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    Wortham Delays

    Uploaded by

    Ajaya Kumar
    This document discusses best practices for managing construction delays. It notes that delays often result in additional costs for all parties. The key causes of delays include weather, changes to plans, and errors or issues outside a party's control. It also distinguishes between excusable delays, for which a time extension may be granted, and non-excusable delays caused by a party's own actions. For compensable delays, a contractor may be entitled to costs in addition to a time extension depending on contract terms and the reason for delay. The document provides guidance on documenting and proving delays, and outlines common contract clauses addressing changes, differing site conditions, and suspensions of work that may apply to delay claims.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Wortham Delays

    Uploaded by

    Ajaya Kumar
    95 views44 pages
    This document discusses best practices for managing construction delays. It notes that delays often result in additional costs for all parties. The key causes of delays include weather, changes to plans, and errors or issues outside a party's control. It also distinguishes between excusable delays, for which a time extension may be granted, and non-excusable delays caused by a party's own actions. For compensable delays, a contractor may be entitled to costs in addition to a time extension depending on contract terms and the reason for delay. The document provides guidance on documenting and proving delays, and outlines common contract clauses addressing changes, differing site conditions, and suspensions of work that may apply to delay claims.

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    Wortham Delays

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    This document discusses best practices for managing construction delays. It notes that delays often result in additional costs for all parties. The key causes of delays include weather, changes to plans, and errors or issues outside a party's control. It also distinguishes between excusable delays, for which a time extension may be granted, and non-excusable delays caused by a party's own actions. For compensable delays, a contractor may be entitled to costs in addition to a time extension depending on contract terms and the reason for delay. The document provides guidance on documenting and proving delays, and outlines common contract clauses addressing changes, differing site conditions, and suspensions of work that may apply to delay claims.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    95 views44 pages

    Wortham Delays

    Uploaded by

    Ajaya Kumar
    This document discusses best practices for managing construction delays. It notes that delays often result in additional costs for all parties. The key causes of delays include weather, changes to plans, and errors or issues outside a party's control. It also distinguishes between excusable delays, for which a time extension may be granted, and non-excusable delays caused by a party's own actions. For compensable delays, a contractor may be entitled to costs in addition to a time extension depending on contract terms and the reason for delay. The document provides guidance on documenting and proving delays, and outlines common contract clauses addressing changes, differing site conditions, and suspensions of work that may apply to delay claims.

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    Construction

    Delays & Best


    Practices
    Gene Wortham
    Idaho Transportation Department
    “Time is Money”
    Who pays the
    Money for the
    Time?
    Effects of Construction
    Delays
    • Acceleration
    • Schedule Change - Inefficiency
    • Delayed project completion
    • Missed intermediate
    completion dates
    • Liquidated Damages
    • Frustration – claims
    • Increased Costs
    Delay Causes
    • Labor Strikes
    • Weather
    • Third Party
    • Plan Errors
    • Change Orders
    • Contractor Errors
    • Suspension of Work
    • Utilities
    • Differing Site Conditions
    • Archaeological Finds
    • The list goes on
    Costs of Delays
    • Delays in most cases always cause
    additional costs
    • Direct Costs
    • Indirect Costs
    • Impact Costs
    Delay

    Excusable Non-Excusable

    No Time
    Entitlement for time
    Non-Compensable

    Compensable

    Non-Compensable
    When a Delay Occurs

    Time for delay needs


    to be addressed
    immediately
    Arbitration
    Appeal CRB Higher Up
    Claim DRB
    Disagreement DRB Project
    Problem Level
    Contract Clause for
    Determination and Extension
    of Contract Time

    Most Owner’s contracts


    have this clause giving
    guidelines for time
    requests
    Contractual Requirements for
    Contractor Scheduling (CPM)
    • Without a Schedule, how does
    Owner/Contractor determine
    how a delay affects time?
    • Initial Schedule
    • Schedule Updates
    • Contract completion date
    • Contractor’s scheduled
    completion date
    • Substantial completion
    • Float
    Types of Non-Excusable Delay
    Non-Excusable (Within control of the Contractor)
    – Under estimate of production rates
    – Inadequate scheduling or management
    – Construction mistakes
    – Equipment problems
    – Bad Luck
    – Liquidated Damages or Termination of
    Contract
    The list goes on
    Bottom line - Construction is a risky business
    Types of Excusable Delay
    • Unusually Severe Weather
    • Changes and Extra Work
    • Differing Site Conditions
    • Delays from unforeseeable causes
    beyond control of the Contractor
    • Labor Disputes
    • Utilities
    • Etc.
    Excusable Delay
    •Foreseeability
    •Beyond the Control
    •Without fault or negligence
    Excusable Delay – Time
    Consideration
    • May entitle Contactor to an extension of time
    (refer to your contract specifications)
    • Contractor not charged Liquidated Damages or
    terminated if the Delay is Excusable – Time
    should be forthcoming
    • If time extension is requested by Contractor and
    not granted and proven to be excusable –
    Constructive Acceleration may exist and costs
    owed by Owner
    • Above may be overturned by a “No Damage for
    Delay” clause in contract
    Excusable Delay
    (Compensable or Non-
    Compensable)
    • Non-Compensable Delay – Unforeseeable
    and beyond the control and without fault or
    negligence by the Owner or Contractor
    (may be entitled to time)
    • Compensable Delay – The Contractor is
    entitled to an adjustment for increases in
    costs to the performance of the contract
    Compensable Time Extensions
    The following clauses are placed in the
    contract to prevent a breach by the Owner

    • Changes and Extra Work clause


    • Differing Site Condition clause
    • Suspension of Work clause
    • Utility Work clause
    Changes and Extra Work Clause

    The Changes and Extra Work may be


    compensable – time may be given if
    proven to affect the critical path
    Differing Site Conditions Clause
    • Direct Costs
    • Indirect Costs (OH & profit)
    Amount to be paid can be limited to Contract
    wording.
    • The Changes and Differing Site Conditions
    clauses are not generally referred to as
    delay or suspension of work
    Suspension of Work Clause
    Delays by the Owner for an unreasonable time fall under
    this clause and are most likely compensable. Very risky
    for liability on the Owner

    • The Suspension of Work clause should provide


    contractual guidance for an equitable adjustment to the
    Contractor for time and money excluding profit
    • Ground rules for Delay generally come from Contract
    Law. The Owner is liable for their actions/inactions that
    result in unreasonably delaying or disrupting the
    Contractor
    • There is an implied obligation on the part of the Owner
    not to delay, interfere with or hinder the Contractor’s
    performance of their contract
    Utility Facilities clause
    Refer to your State contract
    requirements to determine your
    rules for compensation and
    time the Owner is liable to the
    Contractor for a Utility delay.
    Should exclude profit.
    Burden of Proof for Damage
    Must be Proven by
    Contractor (Time and Money)
    • The contract performance was delayed
    • Delay was excusable
    • Delay was for unreasonable period of time
    – Unreasonable means not originally
    anticipated, customary or inherent in the
    construction industry
    – Some States define this unreasonable time by
    days
    • Contractor did incur additional expenses
    Defective Plans and Specifications
    • Contractor does not
    have to prove
    unreasonable time
    delay
    • Any Delay due to
    Defective
    Plans/Specifications is
    unreasonable
    Third Party Delay
    • This is a delay without the fault or
    negligence of either the Owner or
    Contractor
    • Generally eligible for time but not
    compensable
    Concurrent Delay
    • Both Owner and Contractor are
    contributing to the Delay time
    • Neither Party can recover damages
    (non-compensable)
    • Contract time may be extended
    Delay Costs
    The cost of the delay must be traced directly
    to the claimed delay in a clear cause and
    effect relationship
    Acceleration
    Acceleration is action taken by the
    Contractor in order to speed up the
    progress of the project to accomplish early
    completion or to make up for lost time

    • Voluntary
    • Constructive (not ordered by the Owner
    but attributed to the Owner
    • Direction from the Owner
    Constructive Acceleration
    • Constructive Acceleration occurs when the
    Contractor is induced by the
    actions/inactions of the Owner to complete
    the work in accordance with schedules not
    updated to include all time extensions from
    excusable delays.
    Contract Completion

    The contract must be specific in terms of the


    time required to perform the work
    Contractor’s Scheduled Completion

    • This is the date the


    Contractor presents on
    his schedule as to when
    the work will completed.
    Substantial Completion
    • Most contracts define
    what constitutes
    substantial completion
    • Substantial completion is
    primarily used to stop
    time accounting
    No Damage for Delay cause
    • An effort to reduce claims for delay
    • Exculpatory Language – precludes damages for delay
    • Generally, the Contractors sole remedy is only a time
    extension if so stated in the contract
    • Validity of this clause varies from State to State
    • Clause must be very clear and unambiguous
    • Enforceable – with following exceptions
    – Jurisdiction allows the clause
    – Delay was not contemplated by the parties to the contract
    – Delay caused by fraud, gross negligence, active interference
    – Delay is so unreasonable that it is tantamount to an
    abandonment of the Contract by the Owner
    – All of the above have been completely reversed by the courts
    and rulings made in various ways
    Best Practices
    Survey Says ………..
    Owner caused suspension or delay
    for unreasonable period of time
    Excusable – 100%
    Compensable – 100%
    Unavoidable Utility Delay
    Excusable – 95%
    Compensable – 56%
    Unusual Severe Weather

    Excusable – 95%
    Compensable – 8%
    Unavoidable area-wide material
    shortage that occurs after bid

    Excusable – 90%
    Compensable – 0%
    Labor strikes that occur after bid
    Excusable – 81%
    Compensable – 9%
    Unforeseeable and unavoidable;
    such as fires, floods, and natural
    disasters

    Excusable – 100%
    Compensable – 29%
    Third party delay without fault or
    negligence of either Owner or
    Contractor

    Excusable – 88%
    Compensable – 31%
    Differing Site Conditions
    Excusable – 100%
    Compensable – 95%
    Damage to permanent work prior to
    acceptance

    Excusable – 64%
    Compensable – 47%

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