Tag Archives: critical path

THE CREDIBILITY OF YOUR EXPERT (INCLUDING YOUR DELAY EXPERT) MATTERS IN CONSTRUCTION DISPUTES

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Here is a quote from a judge in an order after the bench trial of a complex construction dispute between a prime contractor and subcontractor on a federal project:

The evidence received in this case demonstrates the dynamic nature of complicated construction projects. At every step, the details matter, and coordination and cooperation among the companies tasked with performing the job is essential. Thankfully, as even this case shows, most disagreements that arise as projects evolve are handled during construction, far away from a courthouse, by the professionals who know best how to achieve the ultimate goal of a completed project.

U.S. f/u/b/o McKenney’s, Inc. v. Leebcor Services, LLC, 2022 WL 3549980, *1 (E.D. Va. 2022).

This is a true statement.  A statement that parties should remember as they navigate the nuances of a complicated construction project and dispute.

The facts of the case, however, would hardly be construed as a win for either party. Something else for parties to consider as they navigate the nuances of a complicated construction project and dispute.

While there were many components in dispute, one component is worthy of discussion.  That is competing delay claims between the subcontractor and prime contractor.  The prime contractor claimed the subcontractor delayed the critical path.  The subcontractor claimed the prime contractor delayed the critical path.  Both parties had experts supporting their conflicting delay theories.  The question became which expert is more persuasive? Stated differently, which expert is the most credible? Perhaps neither as neither party recovered delay damages against the other.

The subcontractor’s delay expert did not appear to assign much blame to the subcontractor.  The court did not find this to be credible because the evidence demonstrated the subcontractor’s “own shortcomings consistently delayed its work and, in turn, Project completion.”  Leebcor Services, supra, at *25.  The court understood that the subcontractor needed to prove that but for the prime contractor, the subcontractor would not have completed its work late. Yet, evidence demonstrated there was deficient and untimely work performed by the subcontractor. “Because [subcontractor] failed to disentangle its evidence of alleged [prime contractor]-caused delay from delay caused by its own shortcomings, it failed to demonstrate that [prime contractor] was required under the Subcontract to adjust its fixed-price to account for [prime contractor]-caused delay.”  Leebcor Services, supra, at *26.

The court found the prime contractor’s delay expert, while maybe more credible in certain respects, was not more convincing.  For instance, during a period of time, the court found that while the subcontractor may have been behind schedule, “[prime contractor] has failed to demonstrate by a preponderance of evidence that delays to the Project arising during this period are attributable to [subcontractor’s] failure to timely complete [the scheduled activity].  This is because the court concludes that other activities outside of [subcontractor’s] scope of work were delaying the completion of successor activities.”  Leebcor Services, supra, at *28.  In another instance, the court found that “concurrent issues within [prime contractor’s] control also delayed them, and no evidence was offered that would permit the court to disentangle [subcontractor’s] deficiencies from those attributable to [prime contractor].”  Id. at *29.

Remember, many construction disputes require expert witnesses including delay experts.  The expert needs to carry the day on an issue.  To do this, the expert needs to be credible and persuasive.  This case demonstrates why this should not be overstated and why, even with experts, a trier of fact may still find that neither carry the day.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

 

PRESENTING A “TOTAL TIME” DELAY CLAIM IS NOT SUFFICIENT

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When presenting a delay-type of claim on a construction project, a claimant MUST be in a position to properly PROVE the claim.  Trying to present a delay claim loosey-goosey is not a recipe for success.  In fact, it can be a recipe for an easy loss. This is not what you want.  To combat this, make sure you engage a delay expert that understands delay methodologies and how to calculate delay and do NOT present a total time claim. Presenting a delay claim using a total time approach, discussed below, makes it too easy to attack the flaws and credibility of the approach.  Per the discussion of the case below, a total time claim with a contractor that used its project manager, versus a delay expert, to support its claim turned the contractor’s claim into a loss.

In French Construction, LLC v. Department of Veteran Affairs, 2022 WL 3134507, CBCA 6490 (CBCA 2022), a contractor submitted a delay claim to the government for almost $400,000. The contractor was hired to construct a two-story corridor to connect hospital buildings.  The contractor was required to be complete within 365 days. It was not.  The contractor was seeking 419 days of delay from the government. The contractor’s “delay expert” was its project manager who compared the contractor’s as-planned schedule to an as-built schedule he prepared for the claim.

“To show how the critical path of contract performance evolved over the life of the contract and how excusable delays impacted that path, a contractor, at a minimum, needs a reasonable ‘as planned’ schedule and an ‘as built’ schedule, which it can incorporate into an analysis to show ‘the interdependence of any one or more of the work items with any other work items’ as the project progressed.” French Construction, supra (quotation and citation omitted).

Unfortunately, because the project manager was not a true delay expert, there were material flaws in his methodology from a critical path causation standpoint and a calculation of delay standpoint.  Basically, which is a big no-no, the project manager did a total time claim by simply taking the delta between as-planned and actual completion dates and focusing on durations while skipping the causation.

Under the ‘total time theory,” the contractor simply takes the original and extended completion dates, computes therefrom the intervening time or overrun, points to a host of individual delay incidents for which defendant was allegedly responsible and which ‘contributed’ to the overall extended time, and then leaps to the conclusion that the entire overrun time was attributable to defendant. The [total time] theory of proving delay is insufficient to meet the contractor’s burden to prove that government-caused delay actually delayed the overall completion of the project. [The contractor’s project manager] testified about the drawing delays and other problems that delayed demolition of the building without providing a sufficient showing that all the days of delay were attributable to this cause….

The remainder of [the contractor’s] delay claim suffers from the same problem. [The project manager] simply subcontracted the planned duration from the actual duration and identified that as the period of delay. [The project manager], in his report, then generally describes challenges or issues that [the contractor] faced during periods…without any specifics, to those issues.  [The project manager’s] opinions regarding the causes of delay amount to ‘broad generalities and inferences” that are insufficient to carry [the contractor’s] burden to prove compensable delay.

French Construction, supra (internal quotations and citations omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

A RETROSPECTIVE AS-BUILT SCHEDULE ANALYSIS CAN BE USED TO SUPPORT DELAY

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Delay claims are part of construction.   There should be no surprise why.  Time is money.  A delay claim should be accompanied by expert opinions that bolster evidence that gets introduced.  The party against whom the delay claim is made will also have an expert – a rebuttal expert.  Not surprisingly, each of the experts will rely on a different critical path as to relates to the same project.   The party claiming delay will rely on a critical path that shows the actions of the other party impacted their critical path and proximately caused the delay.  This will be refuted by the opposing expert that will challenge the critical path and the actions claimed had no impact on the critical path (i.e., did not proximately cause the delay). Quintessential finger pointing!

This was the situation in CTA I, LLC v. Department of Veteran Affairs, CBCA 5826, 2022 WL 884710 (CBCA 2022), where the government terminated the contractor for convenience and the contractor claimed equitable adjustments for, among other things, delay.   The contractor’s expert relied on an as-built critical path analysis by “retrospectively creating updates to insert between the contemporaneous updates.”  Id., supra, n.3.  The government’s expert did not do a retrospective as-built analysis and relied on only contemporaneous schedule updates.  Id.

The government’s expert testified he was not a fan of a retrospective (after-the-fact) as-built analysis because this analysis can lead to manipulation.  He testified that he prefers to rely on contemporaneous schedule updates versus an as-built analysis where activities are added.   The contractor’s expert countered by saying the government’s expert wants to ignore as-built facts which would warrant adjustments to contemporaneous project schedules to account for what actually occurred in the field.

Who is right?  Is a retrospective (after-the-fact) as built analysis credible?   YES, it is.  But, in an answering this question, let’s bullet point some key aspects as articulated by the Civilian Board of Contract Appeals, which need to be underscored for importance:

The contractor “has burden of proving the extent of the delay, that the delay was proximately caused by government [owner] action, and the delay harmed” the contractor.  CTA I, supra (citation omitted).

“Only delay on a project’s critical path results in overall delay.”  Id.

 “As as-built critical path that reconstructs schedule updates is an acceptable methodology” “[A] rigorous ‘as-built’ approach- reviewing contemporaneous evidence in hindsight to trace the activities on the actual, longest path to completion-has been endorsed by government contracts tribunals.”  Id.

“Because we must determine why a project lasted as long as it did, we [the Board] want to know the path to the latest work – including the critical work immediately preceding that work, and just before that, and so on.” Id.

“We reject [the government’s] accusation that retrospectively adjusting as-built schedules based on project documentation or other evidence necessarily turns the schedules into ‘fiction.’ There is, to be sure, a heavy presumption that regularly updated, contemporaneous schedules are the best evidence of project progress.”  Id.

“[F]orensic schedule analysis is ‘both a science and an art’ and ‘not a magic wand’ but a set of techniques requiring ‘the application of an expert’s well-considered judgment in evaluating the logic of underlying the various pieces of information that support the analysis.’”  Id.

Even if relying on an as-built analysis, there needs to be persuasive contemporaneous project documents – “[e]xpert opinions offered on certain matters that…are not supported by the record tend[] to cast a shadow on the value of other opinions concerning issues where the underlying factual matters were less clear.” Id. (citation omitted) (discussing aspects of contractor’s experts opinion that relied on an unknown extent of hindsight with interviews of the contractor’s project team which the government and the Board were not privy, and where there was not persuasive contemporaneous evidence).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

FORMAL REQUEST FOR TIME EXTENSION NOT ALWAYS REQUIRED TO SUPPORT CONSTRUCTIVE ACCELERATION

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Does a constructive acceleration claim require the contractor to always request an extension of time which is then denied by the owner?  While this is certainly the preference and the contractor should be requesting an extension of time as a matter of course for an excusable delay, the answer is NO! in certain circumstances.  This is conveyed in the factually detailed case discussed below where a formal request for an extension of time was not required for the contractor to support its constructive acceleration claim.

But first, what is constructive acceleration:

Constructive acceleration “occurs when the government demands compliance with an original contract deadline, despite excusable delay by the contractor.” The Federal Circuit in Fraser defined the elements of constructive acceleration as follows:

(1) that the contractor encountered a delay that is excusable under the contract; (2) that the contractor made a timely and sufficient request for an extension of the contract schedule; (3) that the government denied the contractor’s request for an extension or failed to act on it within a reasonable time; (4) that the government insisted on completion of the contract within a period shorter than the period to which the contractor would be entitled by taking into account the period of excusable delay, after which the contractor notified the government that it regarded the alleged order to accelerate as a constructive change in the contract; and (5) that the contractor was required to expend extra resources to compensate for the lost time and remain on schedule.

Nova Group/Tutor-Saliba v. U.S., 2022 WL 815826, *42 (Fed.Cl. 2022) quoting Fraser Constr. Co. v. U.S., 384 F.3d 1354, 1361 (Fed. Cir. 2004) (internal citations omitted).

Of importance, different formulations proving the elements of constructive acceleration can be used.  Id. (where Court discussed three essential elements to constructive acceleration: “excusable delay, an order to accelerate, and acceleration with attendant costs.”

In Nova Group/Tutor-Saliba, discussed below, the Court stated the “Fraser standard requiring the contractor to submit a time extension request would not be appropriate here since the evidence established that the Government was insisting on compliance with the original schedule despite the [known] delay caused by the global stability dispute.”  Nova Group/Tutor-Saliba, supra, at *43.  A formal request for a time extension was not required by the contractor to support and sustain its constructive acceleration claim.

In this case, a contractor was hired to demolish existing piers and design and construct a new ship wharf and other structures.  During construction, the government sent a letter (supported by its engineer) questioning the structural global stability of the contractor’s design and the design’s conformance with the government’s request for proposals AFTER the design had already been approved.  This resulted in what the contractor claims was an excusable delay because no reasonable contractor would have moved forward when the government lost confidence in the structural integrity of the design; thus, the contractor could not perform critical path activities until the issue was resolved.  When a certain redesign over a different issue (dealing with a batter pile issue) was approved, the global stability issue was put to bed by the government and the contractor implemented its acceleration plan.

The Federal Claims Court went through constructive acceleration factors recognizing different formulations of the elements can be applied to support the claim.

 

(1) Excusable Delay

The government argued its letter questioning the global stability of the design did not stop the contractor’s critical path work.  Rather, the work was stopped so the contractor could complete a batter pile redesign.  Further, the government argued that even if the letter caused a delay, it would have been concurrent with the contractor’s redesign which would have prevented the contractor from completing the work absent the global stability issue.

The Federal Claims Court, however, found that the delay was the result of the government’s letter questioning the global stability of the design and design’s conformance with the request for proposals.

Here, months after approving the design, the Government informed [the contractor] that it believed the design might be out of conformance with the RFP, an unforeseeable act given the Government’s prior approval.  Because the entire design was called into question, it was reasonable for [the contractor] to stop critical path work until the issue was resolved. [The contractor’s] reaction that the Navy’s March 8 letter questioning its design was a ‘bombshell’ and a ‘very, very scary moment’ underscored its reasonable concern about the Project’s path forward.

Nova Group/Tutor-Saliba, supra, at *44.

The Federal Claims Court also rejected the government’s concurrent delay argument.

The Government further contends that delays due to the Delta 12 [batter pile] redesign and global stability were concurrent, which would preclude Plaintiff from recovering. “Where both parties contribute to the delay, neither can recover damage[s], unless there is in the proof a clear apportionment of the delay and the expense attributable to each party.”  However, the record indicates that the Delta 12 redesign delay occurred after the global stability issue delay, not concurrently. This is evident from the fact that [the contractor] was able to start some critical construction work on May 7 — 20 days before the Delta 12 redesign was even approved — once it felt assured the global stability issue would be resolved based on emails from the Government. The Government approved the Delta 12 redesign on May 27, 2010, but work on the redesign was not performed until later. The Court is persuaded by Plaintiff’s expert’s opinion that there were two separate acceleration periods: Acceleration Period 1 covering June through November 2010 resulting from the global  stability issue….

Nova Group/Tutor-Saliba, supra, at *44.

 

(2) Government Knowledge of Excusable Delay

The Federal Claims Court found that the government was well aware of the delay due to the global stability design issue.  Further, government representatives were at the site daily and attended daily production meetings. The delay caused by the government’s concern over the global stability of the design was not a surprise.

 

(3) Government Statements that Can be Construed as Acceleration Orders

The contractor never formally requested an extension of time because it was understood the government required the project to be completed ahead of the contract completion date, and time extensions would not be granted.  Even after the global stability design issue was resolved which included the known work stoppage, the government still pressed the contractor to complete on time.  The government even notified the contractor its concern in the decline in the float available in the schedule and that if the float becomes negative the contractor will be required to submit a recovery plan.  “Here, the Government’s repeated warnings that [the contractor] maintain the original project schedule despite a critical path work stoppage of over two months constituted an order to accelerate.”   Nova Group/Tutor-Saliba, supra, at *48.

 

(4) Government on Notice of Constructive Change Claim

Although the government claimed it had no notice of the contractor’s constructive change claim, the Federal Claims Court found: “[t]he contracting officer had actual knowledge of the circumstances giving rise to [the contractor’s] constructive change claim, because it was the Government that issued the letters questioning [the contractor’s] previously approved design, requested KPFF [contractor’s engineer] to respond to BergerABAM’s [government engineer’s] letters, and reiterated that [the contractor] needed to adhere to the schedule, which caused [the contractor] to accelerate after the stoppage of critical path work.” Nova Group/Tutor-Saliba, supra, at *48

 

(5) Costs Incurred for Constructive Acceleration

The Federal Claims Court found that the contractor proved it incurred costs due to the constructive acceleration.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

STANDARD FOR EVALUATING DELAY – DIRECTLY FROM AN ARMED SERVICES BOARD OF CONTRACT APPEAL’S OPINION

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Sometimes, it is much better to hear it from the horse’s mouth.  That is the case here.  The Armed Services Board of Contract Appeal’s (ASBCA) opinion in Appeals of -GSC Construction, Inc., ASBCA No. 59402, 2020 WL 8148687 (ASBCA November 4, 2020) includes an informative discussion of a contractor’s burden when it encounters excusable delay and, of importance, the standard for evaluating delay.  It’s a long discussion but one that parties in construction need to know, appreciate, and understand.  EVERY WORD IN THIS DISCUSSION MATTERS.

Construction projects get delayed and with a delay comes money because time is money.  Many claims are predicated on delay.  These can be an owner assessing liquidated damages due to a delayed job or a contractor seeking its costs for delay.  Either way, the standard for evaluating delay and the burdens imposed on a party cannot be understated and, certainly, cannot be overlooked.  For this reason, here is the discussion on evaluating delay directly from the horse’s mouth in the Appeal of-GSC Construction, Inc.:

The critical path is the longest path in the schedule on which any delay or disruption would cause a day-for-day delay to the project itself; those activities must be performed as they are scheduled and timely in order for the project to finish on time. Wilner v. United States, 23 Cl. Ct. 241, 245 (1991). In Yates-Desbuild Joint Venture, CBCA No. 3350 et al., 17-1 BCA ¶ 36,870, our sister board compiled an excellent and very helpful synopsis of the standards for evaluating delay claims, which I adopt nearly verbatim among the discussion that follows.

To the extent that the government that delays a contractor’s work and increases its costs, the contractor may seek compensation for its damages. Yet, the mere fact that there is some delay to some aspect of planned contract work is not enough to establish that the contractor’s ultimate contract performance costs or time increased. In evaluating the effect of government-caused delays on the contractor’s ultimate performance time and cost, tribunals generally look to the critical path of contract performance, a method of delay analysis that the United States Court of Claims explained as follows:

Essentially, the critical path method is an efficient way of organizing and scheduling a complex project which consists of numerous interrelated separate small projects. Each subproject is identified and classified as to the duration and precedence of the work. (E.g., one could not carpet an area until the flooring is down and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.) The data is then analyzed, usually by computer, to determine the most efficient schedule for the entire project. Many subprojects may be performed at any time within a given period without any effect on the completion of the entire project. However, some items of work are given no leeway and must be performed on schedule; otherwise, the entire project will be delayed.

Yates-Desbuild, 17-1 BCA ¶ 36870 at 179,684-85 (quoting Haney v. United States, 676 F.2d 584, 595 (Ct. Cl. 1982)).

Where the time frame for performance of an activity, set by the earliest possible start time and the latest possible finish time, establishes a time interval equal to the expected activity duration, the activity is termed ““critical,” and no discretion or flexibility exists in the scheduling of that activity. Items of work for which there is no timing leeway are on the critical path, and a delay, or acceleration, of work along the critical path will affect the entire project. Specifically, then, to prevail on its claims for the additional costs incurred because of the late completion of a fixed-price government construction contract, a contractor must show that the government’s actions affected activities on the critical path. Typically, if work on the critical path is delayed, then the eventual completion date of the project is delayed. Conversely, a government delay that affects only those activities not on the critical path does not delay the completion of the project. As a result, the determination of the critical path is crucial to the calculation of delay damages. Id. at 179,685.

To satisfy its burden, the contractor must establish what the critical path of the project actually was and then demonstrate how excusable delays, by affecting activities on the contract’s critical path, actually impacted the contractor’s ability to finish the contract on time. This is done through an analysis to show the interdependence of any one or more of the work items with any other work items as the project progressed. One established way to document delay is through the use of contemporaneous Critical Path Method (CPM) schedules and an analysis of the effects, if any, of government-caused events. In fact, in situations where the contractor utilized Primavera scheduling software to create schedules throughout the life of the project, it would be folly to utilize some other method of critical path analysis. Id.

Because the critical path of construction can change as a project progresses, activities that were not on the original critical path subsequently may be added, and, to preclude post hoc rationalization and speculation, it is important that the contemporaneous schedules that the contractor uses to show critical path delay are updated throughout contract performance to reflect changes as they happened. Accurate, informed assessments of the effect of delays upon critical path activities are possible only if up-to-date CPM schedules are faithfully maintained throughout the course of construction. Id.

Nevertheless, the existence of contemporaneous schedules does not permit a tribunal to ignore, or fail to consider, logic errors in those schedules. A CPM schedule, even if maintained contemporaneously with events occurring during contract performance, is only as good as the logic and information upon which it is based. CPM is not a “magic wand,” and not every schedule presented will or should be automatically accepted merely because CPM technique is employed. To be a reliable basis for determining delay damages, a CPM schedule must reflect actual performance and must comport with the events actually occurring on the job. Tribunals may need to inquire into the accuracy and reliability of the data and logic underlying the CPM evaluation in appropriate circumstances and reject CPM analyses if the logic was not credible or was suspect. Id. at 179,685-86.

Even if the contractor shows delay by the government that affects the critical path, the contractor must also establish that it was not concurrently responsible for delays. Tribunals will deny recovery where the delays of the government and the contractor are concurrent and the contractor has not established its delay apart from that attributable to the government. Nevertheless, any contractor-caused delays must affect the critical path of contract performance to be considered “concurrent” — contractor delays that, absent the Government-caused delay, would have had no negative impact upon the ultimate contract completion date do not affect the government’s monetary liability. For the same reasons discussed above, because concurrent delays that do not affect the critical path of contract work do not delay project completion, an accurate critical path analysis is essential to determine whether concurrent delays have caused delay damages related to the delayed completion of a complex construction project. Id. at 179,686.

In establishing excusable delay, the contractor may point to causes outside the Government’s control. FAR 52.249-10(b)(1), Default, provides a non-exhaustive list of excusable delays that includes acts of God, acts of a host country government in its sovereign capacity, fires, floods, epidemics, strikes, and unusually severe weather. Obviously, a contractor has no control over whether it rains, whether there is a flash flood, or whether there are forest fires. Nevertheless, the mere fact that a delay is caused by a type of activity listed in the contract as generally excusable does not give the contractor carte blanche to rely upon such excuses. The purpose of the proviso, which is to protect the contractor against the unexpected, and its grammatical sense both militate against holding that the listed events are always to be regarded as unforeseeable, no matter what the attendant circumstances are. A quarantine, or freight embargo, may have been in effect for many years as a permanent policy of the controlling government and, if so, may not meet the definition of a cause “unforeseeable” at the time of contract award, even if quarantines and freight embargoes are listed in the contract as examples of possible excusable causes of delay. Id. at 179,686-87.

Further, even if an unforeseeable cause of delay occurs, the contractor cannot sit back and fail to take reasonable steps in response to it — once such an unforeseeable event occurs, the contractor affected by it has an obligation to attempt to mitigate the resulting damage to the extent that it can. If the contractor fails to do so, it may not recover those damages which could have been avoided by reasonable precautionary action on its part. Id. at 179,687.

To establish entitlement to an extension based on excusable delay, a contractor must show that the delay resulted from “unforeseeable causes beyond the control and without the fault or negligence of the Contractor,” and the unforeseeable cause must delay the overall contract completion; i.e., it must affect the critical path of performance. Sauer Inc. v. Danzig, 224 F.3d 1340, 1345 (Fed. Cir. 2000). Similarly, a contractor’s default is excused only to the extent that there were no additional delays for which the contractor was responsible (beyond those caused by the government) and that “there is in the proof a clear apportionment of the delay and the expense attributable to each party.” See Blinderman Constr. Co. v. United States, 695 F.2d 552, 559 (Fed. Cir. 1982) (quoting Coath & Goss, Inc., 101 Ct.Cl. 702, 714-15 (1944).

However, in order to prove that it is entitled to delay damages in the form of time or money, a contractor must prove that the government was responsible for specific delays, overall project completion was delayed as a result of the government-caused delays, and any government-caused delays were not concurrent with delays within the contractor’s control. L.C. Gaskins Constr. Co., ASBCA No. 58550 et al., 18-1 BCA ¶ 36,978 at 180,121-22. If an event that would constitute an excusable cause of delay in fact occurs, and if that event in fact delays the progress of the work as a whole, the contractor is entitled to an extension of time for so much of the ultimate delay in completion as was the result or consequence of that event, notwithstanding that the progress of the work may also have been slowed down or halted by a want of diligence, lack of planning, or some other inexcusable omission on the part of the contractor. Chas. I. Cunningham Co., IBCA No. 60, 57-2 BCA ¶ 1,541 at 5,843.

A contractor is entitled to time extensions for government-caused delays and excusable delays, even when they are concurrent with contractor-caused delay. When a contractor is seeking extensions of contract time, for changes and excusable delay, which will relieve it from the consequences of having failed to complete the work within the time allowed for performance, it has the burden of establishing by a preponderance of the evidence not only the existence of an excusable cause of delay but also the extent to which completion of the contract work as a whole was delayed thereby. The contractor must prove that the excusable event proximately caused a delay to the overall completion of the contract, i.e., that the delay affected activities on the critical path. And it must also establish the extent to which completion of the work was delayed—it is entitled to only so much time extension as the excusable cause actually delayed performance. R.P. Wallace, Inc. v. United States, 63 Fed. Cl. 402, 409-10 (2004).

Thornier issues are posed by concurrent or sequential delays—the first occurring where both parties are responsible for the same period of delay, the second, where one party and then the other cause different delays seriatim or intermittently. Concurrent delay is not fatal to a contractor’s claim for additional time due to excusable delay, but precludes the recovery of delay damages. If a period of delay can be attributed simultaneously to the actions of both the Government and the contractor, there are said to be concurrent delays, and the result is an excusable but not a compensable delay. A contractor generally cannot recover for concurrent delays for the simple reason that no causal link can be shown: A government act that delays part of the contract performance does not delay the general progress of the work when the prosecution of the work as a whole would have been delayed regardless of the government’s act. Id.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

CONSTRUCTION DELAYS: WHICH METHOD SHOULD BE USED TO CALCULATE DELAY?

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If you need to prove and allocate construction project delays, you should engage a scheduling consultant qualified with CPM (critical path method) analysis.  You should also engage counsel to assist in preserving your rights, as well as presenting and maximing your arguments for delay.

There are numerous methodologies used to quantify and allocate delay. You want to discuss the most effective analysis for your case and facts including whether you want/should use a forward-looking prospective analysis or a backward-looking retrospective analysis that factors in as-built data.  In doing so, you want to make sure you understand the pros and cons of each methodology including the bases to attack the methodology that will be subject to cross-examination.  The five primary CPM methodologies are as follows:

 

 

 

 

  1. As-Planned Versus As-Built. This methodology compares the as-planned baseline schedule to an as-built schedule reflecting progress to assign delay.  An as-built schedule that reflects progress includes actual start dates, finish dates, and durations.  The actual dates and durations are compared with the as-planned dates and durations on the baseline schedule to determine delay.  Under this methodology, the delay impact is determined retrospectively.

 

  1. Windows Analysis. This methodology divides the project into windows of period of time and focuses on an as-built critical path analysis that relies on progress schedule updates and as-built data.  The as-built critical path is then quantified for each of the periods (or windows).   The methodology compares the as-planned baseline schedule’s critical path to the as-built schedule (and as-built conditions) during the window to quantify delay. Under this methodology, the delay impact is determined retrospectively.

 

  1. Collapsed As-Built. This methodology is the “but for” methodology as it analyzes the earliest date the project would have been completed “but for” identified delays.  This methodology removes delay events from the as-built schedule to determine when the project would have been completed “but for” the delay event(s).  Under this methodology, the delay impact is determined retrospectively.

 

  1. Impacted As-Planned. This methodology inserts potential delay events/activities into the as-planned baseline schedule to determine impacts.  By inputting new delay activities into the baseline as-planned schedule, new logic and a new critical path is created to result in a new completion date (i.e., an impacted, as-planned schedule).  The difference between the completion date in the impacted, as-planned schedule and the (unimpacted) as-planned baseline schedule represents the delay.  This methodology does not rely on as-built data and prospectively determines delay.

 

  1. Time Impact Analysis. This methodology analyzes delay events individually based on the schedule update immediately prior to the delay event.  The difference between the project’s completion date before and after the delay event quantifies the delay.  Under this methodology, the delay event is added into the updated schedule closest to the event to see if the project completion date changes based on the event’s impact to the completion date.  This methodology does not rely on as-built data and prospectively determines delay based on when the event occurred.

 

It is not uncommon for parties to use different methodologies to quantify and assign delay.  It is also not uncommon for the parties to attack the other methodology as unreliable– whether not focusing on what actually occurred or not focusing on an event the moment it occurred based on the schedule or plan in-place as of the delaying event(s).  As an example only, in K-Con Building Systems, Inc. v. U.S., 131 Fed.Cl. 275 (Fed.Cl. 2017), a contractor asserted claims relative to the government’s delay. The contractor claimed the critical path should be analyzed with a prospective analysis predicated on its as-planned performance.  The government disagreed claiming the critical path should be analyzed based on a retrospective as-built analysis.  The Court of Federal Claims agreed with the government “that the proper way to determine what activities were on the critical path of performance in this case is to examine what actually occurred during contract performance.”  K-Con Building Systems, supra, at 329.  The Court reached this conclusion because: (1) “a critical path schedule that relies solely on the [baseline] schedule set forth in the contract specifications does not account for subsequent changes to the schedule authorized by the contracting agency” and (2) “the use of a contractually based critical path schedule does not reflect that the [contractor] did not actually perform in accordance with the [baseline] schedule set forth in the contract specifications.”  Id. at 329-330.  Stated differently, the as-planned approach that the contractor employed did not “fully reflect the reality of what occurred on the project.”  Id.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

DOES A SUB NEED TO USE AN EXPERT OR PRESENT CPM ANALYSIS TO SUPPORT A DELAY CLAIM?

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Does a subcontractor need to prove its delay claim (including its lost productivity claim) with expert testimony or a CPM analysis?  A federal decision out of the District Court of Maryland proposes that maybe a subcontractor does not need to go this route. See Baker DC, LLC v. Baggette Construction, Inc., 378 F.Supp.3d 399 (D.Md. 2019). If you are a subcontractor presenting a delay or lost productivity claim, you should work with counsel and ideally an expert to best present, package, and support the claim with expert analysis.   However, this case, discussed below, creates an argument that the use of an expert or even CPM analysis may not be required as a matter of law to support a subcontractor’s delay-type of claim. This is good news for a subcontractor to hear, especially when the subcontractor was not the one that prepared the CPM schedule that included activities unrelated to the subcontractor’s work; and, using an expert and preparing a CPM analysis can be a costly endeavor.

In this case, a concrete subcontractor’s work on a federal project dragged on much longer than anticipated.   The subcontractor sued the prime contractor claiming the contractor delayed and disrupted its work causing its work to be extended and inefficient and costing it more to perform.  The prime contractor moved for summary judgment arguing that the subcontractor cannot demonstrate claims or damages for delay because the subcontractor will not be using an expert or presenting a critical path method (CPM) analysis.  The trial court refused to grant summary judgment on this issue maintaining it is “unwilling to declare as a matter of law [the subcontractor] cannot prove its claim for delay damages without expert testimony or evidence of a CPM analysis.” Baker DC, supra, at 412.

In reaching this decision, the trial court analyzed the purpose and function of a CPM schedule which is to allow “contractors performing complex projects to identify a critical path of tasks that must each be completed before work on other tasks can proceed.” Baker DC, supra, at 411 (quotation and citation omitted).

As one federal court long ago explained, contractors conduct a critical path analysis on a complex construction project by analyzing each of the various separate, but interrelated, small projects within the larger whole, considering the work involved and the expected duration of each subproject. The analysis seeks “to determine the most efficient schedule for the entire project,” recognizing that some subprojects cannot proceed until another has finished its course – for example, “one could not carpet an area until the flooring is down[,] and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.” Subprojects that must be performed on schedule, lest they delay the entire project, are said to be on the “critical path.”

The U.S. Court of Claims has explained:

The reason that the determination of the critical path is crucial to the calculation of delay damages is that only construction work on the critical path had an impact upon the time in which the project was completed. If work on the critical path was delayed, then the eventual completion date of the project was delayed. Delay involving work not on the critical path generally had no impact on the eventual completion date of the project.

Baker DC, supra, at 411-12 (internal citations omitted).

However, while CPM analysis through the use of expert analysis is clearly the preferred or established method, the court noted that this “is not the same as declaring that a plaintiff must provide such evidence, as a matter of law, to prove damages of this variety.” Id. at 412 (explaining that the prime contractor has not produced any cases where a court required a subcontractor to present CPM analysis evidence in its dispute against a general contractor).  This is precisely what the subcontractor wanted to hear!

 

Another noteworthy issue raised in this case dealt with whether the subcontractor’s bid was part of the subcontract.  The subcontractor wanted to argue it was part of its subcontract because the subcontractor included qualifications in its bid that would be used to support its delay and inefficiency claim.  The prime contractor also moved for summary judgment arguing that the bid was not part of the subcontract because the subcontract contained an integration clause and, naturally, the subcontract contained provisions that would render moot the subcontractor’s qualifications in its bid.  (The integration clause read: “This Agreement constitutes the entire agreement between the parties hereto.  No oral representations or other agreements have been by [the prime contractor] except as stated in the Agreement.”  There is a reason lawyers include such language in contracts!  This is important language that should be used and should not be dismissed as unimportant.)  The court agreed with the prime contractor on this issue stating “the parties reasonably understood the written agreement would supersede any prior negotiations or agreements.”  Baker DC, supra, at 409.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

CONTRACTOR’S BURDEN WHEN IT COMES TO DELAY

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When a contractor is challenging the assessment of liquidated damages, or arguing that it is entitled to extended general conditions, the contractor bears a burden of proof to establish there were excusable delays that impacted the critical path and, in certain scenarios, the delays were not concurrent with contractor-caused delay:

When delays are excusable, a contractor is entitled to a time extension, such that the government may not assess liquidated damages for those delays.  The government bears the initial burden of proving that the contractor failed to meet the contract completion date, and that the period of time for which the government assessed liquidated damages was correct. If the government makes such a showing, the burden shifts to the contractor to show that its failure to timely complete the work was excusable. To show an excusable delay, a contractor must show that the delay resulted from “unforeseeable causes beyond the control and without the fault or negligence of the Contractor.”  “In addition, the unforeseeable cause must delay the overall contract completion; i.e., it must affect the critical path of performance.” Further, the contractor must show that there was no concurrent delay.

Ken Laster Co., ASBCA No. 61292, 2020 WL 5270322 (ASBCA 2020) (internal citations omitted).

Arguing delay without understanding your burden of proof obligations will be problematic, as the contractor in Ken Laster found out.  In this dispute, a contractor was issued task orders to repair, prepare and plaint certain floating structures pursuant to task orders.  The contractor was liable for liquidated damages if it did not timely complete the work.  The contractor completed the work 289 days late and the government assessed liquidated damages.  The contractor challenged the assessment of liquidated damages. However, the contractor did NOT show how anything it claimed the government did to delay completion impacted the critical path or that there was no concurrent delay.  Without such showing, the contractor was unable to establish that liquidated damages were improper as it was unable to show there was excusable delay or that the delay to the critical path it caused was concurrent with an owner-caused delay to the critical path.

Remember, if you are a contractor challenging the assessment of liquidated damages and/or claiming you are entitled to delay damages (extended general conditions), you have a burden of proof.  You will want to establish that there was excusable delay, i.e., owner-caused delay, that impacted the critical path of the project resulting in the delay to the completion date, and the excusable delay was not concurrent with delay you caused to the completion date.  This burden will routinely require expert opinion that will need to analyze schedules and contemporaneous project documentation to render these opinions (that there was excusable delay, the delay impacted the critical path, and in certain scenarios, the excusable delay was not concurrent).   It is important to note, however, that if you are able to establish there was concurrent delay, you would still typically be entitled to a time extension, however, you would not be entitled to compensation for the delay (extended general conditions).  But, the burden is still on you to establish there was concurrent delay.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

QUICK NOTE: COVID-19 CLAIM – PROVING CAUSATION

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In certain jurisdictions, the number of people testing positive for COVID-19 is on the rise.  As this occurs, there is the possibility that a construction project will have to deal with one or more workers testing positive.  That is the current reality.   If the dialogue has not occurred before, now is the time to discuss any enhanced measures—above OSHA guidelines—that could be implemented to address this reality and mitigate the risk.  Part of the reality, though, is that regardless of the enhanced measures and mitigation, it is impossible to truly prevent this risk.

No one disputes COVID-19.  There may be a dispute as to whether COVID-19 constitutes a force majeure event or some other event, however, before you start labeling it, you still NEED TO PROVE the impact caused by COVID-19.  There needs to be a cause-and-effect relationship so you can address (i) how this impacted the critical path of your schedule and/or (ii) how this impacted labor productivity.  In other words, you need to prove causation.  Stating there was a delay or loss of productivity without establishing the cause-and-effect relationship (i.e, causation) provides no value because it does not support the production impact or time extension and, without either, there is no basis for additional compensation (even if you establish it should be deemed an excusable, compensable delay).

We have all read articles about how COVID-19 can impact a project.  This does not mean that all or any of these issues impacted your project.  If they did, and you are seeking a time extension and/or additional compensation, remember, it is your burden of proof to support the entitlement, both as to time and money.  This is not an easy task and, in many situations, the impact may be very difficult to actually prove.  But again, stating you have a COVID-19 impact without truly demonstrating causation will be, and should be, a claim that is denied.  If you need assistance putting together or evaluating a COVID-19 claim, make sure you work with experienced counsel and consultants to best package and present the claim.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

QUICK NOTE: SIMPLE BUT THORNY ISSUE OF “CONCURRENT DELAY”

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The definition of “concurrent delay” seems simple, but it can give rise to thorny issues including misunderstandings, not truly digging into the causes of the alleged concurrent delay, and the lack of apportionment of the concurrent delay period.   This is why when dealing with any delay it is good practice to work with a scheduling consultant in conjunction with counsel that understands how to best prosecute or defend against delay-related claims.   This includes dealing with the simple but thorny issue of concurrent delay.   There is a difference between arguing concurrent delay and actually proving it or apportioning the time period that benefits your interests or allows you to understand the practicality of the delay period.

In a nutshell:

“If the contractor and the [owner] cause [independent] concurrent delays that affect the critical path of performance, neither party can recover delay-related damages unless the delays can be apportioned between the parties.”  K-Con Building Systems, Inc. v. U.S., 131 Fed.Cl. 275, 328 (Fed.Cl. 2017).   For there to be a concurrent delay, there needs to be independent delays by both the owner and contractor, and the independent delays needs to impact the critical path.  “If two delays occur at the same time and one is on the critical path and the other is not, then the delays should not be considered concurrent.”  CONBRIEF No. 2004-10, Concurrent Delay (2004).

Note that concurrent delay can occur in two different scenarios: (1) when both parties are responsible for delaying the same critical activity over the same period or (2) when each party delays a separate critical activity at the same time (there were multiple critical paths).  Both delays must be independent of one another.  In other words, the contractor’s delay cannot be as a result of, or contingent upon, the owner’s delay, or vice versa.

CONBRIEF No. 2005-12, Basic Analysis for Delay and Disruption Claims (2005)

For more on concurrent delay check here.  For more on understanding basic scheduling terms, check here.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.