Parties to projects with time-sensitive schedules may be exposed to claims for damages in the event of delays. Contracting parties thus often dispute over the attribution of delay events. In such circumstances, the method of delay analysis employed may significantly affect the potential liabilities (in some circumstances, counterclaims) of parties alleged to have delayed a project.
The article below explores common methods of delay analysis employed in construction or project claims:
Attribution of Delays
Delay events can be caused by reasons attributable to the contractor or the employer.
Sophisticated projects may also include contractual allocation of risks over categories of delay events which may occur during the course of a project.
Delay analysis methods are employed to determine whether a delay event falls within the scope of responsibilities of the contractor or the employer, or to determine its attribution to either party.
Critical Path Method (CPM)
In delay analyses, it is crucial to first appreciate that not all delays will materially impact a project timeline.
CPM is a scheduling method which seeks to identify the sequence of activities in a project schedule up to its completion. This is known as the critical path. Conventionally, delay events which impact the critical path are those which affect the commencement of a sequence of work or project completion.
The planned schedule is often called ‘as-planned’, whereas the actual progress is called ‘as-built’.
Delay Analysis Techniques
- As-Planned vs As-Built (APAB) – The APAB analysis is a method which compares the originally planned duration of a construction project as against the actual duration of the project. From the differences in the as-planned and the as-built progress, parties can identify any excusable or compensable periods of delays. This method sums up the net delays, but its simplicity allows for the analysis to be manipulated, as it may ignore the individual impact of each delay event on other sequence of events in a project.
- Impacted As-Planned (IAP) – The IAP technique involves assessing the impact of a delay event against the as-planned work schedule. This analysis is usually done in a chronological order, and demonstrates how each event individually impacted the project schedule. The amount of delay is measured in the difference between the completion dates between the project schedules before and after impacts. This method considers whether a delay event is material to the critical path of the project, and identifies whether a delay resulted in the slippage of work progress.
- Window Analysis – This is similar to the approach described earlier under the APAB method, but with a key difference. This method divides the total project duration into specific periods of the project, usually in accordance with project milestones. This method is useful to simplify complicated workflows for the purposes of a delay analysis. Analysis is then undertaken to determine critical path and the actual completion date, which is then compared with the as-planned completion date. Differences in the selected window of time can result in significantly advantageous results for either party in a dispute, and such windows may be subject to manipulation.
- Time Impact Analysis (TIA) – The time impact analysis (TIA) approach is similar to the Window Analysis. TIA however focuses on specific delay events, but not on time periods containing various delaying events. TIA adopts a single baseline to determine the effect of delay events on the planned program of work. The TIA method is the preferred technique for determining the amount of extension of time that a contractor should have been granted at the time a risk event occurred.
- Collapsed As-Built (CAB) – The CAB approach uses the as-built or actual completion schedule as the baseline. The analysis involves removing the delay events of parties from the actual completion schedule. The resultant completion schedule is one which would ideally be achieved, if not for the delays of the parties. Such a method is however at risk of ignoring the prevailing circumstances at the time of the delay, and uses hindsight to justify what parties would have done at the time the risk event occurred.
Understanding the various methods of delay analyses is crucial for the management of claims and disputes arising from delays in a project. Different methods of analyses will be required for specific circumstances, and the varying methods may also result in outcomes which are favourable to a party more than the other.
We strongly encourage employers and contractors to engage with experienced professionals in respect of claims for damages arising from delays in construction and project disputes, given the complex variables in disputes over project delays.
Kindly do not hesitate to get in touch with us if you have any queries as to how this decision may affect you or your organisation.
D&P Law Group is a full-service law firm based in Kuala Lumpur,with a roster of leading lawyers from international firms who have extensive experience in claims and disputes relating to construction and projects. Leveraging from the big law experience of its people, the Firm has established a reputation for delivering confident, capable, and timely solutions for regional businesses, corporations, and executives.