This document discusses whether a subcontractor can claim delay damages when the general contractor's schedule is not delayed. It covers topics such as pass-through claims, the Miller Act, combating no damage for delay clauses, and strategies for subcontractors to prove delay claims. A key point is that subcontractors may be able to recover delay costs through a pass-through claim if the general contractor acknowledges liability and the subcontractor meets requirements such as timely notice and good documentation. The Miller Act is also discussed as a potential means for subcontractors to recover increased labor and material costs due to delays. The document emphasizes the importance for subcontractors to be involved in the project schedule and maintain thorough records.

1. Can a Subcontractor Have a Critical Path Delay
When the GC Does Not?
Christopher Carson, PSP
Shannon Campbell, PSP

2. Shannon Campbell, PSP
• Degree:
– B.S. Civil Engineering
– M.S. Engineering Management
• University:
– B.S – United States Military Academy
– M.S. – University of Missouri-Rolla
• Years of Experience:
– 10 years
• Professional Field:
– Engineering Claims Consultant
• Something you do not know about me:
– Served 6.5 years in the military as an army engineer travelling to 14 different countries across 5
continents – many of these visits were to view construction projects throughout the world.
2

3. Chris Carson, PSP, CCM, PMP
• Corporate Director of Project Controls, Alpha Corporation
– Responsible for standards, processes, and procedures for a team of schedulers, analysts, and project
managers in multiple office locations, as well as analysis, work product, and testimony
– Developed and manages the in-house project controls training program at Alpha
• Certifications:
– PSP (Planning & Scheduling Professional – AACEi)
– CCM (Certified Construction Manager - CMAA)
– PMP (Project Management Professional – PMI)
• University: University of Virginia, Mechanical Engineering, 1972
• Professional Field: 38 years of experience in Construction Management Services specializing in
Scheduling, Schedule Analysis, Estimating, Claims
• Active in AACEi (Association for the Advancement of Cost Estimating International)
– Author of Recommended Practices in Scheduling & Forensic Schedule Analysis RP
• Active in PMI (Project Management Institute) College of Scheduling
– Vice President of Scheduling Excellence
– Managing Director for SEI (Scheduling Excellence Initiative) writing Best Practices and Guidelines for
Scheduling and Schedule Impact Analysis
– Serving on team writing Best Practices for Scheduling for GAO
• Active in CMAA (Construction Management Association of America)
– Served on committee revising Time Management Chapter of CMAA’s CM Standards of Practice
• Active in Planning Planet (global planning association)
– Chief Editor for US, writing Planner Users’ Guide, developing accreditation Guild for planners
• Something you don’t know about me: I’m a glider co-pilot, see picture
3
3

4. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Introduction
• Entitlement to Delay Damages only when there is Critical Path
Delay to Project Completion
• What happens when an owner impact extends the time a
subcontractor is on the job but the impact does NOT extend the
Project Completion?
• What, if any, entitlement does the Subcontractor have to recover
delay-related costs?
4

5. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Topics to be Covered
• Example
• Pass-Through Claims
• The Miller Act
• Combating the No Damage For Delay Clause
• Strategies for Proving a Subcontractor’s Delay Claim
• From the Owner’s Standpoint
5

6. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Topics to be Covered
• Example
• Pass-Through Claims
• The Miller Act
• Combating the No Damage For Delay Clause
• Strategies for Proving a Subcontractor’s Delay Claim
• From the Owner’s Standpoint
6

7. As–Planned Schedule - Office Building
Months
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Foundations
4 Structural Steel
Roof
4
1
NTP Curtainwall
4 Interior Finishes Punch
Coord. Dwgs. 4
List
3 Fab/Deliver MEP Rough In MEP Finishes 1
3 4 3
7

8. As–Planned v. As–Built Schedule
Months
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Foundations
4 Structural Steel
Roof
4
1
NTP Curtainwall
4 Interior Finishes Punch
Coord. Dwgs. 4
List
3 Fab/Deliver MEP Rough In MEP Finishes 1
3 4 3
Foundations
4 Structural Steel
Roof
4
1
NTP Curtainwall
4 Interior Finishes Punch
Coord. Dwgs. 4
List
3 Fab/Deliver MEP Rough In MEP Finishes 1
3 4 3 Wks 3
8

9. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Topics to be Covered
• Example
• Pass-Through Claims
• The Miller Act
• Combating the No Damage For Delay Clause
• Strategies for Proving a Subcontractor’s Delay Claim
• From the Owner’s Standpoint
9

10. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Pass-Through Claims
• Privity of Contract
• Recovery of Damages through a Pass Through Claim
• Definition:
A pass-through claim is a claim:
1) by a Subcontractor who has incurred damages due to the
actions of the Owner/Government with whom it has no
contract; and
2) submitted by the GC who has a contractual relationship with
both the Subcontractor and the Owner/Government.
10

11. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Severin Doctrine
“a prime contractor may sue the Government on behalf of its
Subcontractor, in the nature of a pass-through suit, for costs
incurred by the Subcontractor [due to the Government’s
conduct] . . . [i]f the prime contractor proves its liability to the
Subcontractor for the damages sustained by the latter . . . a
showing [which] overcomes the objection to the lack of privity
between the Government and the Subcontractor.”
11

12. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Liquidating Agreements
• Acknowledgement of liability to the Subcontractor
– Satisfies the Severin doctrine requirement that the GC is technically and legally liable to the
subcontractor for the claim before submitting to Government
• Limits liability to the amount that a prime is able to recover from the
owner
– Protects the prime
12

13. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
E.R. Mitchell Constr. Co. v. Danzig
• Basics of the case
• Players
• Facts
• No dispute of Federal Government liability
• Government approved schedule
• Government put on notice of damages to both GC and
subcontractor
• Owner responsible delays not of project schedule critical path
• Results
• Subcontractor satisfied all requirements for entitlement to
Eichleay damages
13

14. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Pass Through Claims -
General Information
• J.L. Simmons v. United States – provides the definition of the
requirements of a liquidating agreement
• Case law varies among State courts
• Benefits of the Pass Through Claim
14

15. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Topics to be Covered
• Example
• Pass-Through Claims
• The Miller Act
• Combating the No Damage For Delay Clause
• Strategies for Proving a Subcontractor’s Delay Claim
• From the Owner’s Standpoint
15

16. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
The Miller Act
• Basic Purpose – means for a subcontractor to receive payment for labor
and materials furnished Players
• Successful recovery of delay damages through the Miller Act
16

17. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
The Miller Act -
Recovering Delay Damages
• Generally recoverable if characterized as increased cost of labor and
materials – other costs have been successfully recovered
• Not relevant whether fault lies with the Owner of the Prime
• Seen as the only alternative in many cases for a subcontractor to recover
increased costs
17

18. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
The Miller Act -
Considerations & Recommendations
• Is a payment bond required?
• Was the payment bond actually attained?
• Timely initiation of a payment bond
• Limited liability by surety – multiple claimants may require each to take a
pro rata share of the penal sum
18

19. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Topics to be Covered
• Example
• Pass-Through Claims
• The Miller Act
• Combating the No Damage For Delay Clause
• Strategies for Proving a Subcontractor’s Delay Claim
• From the Owner’s Standpoint
19

20. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
No Damage for Delay (NDFD)
• Basic Purpose – protects an owner or GC from paying monetary damages
when a project is delayed
• Sample Clause
“No payment or compensation of any kind shall be made to the contractor
for damages because of hindrance or delay from any cause in the
progress of the work, whether such hindrances or delays be avoidable or
unavoidable.”
20

21. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
No Damage for Delay - Enforceability
• Unenforceable in many states
• Established exceptions otherwise –
• (1) not contemplated by the parties;
• (2) so unreasonable in length as to amount to an abandonment of
the project by the Owner;
• (3) caused by acts of bad faith or fraud by the Owner; or
• (4) caused by active interference by the Owner.
• A fifth exception is also sometimes cited - delays caused by gross
negligence.
21

22. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
No Damage for Delay – Considerations
• Sometimes incorporated by reference or in a “Flow-Down” Provision
• May be defense for an owner when presented with a pass through claim
• Has been circumvented by use of a liquidating agreement as already
discussed
22

23. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Topics to be Covered
• Example
• Pass-Through Claims
• The Miller Act
• Combating the No Damage For Delay Clause
• Strategies for Proving a Subcontractor’s Delay Claim
• From the Owner’s Standpoint
23

24. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Strategies for Proving a Subcontractor’s Delay Claim
• Review and Negotiation of the Contract
• Timely Notice
• Waiver of Rights
• Good Documentation
• Involvement in the Baseline Schedule and Subsequent Updates
24

25. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Strategies for Proving a Subcontractor’s Delay Claim
• Review and Negotiation of the Contract
• Subcontractor should
• Carefully review contract, especially from a legal perspective
• Assume any NDFD will be enforced
• Attempt to remove or reduce general assumption of delay risk
• Reduce to specific risks that are under sub’s control
• Watch for verbiage that limits recovery to “active interference”
only by Owner
• Attempt to include language that provides a “Grace Period” that
delays must exceed to allow an adjustment for delays
• Allows a contingency for that period to be carried
• Seek language related to specific events, proof required or price
25

26. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Strategies for Proving a Subcontractor’s Delay Claim
• Timely Notice
• Assume that notice requirements will be enforced and meet them
• Keep the GC informed so he can inform the Owner
• Owner then has opportunity to participate in mitigation
• Owner must be made aware of delays contemporaneously
26

27. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Strategies for Proving a Subcontractor’s Delay Claim
• Waiver of Rights
• Watch for waiver language
• Could be part of a payment application or certification
• Could be part of a change order indicating all past claims are
waived as of change order date
• Provide reservation of rights language to any document if
contemplating submitting a delay claim
27

28. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Strategies for Proving a Subcontractor’s Delay Claim
• Good Documentation
• Key to proving damages
• Accurate and contemporaneous
• All documents including bid documentation, daily reports, pay
requisitions, invoices, correspondence, all input into baseline and
update scheduling process, minutes, resources both planned and
actual
28

29. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Strategies for Proving a Subcontractor’s Delay Claim
• Involvement in the Baseline Schedule and Subsequent Updates
• Ensure input into all schedules
• Review any updates provided by GC to ensure no acceleration or
stacking of crews are planned
• Ensure adequate time and sequencing
• Note subcontractor’s expectations for period of performance
• Includes planned resources in crews and composition
• Stockpiling and materials distribution needs
• Watch for reduction in durations or overlapping of work
• Watch for shifts in start dates, access dates, or completion dates
• Document any problems with schedules
29

30. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Strategies for Proving a Subcontractor’s Delay Claim
• Involvement in the Baseline Schedule and Subsequent Updates
• Review total float for subcontractors’ work to identify criticality at
project schedule
• Attempt to have the impacts to the subcontractor shown on the
schedule
• If failed, document the delay or disruption
• Recognize that the Measured Mile is the most effective analysis for
loss of efficiency
• Requires good resource information
• Related to the schedule to prove impacted & unimpacted times
• Includes participation in any REAs submitted by GC – subcontractors
can lose their rights against the Owner if not involved with REAs
30

31. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Topics to be Covered
• Example
• Pass-Through Claims
• The Miller Act
• Combating the No Damage For Delay Clause
• Strategies for Proving a Subcontractor’s Delay Claim
• From the Owner’s Standpoint
31

32. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
From the Owner’s Standpoint
• Provide fair allocation of risk
• Assign risk to the party most able to control it
• This will reduce claims efforts
• Provide timely and fair review and approval of legitimate time extension
requests
• Follow the same general rules as outlined in the strategies for the
Subcontractor
• Should an Owner be able recover equivalent damages from a
Subcontractor due to Subcontractor impacts?
32

33. Can a Subcontractor Have a Critical Path Delay When the GC Does Not?
Conclusion
• Negotiate the Contract
• Know the Contract
• Be involved in the schedule from start to finish
• Maintain accurate documentation
• Seek legal advice
33

34. Can a Subcontractor Have a Critical Path Delay
When the GC Does Not?
Questions?
Shannon Campbell, PSP
Chris Carson, PSP