The poet Robert Burns wrote that “the best laid plans of mice and men may soon go asunder.” (In the original, it was written: “The best laid schemes o’ mice an’ man gang aft agley.”)
Nothing could be truer for construction schedules. Your plan is supposed to account for known conditions (site access, weather, labor availability, etc.). But every construction project is filled with unexpected occurrences. Typically, there are changes in the work, late deliveries, defective materials, late owner decisions and other headaches that alter your schedule.
Generally, these delay problems fall into three categories: (1) they are your fault; (2) they are the owner/general contractor’s fault; and (3) they are nobody’s fault.
Maybe this sounds simple, but delay issues are among the thorniest to sort out, characterize and price out.
Nature of the beast
Delays, though costly to all parties, add nothing to the value of the project. No one, therefore, wants to pay for them. The owner sees five electricians with nothing to do and is understandably upset, especially when the bill for the crew is delivered.
The electrical contractor is put behind the eight ball when the light fixtures, supplied by the owner, arrive a week late. Or the mason loads up a floor, denying access; a structural defect causes a lengthy job stoppage; there is a jurisdictional dispute between sheet metal workers and ironworkers.
By reassigning crews, rescheduling the work or employing other imaginative techniques, you may be able to lessen the costs caused by the delays. A healthy dose of cooperation with other trades and the owner is a helpful, partial remedy. Eventually, however, there is the contract that provides rights and obligations (but rarely solutions).
Contract delay clauses
There are many varieties of time extension clauses, and they all deserve watching. For example:
No claim by the Subcontractor for an extension of the Contract Time or any Milestones shall be considered unless made in accordance with this paragraph. The Subcontractor shall not be entitled to any extension as a result of any cause unless it shall have given written notice to the Contractor within fourteen days following the commencement of each such condition or cause of the occurrence and probable duration thereof. The Subcontractor hereby waives any claims for any such extensions not timely made.
The meaning of this clause is not readily apparent. First, time extensions here only apply to critical path activities—only those that affect the end date of the contract (“extension of contract time”). Delays to noncritical activities are not addressed. However, non-critical activities can become critical if they are sufficiently delayed.
Second, the 14-day written notice period starts to run at the “commencement” or “cause of the occurrence.” You have to ask yourself what the difference is between these terms. There may be instances where a “cause” of a delay occurs before the delay actually affects the job. For example, the issuance of a change order may cause a delay, although the change will be performed in the future.
Third, an estimate of the “probable duration” of the delay needs to be made within that 14 days. Note that an estimate of cost impact is not required. With this mandate, any estimate you make should be carefully thought out.
If your contract contains a provision like this, you need to stay on your toes, especially given the “waiver” language.
Here is another version, with tougher standards:
If Contractor’s performance is delayed, Contractor shall, within twenty-four hours of the commencement of the delay, give to the Owner written notice thereof and within seven days of the commencement of the delay the anticipated impact of the delay. Failure to give such notice shall be sufficient ground for denial of an extension of time.
A 24-hour written notice! Is this requirement reasonably possible?
Well, it’s in the signed contract. Realize too that this variation is not limited to delays of critical activities but applies to any part of the scheduled “performance.” And the seven-day notice of the “impact” of the delay may include not only the time impact, but also such matters as resequencing or acceleration.
Are you prepared to comply with either of these clauses, or other such provisions? Some popular form contracts mandate a 10-day or 21-day written notice of delays, a written notice that the delay is over, and other paperwork. So, what is in your terms and conditions?
Once you have discovered your contract’s “notice” time frame, you should regularly review your schedule within those periods so that appropriate letters can be sent.
The legal effect
Delays may fall under a number of contract clauses: differing conditions, changes, suspension of the work, force majeure. Each of these clauses often has its own notice requirement, in addition to the time-extension clause. What happens when you do not follow the mandates of the contract? You may have waived your right to additional time and money, and, by doing so, may put yourself in a position where you have to accelerate to account for the unadjusted schedule. Or you may face liquidated damages for late completion with an unadjusted schedule.
Recognize, too, that if delays are not timely accounted for, the schedule itself becomes less usable as a planning device.
Accounting for delays
Without meaning to sound too metaphysical, there can be no delays without an expectation or understanding of what is timeliness. Something is late only in relation to something else.
Even for relatively small jobs, it makes sense to have a schedule so you can gauge whether you are on time and, if not, then why not. The schedule does not need to be ornate, unless required by the contract, but it should map out the major project activities.
In any case, for smaller projects, you should consider preparing a milestone schedule (e.g., completion of first floor, second floor, etc.). By informing the owner or contractor of your plan, you will be better able to justify a request for a time extension, or an explanation for late completion, when necessary.
Be on the alert for impact events—change orders, out-of-sequence work, lack of response to requests for clarification of drawings, over-inspection of your installation. Once there is a delay event, “in writing” requirements can be satisfied with a letter, speed memo, handwritten fax, copy of a daily report and perhaps even an e-mail. Review your contract to determine whether the delay also entitles you to compensation for your added costs.
Modern contracts require documentation, and so does common sense. Most litigation arises because of misunderstandings from missing (undocumented) facts. By keeping up with paperwork, you help your company meet its responsibilities to your other contracting parties and you help yourself by not waiving claims. EC