Upon reviewing the many topics that I have touched upon in this column over the years, it amazes me that I hadn’t yet raised the issue of scheduling delays and their attendant impacts. It certainly is a relevant theme, and one that has not escaped my scope of experience.
Perhaps my omission has something to do with the predictable contention that the subject inevitably evokes. Nah, not likely, as evasion of controversy has never been my calling card—actually, quite the contrary. Oh well, contention notwithstanding, I intend to dive into these dark waters.
Besides, the topic resonates well with another of my repeating themes, that of the dual roles of estimating and project management. It just so happens that there is a strong tracking component associated with delays on the project management side, and a robust costing component on the estimating side of the coin.
Benjamin Franklin in his letter to Jean-Baptiste Le Roy in 1789, wrote: “In this world, nothing can be said to be certain, except death and taxes.” He might have added delays occurring in construction to that short list, as they seem equally certain to arise in one form or another.
A construction delay is defined as a situation in which project events occur at a later date than expected due to causes related to a client, contractor or specialty contractor. That later date usually involves the violation of an agreed-upon project schedule. Most delays involving a commercial drywall specialty contractor will arise from an impact to or by a general contractor or another specialty contractor. Our exemplary circumstance deals with a specialty contractor being impacted adversely and his response to the delay.
Construction delays can be broken down into three main categories:
- Excusable vs. non-excusable,
- Critical vs. non-critical, and
- Compensable vs. non-compensable.
Excusable delays are those beyond the contractor’s control—floods, fires, acts of God and the like. Inexcusable delays are those directly attributable to the fault of the contractor—poor quality or slow acquisition of resources are prime examples of inexcusable delays. Critical delays are clearly those that affect the baseline schedule.
Critical delays may be singular or concurrent (multiple in nature) and may create a ripple effect on other tasks in the path of progress. Compensable delays are those that may include added costs or schedule extensions.
In addition to a hard date of occurrence, an effective delay report should include a short but succinct narrative describing the nature of the delay, its cause and likely consequence. It should also include a location (building, area, room number), relevant plan pages, inclusion of other specialty contractors’ potential effect, predicted length of the delay, weather reports and any other such supporting materials.
If delays appear to be continual or accruing, it may be necessary to report them on a regular basis. A weekly restatement might even be suggested, especially if the baseline schedule is updated weekly, as they often are. This is where a previously stated suggestion of contention can arise. General contractors are notoriously sensitive with regard to delay reports as they, often rightly, surmise that delay reports are the early developments of a claim against them. This touchy state of affairs places the project manager on the razor’s edge between appearing sympathetic while conversely confronting the general contractor with the gravity of the delay. Clearly, a project manager’s ability to effectively express themselves becomes critical to the successful development of a claim.
And claims (whether adversarial or defensive) are the heart of the matter with regard to construction delays. As stated, compensable claims can come in the form of monetary damages, extensions of schedule or both. Cost assessments are usually quite sophisticated and can merit the undivided attention of an astute estimator, preferably one who is familiar with the project in question. Monetary damages often involve a number of combined elements, including labor, material, equipment, specialty contractor costs, jobsite costs and home office overhead.
Labor issues are often the most relevant, and can include additional hours, overtime or premium pay, increased wage rates or loss of productivity. Material issues can involve added value or volume. Equipment matters may include rental rate increases or inefficiency concerns (down time). Second-tier specialty contractors frequently impact schedule issues with extended time and material. Jobsite overhead usually comes in the form of increased resources (job trailer, utilities, etc.), extended supervision, project management, and safety costs. Home office overhead might include added or extended costs for payroll, accounting and supplies.
Of course, this column is a condensed version of an extremely comprehensive topic. But several points should be emphasized: delays should always be documented, timely dated, and accurately tracked by the project manager, regardless of potential impact. Compensable claims should be critically evaluated, preferably by a familiar estimator. Enough said for now.
