Delays on construction projects

[edit] Introduction

Construction projects tend to be one-offs. A project team comes together to create a unique development on a particular site under circumstances that will never be repeated.

They are very complex, requiring the co-ordination of permissions, people, goods, plant and materials. Construction can begin despite many ‘unknown’ matters such as incomplete design information, uncertain site conditions, suppliers, and so on. As a consequence delays are common.

In Modernising Construction: Report by the Comptroller and Auditor General, published in 2001, the National Audit Office found that 70% of government construction projects were delivered late.

Delays might be caused by:

• The uniqueness of the project.
• Speed of decision making.
• Poor or unrealistic scheduling.
• Poor communication.
• Lack of information.
• Labour productivity.
• Availability of resources.
• Adversarial relationships.
• Third party dependencies.
• Lack of finance.
• Availability of the site.
• Site conditions.
• Weather.

Delays can be minimised by:

• Detailed site investigations.
• Careful monitoring and regular meetings.
• Effective site management.
• Collaborative working and effective coordination.
• Careful scheduling.
• Full commitment to the project by all parties.

[edit] Types of delay

Very broadly, there are two types of delay

• Delays in activities for which there is programme float available (i.e. they can be delayed without impacting on the completion date).
• Delays that will impact on the completion date, sometimes referred to as critical delays.

Construction contracts tend provide for four categories of delay:

• Delays resulting from neutral causes.
• Delays that are the fault of the client.
• Delays that are the fault of the contractor, sometimes referred to as culpable delay or contractor delay.
• Concurrent delays.

A 'delay event' is an event or cause of delay, which may be either an employer risk event or a contractor risk event. Ref Society of Construction Law Delay and Disruption Protocol, 2nd edition, February 2017, published by the Society of Construction Law (UK). https://www.scl.org.uk/resources/delay-disruption-protocol

[edit] Delays resulting from neutral causes

Neutral events (which may be 'relevant events'), which are not the fault of either party might entitle the contractor to an extension of time. Typically, this might include:

• Exceptionally adverse weather.
• Civil commotion or terrorism.
• Statutory undertaker’s work.
• Force majeure (such as a war or an epidemic).
• A specified peril such as flood.
• National strikes.
• Changes in statutory requirements.
• Delays in receiving permissions that the contractor has taken reasonable steps to avoid.

This does not necessarily entitle the contractor to claim loss and expense.

[edit] Delays that are the fault of the client

Where the progress of the works is materially affected by a matters for which the client is responsible, the contractor may be entitled to claim direct loss and expense incurred. Such matters might include:

• The client instructing variations in the works.
• Failure by the consultant team to provide information.
• Delay on the part of a nominated sub-contractor.
• Failure by the client to supply materials or goods.
• Delay in giving the contractor possession of the site.

These matters (described in some contracts as 'relevant matters') may also constitute 'relevant events' allowing the contractor to claim an extension of time, however a relevant matter need not necessarily result in a delay to the completion date, and so claims for loss and expense and claims for extensions of time do not necessarily always run together.

[edit] Delays that are the fault of the contractor

Where a delay which impacts on the completion date is caused by the contractor, most construction contracts will require the contractor to pay liquidated and ascertained damages (LADs) to the client. The LADs need to be explicitly written into the contract.

Otherwise the contactor will be liable for general damages incurred by the client due to the delay, subject to any exclusions and limits included in the contract,

For more information, see Culpable delay.

[edit] Concurrent delay

Concurrent delay refers to the complex situation where more than one event impacts on the completion date at the same time, but where not all of those events would entitle the contractor to claim an extension of time or loss and expense.

Some form of apportionment is likely here, however such situations are complex and each case will tend to have circumstances that are unique in some way. What is clear is that it is important for both parties to ensure they keep good records to demonstrate that the event did actually occur and that it did impact on the completion date.

If it is possible to carry out a critical path analysis that demonstrates the effect of events on the completion date, then this is beneficial, however, in the absence of such information it is likely that the courts will take a ‘common sense’ approach.

[edit] Compensation events

NEC contracts deal with these issues under the single heading ‘compensation events’. They do not treat compensation events as an allocation of blame, but rather an allocation of risk. Any risk that is not specifically identified as being attributed to the client is borne by the contractor.

[edit] Early warning

When it becomes reasonably apparent that there is a delay, or that there is likely to be a delay that could merit an extension of time, the contractor must give written notice to the contract administrator identifying the relevant event that has caused the delay.

On NEC contracts both parties must give early warning of anything that may delay the works. They should then hold an early warning meeting to discuss how to avoid or mitigate impacts on the project.

[edit] Mitigation and acceleration

The contractor is generally required to try to prevent or mitigate delay, even where the fault is not their own.

If there is nonetheless a delay, the client may wish to instruct acceleration of the works. An acceleration agreement can be used as a “wrap up” agreement expunging all outstanding claims for extensions of time and loss and expense.

Measures taken to accelerate the works might include

• Additional resources of manpower, plant and materials directly employed or subcontracted.
• Revised methodologies including off-site prefabrication, extra scaffolding, temporary weatherproofing and so on.
• Proposals for phased completion.
• Increasing working hours on and off site, including weekends, holidays, night working and shift working.
• Additional supervision.
• Changes to the design or specification (for example standardisation replacing bespoke solutions)
• Reduction in scope (for example transferring work to a separate post-contract agreement for occupational works).

See also: International research into the causes of delays on construction projects.

[edit] Related articles on Designing Buildings

• Acceleration.
• Compensation event.
• Concurrent delay.
• Contractor delay.
• Critical path.
• Culpable delay.
• Delay to completion.
• Delay to progress.
• Dispute resolution.
• Disruption claims in construction.
• Employer delay.
• Extension of time.
• International research into the causes of delays on construction projects.
• Liquidated damages.
• Long lead-time item.
• Programme.
• Relevant event.
• Relevant event v relevant matter.
• Relevant matter.

[edit] External references

• Walter Lilly and Co Ltd v Mackay 2012.
• Royal Brompton Hospital National Health Trust v Hammond and Others.
• City Inn v Shepherd.