An article we once published in a Newsletter set out the merits of the planning function in construction projects. It encouraged Employers of Contractors, in particular, to take a pro-active approach to planning in terms of interrogating and monitoring a Contractor’s programme. This is because it is becoming increasingly apparent (when a dispute arises) that events/changes which have an effect on the delivery time of a project must be considered at the time that event occurs, and have due regard of the circumstances that prevailed at that time.
All too often Employers are left with a paucity of records and are faced with having to reconstruct the timing of concurrent events and delays leaving themselves exposed to the vagaries of a contractors claim. The benefit of a more proactive and informed approach is to be able to deal with delay events as and when they arise (or as soon as they become apparent) and avoid the lingering uncertainty and indecision that may otherwise permeate through all of the commercial decisions that follow. The presence of an expert in such matters brings benefits of minimising time, cost and uncertainty in dealing with disputes involving delays.
If Employers are using the NEC3 Contract forms then the conditions that are to be followed rely heavily on the Project Manager having an expertise in construction programming and critical path analysis.
In our recent experience a lack of expertise by one or both of the parties in dealing with a time related dispute at the time that the event occurs has been all too evident and has resulted in lingering disputes that then go on to become compounded with subsequent delay events. This has eventually led to both parties becoming embroiled in costly disputes.
The benefits of a pro-active approach are equally meritorious for Contractors and Sub-Contractors alike. But Why and What are the practical applications?
By way of answer to Why?, the following principle considerations are relevant:
- Ability to assess the future effects of known or anticipated events (Prospective analysis)
- Ability to establish the actual effects of delay events and compare same with earlier prospective assessments (Retrospective analysis)
- Creates good discipline in maintaining accurate records and leaves the Employer far more informed of what is happening on its project via interim detailed reports.
- More certainty of causes and extent of critical delays
- Ability to manage prospective delays more effectively, thereby minimising delays to completion.
- Enables earlier determination of extension of time entitlements
- Assists in determining loss and/or expense entitlement
- In the event that a dispute arises, it will be far more cost effective than an entirely retrospective analysis
The principle practical applications are:
- Establishing within the preparation of Contract documents the criteria upon which the Contractor is required to provide its programme and progress reporting.
- Reviewing and commenting upon the Contractor’s submitted programme, ensuring it contains a suitable level of detail and meets the criteria set out by the Contract conditions.
- Monitoring construction progress measured against the Contract Programme on an interim basis
- Assistance with the analysis and assessment of potential critical delays and reaching an early mutual agreement
- Establishing entitlements to extensions of time
- Establishing entitlements to delay damages
- Establishing concurrent delays
- Establishing durations for which prolongation loss and/or expense entitlement exists
- Assisting with the assessment of non-critical activity delay for the assessment of preliminaries thickening (Disruption)
- Assisting with the assessment of disruption loss and/or expense in respect of the contractors resources other than preliminaries
Resolution of the above issues left until construction is almost complete, in our experience, invariably results in considerable resource time and therefore, cost.
In view of the above noted benefits, applications and potential consequences – is inaction in implementing a rigorous planning function, the equivalent of ‘planning to fail’?
This article has stood the test of time and is just as relevant today!
If you would like to discuss (without obligation) any delay and loss and/or expense issues or how to implement planning policy and procedures, please call or complete our contact form.
Mark Brant
Construction Quantum Expert