Knowing how to deal with delays can win the case
Construction projects have one thing in common with a morning commute: expect delays. In the current global construction environment delays in construction projects are the rule, not the exception, and knowing how to deal with delays while they are ongoing can mean the difference between winning and losing at the claims stage.
It is essential to manage such delays at their most critical juncture-while they are ongoing. At any point in time during a construction project, multiple delay events may operate simultaneously to delay the critical path of the project.
These parallel delay events may result from myriad causes and may have varying effects on the project life. When one of these critical path delay events is owner-caused and the other contractor-caused, the focus in a construction dispute often becomes whether the contractor-caused delay event constitutes a concurrent or pacing delay.
A concurrent delay describes a contractor-caused event, which delays the critical path of a project simultaneously with an independent owner-caused event. The key attribute of a concurrent delay is the independent relationship between the contractor and owner-caused delay events.
Meaning, the contractor-caused event would have arisen and delayed the critical path of the project even in the absence of the owner-caused event.
By contrast, a pacing delay broadly describes a contractor-caused event, which delays the critical path of the project only as a result of an owner-caused event. The key distinction between a concurrent and pacing delay is that for a pacing delay to exist there must be complete dependence between the underlying owner-caused and contractor-caused delay events.
Many times delay events bear a causal relationship and parties to a construction project are forced to make critical decisions regarding timing in order to manage overhead and meet construction budgets. It is no secret that in construction time is money.
Concurrent delay is an owner's typical response to a contractor's claim for compensation for an owner-caused delay.
The existence of a concurrent delay can make apportionment difficult or impossible to prove. The allocation of specific damages often becomes a major source of contention.
The crucial determination is which event has in fact caused the delay to the project. If the owner-caused event is the true source of the delay, the contractor may be entitled to an extension of time and prolongation costs, depending on the contract terms.
If the contractor-caused event is the true source of the delay, then likely no extension of time will be granted and the contractor may be liable to the owner for liquidated damages, depending on the contract.
Where both events contribute to the delay apportionment or offset are likely results, depending on the jurisdiction and approach.
A contractor's best counter to an owner's argument that a delay is concurrent and non-compensable is pacing-the contractor-caused delays are dependent and the result of the owner-caused delays. The crux of a contractor's pacing delay argument is usually that it is does not make sense to accelerate its work and incur the inefficiencies and additional cost associated with acceleration. A contractor may also argue that pacing is an aspect of its duty to mitigate the harm caused by an owner-caused delay.
Generally in a pure concurrent delay situation (two independent delays) the contractor is only entitled to an extension of time. Damages are not awarded unless there is a clear apportionment of the delay and expense attributable to each party.
Owners should look for contractor-caused problems to support a concurrent delay argument. The best source for concurrent delay evidence is the contemporaneous project records. If a contractor-caused delay independent of the owner caused delay is documented, the contractor's pacing argument is flawed. If it appears as though a contractor does have a legitimate reason to pace the works, the owner should still seek assurances that the contractor has the resources required to perform the works that it should have performed absent the owner-caused delay.
- Shea Haass is an associate with Fulbright & Jaworski. The article is not a legal advice. No attorney-client relationship is established by means of this article
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