The three fundamental essential elements of any construction contract are PRICE, TIME and SCOPE. Price and Scope are often only perceived as required by contracting parties, without any serious consideration for TIME.
How long will it all take to construct? Between what dates will the construction be done? In what order will it need to be built to achieve these dates?
Time is money, so on any construction project it is little wonder that often when a project is delayed or delivered late, a construction dispute will arise. Imagine the Client procuring a building where they will lose £30,000 per week in lost revenue when they do not get the building on time, and likewise the builder who claims the client has been the cause of delay and, as a result, is losing £30,000 per week. Immediately, you have a £60,000 per week dispute. If the Client has agreed liquidated and ascertained damages (LAD's) with the builder in the contract, the onus or burden of proof is on the builder to prove why they are late. If our example runs on for six months, the difference between the parties can be huge and run into millions of pounds.
If a Construction Delay Occurs
If construction delays occur, to satisfy the burden of proof, it is essential for the contractor to notify the Client and keep good records of the impact each event has on the programmed construction works. The contractor should make an "Extension of Time" claim as works proceed and the substantiation behind this process is called 'Delay Analysis'.
Under the Standard Form of Contract there are normally "mechanisms" in place to extend time and the responsibility for assessing this is with the Employer or their representative. Care should be taken by the Employer to deal with construction delays seriously as it can lead to huge liabilities later in adjudication. It is common practice for Employers to amend the construction contract provisions and contractors should be aware of the implications of these, particularly if they claim to be a "condition precedent".
The delay analysis should not just be procured after the works are complete but should be deployed throughout the construction process, so creating what is known as “contemporaneous evidence”, many complications can occur, and the contract mechanism must be adhered to reduce the risk of loss or dispute. In simple terms, delays can be caused by either party, the offender paying for it, however there are "neutral events" where nobody is to blame and cases where both parties are to blame, often known as concurrent delays.
Delay analysis in construction and time assessments can be a very complex science, the contractor must be alive to good record keeping, factors and risks which can impact on time or result from delay, including:
Careful management, record keeping and an understanding of all these factors and risks must be considered in managing any construction project effectively.
The Importance of Records
As work proceeds, it is important to manage the time with record, and to understand how an Adjudicator is likely to deal with the claim, whether by a critical path analysis or otherwise.
Although common sense may prevail it is recommended that a clear understanding of the concept of time management for any construction project, a clear chronology of events recorded and all the risk factors that can arise be appreciated to avoid unnecessary losses and disputes.
Arbicon are experts in dealing with Delay and Extension of Time issues. Arbicon can prepare or defend quantum time claims using Delay Analysis and dealing with any time issues in adjudication proceedings. If you require advice, please use our contact form or call our offices below: