being resolved in a timely manner.
So, if you want your claims to be resolved and the time extended before it runs out, always remember this key point - the time to submit a claim is when you become entitled to make a claim, not when you need to make a claim.