Construction is a complicated process, so misunderstood and underestimated by the glitzy programmes we see splashed all over our TV sets to keep us entertained on a cold winter's evening. If you have watched any of these programmes you will know that the projects invariably finish much later than expected by the unwitting clients and at a considerably higher cost than anticipated. Sadly, these TV exploits are closer to reality than we might wish.
It is rare these days to hear tales of projects that have been completed on programme and budget but they do exist and my colleagues in our PM team love to entertain me with stories of happy clients. Unfortunately, in my dispute team we are usually left dealing with projects that have gone wrong, more often than not because they have finished late and the Parties are left playing the "blame game".
There are many reasons why projects get into delay but often they will include a misunderstanding of the inter-relationship and interaction between sub-contractors, suppliers, designers and clients who insist on changing their minds part way through a project before they emit the immortal words "not me gov".
There is no excuse for failing to carefully plan and programme a proposed construction project and any contractor who fails to recognise this fact of life is in for serious trouble. Most, if not all, construction contracts contain provisions requiring the payment of liquidated damages in the event of late completion and, if they don't, then common law damages based on the costs incurred by the Employer will be payable. Add to this the additional costs incurred by a contractor who is late in finishing a project and it is not hard to see why it is so important to establish whether it is the Employer that has caused the delay and must stand the associated costs or it is the Contractor who has to take a financial hit. Without an accurate construction programme, measuring and proving liability for delay is nigh on impossible.
It is against this background that the last twenty years has seen the rise in popularity of delay analysis and experts whose job it is to convince a tribunal that it is their opponent's client that has caused delay. The development of powerful computers and sophisticated delay analysis software has added to the price of establishing liability for delay and these guys and girls and the reports they generate do not come cheap. The stakes in the blame game are very high and Parties pay huge sums out to lawyers and experts just to get into the game!
In the adjudications I deal with it is quite the norm to be presented with several files of delay analysis by an expert to convince me that it is their client that has "clean hands" and that I should decide accordingly. Regrettably, the reports produced by delay experts are increasing in size and complexity and, at the risk of being cynical, it is not unusual to come across situations where a deliberate manipulation of the project software has been made in order to get the computer to say what the expert would like it to say rather than actually proving a Client's case – leaving me to wonder whether I am dealing with an expert or hired gun.
Delay analysts will tell you that there are different methods of analysing and proving delay liability, which include:
- a) Impacted as-planned
- b) As planned but for
- c) Collapsed as built
- d) Windows analysis
- e) Time impacted analysis
- f) As planned -v- as built
It is not for me to set out to persuade anyone which method of delay analysis is the best. The reality is that the choice of analysis will depend on when the analysis is being undertaken, what information is available, how good are the records and, frankly, what the client wants to spend! There are circumstances that would warrant all of these different approaches.
However, what I will say as someone who regularly sits as a tribunal is that the drafter of any delay analysis must keep in mind why the report is being prepared in the first place. I would also suggest that any report produced for the purpose of proving responsibility for delay follows the KISS principle by, in relation to each delaying event:
Explaining what was supposed to happen and when....
Explaining what actually happened in practice....
Explaining what the delay to the individual events are....
Explaining what the effect is on the project as a whole....
Construction can be broken down into key milestones and hence keeping delay analysis real is not rocket science. The analysis should be transparent. If changes have been made to the “what was supposed to happen” the analyst should declare them and avoid the fees involved in "hidden changes” being found and argued about at a later date. The progress should be evidenced contemporaneously. For example, a simple site diary entry that records plastering starting in an area can support a watertight date achieved. It is important that the analysis reflects real life and doesn’t become a complex black art of float, criticality and mathematical calculations.
There is nothing like an "as planned v as built" analysis to provide a visual representation of the effects of delaying events on a project, but pictures alone will not be sufficient to satisfy a tribunal on the merits of a particular case. There remains no substitute for concise, clear and evidenced logical reasoning to discharge the burden of proving either an entitlement to an extension of time if you are advising a contractor or proving an entitlement to damages if you are acting for an Employer.
Peter Vinden is a practising Arbitrator, Adjudicator, Mediator and Expert. He is Managing Director of The Vinden Partnership and can be contacted by email at email@example.com. For similar articles please visit www.vinden.co.uk.