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# Extension of time Analysis

Extension of Time Analysis

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### Extension of time Analysis

1. 1. Extension of Time –Various Delay Analysis Approaches By Dharmendar Pardasani LLM, MSc(QS), FRICS, FAIQS, FCIArb, MCIOB & Narinder Kumar Sharma MTech, MCIArb 20 December 2014
2. 2. Few Common Terms used in Delay Analysis-Definition  Critical Path Longest Path in the Program –Commonly known as the path along which float is least (generally zero in a baseline program).  Float This is the period by which an activity can be delayed without delaying the subsequent activity (Free Float) or without delaying the project completion (Total Float)  Excusable Delay Event This is the delay event, the risk of which lies with the Employer and occurrence of which would entitle the Contractor for an Extension of Time, if it cause the delay to the project completion.  Excusable and Compensable Delay Event This is similar to Excusable Delay Event, with the difference that this delay event will entitle the Contractor for the cost in addition to the time.
3. 3. Various Delay Analysis Approaches •As-Planned v As-Built •Impacted As-Planned •Collapsed As-Built •Time Impact Analysis
4. 4. As-Planned v As-Built This method compares the duration of all the activities on the As-Planned program with the corresponding activities on the As-Built Program which are affected by the excusable delay events especially the critical activities. Advantages: •Simple to use •Inexpensive •Disadvantages: •Suitable for only simple programs
5. 5. Impacted As-Planned •This method adds an excusable delay event into the As- Planned Program. •This adding of delay can be as a separate activity or by revising the duration of an existing activity. •The revised completion date achieved as a result of this impact indicates the entitlement for an Extension of Time. •Duration considered for the new activities is generally based on the production rate considered in the original program, unless it is very irrational.
6. 6. As Planned Impacted Approach Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructure Contractor’s Delay =15 days Employer’s Delay =35 days Extension of Time = 35 Days Concurrent Delay = 15 Days Hence Cost = 20 Days Contractor’s Delay =7 days Contractor’s Delay =8 days Employer’s Delay =15 days Employer’s Delay =20 days Contractor’s Delay Employer’s Delay
7. 7. “The sooner you get behind the Schedule, the more time you have to make it up!”
8. 8. An Example of How to Insert Delay in a Program
9. 9. Base Line Program
10. 10. Inserting of Delay Two New Activities Added
11. 11. Impacted As-Planned Advantages:  As-Built Information is not required  There is no hassle of having arguments over correctness of Program Updates.  The Extension of Time is determined as per the original intent of the parties, i.e. any float in the activities comes into effect as per the As-Planned Program. Disadvantages: • This method is very theoretical since it does not take into account that the actual program vary a lot a as compared to As-Planned Program. • Any errors in the program creep into the delay analysis • Any Extension of Time assessed may not be rational if the actual sequence/progress is substantially different to As- Planned Program.
12. 12. Does not Take into Consideration Pre-existing Delays of Other Party Earth Works Pavement Layers Road FurnitureFoundation Superstructure Finishing Pavement Layers Road Furniture Foundation Supers Finishing Earth Works Superstructure Contractor’s Delay Pre-existing Employer’s Delay will show impact on Program incorrectly
13. 13. Delay Impact Does Not Take into Consideration the Actual Sequence /Progress of Works Earth Works Pavement Layers Road Furniture Foundation Superstructure Finishing Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructure Case 1 –Will show delay, while no actual delay Case 2 –Will not show delay, while there is actual delay Work Completed Earlier by Contractor If Float initially consumed by the Contractor before the Employer's Delay, still will not show the delay if the duration of a subsequent activity increased due to Employer’s Delay Employer's Delay
14. 14. Collapsed As-Built In this method, all the Employer’s delays are removed from the As-Built Program. The period by which it shrinks the As-Built Program, reflects the total delay of the Employer or the Extension of Time. Advantages: •It takes into account the actual built program, hence certainty that delay analysis is based on the actual sequence of work adopted in the project. Disadvantages: •The critical path resulting from removal of Employer’s delays retrospectively may not result in the same critical path as existed during the course of project. •Creating an equivalent Baseline Program also involves lot of subjectivity •The logic of the program has to be rebuilt once the Employer’s delays are removed, which is complex
15. 15. As built Collapsed Approach Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructure Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructure Extension of Time Entitlement Contractor’s Delay Employer’s Delay As-Built Program Collapsed Program
16. 16. Time Impact Analysis Time Impact Analysis can be done by either of following methods, • Snap Shot Analysis • Window Analysis (Or Time Slice Analysis) Snapshot Analysis Snapshot Analysis is normally used in contemporaneous delay analysis. i.e. taking the progress update on the instance of occurrence of delay and incorporating the effect of excusable delay in the progress update. This method is recommended in ‘Delay and Disruption Protocol’ by UK SCL
17. 17. Snapshot Analysis –Example 1 ( UK SCL -Delay & Disruption Protocol EOT 4 Days Cost 0 Days
18. 18. Snapshot Analysis –Example 2 ( UK SCL -Delay & Disruption Protocol EOT 9 Days Cost 9 Days
19. 19. Snapshot Analysis –Example 3 ( UK SCL -Delay & Disruption Protocol EOT 4 Days Cost 4 Days
20. 20. “The nice thing about not planning is that failure will come as a surprise rather than being preceded by a period of worry and depression!
21. 21. Time Impact Analysis Window Analysis In Window Analysis, the entire period of project is divided into multiple time windows (Say one month or so depending upon the period of updating the program). Each Progress update is updated with the actual progress /any change of sequence of work etc. This shall also include the effect of delay due to any excusable events. Each window is then compared with previous window to analyze the effect of valid delay events.
22. 22. Window Analysis Advantages: •This method is most favored and is most robust for retrospective delay analysis and has been adopted internationally in many litigation and arbitration cases. •In each window, there are few activities (with negative float) that need to be analyzed to evolve the delay and therefore process of delay analysis is more clearer than a global approach. . •It gives more realistic results, since it takes into account the project status at the time of occurrence of delay events. Also, it takes into account the changes by the Contractor in terms of logic links etc. •Calculation of Concurrent Delays is more practical to do. .
23. 23. Window Analysis Disadvantages: •Accurate Progress information to relate to each progress update needs to be maintained. •This method is more time consuming than other methods and requires more planning skills.
24. 24. Window Analysis
25. 25. Progress Update 1 (End of Month 1) Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructure Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructure Progress Update 2 (End of Month 2) Contractor’s Delay = 10 Days EOT = 0 Days Cost = 0 Days -10 Days Contractor’s Delay Employer’s Delay
26. 26. Progress Update 2 (End of Month 2) Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructure Progress Update 3 (End of Month 3) -20 Days Contractor’s Delay = 20 DaysPavement Layers Road Furniture Foundation Finishing Earth Works Superstructur e Employer’s Delay = 10 Days EOT 0 Days Cost 0 Days - 10 Days Contractor’s Delay = 10 Days Contractor’s Delay Employer’s Delay -10 Days
27. 27. Progress Update 4 (End of Month 4) Progress Update 3 (End of Month 3) -20 Days Contractor’s Delay = 20 Days Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructur e - 10 Days -20 Days Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructur e - 25 Days Employer’s Delay = 10 Days -5 Days Contractor’s Delay = 25 Days Employer’s Delay = 25 Days EOT 5 Days Cost (View 1) 0 Days Cost (View 2 - Sharing) 2.5 Days
28. 28. Progress Update 5 (End of Month 5) -20 Days Pavement Layers Road Furniture Foundation Finishing Earth Works Superstructur e - 25 Days -5 Days Contractor’s Delay = 25 Days Employer’s Delay = 25 Days EOT 10 Days Cost (View 1) 10 Days Cost (View 2 - Sharing) 10 Days -20 Days Pavement Layers Road Furniture Finishing Earth Works Superstructur e - 25 Days -5 Days Employer’s Delay = 35 Days Foundation Contractor’s Delay = 25 Days - 10 Days Progress Update 4 (End of Month 4)
29. 29. Summary of EOT & Cost Window Period EOT Cost (View 1) Cost (View 2) Sharing Window 1 End of Month 1 to End of Month 2 0 Days 0 Days 0 Days Window 2 End of Month 2 to End of Month 3 0 Days 0 Days 0 Days Window 3 End of Month 3 to End of Month 4 5 Days 0 Days 2.5 Days Window 4 End of Month 4 to End of Month 5 10 Days 10 Days 10 Days Total 15 Days 10 Days 12.5 Days
30. 30. Concurrent Delays •What is concurrent Delay Where two or more events of approximate equal efficacy (one Employer’s Risk event an other Contractor’s Risk Event), causes the delay in almost the same period •General Practice in the Industry •In case of Concurrent Delays, i.e. delay by the Employer as well as the delay by the Contractor, only entitlement would be Extension of Time but no prolongation cost. •Approach Advocated by Society of Construction Law ‘Delay and Disruption Protocol’ •Unless it is possible to separate out the cost caused by the Contractor’s delay and the cost caused by the Employer’s delays, the Contractor will not have an entitlement of cost in case of concurrent delay.
31. 31. Concurrent Delays  What does the Contract Stipulates  Most of the contracts do not have any express provision to address the concurrent delays. As such, the parties intentions are to be interpreted from the associated terms of contracts.  What are other ways to deal with Concurrent Delays  In various cases, the courts have addressed the issue of concurrent delays in different ways, such  Only time, but no cost based on the principle of ‘loss lies where it falls’  Apportioning the cost to relate to the delay caused by each party.  Apportioning the time as well as the cost.
32. 32. Concurrent Delays  What is the legal views that the courts in some countries may take on this issue:  Apportionment of damages based on the responsibility of respective party is widely accepted in most of the jurisdictions. Accordingly, this approach may be adopted by the courts.  However, again, apportionment may be viewed differently by courts, such as  Employer to bear its own loss of not being able to levy the delay damages and contractor to bear its own loss of prolongation cost.  Entitlement for Extension of Time to be reduced due to delays by both the parties. However, in that case, the cost is likely to be awarded for the reduced Extension of Time period.  Entire period of Employer’s delay be awarded as Extension of Time and Cost be apportioned between the parties.  Due to contrasting judgments by various courts across the world, it may be difficult to arrive to a conclusion
33. 33. Concurrent Delays Recent Legal Cases in Scotland and England City Inn and Shephard Construction In this Scottish case, the Scottish Appeal court mainly emphasized on two issues: In case, the Employer’s delay and the Contractor's delays are fairly concurrent, the Contractor is entitled for an Extension of Time. What is ‘fair and reasonable’ is a matter of ‘common sense’ and a critical path analysis was not always necessary. De Beers Case In this English case, the judge concluded that delay damages were not recoverable as long as the contractor would have suffered same damages due to his own delays
34. 34. Heads of Prolongation Cost Claims  Site Overheads  Salaries or Wages of Indirect Staff such as project Manager / Engineers/Foremen/Store man/QSs/Safety Staff/Watchmen etc.  Engineer’s and Contractor’s Site Offices cost  Extended Safety Requirement  Handling /Protection works  Material Storage Yards  Scaffolding Extended Duration  Bond/Insurances Extension  Other costs  Head Office Cost (Mostly contentious)  Sub-Contractor’s claims  Delayed Release of Retention  Financing Cost for Delayed payments (Always contentious)  Loss of Profit due to lost opportunities (Always contentious)  Disruption (Reduced Productivity /Idle Resources etc.)  Off-site overheads
35. 35. Good Planning –To Ensure Effective Use of Baseline Program for Delay Analysis  Activities Duration 7-28 Days  Activity Duration to be derived from Standard Production Rates or the Company Standard Production Rates with reasonable allowance for specific risks  Ensure Milestones are included  Ensure complete scope of work is included  Ensure activities are linked logically (correct predecessor and successors)  Ensure reasonable period allowed for approvals  Allowance for Specified Provisional Sums  Verify critical path runs through logical chain of activities  Avoidance of open ends  Check for excessive floats  Lags to be checked
36. 36. Good Planning –To Ensure Effective Use of Baseline Program for Delay Analysis  Check Holidays/Weekly-Offs are assigned  Resources are loaded into the program and resources are leveled /balanced.  Cost is loaded into the various activities  Check for resources with respect to projected cash flow  Avoidance of (Constraints) Must start /Must Finish dates etc. as far as possible.  Check what is the %age of critical activities to the total number of activities, to ensure that it is realistically planned.
37. 37. Final Word  Follow the contract provisions related to techniques to be used for Extension of Time Analysis, since that is what has been agreed between the parties.  In case the provisions in the contract are not well defined, look for what could be acceptable the local laws by consulting the legal experts.  Key word in Delay Analysis is to be Fair in our approach  Regardless of which approach we use (As Planned-Impacted or Window Analysis), it is always good to maintain the bi-weekly or monthly progress updates. Ensure protect the digital files.  As QSs/Cost Professionals, ensure we all learn Primavera, so that at least can read the Program and understand the basis principles how the claim can be made or defended
38. 38. If Contract Terms Are Not Clear… Don’t Expect Other Party to Rescue You During Dispute…………
39. 39. What is Fair differs from case to case Apportionment is not fair in the given case……..
40. 40. QUESTIONS? (if still awake !)