PROVING IMPACTS TO CRITICAL PATH TO DEFEAT LIQUIDATED DAMAGES ASSESSMENT

When a contractor is staring down the barrel of an owner’s assessment of liquidated damages, the burden will fall on the contractor to establish that the delay was attributable to the owner and the owner’s agents.  The contractor will want to do this not only to defeat the assessment of liquidated damages, but because it will want to establish that the delay caused it to incur extended field overhead (general conditions) for which the owner is responsible.   A contractor supports its burden by proving the impacts to its critical path.  “In general, proving an allegation of government-caused delays without a means of showing the critical path is a steep prospect.”  James Talcott Construction v. U.S., 2019 WL 1040383, *8 (Fed. Cl. 2019) (unreported opinion) (finding that because contractor did NOT present a critical path analysis it could not support its claim for delay caused by the government).

Avoiding the assessment of liquidated damages means the contractor needs to support that it encountered excusable delay and it is/was entitled to an extension of time to complete the project.

An excusable delay is one due to causes that are unforeseeable, beyond the contractor’s control, and not resulting from its fault or negligence.  The delay must be to overall contract completion, meaning ‘it must affect the critical path of performance.’  If the failure is excusable, then appellant [contractor] would be entitled to time extensions and thus remission of LDs [liquidated damages].

Appeal of – Maruf Sharif Construction Co.,ASBCA No. 61802, 2019 WL 410470 (2019) (internal citation and quotation omitted).

A contractor presenting a critical path analysis allocating delay may become imperative when seeking remission of a liquidated damages assessment and, potentially, proving its own entitlement to extended general conditions.  Again, the burden falls on the contractor; therefore, not proving the impacts to the critical path and the excusable delay the contractor should be entitled to will likely result in the contractor failing to carry its burden.

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.

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