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Extensions of Time: Methodology

Here we briefly discuss and explain the extension of time techniques available in making an assessment of any delay that has occurred on a construction project.

Quite naturally the Courts look at the matter of extension of time on a retrospective basis and often a very long time after actual completion is achieved. However such a retrospective perspective is not how it should be viewed. All common standard forms of contract require the matters giving rise to a delay to be notified by the Contractor as soon as they arise and for the Architect or Project Manager or Contract Administrator or Employer (for ease we will use the term ‘CA’ to cover whoever has that duty under the contract) to assess any effect on the completion date and fix a new date, with1 or without2 the facility for subsequent review, as soon as possible after that.

How that is done is generally left to the CA’s discretion but there are two important restraints. Firstly, he is required to carry out that function in a fair and reasonable manner whether the contract specifically says so or not for, just to remind you of a point made before, if he does otherwise the right of the Employer to deduct the pre-ascertained damages for inexcusable delay (LAD’s) could be compromised. Secondly, he has to make some calculation or demonstrate some logical thought process in arriving at his decision for two good reasons. The first is that the Courts have said so3. The second is that justifying his decision in front of a tribunal called upon to decide on a disputed extension of time situation is very difficult without some analytical support.

When making an assessment prospectively, at the time of the event, the CA clearly only has available the facts existing at that moment. If the assessment is delayed until a later date more information is available. The question arises as to whether, where the assessment is incorrectly delayed or is disputed and later reviewed by a tribunal tasked with deciding that issue, that better level of information should be used. The Society of Construction Law suggests not4. The Law Lords5 seem to say that it should6. You would ordinarily expect the Law Lords to win that argument. Also despite what the SCL says some of the techniques we are going to talk about use as-built programme information for the period of delay. If you discounted information available after the delaying event first occurred those methods of analysis would be redundant.

The methods of analysis rely upon a computer based software programme simply because, except in the most straightforward of cases, a proper analysis ‘on paper’ will not be feasible or even possible. It might sound obvious but all computer-based methods of analysis rely upon a robust baseline programme7 reflecting the Contractor’s original intent. That programme must show or have inherent a critical path8 or paths and proper links between activities. Many baseline programmes are simply not up to the job, with missing activities, with insufficient links between activities, with fallacious links that produce bizarre results when the delaying event is impacted, with one bar or activity covering an important series of activities, with one bar extended as if continuing over a period of in fact intermittent activity, and so on. In a dispute (and that is really the context that these are used) these deficiencies become major obstacles in achieving a proper resolution.

There are five recognised forms or methods of analysis, although some are just a variation on the others. Which to choose depends upon critically what level of as-built information is available and how reliable is the base-line programme, but also what is the proportionate amount of effort (and cost) in arriving at an answer, and to an extent since they will often give differing results, the end result desired. Broadly in the order of least expensive to prepare to most expensive and accordingly least to most accurate answer produced they are – as planned versus as-built, impacted as-planned, collapsed as-built, windows analysis and time impact analysis. Because of their relative ease of use ‘as-planned v as-built’ and ‘impacted as-planned’ are probably the most commonly used.

As-planned versus as-built. Here what actually happened is compared to what was planned to happen. This is carried out sequentially from the start at intervals depending upon the frequency of the as-built records. Most likely that will be something like the Contractor’s monthly progress reports. Once a slippage in a critical activity is identified then a reason is found. If caused by one of the listed matters in the contract entitling an extension of time for completion then the Contractor gets his extension, otherwise not. This method starts with a delayed activity and looks for a reason rather that starts with an event and tries to assess its effect. It is one of the more straightforward forms of analysis that tend to be used on relatively straightforward projects. This is very much an after-the-event analysis, rather than used to arrive at a revised completion date prospectively. Its shortcomings in ignoring changes to the baseline programme and in particular to the critical path have lead to other forms of more detailed analysis.

Windows analysis. Here the project duration is divided into appropriate ‘windows’. The period of each of the Contractor’s progress reports as above could be such windows or between such milestones as ‘complete substructure’, ‘weather tight’ and so on. The smaller each window then the more accurate the result, but obviously the more effort (and cost) required in the analysis. The period of the first window is updated using as-built information, whilst the baseline programme from that window to completion is unaltered. The effect on completion is noted. Then the same for the next window, and so on, until completion. Then each window is analysed for the reasons for the delay in that period and the causes and the periods of delay married up.

Impacted as-planned. Here the delaying event is impacted into the baseline programme. This might be for example by introducing a new activity, altering the duration of an existing activity or by altering the earliest start of an activity. If the end date moves then an extension is due. This has the fairly obvious deficiency that it takes no account of actual progress or concurrent delaying causes. It will produce an extension even when the project is already in delay due to the Contractor’s own problems. Accordingly it needs using with care and common sense. It can however be used as a tool for prospective evaluation, unlike the ‘as-planned v as-built’. Because of the rather theoretical result produced we also have a more accurate form of analysis as follows.

Time impact analysis. Here each claimed delaying event is impacted not into the baseline programme but into the base-line programme updated on actual progress to the point in time that the event is said to have effect. The effect on the completion date is noted and an extension given accordingly.

Collapsed as-built. Here we start with an as-built programme of how the project actually proceeded and remove from that in the reverse sequence in which they occurred the events claimed as delaying completion, noting how the completion date moves and thus their effect. This perhaps gives the most accurate result but is expensive in the resources required to carry out the exercise. It also cannot be used prospectively, but only as a retrospective analysis.

Still confused? We are here to help, call us on 01480 426555 to discuss any particular issues you may be encountering on your specific project(s).

1 As JCT 2005 Clause 2.28.5

2 As NEC3 clause 65.2

3 John Barker Construction Ltd v London Portman Hotel Ltd (1996) 83BLR35 in which Mr Recorder Toulson QC held that an architect who had to decide whether to grant an extension of time under clause 25 of the JCT 80 conditions would not have acted fairly and lawfully and his decision would be fundamentally flawed if he had not carried out a logical analysis in a methodical way of the impact of the relevant events on the contractor’s programme and made only an impressionistic, rather than a calculated, assessment.

4 SCL Delay Protocol paragraph 4.19 “ … in deciding entitlement to EOT , the adjudicator, judge or arbitrator should so far as is practicable put him/herself in the position of the CA at the time the Employer Risk Event occurred.”

5 Strictly the Lords of Appeal in Ordinary of the House of Lords of the United Kingdom– from1st October 2009 remodelled as the Supreme Court. This is the final court of appeal for all civil cases in the UK.

6 In their judgement in Golden Strait Corporation v Nippon Yusen Kubishka Kaisha [2007] UKHL 12, by a 3 to 2 majority the Law Lords upheld the decisions of the courts below that damages for repudiation of a contract should be calculated not at the date of the repudiation but at a later date taking account of subsequent events even though (or perhaps because and thus avoiding unjust enrichment) it lead to a substantially reduced level of damages.

7 This can simply be the Contractor’s first programme reflecting his logic to achieve the Completion Date (or earlier – a discussion on the question of the use of ‘float’ is for another day), or required by and formally recognised as a document under the contract e.g. ICE Clause 14 programme, JCT2005 master programme, NEC3– the Accepted Programme.

8 The critical path is a sequence of activities which

– run continuously from commencement to completion

– each activity cannot commence until its predecessor is completed

– accordingly an activity’s earliest and latest start are the same and its earliest finish and latest finish are the same

Any delay to one or more of these critical activities results automatically in a delay to completion – a ‘critical delay’.

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