GYK Newsletter – Proving a Delay Claim is mostly challenging

Welcome to the new issue of Grow Your Knowledge Newsletter where you get free, ready to use, actionable, clear information regarding FIDIC Contracts and Construction Claims.

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Today at a Glance;

➤   Term of the Week

➤   One Tweet

➤   Proving a Delay Claim is mostly challenging

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TERM of the WEEK 

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ONE TWEET 

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Happy Thursday.

You should NOT WAIT to submit a delay claim if you believe that the delay event;

➤ will delay the Completion Date, and,

➤ is Excusable and Compensable

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Not an easy task really.

In projects whose schedules contain;

➤   Hundreds of activities

➤   Lots of details

➤   Too many stakeholders

proving delay is;

➤   Time-consuming

➤   Not an easy task

➤   Complicated process

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Let’s elaborate the steps of “Proving a Delay Claim”.

Here’s what we covered;

1. Preparing the Baseline Programme

2. Properly Updating the Programme

3. Identification of Delay Event

4. Delay Analysis Techniques

5. Components of a Delay Claim

6. Proper Documentation

1.  Preparing the Baseline Programme

You should start by identifying the required activities to execute the work in accordance with the contract and specifications.

You should confirm that the exact contract scope is represented in the baseline programme without additions or omissions.

After identifying the activities, you should define the interrelationships between the activities in accordance with the sequence of the work to finish the work by the completion date.

You should confirm that all contractual milestones are represented accurately in the baseline programme.

The complexity of the project will determine the number of activities and interrelationships.

Then, you should calculate the durations which are required to execute each activity.

You should determine the chain of interrelated activities from the project’s start to its completion date. You should have at least one Critical Path.

The approval of the baseline programme takes time.

In accordance with 1999 FIDIC Red Book Sub-Clause 8.3;

“Unless the Engineer, within 21 days after receiving a programme, gives notice to the contractor stating the extent to which it does not comply with the Contract, the contractor shall proceed in accordance with the programme, subject to his other obligations under the Contract. The Employer’s Personnel shall be entitled to rely upon the programme when planning their activities’’.

2.  Properly Updating the Programme

The process of construction is dynamic.

Changes related to original plans and assumptions are inevitable.

Because of those, you should update or revise the programme in accordance with the frequency stated in the contract documents.

In that way, you will have a chance to;

➤ Identify the changes to the critical path

➤ Determine the out-of-sequence activities

➤ Reflect the current site conditions

Updated programmes are critical in terms of assessing the impact of changes and implementing timely remedial measures when required to mitigate the impact of these changes.

If you update the programme properly, you can think of the final updated programme as an as-built programme.

3.  Identification of Delay Event

The delay event should be excusable and compensable.

You are responsible for proving that the delay is excusable and compensable.

The delay event should be excusable

You should demonstrate that the entire delay is excusable under the governing provisions.

If you are delayed through no fault of your own, but also through no fault of the Employer, then the delay is excusable, but not compensable.

If the delay is excusable but not compensable, generally you are entitled only to a time extension.

Delays resulting from the following causes are generally excusable delays;

➤ An act of the Employer

➤ Changes

➤ Labor disputes

➤ Fire

➤ Unusual delays in deliveries

➤ Any other causes beyond your control

The delay event should be compensable

For a delay to be compensable, you must prove the Employer’s responsibility.

Certain types of excusable delays, such as those by some action or inaction of the Employer, may be considered compensable delays that entitle you to compensation for the additional costs of the delay, as well as a time extension for the delay.

4. Delay Analysis Techniques

The delay analysis must include an in-depth review of the project documentation related to the delay event and its impacts on the whole project. 

All the details regarding the delay should be reviewed by the delay expert. The most used delay analysis techniques are as follows;

As-Planned v As-Built

This method compares the planned start and finish dates with the actual start and finish dates of the activities regarding the critical and near-critical paths as planned.

Impacted As-Planned Method

In this method the delay, the excusable delays (or delays where a time extension is related to the contractor) are listed and the extended duration to the relevant activities are inserted.

The Impact Analysis

A time impact analysis is a method used to determine the extent of the impact of potential delays in the construction process. This process can be a preferred way to promote negotiation and later agreements on delay claims.

Collapsed As-Built (or ‘As-Built But For’ Method)

The Collapsed As-Built Windows Analysis is generally defined as a retrospective schedule delay analysis method that models the overall completion date of a project schedule absent identified owner delays based on a defined as-built portion of a schedule.

5. Components of a Delay Damage

Your delay claim should include; 

➤   Increased Material Direct Costs 

➤   Lost Productivity 

➤   Home Office Overhead 

➤   Indirect Costs 

➤   Other  Damages directly related to and attributable to the delay

6. Proper Documentation

The value of developing and preserving supporting documentation is crucial.

One of the most important aspects of documentation is that it is kept on a consistent and contemporaneous basis. 

In the case of the Critical Path Method, many times, the schedules fail to provide the information needed to prove the actual delays. 
Historical data is lost, when the baseline schedule and the periodic updates are not preserved.

See you next week.

 

This information is provided for your convenience and does not constitute any “Legal Advice”. This document is prepared for the general information of the interested persons. This should not be acted upon in any specific situation without appropriate legal advice.

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