Time & Progress Reporting

 

In most construction projects, the presence of delays in construction are just all too common.

So, what should contractors and subcontractors do when they are faced with delays? What are the ramifications of not following their intended plan for completing the works?

To tackle this issue, it is always best to start with the project contract. Usually, the contract contains a road map for any entitlement to time and cost resulting from such delays, in which the liability is shared between the contracting parties.

Nonetheless, to effectively quantify the number of delayed days and its impact and culpability, within the contract, there are generally a few programming obligations set out for a contractor to effectively develop robust contemporaneous records. These obligations usually include:

  1. Submitting a Contract Program that captures the full scope of work and provided with contractor’s intentions to perform the work within a reasonable and acceptable logic.
  2. Providing periodic updates, whether it may be on a weekly, fortnightly or monthly basis.
  3. Record keeping of any relevant as-built data to support the progress information in the program.
  4. Photographic records of site progress with proper naming and dating.

 

 

In our experience, performing these tasks usually keeps a planner busy on a full-time basis to ensure preserving an acceptable level of program reliance and integrity.

Whilst it may come across as a cumbersome task, these records are very important when circumstances need to be revised at a later stage.

But in reality, and due to the exorbitant amount of required work and lack of budget to assign a competent team to manage the above tasks, many of these requirements are not properly managed, and the window of opportunity of obtaining accurate site data is drastically reduced.

This results in Delay Analysts and Claims Managers having to undergo a substantial amount of research, and liaising with the relevant personnel familiar with the delay events, to stitch all required information together to establish causation, or trawling through site diaries and trying to make sense of the recorded information. Additionally, most forensic analysis occurs long after the relevant delay event or even the project is completed and often the staff who possessed the relevant knowledge are not available, resulting in the required information needing to be retrieved proving too difficult to obtain.

 

 

When program information is being updated and maintained to an acceptable level of accuracy, fulfilling contractual obligations, agreement from all project stakeholders, and provided at agreed periodic intervals, this would usually include (amongst other things):

  1. A proper representation of the critical path(s) in the contract program that demonstrates a feasible and achievable work plan to be executed by a competent Contractor.
  2. An accurate and sufficient capture of site records into the program (e.g. actual start and end dates, % complete, remaining duration, etc.) and accompanying narration of project as built progress leading to realistic forecast completion date(s).
  3. The various changes and shifts in critical path(s) and other driving logic(s) made as a result of the dynamic challenges faced during the execution of various project activities throughout project lifecycle.
  4. An adequate inclusion of delay events and the relevant EOT approvals, covering the various circumstances that projects typically go through, which results in slippage in the Project completion date.

 

What do you think is the best way to maintain program and site records? and how to leverage such awareness among project stakeholders?

 

N.B: This does not constitute legal advice.


Commonly Used Terms

In this blog, we cover 6 common terms used in describing and discussing the effects of unforeseen events. Often, individuals define these terms based on their own experience, which can at times lead to varying definitions.

When works-on-site are subject to unforeseen events, people often describe these events with reference to the following terms:

  1. Delay
  2. Disruption
  3. Concurrency
  4. Float
  5. Critical path
  6. Contingency

In our experience, individuals tend to define each term differently. This can often result in mixed responses, discussions and debates during relevant commercial meetings.

Putting it simply in our own words:

Delay

Delay is an event that prolongs planned work. A delay can prevent the commencement or completion of an activity; or increase the duration of an activity, whether an activity has or has not started. A delay has the ability to affect and/or change the critical path; as well as change the entire sequencing of works. Delays are generally measured against a planned start/finish date as the benchmark.

 

Disruption

Disruption is the rise in the cost of carrying out work. It is measured by comparing planned cost and actual cost or comparing actual costs arising from different circumstances (for example uninterrupted vs interrupted work).  It is therefore a measure of different productivities. Whilst delay and disruption can be related and intertwined, they can also occur without one another.


Concurrency

Concurrency is often the most complex event arising on a project. It is the presence of two or more delays at play.

Different forms of concurrency can arise based on the following variables:

  1. The timing of the events.
  2. The duration of the delays.
  3. The party or parties were responsible for the delays.
  4. The criticality of the delays.
  5. A delay triggers another delay.

Float

Float is the amount of freedom that an activity has for movement (if any) beyond its planned duration. It is usually measured in days. There are 3 main types of float:

  1. Total float – the amount of freedom that an activity has for movement before it starts impacting the end date of a project. This is the most common type of float people refer to.
  2. Free float – the amount of freedom that an activity has for movement before it reaches its successor.
  3. Terminal float – the amount of freedom that a project has (if any) prior to a contractual date.

Critical path

The critical path in its simplest form is the longest path (or paths) to project completion where there is no total float available. On complex projects with multiple work fronts, separable portions staged handovers etc., the critical path (or paths) may not be straightforward.

Contingency

Contingency is any period(s) of time where a contractor purposely allows for no planned work. This excludes set holidays and RDOs. It is represented as non-working days set in a calendar or blocks of time expressed as an activity. Its main purpose is to provide the contractor leeway in cases where the contractor is unable to maintain planned progress. Whilst float is generally a first come first serve basis i.e. for the benefit of either the principal or the contractor, contingency is for the benefit of the contractor only.

 

I hope you have found this blog helpful and if you require further clarification please do not hesitate to get in contact with us at info@anvelo.com.au or LinkedIn

 

N.b. Nothing in this article constitutes legal, professional or financial advice.

 


Tender Program

“If you fail to plan, you are planning to fail” – Benjamin Franklin

Planning is one of the most important aspects of construction.

A contractor’s initial plan to execute the works is submitted during the tender stage. These plans are commonly referred to as tender programs. Contractors generally prepare tender programs in the following manner:

  1. Optimistically – to ensure contractual time frames are met, despite not necessarily being achievable.
  2. Rapidly – because of the timeframes involved in preparing tenders.
  3. At high level – also dictated by the time constraints involved in preparing tenders. The cost of the exercise may also be a factor.

In the event that a contractor is awarded a project, it is important for the contractor to ensure the credibility of its tender program. Particularly if the tender program was not carefully thought out during the tender time. If the contractor fails to do so, the risks and effects can be potential problems in the future.

Despite this, it is common that a tender program automatically becomes a contract program and/or a construction program. Only when works on-site commence, do flaws in the program become apparent.

In preparing tender programs, common errors and consequences include:

Error

Potential Issues

Missing scope
  • Insufficient detail.
  • May affect the critical path.
  • Uncertainty as to when the missing scope will be performed.
  • The project end date may be unachievable.
Planned logic different to actual sequencing & Execution
  • Incorrect sequencing.
  • Incorrect critical path.
  • Incorrect float values.
  • Confusion and miscommunication.
Insufficient duration
  • Insufficient allowances to begin with.
  • Unrealistic timeframes.
Lack of subcontractor consultation
  • Contractors make incorrect assumptions without consulting their subcontractors.
  • Under-estimating scope durations and their consequential effects on the program logic.

 

What does this mean?

If an Extension of Time (EOT) claim is based upon a poorly constructed program, it may not provide a clear and realistic representation of the cause and effect of a purported event. Therefore, a ‘poorly made’ program can undermine the integrity of a programming analysis and reduce the credibility of a claim.

As an example, if a program is incorrectly showing critical activities as non-critical activities, this will undermine the basis of a claim, and serve as grounds for which a superintendent may reject a claim.

 

What should a contractor do?

In our view, prior to any programming analysis, it is always best to correct the shortfalls and provide full transparency of the changes required. This will ensure that the program used as a basis for analysis, accurately reflects a contractor’s position before the rise of any unforeseen events. When doing so, a contractor should be mindful of the following:

  1. Confusion may arise from all parties, as to which programs are current and which programs are not.
  2. Providing clarity around which program will be the plan moving forward.
  3. The contractual ramifications that arise, when deviating from a contract program.

Therefore, it is always best to ensure a clear and concise program from the beginning. The process of maintaining and updating the program, along with the preparation of claims, becomes a simpler, clearer and more efficient process.

 

I hope you have found this blog helpful and if you require further clarification please do not hesitate to get in contact with us at info@anvelo.com.au or LinkedIn

 

N.b. Nothing in this article constitutes legal, professional or financial advice.