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The Dynamics of Float, Logic, Resource Allocation, and Delay Timing in
Forensic Schedule Analysis and Construction Delay Claims
By
Long Duy Nguyen
KY SU (Ho Chi Minh City University of Technology, Vietnam) 1999 M.ENG. (Asian Institute of Technology, Thailand) 2003
M.S. (University of California, Berkeley) 2005
A dissertation submitted in partial satisfaction of the
requirements for the degree of
Doctor of Philosophy in
Engineering-Civil and Environmental Engineering
in the
Graduate Division
of the
University of California, Berkeley
Committee in charge:
Professor C. William Ibbs, Chair
Professor Glenn Ballard Professor Frederick Collignon Professor Arpad Horvath
Fall 2007
The dissertation of Long Duy Nguyen is approved:
Chair __________________________________________ Date _________________
__________________________________________ Date _________________
__________________________________________ Date _________________
__________________________________________ Date _________________
University of California, Berkeley
Fall 2007
The Dynamics of Float, Logic, Resource Allocation, and Delay Timing in
Forensic Schedule Analysis and Construction Delay Claims
Copyright 2007
by
Long Duy Nguyen
1
Abstract
The Dynamics of Float, Logic, Resource Allocation, and Delay Timing in
Forensic Schedule Analysis and Construction Delay Claims
By
Long Duy Nguyen
Doctor of Philosophy in Engineering-Civil and Environmental Engineering
University of California, Berkeley
Professor C. William Ibbs, Chair
Delay claims in construction projects present various tough and controversial issues.
How to prove the three elements, namely entitlement, causation, and quantum in the
“triad of proof” is an onerous task. The analyses of schedule delays and their associated
damages especially concern claims analysts, project parties, courts, Boards of Contract
Appeals, and so forth. On the one hand, the industry has employed various forensic
schedule analysis techniques to support delay claims. Paradoxically, schedule-related
factors such as float, logic, and resource allocation are frequently ignored even though
they can affect project completion time and delay responsibility, too. On the other hand,
the current “one-size-fits-all” methods for calculating financial consequences undermine
the relative importance of delayed activities and the fluctuating nature of overhead levels.
The effects of the context of a delay in terms of the timing of the delay and degree of
suspension should be therefore paid attention in quantifying delay damages.
Accordingly, this research develops novel techniques for analyzing causation and
calculating damages in construction delay claims. They address the dynamics of float,
2
logic, resource allocation and the delay context in forensic schedule analysis and delay
claims. Several published and hypothesized case studies are used to illustrate their
applications.
Among other things, this research proposes: (1) an enhanced window analysis
technique considering resource allocation; (2) an activity-specific overhead allocation
process (ASAP) for quantifying field-overhead damages; (3) FLORA as a novel forensic
schedule analysis technique that can capture the dynamics of float, logic, and resource
allocation; and (4) a framework which integrates FLORA and ASAP for analyzing
schedule delays and their field overhead damages in a real-time and interactive manner.
Through the applications, comparisons, and evaluations in case studies, these
developments really overcome various limitations of the available techniques and
practices currently used in forensic scheduling and delay claims.
This research recommends that the schedule-related factors should be captured in
forensic schedule analysis. In addition, the quantification of delay damages should
emphasize the context of a delay. This also enables equitable apportionments when
concurrent delays occur. ASAP and FLORA developed in this research are able to tackle
these issues.
__________________________________________
Professor C. William Ibbs
Dissertation Committee Chair
i
To my Mom and Dad
�guyen Thi �goc Lan and �guyen Van Quy
Kính Tặng Ba Mẹ
�guyễn Văn Quy và �guyễn Thị �gọc Lan
ii
Table of Content
Table of Content ................................................................................................................. ii
List of Figures .................................................................................................................... ix
List of Tables ..................................................................................................................... xi
Acknowledgements ........................................................................................................... xii
Abbreviations ................................................................................................................... xiv
Symbols............................................................................................................................ xvi
Chapter 1 ............................................................................................................................. 1
Introduction ......................................................................................................................... 1
1.1 Background ............................................................................................................... 1
1.2 The Need for Research .............................................................................................. 2
1.3 Problem Statement .................................................................................................... 6
1.4 Research Objectives .................................................................................................. 7
1.5 Scope of Work .......................................................................................................... 8
1.6 The Structure of the Dissertation .............................................................................. 9
Chapter 2 ........................................................................................................................... 11
Literature Review.............................................................................................................. 11
2.1 Scheduling Practices in Delay Claims .................................................................... 11
2.1.1 Types of Schedules .......................................................................................... 12
2.1.2 The Use of the Critical Path Method ............................................................... 13
2.2. Roles of Project Change in Delays and Disruptions .............................................. 14
2.2.1 The Concept of Project Change ....................................................................... 14
iii
2.2.2 The Extent of Project Change .......................................................................... 15
2.3 Delay, Disruption, Acceleration, and Delay Concurrency ..................................... 16
2.3.1 Delay, Disruption, and Acceleration ................................................................ 16
2.3.1.1 Delays ....................................................................................................... 16
2.3.1.2 Delay versus Disruption ............................................................................ 17
2.3.1.3 Delay versus Acceleration ........................................................................ 19
2.3.2 Causes and Costs of Delays ............................................................................. 22
2.3.3 The Types of Delays ........................................................................................ 23
2.3.4 Concurrent Delays ........................................................................................... 25
2.3.4.1 The Concept of Concurrent Delays........................................................... 26
2.3.4.2 Conditions for Occurrence of Concurrency .............................................. 27
2.3.4.3 Apportionment of Concurrent Delays ....................................................... 28
2.4 Float and Criticality in Project Schedules ............................................................... 32
2.4.1 Float ................................................................................................................. 32
2.4.2 Float versus Criticality ..................................................................................... 33
2.4.3 Float Ownership ............................................................................................... 34
2.4.4 Alternatives to Float Distribution and Management ........................................ 35
2.5 Process of Forensic Schedule Analysis................................................................... 37
2.6 Forensic Schedule Analysis Techniques ................................................................. 39
2.6.1 Global Impact Method ..................................................................................... 41
2.6.2 As-Planned vs. As-Built Method ..................................................................... 41
2.6.3 Impacted As-Planned Method.......................................................................... 42
2.6.4 Collapsed As-Built Method ............................................................................. 43
iv
2.6.5 Schedule Window Analysis ............................................................................. 44
2.6.6 Time Impact Analysis ...................................................................................... 45
2.6.7 Other Schedule Analysis Techniques .............................................................. 46
2.6.8 Criticism of Available Schedule Analysis Techniques .................................... 48
2.7 Delay Damages and Commonly Applied Methodologies ...................................... 49
2.7.1 Overview of Delay Damages ........................................................................... 49
2.7.2 Owner’s Delay Damages ................................................................................. 50
2.7.3 Contractor’s Delay Damages ........................................................................... 51
2.7.3.1 Types of Recoverable Damages................................................................ 51
2.7.3.2 Equitable Adjustments .............................................................................. 52
2.7.3.3 Field Overhead Damages .......................................................................... 52
2.7.3.4 Extended HOOH versus Unabsorbed HOOH ........................................... 54
2.7.3.5 Methodologies for Calculating HOOH Damages ..................................... 55
2.8 Summary of the Literature Review ......................................................................... 62
Chapter 3 ........................................................................................................................... 63
Research Methodology ..................................................................................................... 63
3.1 Research Framework .............................................................................................. 63
3.2 Bases, Tools, and Techniques ................................................................................. 66
3.2.1 Current Forensic Schedule Analysis Techniques ............................................ 66
3.2.2 CPM, Linked Bar Charts, and Resource-Constrained Scheduling .................. 67
3.2.3 Scheduling Software Packages ........................................................................ 67
3.2.4 Project Overhead Allocation ............................................................................ 67
3.2.5 Research Evaluation......................................................................................... 70
v
3.3 Data Sources ........................................................................................................... 71
Chapter 4 ........................................................................................................................... 72
Impacts of Resource Allocation on Forensic Schedule Analysis ..................................... 72
4.1 Introduction ............................................................................................................. 72
4.2 Motivating Case ...................................................................................................... 73
4.3 Window Analysis under the Effect of Resource Allocation ................................... 75
4.4 Case Study .............................................................................................................. 78
4.4.1 Case Overview ................................................................................................. 78
4.4.2 Analysis of Delays ........................................................................................... 79
4.5 Discussion ............................................................................................................... 84
4.5.1 Possible Extended Effect of Delays ................................................................. 84
4.5.2 Positive/Negative Effect of Resource Allocation on Delay Responsibility..... 85
4.5.3 Legal Acceptability .......................................................................................... 85
4.5.4 Implications of Applying the Enhanced Window Analysis ............................. 86
Chapter 5 ........................................................................................................................... 89
Delay Damages and Schedule Window Analysis ............................................................. 89
5.1 Introduction ............................................................................................................. 89
5.1.1 Delay Context versus Delay Responsibility .................................................... 90
5.1.2 Field Overhead Damages ................................................................................. 94
5.2 An Integrated Approach .......................................................................................... 95
5.3 Hypothetical Case Study ......................................................................................... 98
5.4 Discussion ............................................................................................................. 104
5.4.1 Estimated FOH versus Actual FOH ............................................................... 104
vi
5.4.2 Degree of Suspension .................................................................................... 104
5.4.3 Apportionment for Concurrent Delays .......................................................... 105
5.4.4 Float Ownership ............................................................................................. 106
5.4.5 Statistical Implications ................................................................................... 107
5.4.6 Difficulties in Using the Proposed Method ................................................... 108
5.5 Summary ............................................................................................................... 109
Chapter 6 ......................................................................................................................... 111
Novel Forensic Schedule Analysis Technique ............................................................... 111
6.1 Introduction ........................................................................................................... 111
6.2 Issues in Forensic Schedule Analysis ................................................................... 113
6.2.1 Float and Float Ownership ............................................................................. 113
6.2.2 Hard Logic vs. Soft Logic .............................................................................. 117
6.2.3 Resource Allocation ....................................................................................... 118
6.2.4 The Dynamics of Float, Logic, and Resource Allocation .............................. 119
6.3 Novel Forensic Schedule Analysis Technique ..................................................... 120
6.4 Case Study ............................................................................................................ 124
6.4.1 Day 2: One-Day Contractor-Caused Delay on Activity A ........................... 125
6.4.2 Day 4: One-Day Owner-Caused Delay on Activity B .................................. 127
6.4.3 Day 5: One-Day Concurrent Delays, Contractor- and Owner-Caused, on
Activities B and C ................................................................................................... 128
6.4.4 Day 6: One-Day Concurrent Delays, Owner- and Contractor-Caused, on
Activities C and D ................................................................................................... 130
6.4.5 Days 7 and 8: Two-Day Third Party-Caused Delay on Activity D .............. 131
vii
6.4.6 Days 10 and 11: Two-Day Owner-Caused Delays on Activities E and G ... 132
6.5 Discussion ............................................................................................................. 134
6.6 Summary ............................................................................................................... 137
Chapter 7 ......................................................................................................................... 139
Integrated Framework of Schedule and Damage Analyses ............................................ 139
7.1 Introduction ........................................................................................................... 139
7.2 Framework Description ........................................................................................ 140
7.3 Case Study ............................................................................................................ 142
7.3.1. Applications of the New Framework to a Case Study .................................. 142
7.3.2 Discussion ...................................................................................................... 145
7.4 Summary ............................................................................................................... 145
Chapter 8 ......................................................................................................................... 146
Conclusions and Recommendations ............................................................................... 146
8.1 Conclusions and Contributions ............................................................................. 146
8.1.1 The Effect of Resource Allocation on Forensic Schedule Analysis .............. 146
8.1.2 The Enhanced Schedule Window Analysis Technique ................................. 147
8.1.3 ASAP as a New Approach for Quantifying Field Overhead Damages ......... 147
8.1.4 FLORA as a Novel Forensic Schedule Analysis Technique ......................... 148
8.1.5 New Integrated Framework for Analyzing Schedule Delays and Damages.. 149
8.2 Recommendations ................................................................................................. 150
8.2.1 Schedule Analysis Considering Resource Allocation.................................... 150
8.2.2 Schedule Analysis Capturing the Dynamics of Float, Logic, and Resource
Allocation ................................................................................................................ 150
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8.2.3 The Context of a Delay Addressed in Calculating Delay Damages .............. 151
8.2.4 Apportionment for Concurrent Delays .......................................................... 151
8.2.5 Applications of ASAP and FLORA in the Industry ...................................... 152
8.3 Limitations and Future Research .......................................................................... 152
References ....................................................................................................................... 155
ix
List of Figures
Figure 1.1 Extended “triad of proof” in delay claims ......................................................... 6
Figure 2.1 Delay versus acceleration ................................................................................ 20
Figure 2.2 Delays: responsibility, liability and recoverability .......................................... 24
Figure 2.3 Delay concurrency scenarios ........................................................................... 27
Figure 2.4 Generic methodology for analyzing delay claims ........................................... 38
Figure 2.5 Mapping of forensic schedule analysis techniques ......................................... 40
Figure 2.6 As-planned vs. as-built method ....................................................................... 42
Figure 2.7 Contractor’s cost breakdown structure ............................................................ 52
Figure 2.8 Application areas of percentage markup versus Eichleay formula ................. 61
Figure 3.1 Research framework ........................................................................................ 64
Figure 3.2 Types of effort and overhead costs .................................................................. 69
Figure 3.3 Contactor’s overhead costs .............................................................................. 70
Figure 4.1. Schedules of the motivating example ............................................................. 74
Figure 4.2. As-planned resource-constrained schedule .................................................... 79
Figure 4.3. Hypothesized as-built schedule ...................................................................... 80
Figure 4.4. Traditional window analysis: window #1....................................................... 81
Figure 4.5. Enhanced window analysis: window #1 ......................................................... 82
Figure 4.6. Traditional window analysis: window #2....................................................... 83
Figure 5.1. The context of delays versus delay responsibility .......................................... 92
Figure 5.2. As-planned schedule ....................................................................................... 99
x
Figure 5.3. As-built schedule .......................................................................................... 100
Figure 5.4. Time plot for time-related field overhead versus week ................................ 103
Figure 5.5. Histogram of per-week time-related field overhead ..................................... 108
Figure 6.1. The dynamics of float, logic, and resource allocation .................................. 115
Figure 6.2. FLORA process flowchart for “real-time” analysis ..................................... 123
Figure 6.3. As-planned schedule ..................................................................................... 124
Figure 6.4. Analyses for the contractor-caused delay on activity A at day 2 ................. 126
Figure 6.5. Analysis for the owner-caused delay on activity B at day 4 ........................ 128
Figure 6.6. Analysis for concurrent delays on B and C at day 5 .................................... 129
Figure 6.7. Analysis for concurrent delays on C and D at day 6 .................................... 130
Figure 6.8. Analysis for the third party-caused delay on D at days 7 and 8 ................... 131
Figure 6.9. Analyses for the owner-caused delays on E and G at days 10 and 11 ......... 132
Figure 7.1. Integrated framework for schedule and damages analyses .......................... 141
xi
List of Tables
Table 2.1 Divergent and inconsistent perspectives on concurrent delays ........................ 29
Table 2.2 Comparative results of schedule analysis methods........................................... 48
Table 2.3 Formulas for calculating home office overhead ............................................... 56
Table 2.4 Allowed markup for home office overhead ...................................................... 59
Table 3.1 Criteria for evaluating forensic schedule analysis techniques .......................... 70
Table 4.1. Step-by-step schedule window analysis .......................................................... 76
Table 4.2. Schedule analysis summary ............................................................................. 84
Table 5.1. ASAP’s steps for quantifying field overhead damages ................................... 97
Table 5.2. Project cost estimate (in dollars) ...................................................................... 99
Table 5.3. Distributed activity-specific field overhead (in dollars) ................................ 102
Table 5.4. Field overhead delay damages (in dollars) .................................................... 103
Table 6.1. FLORA’s rules for time impact analysis ....................................................... 121
Table 6.2. Delay events and their secondary effects ....................................................... 125
Table 6.3. Summary of forensic schedule analysis ......................................................... 134
Table 7.1. Activity-specific allocation of field overhead (in dollars) ............................. 143
Table 7.2. Field overhead delay damages (in dollars) under different methods ............. 144
xii
Acknowledgements
I would like to thank many people for helping me during my graduate study and doctoral
research at Cal. I would particularly like to thank my research advisor, Professor William
Ibbs, for his invaluable guidance. He has advised me to research practical and interesting
areas. He also took a lead in securing my graduate assistantship in the last few years. I
am truly appreciative for the constructive comments of the other dissertation committee
members, Professors Glenn Ballard, Frederick Collignon, and Arpad Horvath. I would
also like to thank Professors Sara Beckman and Iris Tommelein for their exceptional
critiques and suggestions before and during my qualifying exam.
I extend many thanks to my sponsor, officers, friends, and colleagues. I owe a
special note of gratitude to VEF for financially supporting me in the first two years in the
United States. I would like to express appreciation to E&PM students at Cal for our
valuable discussion and interaction. Among them, I especially thank Kofi Inkabi, Martin
Chandrawinata, Sebastien Humbert, Tai-Lin Huang, Ying-Yi Chih, and Zofia
Rybkowski. I am very grateful for the generous support of the CEE Department staff,
especially Ms. Shelley Okimoto. I would also like to thank my Vietnamese seniors and
friends in Berkeley and the United States I have had opportunities to chat, play, and share
with my personal and professional hobbies, feelings, failures, and successes.
I would like to express my thanks to my former professors, teachers, and friends,
especially Professor Stephen Ogunlana, Do Thi Xuan Lan, Luu Truong Van, and Nguyen
Thi Dung. They continually stimulate my self-confidence even when I left them. I
xiii
would like to thank Dung for her lovely patience and sharing for many ups and downs of
our love over the past seven years. Though I do not have her anymore, I hope she is
always happy.
Finally, I would like to thank my family. I am especially grateful to my parents
for their eternal sacrifice. I always miss and love you, Mom. Even you no longer live in
this world to see your son growing up, I wish you and Anh Quyen are happy in the
heaven. We never forget your smiles, Anh Quyen. Special thanks to Anh Quang for his
endless support to our home and family. I wish you all have happy and wonderful lives.
xiv
Abbreviations
AACEI : The Association for the Advancement of Cost Engineering
ASAP : Activity-specific overhead allocation process
ASBCA : The Armed Services Board of Contract Appeals
BCA : Board of Contract Appeals
CDM : Continuous delay measurement
CPAT : Contemporaneous period analysis technique
CPM : Critical path method
C/SCSC : Cost/Schedule Control Systems Criteria
DDV : Daily delay values
DOD : The U.S Department of Defense
DOT : The Departments of Transportation
EBCA : The Department of Energy Board of Contract Appeals
EFC : Early finish cost
ENG BCA : The Army Corps of Engineers Board of Contract Appeals
EVA : Earned Value Analysis
EVMS : The earned value management system
FLORA : A new forensic schedule analysis technique
FOH : Field office overhead
FS : Finish-Start
G&A : General and administrative expense
xv
GSBCA : The General Services Board of Contract Appeals
HOOH : Home office overhead
IDT : Isolated delay type
JLARC : The Joint Legislative Audit and Review Commission
LFC : Late finish cost
LOE : Level of effort
NCHRP : National Cooperative Highway Research Program
P3 : Primavera Project Planner
SS : Start-Start
TIA : Time impact analysis
TRB : Transportation Research Board
VABCA : The Veterans Affairs Board of Contract Appeals
xvi
Symbols
ATF : Allowable total float
Ba : Total billings for actual contract period
Bc : Contract billings
Be : Contract billings for extended period
Bo : Total billings for original contract period
CD : Cost driver value for the whole contract
CDi : Cost driver value for activity i
Di : Duration of activity i
Da : Actual days of contract performance
De : Days of owner-caused delay
Do : Original days of contract performance
DDj : The delay day(s) for the jth analysis
DP : Delay period identified by a window analysis
(DP)Wj : Delay period of window Wj
∆TF : Difference in total float that an activity has after and before the
occurrence of the corresponding event and analysis
FOH : Field overhead
FOHn : Non-time-related field overhead
FOHni : Non-time-related field overhead for activity i
FOHt : Time-related field overhead
xvii
FOHti : Time-related field overhead for activity i
FOHC : Total compensable field overhead damages
(FOHC)Wj : Compensable field overhead damages in window Wj
HOOH : Home office overhead
i : ith activity or activity i
iD : Critically delayed activity i
iDo : Owner-caused critically delayed activity i
La : Total labor costs: actual period
Ld : Labor costs: delay period
Ma : Actual HOOH: entire period (%)
Me : Actual HOOH: delay period (%)
Mn : Normal HOOH (%)
Mp : Planned HOOH and profits at time of bid
OH : Overhead
Oa : Total overhead during actual contract period
Oc : Overhead allocable to contract
Oo : Total overhead during original contract period
PDD : The number of days that the party delays on the affected activity path
Rd : Daily overhead allocable to contract
RDD : The number of delayed days that a party is held responsible
TDD : The total delayed days of the entire project
TF : Total float
TFC : Contractor’s total float
xviii
TFO : Owner’s total float
uFOHni : Non-time-related field overhead for activity i per time unit
uFOHti : Time-related field overhead for activity i per time unit
uFOHtiD : Time-related field overhead for critically delayed activity i per time unit
uFOHtiDo : Time-related field overhead for owner-caused critically delayed activity i
per time unit
Vo : Original contract value
Wj : jth window period or window j
1
Chapter 1
Introduction
“Time is of the essence.1”
1.1 Background
Project schedules are invariably dynamic and uncertain. Various controllable and
uncontrollable factors can adversely affect the project schedule and cause delays. These
delays undoubtedly create negative impacts on project performance. They are also the
major cause of construction claims2 (Hester et al., 1991; Abdul-Rahman et al., 2006).
Together with the money associated with increased costs and expenses for delays on a
project, delay claims are possibly the most problematic type of construction dispute case
to handle (Hughes, 2003a). As a result, forensic schedule analysis3 or the identification
and analysis of delays become essential (Finke, 1999). They are however onerous tasks.
Contractors are prone to view most delays as the responsibility of the owner while
owners frequently attempt to tag delays as contractor-caused, third party-caused or
concurrent (Zack, 2001). Consequently, delays may lead to some form of dispute
resolution alternatives, from negotiation to litigation, which may be expensive and a
1 A proverbial expression 2 Claims in this context are defined as the seeking of consideration or change, or both, by one of the parties to a contract based upon an implied or expressed contract provision (Diekmann and Nelson, 1985). 3 “Forensic scheduling analysis refers to the study and investigation of events using CPM or other recognized schedule calculation methods for potential use in a legal proceeding” (AACEI, 2007).
2
crapshoot. There is a recent increase in both the number and size of construction claims
(Schone, 1985; Pinnell, 1998).
In addition to evaluating and apportioning responsibility for schedule delays, the
quantification of the damages caused by delays is also an extremely challenging job.
Most professionals agree that measuring and demonstrating evidence on the damages are
the most arduous part of many delay claims and construction cases (Overcash and Harris,
2005). All parties more consider the cost of delay and impact, are more sophisticated in
their scheduling techniques and tools, have tighter budgets that cannot afford delay or
impact, and are more contentious (Pinnell, 1992). As such, more appropriate approaches
for the analysis and determination of schedule delays and associated financial
consequences are imperative in today’s “claims-oriented” construction business.
1.2 The #eed for Research
The fact that the construction industry is unable to properly address scheduling and delay
problems has led to a “chronically sick building industry” (Sweet and Schneier, 2004). In
addition, “most public and private construction contract disputes touch on the issue of
delay” (Calkins, 2006). Responding to such a challenge, practitioners and researchers
have created and employed many schedule analysis techniques. The level of
acceptability of each technique depends on its credibility and the court or board ruling the
corresponding delay claims. However, schedule-related issues such as float, float
ownership, soft logic, and resource allocation can cause delays yet their effects are
typically neglected in those techniques. For instance although a number of studies have
3
focused on scheduling with resource allocation (e.g., Wiest, 1967; Davis, 1974; Willis,
1985; Fondahl, 1991; Bowers, 1995; Hegazy, 1999; Kim and de la Garza, 2003; 2005;
Chua and Shen, 2005), none of them addressed resource allocation in forensic
scheduling. Recent studies have tried to consider float ownership in delay analysis but
they only deal with this issue or provide unrealistic alternatives. No research holistically
captures the dynamics of float, logic, and resource allocation in forensic schedule
analysis.
Analysis of delays is more complicated if concurrent delays occur. There are two major
problems encountered in scrutinizing delay concurrency4. They include (i) how to
properly separate competing causes of delay and (ii) how to equitably apportion damages
incurred by concurrent delays between the parties. Though success varies, researchers
have tried to tackle the first problem (i.e., Kraiem and Diekmann, 1987; Arditi and
Robinson, 1995; Reynolds and Revay, 2001; Kim et al., 2005). There has been little
research on the second problem.
The context of a delay in terms of the timing of delay and degree of suspension
potentially affects delay responsibility. This dissertation defines degree of suspension as
the proportion of work under a contract that is delayed, suspended, or interrupted in a
certain period of time; i.e. partial or total suspension. Project expenses, both direct and
indirect costs, change over time. The argument therefore concerns whether it is the level
of overheads during the extended period that should be paid or whether it should be the
4 Delay concurrency is when two or more events are concurrent in their causation of the project delay.
4
level of overheads at the time of the delaying event (Scott and Harris, 2004). This
implies that the time a delay arises matters in apportioning delays and damages. In
addition, damages caused by concurrent delays on different critical activities may not be
the same. For instance, if two critical activities, “roofing” and “landscaping,” are
simultaneously delayed by the contractor and the owner, respectively, it is difficult to
accept that their effects on the project costs are similar. These issues have not been
considered properly in the current practice.
Although courts, boards, practitioners, and researchers have various perspectives on the
determination of monetary damages, project parties normally bear their own costs when
concurrent delays exist. That is, the industry tends to follow the doctrine of contributory
negligence and is simply loath to accept the doctrine of comparative negligence in
solving consequences of concurrent delays. In view of the modern tendency toward
comparative negligence, the grounds for such continued acceptance of contributory
negligence are rather perplexing (Hughes and Ulwelling, 1992). Some courts (i.e.,
William F. Klingensmith, Inc. v. United States, 1984; cited in Kutil and Ness, 1997) have
required the contractor, as the party claiming delay damages, to provide a logical
rationale for apportioning the effects of the concurrent delays between the owner and the
contractor. A systemic approach that supports comparative negligence analysis in
concurrent delay scenarios is necessary. This research aims at developing such an
approach.
5
Figure 1.1 illustrates the extended “triad of proof” in delay claims, including entitlement,
causation, and resultant damages (quantum5). Like proving who is responsible for a
delay (causation), the process of proving the amount of damages is challenging. The
quantum is controversial and a major source of construction disputes. The fact that
project delay should continue to create controversy is “strong evidence that there is a
flaw in the concept of quantifying the damages to the contractor regarding its capacity
utilization disrupted by delay of work” (Kenyon, 1996). Zack (2001) claimed that there is
no standard accepted method of calculating home office overhead (HOOH) incurred by
delays. The author added that “most contractors want to use formulas to calculate their
damage. Most owners, on the other hand, want to see ‘real damage’ based on some sort
of audit – ‘prove that your overhead increased as a result of my delay!’” Unfortunately,
the process of measuring the actual costs of construction delays is a mess (Overcash and
Harris, 2005).
The National Cooperative Highway Research Program (NCHRP, 2003) in the
Transportation Research Board (TRB) of the National Academies revealed that one of the
more controversial issues influencing the development of transportation infrastructure
projects is that of delay claims. The above issues should inspire more extensive research
in quantifying monetary consequences in delay claims.
5 The amount of compensation in delay claims
6
Figure 1.1 Extended “triad of proof” in delay claims
1.3 Problem Statement
The industry has employed various schedule delay analysis techniques to support delay
claims. Paradoxically, schedule-related factors are frequently ignored even though they
can affect project completion time, too. A part of this dissertation addresses the
dynamics of float, logic, and resource allocation in forensic schedule analysis. That is,
these factors and others such as acceleration, pacing delays6, concurrent delays, and real-
time analysis are captured in forensic scheduling analysis.
6 Pacing delays relieve the owner (contractor) of some of delay damages it otherwise may have owed to the contractor (owner) since they can cause concurrent delays and/or float consumption (Zack, 2000).
7
Entitlement, causation, and resultant damages are the three elements in the “triad of
proof” in delays claims (Figure 1.1). Parties find it difficult to agree on issues related to
causation and resultant damages of schedule delay. The logic measure of damages on
construction contracts is frequently more complicated to approach than entitlement
(Overcash and Harris, 2005). In addition, the existing techniques seem to neglect or at
least underestimate the effect of the context of a delay on delay responsibility. The new
method for quantifying delay damages approaches this issue. Though the Eichleay
formula7 and similar methods of calculating HOOH remain a controversial issue for the
project parties, the courts, and the Boards of Contract Appeals (BCAs) (Love, 2000),
HOOH may less depend on the context of a delay which is project- and activity-specific.
Field office overhead (FOH) however is significantly time-varying thus its damages can
be impacted by the delay context. This research attempts to explore this impact.
1.4 Research Objectives
This research proposes to improve the methodologies for analyzing schedule delays and
quantifying associated damages in construction delay claims. The specific objectives of
this research are:
1. To identify the effect of resource allocation on forensic schedule analysis and to
enhance the window analysis technique by embedding necessary steps that deal
with the practice of resource allocation in its analyses;
7 This formula was drawn in a case – Eichleay Corp., ASBCA No.5183, 60-2 BCA ¶ 2688 (1960) – held by the Armed Services Board of Contract Appeals (ASBCA).
8
2. To propose a new approach for quantifying and apportioning delay damages
under the impacts of the context of a delay in terms of the timing of delay and the
degree of suspension during the course of a project;
3. To develop a new forensic schedule analysis technique that addresses the
dynamics of float, logic, and resource allocation;
4. To propose an integrated framework for analyzing delays and damages in delay
claims under the dynamic impacts of float, logic and resource allocation and the
context of a delay; and
5. To evaluate the proposed approaches compared to the current forensic schedule
analysis techniques and damages-quantification methodologies using hypothetical
and available published case studies. This objective is achieved by evaluation of
the individual proposed approaches.
1.5 Scope of Work
Schedule delays and delay claims occur in a variety of industries such as defense,
construction, and software engineering. This research concentrates on delay claims in the
construction industry. In addition, only delay claims between contractors and owners are
in the scope of this research. As the research objectives suggested, this dissertation only
addresses two elements, namely causation and resultant damages of the “triad of proof”
in delay claims (Figure 1.1). In the “causation” element, forensic schedule analysis is
focused to improve its credibility. In the “resultant damages” element, problems in
quantifying FOH damages are solved since they potentially depend on the schedule-
related factors. Finally, this research primarily considers forensic schedule analysis for
9
construction projects employing the critical path method (CPM) scheduling. CPM is the
most dominant application in project scheduling and forensic scheduling for other
scheduling techniques (i.e., line of balance) can be quite different.
1.6 The Structure of the Dissertation
This dissertation contains eight chapters. The first three chapters present the background,
literature, and methodology of the research. The next four chapters demonstrate how the
research objectives are achieved and present findings. The last chapter summarizes
major research findings, discusses research limitations, and recommends future research.
The detail of the dissertation structure is as follows:
Chapter 1 is Introduction. It presents the background, the need for research, the problems,
objectives, and scope of this research and dissertation.
Chapter 2 reviews literature related to this current research. They include schedule
delays, forensic schedule analysis, the calculation of delay damages, and so forth.
Chapter 3 formulates research methodology which is research framework, bases, tools,
and techniques for which this research stands, and data sources used for this research.
Chapter 4 presents the initial investigation of the impacts of resource allocation on
forensic schedule analysis. An enhanced schedule window analysis is also proposed in
this chapter.
10
Chapter 5 proposes an activity-specific overhead allocation process called ASAP for
quantifying field overhead damages when a delay occurs.
Chapter 6 develops a novel forensic schedule analysis technique called FLORA that
captures the dynamics of float, logic, and resource allocation (FLORA) in its analysis.
Chapter 7 integrates ASAP and FLORA to form a new framework for analyzing schedule
delays and their financial consequences in delay claims.
Chapter 8 discusses conclusions and recommendations drawn from this research.
11
Chapter 2
Literature Review
This chapter presents literature relevant to the research. The aim is to describe current
paradigms and reveal unsolved issues that motivate this research. The major topics
include:
a. Scheduling practices in delay claims;
b. Roles of project change in delays and disruptions;
c. Concepts of delay, disruption, acceleration, and delay concurrency;
d. The state-of-the-practice management of float and criticality in CPM project
schedules;
e. Process of forensic schedule analysis in delay claims;
f. Forensic schedule delay analysis techniques used in delay claims; and
g. Delay damages and methodologies for quantifying them.
2.1 Scheduling Practices in Delay Claims
Project scheduling is a very broad topic. An understanding of scheduling concepts and
acquaintance with tools and techniques for analyzing and explaining scheduling problems
and their cost impact is helpful in any kind of construction schedule dispute (Pinnell,
1992). The interface between scheduling and delays creates the conditions for all delay
claims (Wigal, 1990). Extensive review of project scheduling concepts and techniques is
beyond the scope of the present research. This section therefore focuses only on
12
pertinent scheduling issues that are normally and currently used in forensic schedule
analysis and construction delay claims.
2.1.1 Types of Schedules
Project schedules are an effective means for planning, monitoring, and controlling project
time performance. There are various types of schedules. In the project time management
perspective, schedules are classified as master schedules, detailed schedules, and so forth.
In the delay claims context, Finke (1999) categorizes project schedules into three major
types as follows:
a. As-Planned Schedule: defines a contractor’s original plan for performing the
entire scope of work at the onset of a project. It shows how and when the work
would have been undertaken had there been no changes or delays.
b. As-Built Schedule: defines how a contractor actually performed the work. It
embraces the impacts or effects of all changes and delays that occurred during the
course of the project.
c. Entitlement Schedule: illustrates when the project would have been completed
had certain types of delays not occurred. Entitlement schedules can be either
extended or impacted as-planned schedules (e.g., the as-planned schedule with
certain types of delays added) or but-for or collapsed as-built schedules (e.g. the
as-built schedule with certain types of delays removed). A schedule analysis will
eventually compare an entitlement schedule to the pertinent baseline schedule
(some version of either the as-planned or as-built schedule) to find out the extent
of delay and apportion delay responsibility.
13
2.1.2 The Use of the Critical Path Method
The critical path method (CPM) is a technique for scheduling a project. It produces
valuable information about the project such as the shortest duration, the critical path(s),
and the float (Kim and de la Garza, 2003). The application of CPM has been more
widespread with the aids of scheduling software such as Microsoft Project, Primavera
Project Planner, and SureTrak. CPM scheduling has obtained prominence in the
construction industry as the method for scheduling projects of all sizes (McCullough,
1999). Also, the U.S. government has required CPM for major projects since the mid-
1960s. The California Department of Transportation has required its construction
contractors to use CPM for progress schedules since 1992 (Rouen and Mitchell, 2005).
Extensive introduction to CPM can be found in any project management-related text.
In the construction claims world, CPM is the best available option for schedule delay
analysis. Owners increasingly require CPM schedule impact analysis on change orders
and time extension to provide evidence that the contractor is entitled to an extension of
time and corresponding cost impact (McCullough, 1999). Contractors should also
consider the relationship between their cost elements and the activities in their CPM
schedules since this can be crucial, especially for evaluating the impact of delays on the
work (Overcash and Harris, 2005). Boards and courts have also recognized the
importance of CPM to assess the impact of delays and disruptions (Wickwire and
Ockman, 1999). The Department of Energy Board of Contract Appeals (EBCA) in Lamb
Engineering and Construction Company (1997) noted that bar charts can provide an
understandable illustration of main project tasks, but they do not provide the best
14
mechanism for analyzing delays on sizable projects, without additional supports such as
models or expert testimony. However, the use of CPM schedule analysis in resolving
delay claims has raised various issues (Wickwire and Smith, 1974; Wickwire et al., 1989;
Wickwire and Ockman, 1999):
a. Which project party owns extra time or float?
b. When and how should delay be analyzed and measured?
c. How is the need to award time extensions on a real-time basis (update-to-update)
settled with the need to know and prove those delays that in fact delayed
completion of the project?
d. What role do resources play in assessing and granting time extension requests and
determining owner-caused delay?
e. Who owns the additional float generated by delays to other tasks?
f. What is the importance of approval by the owner of the project schedule?
g. How and when can a contractor recover for the incapability to finish the project
early?
2.2. Roles of Project Change in Delays and Disruptions
2.2.1 The Concept of Project Change
Change is normally defined as any event that results in a modification of the original
scope, execution time, cost and/or quality of work (Ibbs and Allen, 1995; Revay, 2003).
There are generally five types of changes: change in scope; differing site conditions;
delays; suspensions; and acceleration. The types of changes have been discussed by
researchers such as Orczyk (2002).
15
Change may not only directly add to, subtract from, or change the type of work being
performed in a particular area but also affect other areas of the work for which the change
order has not accounted (Jones, 2001). The Armed Services Board of Contract Appeals
(ASBCA) once stated that the costs of performing changed work consist of both (i) those
costs directly related to the accomplishment of the changed work and (ii) those costs
arising from the interaction between the changed work and unchanged work (Triple “A”
South). This was also used by the other Boards of Contract Appeals such as the Veterans
Affairs Board of Contract Appeals (VABCA) in Coates Industrial Piping (Coates
Industrial Piping, Inc., 1999).
2.2.2 The Extent of Project Change
The degree of project change is frequently significant. An overall additive change rate
for 22 federally funded and administered projects during the 1979-1983 period was six
percent on the dollar due to design errors, owner initiated changes, differing site
conditions, etc. (Diekmann and Nelson, 1985). Among 24 construction projects in
Western Canada, project costs increased by at least 30 percent and 60 percent for more
than half and a third of projects, respectively (Semple et al., 1994). Several projects
suffered delays over 100 percent. A study of the Joint Legislative Audit and Review
Commission (JLARC, 2001) on approximately 300 road construction projects in Virginia
revealed that average project change in dollars was more than 11 percent.
The amount and timing of change are also significant factors affecting productivity.
From 90 construction disputes in 57 independent projects, Leonard (1987) demonstrates a
16
significant correlation between percentage of change order hours to contract hours and
percentage of lost productivity. Ibbs (1997 and 2005) found that: (i) the greater the
amount of change, the less the efficiency; and (ii) late project change more adversely
affects labor productivity than early change. This finding was also confirmed by later
studies (e.g., Hanna et al., 1999).
2.3 Delay, Disruption, Acceleration, and Delay Concurrency
This section reviews the literature on key issues related to delays in construction projects,
namely delay, disruption, and acceleration, differences between delays and disruptions,
causes and types of delays, and delay concurrency..
2.3.1 Delay, Disruption, and Acceleration
Delay, disruption, and acceleration are components of changed work that are difficult to
pin down (Rishe, 1973). Although this research focuses on delay-related issues, clear
differentiations among these three concepts in the contractual context are therefore
necessary.
2.3.1.1 Delays
The Oxford Advanced Learner’s Dictionary (Oxford, 2007) defines a delay as “a period
of time when somebody or something has to wait because of a problem that makes
something slow or late, as a situation in which something does not happen when it
should, and as the act of delaying.” Four definitions are found for the term delay in the
Merriam-Webster Online Dictionary (Merriam-Webster, 2007). They are: (i) the act of
17
delaying, (ii) the state of being delayed; (iii) an instance of being delayed; and (iv) the
time during which something is delayed.
In the project management context, a delay is about the time during which the project
cannot proceed as scheduled (Lovejoy, 2004). It is defined as an effect to the completion
date of the project or effect to the project’s critical path(s) (Zack, 2000). It is an act or
event that extends the time necessary to finish activities under a contract (Stumpf, 2000).
In the legal sense of the term, “delay” can involve several different circumstances that
present different legal claims and defenses (Hughes, 2003a). Unless otherwise stated
differently, the term delay in this dissertation means a cause that extends the duration of
contract work.
2.3.1.2 Delay versus Disruption
Delays and disruptions and their corresponding claims, namely delay claims and
disruptions claims, are different concepts. Disruption is “the act of rending asunder, or
the state of being rent asunder or broken in pieces” (Answers, 2007). In terms of
contract claims, disruption is an activity-specific loss of productivity caused by changes
in the working conditions under which that activity was carried out (Fink, 2000). Gavin
(2001) stated that delay damages are caused only by delays to overall project completion;
disruption damages are caused by changes in working conditions that can occur
regardless of whether the project end date changes.
18
In Coastal Dry Dock & Repair Corporation, disruption is noted as the “cost effect upon,
or the increased cost of performing, the unchanged work due to a change in contract”
(Coastal Dry Dock & Repair Corporation, 1990). In some studies (Thomas and
Napolitan, 1995; Thomas and Raynar, 1997), disruptions are defined as the occurrence of
events that are acknowledged to negatively impact labor productivity. More broadly, a
Recommended Practice standard (AACEI, 2004) defines “disruptions as an action or
event which hinders a party from proceeding with the work or some portion of the work
as planned or as scheduled.”
Disruptions can be caused by project change. They can reduce labor productivity and
extend the project duration (Hanna et al., 2002). Change-caused disruptions can be both
foreseeable and unforeseeable. The foreseeable or local disruptions can occur at the same
time and either the same place or within the same resource as the changed work while
unforeseeable or cumulative disruptions can also occur at a time or place, or within
resources, different from changed work (Finke, 1998). The words “cumulative
disruption” and “cumulative impact” can be used interchangeably. The Veterans Affairs
Board of Contract Appeals recently described cumulative impact as “the unforeseeable
disruption of productivity resulting from the ‘synergistic’ effect of an undifferentiated
group of changes. Cumulative impact is referred to as the ‘ripple effect’ of changes on
unchanged work that causes a decrease in productivity and is not analyzed in terms of
spatial or temporal relationships” (Centex Bateson Construction Company, 1998). Jones
(2001) argues that when the Board states that cumulative impact cannot be analyzed in
19
terms of spatial or temporal relationships, it means that cumulative impact costs cannot
be secured in individual contract changes.
Pricing of the direct impact due to local disruptions and cumulative impacts due to
cumulative disruptions is different. The direct impact costs are prepared on a forward
pricing basis. The cumulative impact costs, on the other hand, are more often priced on a
backward-pricing basis since a contractor cannot foresee or readily quantify the impact, if
can foresee,. In other words, a cumulative impact claim addresses the changed work’s
effect on working conditions that influence the unchanged work while a direct impact
claim covers the impact of changed work on unchanged work (Jones, 2001).
2.3.1.3 Delay versus Acceleration
Schedule delay and acceleration are contrary concepts but can co-exist (Figure 2.1).
They often have a cause and effect relationship. For instance, acceleration of the
remaining work of a project is typically ordered to compensate for the delays that
occurred in the completed work of the project (Arditi and Patel, 1989). Schedule
acceleration is defined as having more work to carry out in the same period of time or
having a shorter period of time to carry out the same amount of work (Thomas, 2000).
The contractor normally has to add additional efforts (money, manpower, equipment, and
materials), either through overtime or additional shifts (Evans, 2004). Extra costs
associated with acceleration efforts are qualitatively different from delay damages (Kutil
and Martin, 1995).
20
Schedule acceleration generally incurs additional costs. The party responsible for the
cost of the acceleration is the party responsible for the underlying delay and/or the party
deciding to accelerate (Evans, 2004). The cost includes overtime, additional labor,
stacking of trades, loss of labor efficiency, additional equipment, additional supervision,
increased material delivery, and increased overhead costs (Livengood and Bryant, 2004).
Among others, the financial consequences to the contractor relative to labor productivity
are rather severe, with losses of labor efficiency easily within the range of 20 to 45%
(Thomas, 2000).
Figure 2.1 Delay versus acceleration
There are three types of acceleration: directed; constructive; and voluntary. A detailed
discussion of each type can be found elsewhere (e.g., Jensen et al., 1997). Directed
acceleration occurs when a contractor (or a subcontractor) is required by an owner (or a
contractor) to perform the initial scope of work in a shorter amount of time than
originally planned (Evans, 2004). As its name implies, voluntary acceleration occurs
when a contractor unilaterally chooses to accelerate the work (Evans, 2004). Thus, no
monetary compensation is granted to the contractor for voluntary acceleration.
ID Task Name Duration
1 As-planned duration 7 wks
2 As-projected duration 12 wks
3 As-built duration 10 wks
-1 1 2 3 4 5 6 7 8 9 10 11 12
Projected Delay
Acceleration
21
Constructive acceleration is the most complicated one among the three. It occurs when a
contractor experiences an excusable delay, but the owner requires performance in
accordance with the contract schedule (Keco Industries, Inc., 1963). Constructive
acceleration is considered a constructive change within the scope of the Changes clause
(Rishe, 1973). The parties use the contract documents to specify whether a proper claim
for constructive acceleration can be made in the face of an inexcusable delay by
clarifying which delays gets accelerated first, the inexcusable delay, the excusable delay,
or a combination of both (Peters, 2004).
One of the critical elements necessary to establish a claim for constructive acceleration is
a showing that the owner or owner’s representatives actually did something in order to
promote the acceleration (Bateson Construction Company, 1960). An owner’s order to
accelerate can be apparent in several forms: (i) direct orders; (ii) requests to accelerate;
(iii) threats to terminate for default; (iv) pressure to complete on schedule; (v) refusal to
grant time extensions plus liquidated damages; (vi) delays in granting extensions; and
(vii) denial of a request for time extension (Cibinic and Nash, 1995).
The Board of Contract Appeals once crafted the five-element test required to institute a
claim for constructive acceleration in Fermont Division, Dynamics Corporation of
America (1978). Wray (2000) summarizes these five elements as follows:
a. An excusable delay must exist;
b. Timely notice of the delay and a proper request for a time extension must have
been given;
22
c. The time extension must have been postponed or refused;
d. The owner must have ordered (either by coercion, direction or some other
manner) the project completed within its original performance period; and
e. The contractor must actually accelerate its performance, thereby incurring excess
costs.
2.3.2 Causes and Costs of Delays
There are various factors affecting schedule delays. Delays typically occur when
problems inherent in the actual construction are encountered and have a negative impact
on the project schedule (Wigal, 1990). Assaf et al. (1995) identified 56 causes of delays
from previous studies. Majid and McCaffer (1998) summarized 12 major causes of
inexcusable delays and 25 factors contributing to them. Generally, the cause of a delay
can be attributed either to (i) a specific party, (ii) a combination of parties, or (iii)
unforeseeable and unalterable circumstances (Lovejoy, 2004).
Costs of delays are also severe. When a project suffers a critical delay while substantial
work is in progress, construction job site support costs such as trailers, supervision costs,
maintenance, utilities, equipment and plants will continue to accumulate unless it is
practical to mobilize these resources to another job site (Love, 2000). Similarly,
manufacturing resources idled by delay can cause continuing unforeseen costs (Love,
2000). Koehn et al. (1978) investigated the percentage of construction cost spent for
delays by all consultants appearing on “The ENR 500” Consultants Compilation due to
governmental regulations. This study indicated that 30.3% of the overall yearly
23
construction cost of projects in which “The ENR 500” consultants are involved is spent
for construction delays. In addition, the associated schedule delay due to governmental
regulations was 29.9 months (Koehn et al., 1978).
2.3.3 The Types of Delays
Schedule delays are classified in several ways. The classification can be based on origin,
compensability, and timing of these delays (Kartam, 1999). However, these
classifications are interrelated as shown in Figure 2.2. In terms of responsibility, delays
can be owner caused, contractor caused, or third party caused delays. As their names
suggest, an owner-caused (contractor-caused) delay is within the control of, is the fault
of, or is due to the negligence of the owner (contractor) (Sweet and Schneier, 2004). The
third party caused delay is attributable to neither the owner nor contractor (Kraiem and
Diekmann, 1987).
Liability for a certain delay is normally stipulated by contractual terms. In general,
compensable, inexcusable and excusable delays are corresponding to owner-, contractor-,
and third party-caused delays, respectively (Figure 2.2). However, there are some
exceptions imposed by contract clauses; e.g. “no-damage-for-delay” clauses. This leads
to the fact that several excusable delays may be caused by the owner (Bartholomew,
1987). Also, some inexcusable delays may be not attributable to the contractor.
Bartholomew (1987) claims that the event may have been unforeseen, or due to no fault
or negligence of the contractor, will not necessarily qualify an excusable delay. Figure
2.2 presents these exceptions as dotted lines.
24
Figure 2.2 Delays: responsibility, liability and recoverability
Inexcusable delays are typically within the control of the contractor, its subcontractors, or
suppliers (Stumpf, 2000; Zack, 2000). The contractor (i) is not entitled to receive any
time extension, and (ii) can be liable for delay damages to its owner. The owner’s delay
damages are calculated by either contractual terms (e.g., liquidated damages) or actual
delay damages incurred (Figure 2.2). The underlying concept of inexcusable delays is
that a party to a contract should not benefit from its own fault or negligence, nor should it
be free from liability when mistakes are caused by some party for which it is liable (Zack,
2000). Late mobilization, late equipment deliveries, or insufficient manpower are
examples of inexcusable delays (Stumpf, 2000).
Excusable delays are not attributable to either the owner or contractor (Kraiem and
Diekmann, 1987). The determination of excusable delays generally rests on whether the
delay event was foreseeable at the time of bidding and was beyond the control of both the
owner and contractor (Zack, 2000). As such, they are those for which the contractor is
25
promised an extension of time only (Bartholomew, 1987). Examples are Force Majeure
and unforeseen inclement weather. In some studies (Arditi and Robinson, 1995; Alkass
et al., 1996; Kartam, 1999; and Stumpf, 2000), excusable delays include excusable and
compensable delays as classified herein. They subdivide excusable delays into excusable
compensable and excusable noncompensable delays. Analogously, excusable
compensable and excusable noncompensable delays are compensable and excusable
delays, respectively, in Figure 2.2.
Compensable delays are caused by the owner or its representatives. They are from (i)
acts of the owner in its contractual capacity and (ii) acts of another contractor in
performance of a contract with the owner (Ponce de Leon, 1987). The contractor is
typically entitled to both a time extension and monetary damages due to these delays.
Changes and different site conditions are examples of compensable delays. However, the
determination of compensable delays can be seriously challenged if there is a “no-
damage-for-delay” clause in the contract. An identification of which delays are the
responsibility of the owner relies significantly upon the language of the contract itself
(Hughes and Ulwelling, 1992). Discussion of “no-damage-for-delay” clauses can be
found elsewhere (e.g., Lesser and Wallach, 2003; Thomas and Messner, 2003).
2.3.4 Concurrent Delays
Concurrent delays occur frequently, particularly at the peak of a project when multiple-
responsibility activities are being performed at the same time (Baram, 2000). Delay
claims are much more complicated when concurrent delays possibly exist. Analysis of
26
schedule delays takes a major leap in complexity when there are multiple sources of
delay with interrelated impacts (Galloway and Nielsen, 1990; Kutil and Ness, 1997;
Ness, 2000). This section reviews the concept of delay concurrency, conditions of its
occurrence, and the current practice in evaluation and apportionment of concurrent
delays.
2.3.4.1 The Concept of Concurrent Delays
Schedule delay analysis is among the most challenging tasks in claims-related issues.
This analysis will be more complicated when concurrent delays have occurred in the
project. Navigating the seas of concurrent delays is possibly the most challenging task
faced by a construction lawyer (Hughes and Ulwelling, 1992).
Concurrent delay is customarily described as two or more delays that occur at the same
time, either of which would cause a delay but if either of them had not occurred, the
project schedule would have been delayed by the other (Rubin, 1983; Cushman et al.,
1990; Stumpf, 2000). However, there is no consistent agreement on what concurrent
delay actually means (Peters, 2003). Another definition is that delay concurrency occurs
when two or more separate causes of events delay the project within a specific time
period (Baram, 2000). Simultaneous delays, commingled delays, and intertwined delays
are other terms used to interchange for concurrent delays.
In terms of their timing relationship, delays can be also classified into independent
delays, serial delays and concurrent delays (Figure 2.3). An independent delay is a
27
particular delay which occurs in isolation or does not result from a previous delay and
which effects can be readily calculated (Arditi and Robinson, 1995). A delay which
occurs solely as a consequence of an earlier, unrelated delay in the contract is called a
serial delay (Ponce de Leon, 1987). Serial delays are sequences of successive non-
overlapping delays on a certain network path (Arditi and Robinson, 1995). In addition, a
serial delay may be caused by an independent delay (Stumpf, 2000).
Figure 2.3 Delay concurrency scenarios
2.3.4.2 Conditions for Occurrence of Concurrency
Hughes and Ulwelling (1992) reveal that the word “concurrent” describes either temporal
concurrence or causal concurrence. They also claim that: (i) while the word “concurrent”
may appropriately apply to temporally concurrent events, temporal concurrence is
irrelevant for the purpose of attempting to assess liability for project delay; and (ii) the
28
actual issue in construction is whether two events are concurrent in their causation of the
project delay.
Differentiation between concurrent delays and those which simply absorb float requires a
thorough knowledge of the facts, an understanding of the basis of CPM analysis, and a
determination of whether three key factors exist: (i) the delays are critical; (ii) the delays
are independent; and (3) the delays occur during the same time period (Boe, 2004). More
broadly, Ponce de Leon (1987) points out the occurrence of concurrency in construction
as follows:
a. Two unrelated delays taking place in an overlapping timeframe are truly
concurrent only if both delays fall on parallel critical paths.
b. Two unrelated delays arising at quite different timeframes are ultimately
concurrent if they fall on two as-built critical paths.
2.3.4.3 Apportionment of Concurrent Delays
Analysis of concurrent delays raises various issues. This is because both owners and
contractors employ concurrent delays as a strong defense tool against each other (Baram,
2000). For instance, owners use them to protect their interest in obtaining liquidated
damages, while contractors use them to neutralize or waive their inexcusable delays and
hence avoid damage entitlement (Baram, 2000).
Courts, boards, practitioners, researchers are generally inconsistent in terms of both
definition, as mentioned earlier, and apportionment of concurrent delays. The recent
29
empirical study (Scott and Harris, 2004) shows that all kinds of practitioners, namely
contractors, contract administrators, and claims consultants had divergence of opinions
on issues related to concurrent delays. Table 2.1 summarizes the divergent perspectives
on concurrent delays from previous studies nine of which are adapted from Peters (2003).
A summary of law cases that treated concurrent delays differently can be found in James
(1991).
Table 2.1 Divergent and inconsistent perspectives on concurrent delays No Literature Concurrent Delays
Excusable & Inexcusable
Excusable & Compensable
Compensable & Inexcusable
1 Ponce de Leon (1987)1 Excusable Compensable Excusable
2 Reams (1989) 1; Battikha and Alkass (1994) 1
Excusable Excusable Not available
3 Arditi and Robinson (1995) 1; Al-Saggaf (1998) 1
Inexcusable Excusable Not available
4 Rubin (1983); Galloway and Nielsen, (1990); Wiezel (1992); Alkass et al. (1995); Schumacher (1995); Galloway et al. (1997); Kartam (1999); Stumpf (2000); Reynolds and Revay (2001) 1; Niesse (2004)
Excusable Excusable Excusable
5 Construction (1993) 1; Baram (2000) 1; Construction (2002) 1
Inexcusable Excusable Inexcusable
6 Kraiem and Diekmann, (1987); James (1991); Kutil and Ness (1997); Finke (1999); Ness (2000); Bubshait and Cunningham (2004)
Excusable Excusable Excusable or Apportioning
7 Hughes and Ulwelling (1992); Wickwire et al. (2003)
Excusable Excusable Apportioning
Note: 1Based on Peters (2003)
30
As shown in Table 2.1, general views consider concurrent delays as being similar to
excusable delays. That is, contractors are entitled time extension only. Figure 2.2
reflects this fact. When a compensable delay is concurrent with an inexcusable delay,
this scenario follows an “easy rule” or “contributory negligence” (Figure 2.3). However,
a recent trend advocates an equitable apportionment when compensable and inexcusable
concurrent delays occur. Figure 2.3 illustrates this trend as “fair rule” (Kraiem and
Diekmann, 1987) or “comparative negligence” (Hughes and Ulwelling, 1992). The fair
apportionment means apportionment of days and/or dollars. These different rules can be
derived from two different doctrines: the doctrine of contributory negligence and the
doctrine of comparative negligence. The California Appellate Court in Li v. Yellow Cab
(1975) explains (cited in Hughes and Ulwelling, 1992):
“The rule that contributory fault bars completely is a curious departure from
the central principle of 19th century Anglo-American tort laws – that
wrongdoers should bear the losses they cause. Comparative negligence more
faithfully serves that central principal by causing the wrongdoers to share the
burden of resulting losses in reasonable relation to their wrongdoing, rather
than allocating the heavier burden to the ones who, as luck would have it,
happened to be more seriously injured.”
Hughes and Ulwelling (1992) confirm that a comparative negligence analysis in
concurrent delay situations would undoubtedly produce results which are substantially
more fair and equitable. Among other things, the authors recommend the following:
31
a. The courts should reject the rule that “damages are not apportioned” in concurrent
delay situations.
b. The courts should reject the federal “shield” rule, which grants the contractor time
but no money (and the owner no liquidated damages) in the event of concurrent
delay.
c. The courts should resolve the issue of apportioning damages for delay in
accordance with the doctrine of comparative negligence.
Although most cases ruled that no damages are recoverable when effects are concurrent
and their costs cannot be segregated, there are some cases adopting the doctrine of
comparative negligence. A few cases held that despite the inability of the parties to
segregate damages or costs attributable to each cause, forfeiture of damages is
excessively harsh (James, 1991). In addition, these courts usually used a jury verdict
method to apportion damages to each party (James, 1991).
Undoubtedly, it is more equitable and reasonable to apportion damages in concurrent
delay circumstances. The current practice reveals that courts and boards can adopt the
doctrine of comparative negligence for solving concurrent delays. However, a jury
verdict method is very subjective and places the project parties in a passive position. The
project parties should therefore proactively apportion damages in concurrent delays by
employing a more logical and systematic approach. This research aims at developing
such an approach.
32
2.4 Float and Criticality in Project Schedules
Float plays a decisive role in determining whether an event causes project delays. The
question “who owns float?” has conflicting answers in previous law cases as well as
practitioners. Several studies have attempted to allocate float to the project parties in a
more reasonable manner. Details of the concept “float” can be found in any network
scheduling text (e.g., Antill and Woodhead, 1990; O’Brien and Plotnick, 2006). This
section presents float-related issues that are relevant for schedule delay analysis only.
Also, float in network-based techniques and specifically in CPM will be discussed. The
reason is that CPM is widely used in schedule delay analysis. Discussion of float in other
scheduling techniques, in linear scheduling or line of balance (Harmelink, 2001) for
example, is beyond the scope of this research.
2.4.1 Float
In network scheduling like CPM, float or slack represents the amount of time that an
activity can be delayed without delaying the project duration. Total float and free float
are the other commonly-used terms. Total float is the time difference between the
earliest finish and the latest finish of an activity (Ponce de Leon, 1986). All activities on
the same path co-share the total float in that path (Callahan et al., 1992). It is a by-
product of the CPM analysis (de la Garza et al., 1991). Free float presents the amount of
time that an activity can be delayed without delaying the earliest start of its following
activities. Normally, free float is not very meaningful in schedule management. As such,
the term float discussed below also means total float. Raz and Marshall (1996) mention
two other types of float, namely interfering float and independent float. The first refers to
33
the difference between total float and free float while the second refers to the difference
between the interval of time from the latest finish of an activity’s predecessors to the
earliest start of its successors, and the activity duration. Float is an important measure of
schedule flexibility associated with activities and an indicator of the amount to which the
schedule can absorb delays without affecting the project duration (Raz and Marshall,
1996).
2.4.2 Float versus Criticality
Float and criticality of an activity or a network path have an underlying relationship. A
network path is called a critical path when its float equals zero. All activities on the
critical path are called critical activities. A project has at least one critical path. The
concept that some activities are critical (zero float) while other activities have float is not
only beneficial as a management tool but also is useful in properly evaluating the impacts
of delaying events (Householder and Rutland, 1990).
Nevertheless, some practical considerations substantially challenge the “float” and
“criticality” concepts in both scheduling and forensic schedule analysis. In resource-
constrained scheduling, Fondahl (1991) claimed that an activity having positive float can
still be “resource critical.” He added that if this “resource-critical” activity fails to
release the resource units needed by a critical activity, it delays that activity and hence the
project. Kim and de la Garza (2003; 2005) use the term “phantom float” to reflect this
fact in resource-constrained CPM. Many contract change-order clauses do not tackle
34
“resource critical” extensions (Zollinger and Calvey, 2004). In delay analysis, Peters
(2003) raises some interesting issues:
“Which longest path governs? Is it the longest path on the baseline schedule?
Is it the longest path on the schedule update? Is it the as built critical path? If
it is the as built critical path, how will it be calculated? The use of total float
as a measure for assigning activities to their representative paths can become
problematic when analyzing as built schedules. CPM is unable to calculate
total float on an as built schedule in which estimated dates have been replaced
by actual dates.”
The concepts of float and criticality in networking scheduling are therefore not
straightforward as they superficially appear. When all project facts are justified, it
can be said that schedule analysis in delay claims mostly deals with float and
criticality under the impacts of delaying events. Kraiem and Diekmann (1987) state
that any change in the critical path can cause errors in delay analysis.
2.4.3 Float Ownership
Float is a valuable commodity in project scheduling (Kraiem and Diekmann, 1987;
Bubshait and Cunningham, 2004). Thus, both owner and contractor want to own float.
On the one hand, owners tend to use total float time to accommodate changes in the
original project scope to reduce the time impact of those changes by the amount of the
total float consumed (de la Garza et al., 1991). On the other hand, contractors have
reacted to these practices by using total-float removing techniques, such as artificial
35
lead/lags, unprecedentedly long activity durations, preferential logic, and other methods
(Ponce de Leon, 1984; cited in de la Garza et al., 1991). Various studies (Peterman,
1979; Ponce de Leon, 1986; Householder and Rutland, 1990; Zack, 1993) have tried to
find an appropriate answer to the question “who owns float?” Courts sometimes granted
ownership of total float to contractors, at other times to owners, and lately to the project
under the first-come-first-served basis on very similar facts (de la Garza et al., 1991;
Prateapusanond; 2003).
The legal precedent established that float belongs to the contractor as one of his resources
unless there is a contract clause to the contrary (Wickwire and Smith, 1974). To avoid
similar decisions, owners have introduced “float ownership” clauses in contracts. For
instance, a joint-ownership-of-float clause specifies that project float (or that time
between the contractor’s scheduled completion date and the contract completion date)
belongs to neither the contractor nor the owner but is for their mutual benefit and will be
used on a first come, first served basis (Zack, 1986).
2.4.4 Alternatives to Float Distribution and Management
Appropriate total float distribution and management ensure proper delay analysis and
equitable apportionment of delays. The confusion of float ownership incurs ambiguous
designated responsibilities since parties try to assert their right to use floats to maximize
the productivity and to minimize direct cost (Pasiphol and Popescu, 1994). Practitioners
and researchers have introduced different alternatives as to float distribution and
management. They include: (i) allocating float to individual activities along a path of
36
activities; (ii) trading total float as commodity; (iii) calculating and using safe float; and (iv)
using float clauses in contracts (Prateapusanond; 2003). The summary of the last four
alternatives can be found in Prateapusanond (2003). The following are some discussions
about the first two alternatives.
Allocating float to individual activities and/or parties along a path is a float distribution
alternative introduced by some studies. The allocation process can be either simple
(Wickwire et al., 1991) or more sophisticated by using various qualitative criteria
(Pasiphol and Popescu, 1994; Pasiphol and Popescu, 1995). In general, these studies try
to objectively distribute total float to each activity. Nevertheless, this alternative does not
easily recognize float ownership since the major objects for the distribution are activities
themselves and not project parties. Prateapusanond (2003) seeks a mechanism which
pre-allocates a set amount of total float on the same non-critical path of activities to the
two contractual parties, the owner and the contractor. The author recommends the 50-50
pre-allocation of total float. According to the author, this policy gives the owner and the
contractor equal rights to the total float. In other words, the owner and the contractor
each owns one-half of the total float available on any non-critical path of the project
(Prateapusanond, 2003). However, this 50-50 pre-allocation is rather arbitrary and does
not consider relative importance of activities in the corresponding critical path.
The second alternative views float as a commodity which can be traded between parties.
Under this perspective, contractors are entitled to administer total float, imposed the
obligation to disclose its value and trade it on demand (de la Garza et al., 1991). de la
37
Garza et al. (1991) introduce a method for calculating the daily trade-in value of total
float for a given activity involving the determination of an early finish cost (EFC) and a
late finish cost (LFC). The daily trade-in value of total float is the product of the
difference of LFC and EFC and total float. Finke (2000) recommends weighted schedule
density as a tool for pricing compensable float consumption. It should be noted that this
author uses free float instead of total float by reasoning that total float is shared by all
activities along a given path and does not necessarily represent the float available to a
specific activity.
2.5 Process of Forensic Schedule Analysis
Schedule analysis is an inexact science (Oles, 1997). It is the analytical process through
which a professional employs the critical path method (CPM), together with a forensic
review of project documentation and other pertinent data, to evaluate and apportion the
effects of delays and other impacts on the project schedule (Holloway, 2002). The
process of schedule delay analysis differs from one project to another because each
construction project is unique in nature. However, this process has to answer the
following questions (Al-Saggaf, 1998; Zack, 2003):
a. What happened on the project?
b. When and where did event(s) occur?
c. Why did the event(s) occur?
d. How did the event(s) happen?
e. When and how did the event(s) impact the schedule?
f. Who caused the event(s)? Or who is responsible?
38
g. What relief is provided in the contract for these event(s)?
h. Is time or money owed? If so, by whom and to whom?
There are some typical steps for schedule analysis. Al-Saggaf (1998) describes a formal
schedule analysis procedure with the following five steps: (i) data gathering; (ii) data
analysis; (iii) identification of the root cause; (iv) classification of the type of delay; and
(v) assigning responsibility. Selecting an expert witness can be another earlier step
described by Pinnell (1992). Baki (1999) presents a five-phased approach for claims
prevention, claims preparation, and claims defense. Kartam (1990) proposes a generic
methodology for analyzing delay claims (Figure 2.4). Window analysis or
contemporaneous period analysis technique (CPAT) is the only delay analysis method
recommended in that methodology since the data are assumed or perceived to be
sufficient.
- Daily Inspection Reports (DIR)- Schedule Updates- Submittal LogsRequest for Info (RFI)- Contract Document - Clarification (CDC)- Potential Cost/Schedule Incidents Reports (PCS)- Change Order Log- Claims Logs- Cost & Progress Payments
Maintain Effective Documentation
Analyze Project Documents
- The Level of Detail- The Logic- The Production Rates
Analyze Project Resources Utilization
- Summarize the DIR- Plot the DIR- Develop Various Level of Details
Identify & Analyze
Concurrent Delays
Analyze the Impact of
Specific Issues
Identify & Analyze Delay
Disruption Periods
Apply the Contemporaneous Period Analysis Technique (CPAT)
Analyze & Evaluate Contractor’s Claims
Summarize, Analyze & Calculate
Compensation
Conduct Effective
Meetings to Present,
Negotiate, & Settle Claims
Analyze the Original Schedule (OCPM)
Develop the As-Built Schedule (ABS)
Figure 2.4 Generic methodology for analyzing delay claims (Source: Kartam, 1999)
39
In general, CPM schedules play a critical role in success or failure of schedule analysis.
The use of CPM schedules to prove construction claims became the standard (Wickwire
and Smith, 1974). A CPM analysis is one of the best ways to persuade courts and
mediators who want to hear in the simplest possible terms what really occurred day to
day on the project (Frost, 2002). Though its success varied, CPM was used for
supporting delay and disruption claims in early 1970s such as in Chaney & James
Construction Company v. United States (1970) and Continental Consolidated
Corporation v. United States (1972).
2.6 Forensic Schedule Analysis Techniques
Many schedule analysis techniques are available in the industry. Each technique may
also have many variants. Oles (1997) claimed that the “scientific” principles of schedule
analysis can occasionally be lost by the confusion of conflicting illustrations and eloquent
expert witnesses. One can manipulate a methodology to provide a desired answer
(Farrow, 2007). However, an appropriate schedule analysis technique and its proper use
are keys to schedule analysis’s success. This section reviews and discusses current
techniques employed by the industry.
Figure 2.5 conceptually illustrates these techniques based on views of previous studies
(Wickwire et al., 1989; Pinnell, 1992; Alkass et al., 1996; Bubshait and Cunningham;
1998a,b; Finke, 1999; McCullough, 1999; Zack, 1999; Wickwire and Ockman, 1999;
Stumpf, 2000; Fredlund et al., 2003; Lee, 2003; Zack, 2003; Lovejoy, 2004; Niesse;
2004; Mbabazi et al., 2005). Intuitively, reliability and the extent of contemporaneous
40
project documentation needed and effort to prepare are associated among schedule
analysis techniques. In this dissertation, the term reliability describes the result of
forensic schedule analysis that accurately presents and captures the facts. Major
techniques presented herein are as follows:
Figure 2.5 Mapping of forensic schedule analysis techniques
a. Global impact method
b. As-planned vs. as-built method (a.k.a. total time, net impact)
c. Impacted as-planned method (a.k.a. “what-if”, adjusted-baseline)
d. Collapsed as-built method (a.k.a. “but-for”)
e. Schedule window analysis (a.k.a. snapshot, contemporaneous period analysis)
f. Time impact analysis (a.k.a. modified as-built)
41
2.6.1 Global Impact Method
This method treats all delays equally regardless of whether they are on critical paths,
concurrent with other delays or really impact project completion time. Under this
method, the total delay is determined by the sum of the durations of all delaying events
(Alkass et al., 1996). Alkass et al. (1996) reveal that the sum of delays can exceed the
actual completion date in some circumstances. This technique is generally the least
reliable among the schedule analysis techniques identified and discussed in this research
(Figure 2.5).
2.6.2 As-Planned vs. As-Built Method
The as-planned versus as-built method compares the as-built schedule to the as-planned
schedule (Stumpf, 2000). That is why it is also known as the total time or net impact
method. It illustrates the as-planned and as-built schedules and occasionally the would-
have-been schedule as either single bars or summary bar charts (Pinnell, 1992). The
“total time” method analogously indicates the “total cost” method in quantifying
inefficiency of cumulative disruptions or “ripple” effects. In its simplest form, the
method assumes that the party (the contractor) using it causes no delays, and that the
other party (the owner) causes all delays (Stumpf, 2000). Thus, the amount of delays
having an impact on the project’s completion date is likely overestimated (Alkass et al.,
1996). Figure 2.6 illustrates an example of the total time method in the simplest form.
The as-planned and as-built schedules are 10 days and 15 days, respectively. The
difference between them (5 days) is the total amount of delays recoverable.
42
ID Task Name Duration
1 As-Planned 10 days
2 As-Built 15 days
3 Delays 5 days
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Figure 2.6 As-planned vs. as-built method
The total time method has some variants. The total time method can be called the
adjusted as-built CPM method when it employs CPM-based schedules. The critical paths
are identified in the as-planned and as-built schedules with delaying events are displayed
as activities and linked to specific work activities (Alkass et al., 1996). This variant is
similar to the total time method in the simplest form, except that it uses CPM (Pinnell,
1992). The two methods typically yield similar results since both methods only display
the net impact of all claimed delays on the project schedule (Leary and Bramble, 1988).
Alternatively, the total time method can go further by scrutinizing categories of delays as
owner-, contractor-, or third party-caused delays. It is called the modified total time
method in this research. The result of the schedule analysis can be different and
expectedly less unreliable (Figure 2.5). An example can be found in Stumpf (2000).
2.6.3 Impacted As-Planned Method
The impacted as-planned method is also known as the “what-if” or adjusted-baseline
method. It aims to present a fair view of responsibility for owner delays on the project’s
completion time by impacting the initial CPM solely with owner-caused delays
(Wickwire and Ockman, 1999). The process is similar for measuring impacts of
43
contractor-caused delays on the original CPM schedule. The as-planned schedule is
utilized as a baseline against which to determine schedule delays (Schumacher, 1995; Al-
saggaf, 1998; Kim et al., 2005).
Notably, the “what-if” method assumes that the as-planned schedule was reasonable.
This is almost always impossible in the real world. In addition, delay concurrency is not
considered properly since the method treats each type of delays separately. The courts,
boards and other legal bodies have generally held that a delay analysis must be based
upon and consider the actual performance by all parties on the project (Wickwire and
Ockman, 1999). Nevertheless, because it differentiates types of delays, the “what-if”
method is more reliable compared to the total time method.
2.6.4 Collapsed As-Built Method
The development of an as-built schedule is a key process since the method uses the as-
built schedule instead of an as-planned schedule as described in the “what-if” analysis. It
theoretically shows when the work would have been completed “but-for” the delays of
the other party (Wickwire and Ockman, 1999). That explains why it is also called the
“but-for” method. Specifically, the collapsed as-built analysis starts with an as-built
schedule, including all known delaying events, then subtracts delays of one party from
the schedule to illustrate how work would have progressed but for those delays by the
other party (Lovejoy, 2004).
44
This method can be acceptable in the industry. Despite incompleteness, a collapsed as-
built analysis addresses the issue of concurrent delays and assesses types of delays
(Alkass et al., 1996). In construction litigation, the method has been utilized by the
Boards of Contract Appeals (Wickwire et al., 1989). Lovejoy (2004) says that the
collapsed as-built method has risen to an acceptability level almost equal to that of the
contemporaneous period analysis.
Some research has attempted to improve the collapsed as-built method. Mbabazi et al.
(2005) propose a modified but-for method that considers and reconciles the viewpoints of
all the parties based on a mathematical basis. The modified but-for method uses Venn
diagrams to represent the different sets of one-party, two-party, and three-party
concurrent critical delays. The authors claims that the modified but-for method could
identify the hidden concurrent delays. Nevertheless, those hidden concurrent delays
described by the authors can be questioned when the conditions of the occurrence of
concurrency in construction (Ponce de Leon, 1987) are tested.
2.6.5 Schedule Window Analysis
Unlike previous methods which analyze delays by looking at an entire project, window
analysis assesses delays in certain periods of time separately and independently. Window
analysis divides a project into specific time periods (that is, window sizes, windows of
time, or snapshots) which are determined by the contemporaneous project program and
documentation (Galloway et al., 1997). Thus, the window analysis method is also known
as the snapshot method or contemporaneous period analysis. The term “snapshot”
45
naming this method underlines the need for relying only on factual as opposed to fictional
data (Reynolds and Revay, 2001).
Courts and boards as well as practitioners and researchers generally agree that window
analysis is the best available option. The window analysis method utilizes up-to-date
information to enable evaluation against varying critical activities which reflect actual job
statuses at the time (Galloway et al., 1997). It builds a period analysis upon the previous
period’s analysis and assesses each new period for delay, causation, and responsibility as
the analysis proceeds (Zack, 1999). A major drawback is potentially selecting window
sizes arbitrarily and subjectively. It also may not scrutinize delay type during the
analysis (Alkass et al., 1996).
2.6.6 Time Impact Analysis
Time impact analysis (TIA) is currently one of the most reliable delay analysis
techniques. It is a chronological and cumulative method to analyze delay (Wickwire and
Ockman, 1999). Similar to schedule window analysis, TIA uses the current update of the
project schedule when an impacting event occurs as the baseline for measuring the
impact (McCullough, 1999). It is an iterative process of multiple analyses, starting with
the as-planned schedule which is adjusted each time an event occurs (Pinnell, 1992). The
difference between these two methods is that TIA focuses on a specific delay or delaying
event, whereas the windows method focuses on a time period (a.k.a. window or snapshot)
which may contain multiple delays or delaying events (Alkass et al., 1996).
46
The timely evaluation of impacts of a delaying event is a prominent advantage of TIA. In
other words, it enables the contracting parties to determine a contractor’s right to obtain a
time extension in a real-time manner and to provide the capability for the parties to
resolve disputes prior to an exhaustive after-the-fact analysis reconstructed upon the
completion of the project (Wickwire and Ockman, 1999). However, TIA is unable to
capture and scrutinize potential concurrent delays. Since delayed activities are analyzed
discretely, the effect of concurrent delays is not instantaneously addressed in the analysis
(Alkass et al., 1996). Wickwire and Ockman (1999) recommend one way to avoid this
problem is through the use of measuring points such as monthly updates. The authors
describe this way as a “fact finder” which can look not only at the location of the critical
path at the initiation of the delay, but also can confirm the actual effect of the delay by
reviewing the project status at the end of each update and the history of actual events.
2.6.7 Other Schedule Analysis Techniques
Inspired by the sometimes inexact and inconsistent results yielded by these techniques,
both researchers and practitioners have attempted to either improve the existing
techniques or propose new methods for forensic schedule analysis. Yates (1993)
develops a construction decision support system for delay analysis. Alkass et al. (1996)
propose a new method called “isolated delay type” which utilizes advantageous attributes
of the three techniques; namely but-for, window analysis, and time impact analysis.
Unfortunately, there is no successful case using that method reported during the last 10
years. Shi et al. (2001) propose a computation method using as-planned schedules as a
basis of analysis and not based on the criticality of activities. Those premises in concert
47
with other limitations can hamper its acceptability in the real world. Seals (2004)
presents an analytical tool combining continuous delay measurement (CDM) and daily
delay values (DDV). Similarly, Hegazy and Zhang (2005) develop a spreadsheet to
facilitate daily window analysis for small and medium-size projects. From a practical
viewpoint, however, daily window analysis tends to be too much work. In addition,
current time impact analysis may be used instead of daily window analysis with similar
effort and accuracy.
Lee et al. (2005) present a delay analysis method considering lost productivity. Unclear
differentiation between delay and disruption as well as between their claims may really
challenge its applicability. Discussion of delay versus disruption is presented previously.
Kim et al. (2005) propose a method using delay section, which addresses the two
limitations of available methods, namely ambiguity in the analysis of concurrent delays
and inadequate consideration of time-shortened activities. As the authors point out the
method requires much effort and time in project records, updates, and analyses. Mbabazi
et al. (2005) interestingly employ a Venn diagram to eliminate such drawbacks of the
but-for method as its narrow focus on the viewpoint of a single party and its inability to
accurately consider concurrent delays. However, when applied to their case study the
modified method results in so-called hidden concurrent delays, whereas no concurrency
apparently exists in their as-built schedule, thus producing a questionable result. For
instance, there is no concurrent delay identified in that case by using “daily” window
analysis.
48
2.6.8 Criticism of Available Schedule Analysis Techniques
As previously discussed, the current delay analysis methods have different levels of effort
and accuracy. Previous studies (e.g. Alkass et al., 1996; Stumpf, 2000; Zack 2003; Ng et
al., 2004) illustrates that different techniques yield different results. Table 2.2 displays as
an example the delay analyses for a small home construction project. In addition, the
same method may result in different outputs. For instance, Hegazy and Zhang (2005)
shows that within the window analysis method, results can be different by selecting
different time periods for the analyses.
Table 2.2 Comparative results of schedule analysis methods (Source: Stumpf, 2000) Method Number of days
Inexcusable delays Excusable delays Compensable delays
Total time 8 Modified total time 3 5 Impacted as-planned (owner delays)
2 6
Impacted as-planned (contractor delays)
5 3
Collapsed as-built 5 3 Window analysis 1 2 5
Although various techniques are available, none of them can overcome some major
limitations. Paradoxically, schedule-related issues such as float, float ownership, change
in logic, and resource allocation can cause delays yet their effects are typically neglected.
In addition, the current methods potentially “compare apples and oranges.” That is, two
events will be considered to have the same impact if they cause the same delay of the
project completion date. Crucial issues such as their timing and relative importance of
the corresponding delayed activities are not scrutinized during the analysis. This research
will focus on resolving those problems.
49
2.7 Delay Damages and Commonly Applied Methodologies
The determination of damages is the third component of the “triad of proof” for proper
delay claims (Figure 1.1). Hughes (2003b) states: “after all this effort to document
delays, comply with notice provisions, analyze schedules and the like, the final question
is: What is the payday from all this work? In the context of a delay claim, the question
translates to: What are the possible damages that flow from a delay claim?” This section
presents possible damages of contractors and owners. The contractor’s damages are
however focused due to their controversial issue among courts, boards, practitioners, and
researchers.
2.7.1 Overview of Delay Damages
Together with proving causation and liability, properly quantifying damages in delay
claims is an arduous task. They require creative analysis, laser-like attention to factual
detail, and experience and great judgment (Strogatz et al., 1997). They also require
detailed analysis of numerous cost accounts and schedule activities, complicated by a
practical inability to separate the impacts of each impacting event giving rise to a claim
(Oles, 1998). National Cooperative Highway Research Program of Transportation
Research Board (NCHRP, 2003, p.18) expresses the courts’ views:
“Courts have long recognized that damages need not be calculated with
absolute certainty to be recoverable. Courts have also long held that damage
calculations that are based upon speculation may not be recovered, even if
some damage was almost certain. The ground between certainty and
speculation, however, provides a fertile playing field for courts and boards to
50
make decisions that will continue to affect the fate of owners and contractors
alike.”
Either owner or contractor may be entitled for recovery of damages caused by the other
party. An owner typically recovers damages subject to a liquidated damages clause in the
contract with his/her contractor. Alternatively, an owner may recover based upon his/her
own actual damages due to inexcusable delays when no such a liquidated damages clause
exists. A contractor however has to prove his/her actual damages incurred as a result of
compensable delays. Some contract clauses such as no-damage-for-delay may place the
contractor in an inferior situation in delay claims.
2.7.2 Owner’s Delay Damages
As previously discussed, a liquidated damages clause is normally a basis for calculation
of the owner’s damages. Absent such a predetermined provision the owner has to be
prepared to prove its actual damages incurred as a result of contractor-caused delay
(Strogatz et al., 1997). Some owners do not want to be bound by that predetermined
provision due to: (i) if they suffer damages, the quantification of actual damages after the
fact will be a much more favorable outcome and consistent with damages incurred; and
(ii) they have little to no confidence in their quantification of liquidated damages, which
may be equivocal when it comes to enforcing them (McCormick, 2003). Hosie (1994)
discusses the use of liquidated damages in details. Types of owner’s delay damages
include (Strogatz et al., 1997):
51
a. Direct damages: They are incurred due to the extended construction period such
as extended construction supervision, additional engineering service, extended
financing, and so forth.
b. Consequential damages: They are indirectly incurred due to the delayed use of
the project or delay impacts on the owner’s business such as lost profits and lost
rents.
2.7.3 Contractor’s Delay Damages
Figure 2.7 demonstrates a typical cost breakdown structure of a contractor. Pricing
contractor’s delay damages on construction contracts is very intricate. On any project,
the facts are complex and extensive, and testimony of liability can be elusive (Overcash
and Harris, 2005). This section presents types of recoverable damages, principles of
recovery or equitable adjustments, calculating formulas, and conditions of damages
recovery. Field overhead and home office overhead damages are highlighted because
they are more controversial than direct costs incurred due to delays.
2.7.3.1 Types of Recoverable Damages
Contractor delay damages can be direct and indirect. The direct damages are related to
mobilization/demobilization, standby time/idle tools and equipment, extended general
conditions or field office overhead, extended home office overhead, escalated labor or
material costs, and loss of productivity (Strogatz et al., 1997). Indirect damages or
consequential damages are those impacting upon other aspects of the contractor’s
business – loss of profits on the delayed project, loss of profit on other projects, and
destruction of business.
52
Profit
Subcontracts
DIRECT COSTS
Work
Packages
Direct Items
Time & Materials
Accounts
Tools & Supplies
Materials
Field Labor
Equipment
Supplies & Services
Facilities
Staff
INDIRECTS
Contingency Reserve
Home Office General Overhead
COST BREAKDOWN STRUCTURE (CBS)
Work Breakdown
Structure (WBS)
Figure 2.7 Contractor’s cost breakdown structure (Source: Overcash and Harris, 2005)
2.7.3.2 Equitable Adjustments
Equitable adjustments are normally used for governmental caused delays. The primary
pricing rules for an equitable adjustment for damages are (Love, 2000):
a. Only foreseeable cost increases are recoverable, which generally precludes
recovery of cost increases that the delay causes to other contracts;
b. The contractor is to be restored in as good a position as if the delay had not
occurred; and
c. All direct and allocable indirect costs can be recovered, if reasonable.
2.7.3.3 Field Overhead Damages
Field office overhead or job site overhead is the costs spent to manage, control and
administer a specific contract or project such as the costs of connecting and mobilizing
utilities, providing a job site office, and supervising the project. The calculation of field
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overhead damages needs to differentiate between time-related costs and activity-related
costs. Only time-related costs can be included in estimating the delay period daily rate
for field overhead. For the total cost claim approach, the industry currently uses the
following formula for calculating field overhead damages (Lankenau, 2003):
Delay Period Daily Rate = Total Time Dependent Costs to Date
Project Duration to Date
Field Overhead for Delay Period = (Delay Period Daily Rate) x (Delay Period)
Field overhead for a delay period determined by the above formula is potentially unfair.
It assumes that all time-related costs are the fault of the owner and a complete
extrapolation is foreseen by the owner (Lankenau, 2003). In WRP Corporation (WRP
Corporation v. United States, 1968; cited in Lankenau, 2003), the court ruled that the
total cost claim approach can only be used when four elements are satisfied:
a. It is impossible to determine losses with reasonable accuracy;
b. The bid was realistic;
c. The costs are reasonable; and
d. The contractor was not responsible for the costs.
Delay claims therefore need a more accurate methodology of calculating field overhead
damages. The above formula which results in the “one-size-fits-all” daily rate is not
appropriate. Lankenau (2003) states that this is unfortunate since the pertinent data are
normally available and maintained in an easy-to-use electronic form.
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2.7.3.4 Extended HOOH versus Unabsorbed HOOH
Home office is the contractor’s principal office, where executive and administrative
actions are undertaken for the business as a whole (NCHRP, 2003). As such, HOOH is
typically described as enterprise costs incurred by the contractor for the benefit or support
of all of a contractor’s projects in progress (Zack, 2001). HOOH is frequently expressed
as a percentage of other costs, and thus is sometimes described as a contractor’s general
and administrative (G&A) expense (NCHRP, 2003).
Owner caused delays can increase a contractor’s HOOH. There are two different types of
HOOH damages, namely extended HOOH and unabsorbed HOOH. Extended or
overextended overhead arises when the extension of the performance period of a contract
increases HOOH costs (Ottesen and Dignum, 2003). Unabsorbed, underabsorbed or
underutilized overhead occurs when a contractor’s cash flow on a project is considerably
reduced as a result of an owner-caused delay of unknown duration at the outset (Zack,
2001). Similar definitions can be found elsewhere (e.g. Wright and Bedingfield, 1979;
Nash, 1989).
Some courts and authors differentiate the two terms by stating that unabsorbed HOOH is
associated with the manufacturing industry, whereas extended HOOH is associated with
the construction industry (Schwartzkopf and McNamara, 2001). The General Services
Board of Contract Appeals (GSBCA) once stated that extended overhead is a concept
unique to construction contracting (Capital Electric Company, 1984). Other authors
differentiate between them based upon whether a project was formally suspended or only
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partially or informally suspended (Trauner, 1990). In sum, unabsorbed overhead occurs
in the original contract period while extended overhead occurs when original work is
performed in a period beyond the original contract period and can occur when a
contractor is in a standby status beyond the original contract period (Kenyon, 1996).
2.7.3.5 Methodologies for Calculating HOOH Damages
There are several methodologies for calculating HOOH incurred by compensable delays.
Ottesen and Dignum (2003) listed three frequently applied methodologies: (i) application
of the Eichleay-type formula; (ii) use of a markup percentage multiplier; and (iii)
execution of a change order authorizing additional cost and/or time. The federal
government is normally tied to the Eichleay formula through precedent and practice
(NCHRP, 2003). For instance, in Wickham Contracting Company (1994), the Federal
Circuit held that the Eichleay formula was the only appropriate means for calculating
HOOH. The Departments of Transportation (DOT) in some states such as California,
Colorado, Connecticut, Florida, Georgia, New Jersey, New York, Ohio and Virginia have
established their standard markups (NCHRP, 2003).
Formulas for Calculating HOOH
Courts, boards and participants have proposed and used various formulas for pricing
HOOH damages in delay claims. The use of a formula for calculation of HOOH was
tracked back to more than 60 years ago in Fred R. Comb Company v. United States
(1945). Fifteen years later in Eichleay Corporation (1960), the Armed Services Board of
Contract Appeals allowed Eichleay Corporation to calculate HOOH damages using the
so-called Eichleay formula. Description of the Eichleay formula is as follows:
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Overhead Allocable to Contract = Contract Billings x Total Overhead
Total Billings for Actual Contract Period
Daily Overhead Allocable to Contract = Overhead Allocable to Contract
Actual Days of Contract Performance
Home Office Overhead Owed = Daily Overhead x Days of Compensable Delay
Succeeding cases have proposed various formulas. Table 2.3 summarizes nine formulas.
Eight of them are derived from court cases. The other is reported by Ernstrom and Essler
(1982). Different formulas generally result in very different HOOH damages. Examples
can be found elsewhere (Zack, 2001).
Table 2.3 Formulas for calculating home office overhead Formula Origin Home Office Overhead (HOOH)
Country Year Allocable HOOH Daily Rate HOOH Owned
Eichleay USA 1960 (Bc/Ba)*Oa Oc/Da Rd*De Eichleay - Var. 1 USA 1984 (Bc/Bo)*Oo Oc/Do Rd*De Eichleay - Var. 2 USA 1980 [Bc/(Bo+Be)]*Oo Oc/Do Rd*De Hudson UK 1989 - (Vo/Do)*Op Rd*De Ernstrom & Essler USA 1982 - - (Oa/La)*Ld Manshul USA 1981 - - [Be/(1+Mp)]*Mn Carteret USA 1954 - - (Me-Mn)*Be Allegheny USA 1958 - - (Me-Ma)*Vo Emden Canada 1995 - (Mp*Vo)/Do Rd*De
Legend:
Bc Contract billings Da Actual days of contract performance
Bo Total billings for original contract period Do Original days of contract performance
Ba Total billings for actual contract period Mp Planned HOOH and profits at time of bid
Be Contract billings for extended period Mn Normal HOOH (%)
Oo Total overhead during original contract period Ma Actual HOOH: entire period (%)
Oa Total overhead during actual contract period Me Actual HOOH: delay period (%)
Vo Original contract value Rd Daily overhead allocable to contract
La Total labor costs: actual period De Days of owner-caused delay
Ld Labor costs: delay period Oc Overhead allocable to contract
(Based on Zack, 2001; NCHRP, 2003; Ottesen and Dignum, 2003)
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Although the Eichleay formula has long-standing precedent that supported its use, it has
been rejected by many court cases, for example Berley Industries, Inc. v. City of �ew
York (1978) and Capital Electric Company (1984). In California, the Court in W.B.
Construction v. Mountains Community Hospital District (2005) noted that “the Eichleay
formula has not been adopted by any California decisional authority, and it is
questionable whether it should be.” Similarly, many practitioners and researchers
showed that the Eichleay formula is very often inappropriate (e.g. Kenyon, 1999; Love,
2000; Ottesen and Dignum, 2003). Love (2000) finds that the Eichleay formula has no
meaningful relation to unabsorbed overhead, extended overhead, or the difference
between the two. Many criticisms made of the Eichleay formula include, but are
certainly not limited to (Lubka, 2005):
a. That there is a lack of evidence of damages. That the damages are awarded
simply as the result of making a prima facie case and assumption that such
damages exist;
b. That the damages only exist to the extent that there is an actual delay in the
project. Increased overhead resulting from a breach that does not result in a
project delay and does not yield damages;
c. That if the government simply provides a date of resumption of work, that there is
no uncertainty with regard to the delay, and damages are precluded;
d. That the concept of "stand-by status" is still uncertain and that the extent to which
a contractor can perform work without impairing its Eichleay rights is not well
defined; and
e. Situations where there is a suspension, followed by a termination.
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Standard Markups in State DOTs
In a recent survey of the transportation agencies of all 50 states, Puerto Rico, and the
District of Columbia, the Transportation Research Board (NCHRP, 2003) classifies the
approaches to the issue of unabsorbed HOOH into three models. They are Avoidance,
Compliance, and Proactive models. Brief descriptions are as follows (NCHRP, 2003):
a. Avoidance Model: Contractors are never paid for HOOH. Arkansas, Minnesota,
Nebraska, North Dakota, and Wisconsin were examples.
b. Compliance Model: Contractors are paid for HOOH based primarily on court
and board precedent such as the use of Eichleay-type formulas. Arizona, Indiana,
and Texas were in this group.
c. Proactive Model: Payment of HOOH is addressed in the standard specifications,
normally standard markups. As previously mentioned, California, Colorado,
Connecticut, Florida, Georgia, New Jersey, New York, Ohio and Virginia were in
this group at the time of the survey.
Under the proactive model, these states have established their own standard markups and
perhaps different formulas. For instance, the Florida approach is essentially the same as
the above Emden or Canadian formula except that this approach establishes the markup
at a constant 8% (NCHRP, 2003). Table 2.4 presents standard markups in six states.
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Table 2.4 Allowed markup for home office overhead (Source: NCHRP, 2003) State Allowable
Markup Covers Applied to
Colorado 10% Home office overhead and profit
• Nonsalaried labor costs • Added bond, insurance, and tax expense
• Increased material costs • Added equipment costs • Added job site overhead costs
Connecticut 10% Home office overhead and profit
• Nonsalaried labor costs • Increased material costs • Added job site overhead costs
Georgia 15% Home office overhead and profit
• Nonsalaried labor costs • Added insurance and tax expense • Increased material costs • Added equipment costs • Added job site overhead costs
New Jersey 10% Overhead, general superintendence, and other costs attributable to delay (specifically excluding profit, as profit is not allowed on delay claims)
• Nonsalaried labor costs • Bond, insurance, and tax expense • Added equipment costs
New York 10% Home office overhead and profit
• Nonsalaried labor costs • Added insurance and tax expense • Added equipment costs • Added job site overhead costs
Virginia 15% Field and home office overhead
• Costs associated with a compensable delay claim
Prerequisites for Recovering HOOH
Many federal court decisions have stated similar prerequisites for recovering HOOH
and/or an Eichleay award. A synthesis undertaken by TRB (NCHRP, 2003) states:
“Among the distinctions articulated by courts that adopt the Eichleay Formula
are variations that require the analysis of (1) unabsorbed overhead versus
extended overhead and (2) delays caused by additional work versus delays
caused by suspensions. Among the prerequisites that have been articulated by
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courts adopting the Eichleay Formula are (1) an owner-imposed suspension of
critical work, (2) an owner requirement that the contractor stand-by during the
associated delay, and (3) proof that while standing-by the contractor was
unable to take on additional work.”
In other words, in order to recover HOOH a contractor has to show that (i) the
government-caused delay exists, (ii) the “standby” test is passed, and (iii) proper
mitigation of damages. Detailed discussions of these prerequisites can be found in
Kauffman and Holman (1995).
Figure 2.8 presents the application areas of the two common methodologies – the
Eichleay-type formula and the percentage markup method. From reviewing different
court decisions, the use of the percentage markup approach is possibly appropriate when
compensable delays are caused by scope additions. The change clause is normally
applied in this situation. In contrast, the Eichleay formula is more appropriate when
compensable delays are caused by a suspension of work. The Army Corps of Engineers
Board of Contract Appeals (ENG BCA) in R.G. Beer Corporation notes that only in rare
cases will an Eichleay award be proper for delays caused by changes to the contractual
scope of work (Love, 2000).
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Figure 2.8 Application areas of percentage markup versus Eichleay formula
The U.S Claims Court in C.B.C. Enterprises, Inc. v. United States (1991) stated:
“When a contract period is extended for additional work, rather than a
suspension of work, home office overhead generally can be calculated more
accurately by applying a percentage overhead markup to direct costs rather
than by use of the Eichleay formula. This is so because, by definition, a
suspension of work means that little or no work is being performed, with a
corresponding decrease in direct costs incurred. Thus, applying a percentage
overhead markup to direct costs would produce little or no overhead, and
would not adequately compensate the contractor for overhead costs incurred.
On the other hand, when changes are made to add work and the performance
period is extended solely to accommodate the extra work as in the present
situation, there is an ongoing level of work which usually produces sufficient
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direct costs such that the contractor generally is adequately compensated by
applying a percentage overhead markup to direct costs.”
The illustration of the application areas (Figure 2.8) raises various issues. How these
approaches are applied when both additional work and a suspension of work cause
compensable delays. Are HOOH damages incurred by the additional work and the
suspension of work calculated separately? If yes, how does one ensure that no
overlapped or overallocated HOOH recovery exists? If no, which methodology will
be more accurate and equitable? The current methodologies cannot handle these
issues.
2.8 Summary of the Literature Review
This chapter has reviewed various topics related to delay claims in the construction
industry. Different concepts, techniques, and methodologies currently used in delay
claims and disputes have been summarized and their rationale, strengths, and limitations
have been analyzed. This review shows that the existing ways of proving causation and
pricing damages in delay claims need improving to obtain general consensus among the
project stakeholders (e.g. owners, contractors, courts, boards, and so on) when project
schedule delays and disputes occur. Specifically, forensic schedule analysis techniques,
apportionment of delay responsibility in concurrent delay situations, and quantification of
recoverable damages, among other things, need to be improved.
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Chapter 3
Research Methodology
This chapter presents the methodology used to achieve the research objectives. A
research framework illustrates the process of conducting the research associated with the
use of various concepts, techniques, tools, and data sources. Next, those concepts,
techniques, tools, and data sources are elaborated to what extent they have been applied
to this research.
3.1 Research Framework
As discussed in chapter 1, this research solves problems surrounding the “causation” and
“resultant damages” in the triad of proof in construction delay claims. on the intent is to
improve both forensic schedule analysis and delay-damages analysis that delay claims
typically require. Figure 3.1 displays the research framework. The research objectives
are numbered in the order listed in chapter 1. The left side displays concepts, techniques,
tools, and data sources adopted to achieve the research objectives listed on the right side.
The research starts with a review of the literature. Relevant concepts of delay claims,
forensic schedule analysis techniques, and methodologies for calculating damages are
reviewed to identify and understand research problems.
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Figure 3.1 Research framework
To examine the effects of resource allocation in schedule delay analysis, this research
constructs some simple project cases illustrating different delay scenarios. Next, some
best available schedule analysis techniques are used to analyze the delays. Historical data
on resource allocation practice in these cases are then loaded into the project schedules to
observe whether the existing techniques are adequate and reliable. It should be noted that
current delay analyses very often neglect resource allocation. An enhanced schedule
window analysis technique is introduced to capture resource allocation practice.
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Resource-constrained CPM and a project scheduling software package facilitate the
analysis.
The measurement and apportionment of delay damages are a necessary step in delay
claims. This is because a single party rarely causes all delays in a project. Thus, the
effects of the context of a delay must be considered. The context of a delay is understood
to include the timing of a delay and the degree of suspension. This research introduces
the concept of the activity-specific overhead allocation process to resolve this problem.
A case study published in a previous work is used to demonstrate the application of the
process and comparisons between it and the daily overhead rate-based method.
Existing methods for calculating field overhead damages assume that these damages
cannot be traced to a specific schedule activity. In addition, home office overhead
damages cannot be traced to a specific contract. These have generated controversy over
the amount of recoverable damages. This research develops a process for quantifying
field overhead damages incurred by schedule delays. This research also recommends a
possible direction to develop a new approach for quantifying home office overhead
damages. This is presented in the last chapter – conclusions and recommendations.
This dissertation develops a novel forensic schedule analysis technique that
systematically addresses the dynamics of float, logic, and resource allocation. Current
bases and tools include total float in the critical path method, resource-constrained
scheduling, float ownership, hard logic versus soft logic, and the resource allocation
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practice. The consideration of resource allocation in this new technique is based upon the
initial investigation for the first research objective of this dissertation.
Finally, this research introduces a new framework to foster the analyses of the causation
and quantum in delay claims. That is, the framework advances the credibility of both
forensic schedule analysis and delay-damages calculation. The development of this
framework is based on the integration of the new techniques achieved in the second and
the third objectives. The framework is then applied to a case study to compare results
with those derived from previously available methods.
3.2 Bases, Tools, and Techniques
This section describes major bases, tools, and techniques used for this research. Other
concepts and techniques may be discussed in the relevant sections of the following
chapters.
3.2.1 Current Forensic Schedule Analysis Techniques
There are many schedule delay analysis techniques. Chapter 2 describes them in detail.
However, this research mainly uses the most acceptable techniques in the industry: but-
for, time impact analysis, and especially window analysis. Specifically, this research
focuses on improving the window analysis method by integrating necessary steps so that
effects of resource allocation can be captured during analysis. They are also a
cornerstone for developing a novel forensic schedule analysis technique in this
dissertation.
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3.2.2 CPM, Linked Bar Charts, and Resource-Constrained Scheduling
CPM is used for forensic schedule analysis. However, graphical exhibitions include bar
charts and linked bar charts for ease of understanding. Since one of the major ideas is to
examine the impacts of resource allocation practice on delay analysis, the concepts of
resource-constrained scheduling are also employed to develop as-planned, as-built, and
entitlement schedules8.
3.2.3 Scheduling Software Packages
Microsoft (MS) Project, Primavera Project Planner (P3), and SureTrak are project
scheduling software packages commonly used in the construction industry. In this
research, MS Project is used in most cases to facilitate schedule analyses. MS Project is
chosen because it is available and adequately sophisticated for those analyses.
3.2.4 Project Overhead Allocation
The earned value management system (EVMS) is used to manage and control project
performance. Remarkably, the U.S Department of Defense (DOD) replaced its well-
known Cost/Schedule Control Systems Criteria (C/SCSC) for EVMS in 1996. In EVMS,
Earned Value Analysis (EVA) is a method of comparing the amount of work planned
with what is actually completed to determine if cost and schedule performance is as-
planned (Barr, 1996). EVA and EVMS are now using in project management by many
industries (Singletary, 1996). Discussions of EVA can be found in any recent project
management textbook.
8 Refer to section 2.1.1 “types of schedules” in Chapter 2
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However, this research does not use EVA to apportion delay responsibility between the
project parties. EVA cannot do that. Instead, the principles of the allocation of indirect
costs through the project and schedule activities in EVMS are employed, modified, and
elaborated to embrace the effects of the context of a delay in terms of the timing of a
delay and degree of suspension in the apportionment of delay damages. This research
adopts these principles since EVMS is now a popular and effective tool used in the
construction industry. Thus, the proposed activity-specific field overhead allocation
process presented in Chapter 5 for quantifying and apportioning field overhead delay
damages can be readily applicable in the real world. Figure 3.2 depicts the EVMS’s
types of effort. The bottom part of the figure lists the equivalent and normally-used
terms. Similar to C/SCSC (Raz and Elnathan, 1999), with these subdivisions of control
account efforts, EVMS recognized two cost drivers for overhead allocation: direct cost
and activity duration. Specifically, the Department of Defense Earned Value
Management Implementation Guide (2005) describes these types of effort as follows:
a. Discrete Effort: Efforts with definable scope and objectives that can be
scheduled and on which progress can be objectively measured.
b. Apportioned Effort: Activity dependent on and related in direct proportion to the
performance of other discrete effort. The resource plan for apportioned efforts
will be in accordance with the plans of the base accounts.
c. Level-of-Effort (LOE): Work scope of a general or supportive nature for which
performance cannot be measured or is impractical to measure. Resource
requirements are represented by a time-phased budget scheduled in accordance
with the time the support will likely be needed. For discrete effort
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accomplishment can be measured based on the completed pieces of work but LOE
is “measured” through the passage of time.
Figure 3.2 Types of effort and overhead costs
This research classifies project overhead in terms of home office overhead, time-related
field overhead, and non-time-related field overhead based on these types of effort in
EVMS as a structured approach to determine the level of overhead incurred during
construction (Figure 3.3). This forms a basis for introducing a new process for
quantifying field overhead damages, which will be discussed in Chapter 5.
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Figure 3.3 Contactor’s overhead costs (Adapted from Scott and Harris, 2004)
3.2.5 Research Evaluation
All approaches proposed in this dissertation are comprehensively evaluated in the form of
case applications. They are compared to the best available techniques or methodologies.
Case studies are used to evaluate performance of the proposed approaches and the best
available ones. Evaluation criteria include, but are not limited to, consistency,
practicality, reliability, and acceptability of results obtained. Table 3.1 describes these
criteria.
Table 3.1 Criteria for evaluating forensic schedule analysis techniques
Criteria Description
Consistency Forensic schedule analysis is logical coherence and accordance with the project facts.
Practicality Forensic schedule analysis can be applied to the real project rather than presents theoretical possibilities.
Reliability The result of forensic schedule analysis can accurately present and capture the project facts.
Acceptability The result of forensic schedule analysis can satisfy the concerned project parties.
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3.3 Data Sources
This research uses both primary and secondary data to develop, evaluate, and validate its
proposed methodologies. Secondary data include published case studies and documents
of related law cases. There are some published case studies appropriate for the
comparative evaluations. Cases reported in Fondahl (1991), Alkass (1996), Stumpf
(2000), Kim and de la Garza (2003), and so forth are used for the evaluations of the
proposed approaches. Occasionally, this research formulates hypothetical case studies to
conduct the evaluations and cross-comparisons.
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Chapter 4
Impacts of Resource Allocation on Forensic Schedule Analysis
The construction industry has employed various schedule analysis techniques to support
delay claims. Resource-related issues are frequently ignored even though they can affect
project completion time. This chapter shows that delay analysis without considering
resource allocation substantially affects results. Some delay can cause unrealistic
resource allocation in downstream work, which in turn may further delay the project.
The effect of resource allocation can either add to or reduce the severity of a delaying
event. Apportionment of delay responsibility may be inaccurate unless resource
allocation practice is considered in the analysis. Practical and necessary steps are
proposed to enhance the existing window analysis technique. A case study is presented
to compare the enhanced window analysis with the existing window analysis.
4.1 Introduction
As discussed in chapter 2 the industry has created and employed many schedule analysis
techniques. The level of acceptability of each technique depends on its credibility and
the court or board ruling the corresponding delay claims. However, resource-related
issues such as constraints, availability, or in broader term resource allocation can cause
delays yet their effects are typically neglected in those techniques. It should be noted that
although a number of studies have focused on scheduling with resource allocation (e.g.
Wiest, 1967; Davis, 1974; Willis, 1985; Fondahl, 1991; Bowers, 1995; Hegazy, 1999;
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Kim and de la Garza, 2003; 2005; Chua and Shen, 2005), none have addressed resource
allocation in “after-the-fact” schedule delay analysis.
The objectives of this chapter are threefold: (i) show that effects of resource allocation
should not be neglected in schedule analysis by means of a motivating case; (ii) propose
practical and necessary steps for dealing with resource allocation and embed them in the
most acceptable technique – schedule window analysis; and (iii) compare the enhanced
window analysis with the existing window analysis for a simple case study. The benefit
is that schedule analysis will be more acceptable and practical for project parties. This
chapter also raises issues that need further studies to improve reliability of schedule
analysis.
4.2 Motivating Case
Figure 4.1 illustrates the as-planned, as-built, and collapsed as-built schedules of the
motivating case. The as-planned duration is seven weeks. The contractor will only be
able to allocate two backhoes to this site. Numbers denoted in each activity bar indicate
the number of backhoes needed for that activity. During the course of work there are two
two-week delays by the owner and the contractor on two activities, namely “excavation
trench 1” and “excavation trench 2,” respectively (Figure 4.1(b)). The project is therefore
delayed one week. Similar to Hagazy and Zhang (2005), the “o” (or “c”) denoted in the
bar indicate the owner-caused (or contractor-caused) delay in that activity.
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Activity \ Week 1 2 3 4 5 6 7 8
Site preparation 0
Excavation Trench 1 1 1 1
Excavation Trench 2 1 1
Excavation Trench 3 1 1
Piping & backfilling 1 1
Number of backhoes 0 2 2 2 1 1 1
Activity \ Week 1 2 3 4 5 6 7 8
Site preparation 0
Excavation Trench 1 1 1 o o 1
Excavation Trench 2 c c 1 1
Excavation Trench 3 1 1
Piping & backfilling 1 1
Number of backhoes 0 1 1 2 2 1 1 1
Activity \ Week 1 2 3 4 5 6 7 8
Site preparation 0
Excavation Trench 1 1 1 1
Excavation Trench 2 c c 1 1
Excavation Trench 3 1 1
Piping & backfilling 1 1
Number of backhoes 0 1 1 3 2 1 1
(c) Collapsed as-built schedule
(a) As-planned schedule
(b) As-built schedule
Figure 4.1. Schedules of the motivating example
The But-for method is used to analyze the delays. Figure 4.1(c) shows the collapsed as-
built schedule, which results from removing the owner delay in the as-built schedule.
The difference in time between the completion date on the as-built and collapsed as-built
schedules is the amount of owner-caused delays (Schumacher, 1995). Thus, the owner
solely caused the one-week delay. Note that a window analysis with day-by-day window
sizes also yields the same result.
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The effect of resource allocation actually reverses the above result. The collapsed as-
built schedule indicates that the contractor would have completed the project in seven
weeks but for the owner-caused delay. However, this is not true and practical. At the
fourth week the work would have required three backhoes for simultaneously performing
the three excavation activities (Figure 4.1(c)). This contradicts the fact that the contractor
could have been able to allocate only two backhoes on this site. That is, the contractor
would still have delayed (paced) the project one week even if the owner had not caused
the delay. The one-week compensable delay yielded from available schedule analyses is
therefore misleading. In other words, the owner has to be responsible for what he or she
does not if the effect of resource allocation is not taken into consideration in this
circumstance. This example case demonstrates that resource allocation practice may
substantially affect the results of schedule analysis and therefore should not be neglected.
4.3 Window Analysis under the Effect of Resource Allocation
The need for reflecting and capturing the practice of resource allocation in schedule
analysis is apparent and imperative. Many existing and new techniques pay little or no
attention to this crucial issue. This chapter adopts window analysis as a technique for
improvement. The reasons are twofold. First, courts and boards as well as practitioners
and researchers generally agree that window analysis is the best available option (Finke,
1999; Kartam, 1999; Stumpf, 2000; Hegazy and Zhang, 2005). Second, a mechanism
that incorporates resource allocation is more feasible, practical, and ready to use.
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Table 4.1. Step-by-step schedule window analysis
Step Existing window analysis without considering resource allocation1
Enhanced window analysis considering resource allocation
0 Document, disseminate, and consent technical and resource constraints, and resource availability and allocation practice
1 Prepare or recover the original as-planned schedule
Prepare and update the as-planned CPM schedule under technical and resource constraints, and resource availability and allocation practice
2 Select meaningful window periods to analyze
Select meaningful window periods to analyze
3 Enter actual progress and delay activities to a copy of the original as-planned schedule, using contemporaneous project documents for the first window period
Enter actual progress and delay activities to a copy of the original as-planned schedule, using contemporaneous project documents for the first window period
4a Reschedule and resequence, if necessary and feasible, the not-yet-completed and not-yet-started activities reflecting technical and resource constraints, and resource availability and allocation practice
4b Calculate the schedule to analyze delay for the first window analysis
Calculate the schedule to analyze delay for the first window analysis
5 Calculate owner-caused delay, contractor-caused delay, and concurrent delay for the first window period
Calculate owner-caused delay, contractor-caused delay, third party-caused delay and concurrent delay for the first window period
6 Copy the schedule to use as a basis for the second window
Copy the schedule to use as a basis for the second window
7 Repeat this procedure for each period to the end of the project
Update step 0, if necessary, and repeat the procedure from Step 2 to Step 6 for each window period to the end of the project
1Adapted from Stumpf (2000)
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Table 4.1 above displays the steps of the enhanced window analysis considering resource
allocation and the current window analysis. Seven steps of current window analysis are
adopted from Stumpf (2000). Basically, steps 2, 3, 5, and 6 between current and
enhanced window analyses are similar. The enhanced window analysis introduces step 0
which emphasizes that technical and resource constraints, and resource availability and
allocation practice should be documented, disseminated, and obtained a consensus
between the contractor and owner. This ensures that schedule analysis considering the
effect of resource allocation is legally enforceable thereafter. For instance, the contractor
must inform the owner at the beginning that he or she will only be able to allocate two
backhoes on site in the case described above. Resource allocation practices can change
and/or be changed over time when more information from the project or the project
parties is available. This is reflected in step 7, which includes updating step 0 and repeats
the procedure from Step 2 to Step 6 for each window period to the end of the project.
Step 1 is to prepare and periodically update the as-planned CPM schedule under technical
and resource constraints, and resource availability and allocation practices from step 0.
Step 4 of the current window analysis is subdivided into steps 4a and 4b. Step 4b is the
same between the two analyses. By including step 4a, the enhanced analysis stresses
rescheduling and resequencing the not-yet-completed and not-yet-started activities, which
reflects technical and resource constraints, and resource availability and allocation
practice. Delays not only change critical path(s) but also disorganize planned resource
allocation practices. This appears to be disregarded in current window analysis.
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Finally, existing CPM scheduling with resource constraints, resource-constrained
scheduling, and resource leveling in commercial scheduling software packages can
facilitate steps 1 and 4a. The answer to which one is chosen depends upon various
factors such as contractual stipulations, availability of those scheduling techniques and/or
software packages, and reliability of their underlying algorithms. Discussion of this issue
is also beyond scope of this paper.
Although several steps in the enhanced and current window analyses are similar, the
enhanced method will result in more reliable delay analysis. As the motivating case
suggests, resource allocation practice can significantly affect delay analysis.
Unfortunately, the current method barely weighs resource allocation. The enhanced
window analysis presented herein fundamentally solves this problem. It ensures how
resource allocation practice should be embedded during delay analysis so that its effects
in apportionment of delay responsibility can be captured in an equitable manner. As
such, an answer to the question “who really caused delays” is more reasonable and
potentially less disputable.
4.4 Case Study
4.4.1 Case Overview
Figure 4.2 presents the as-planned schedule of the case study adopted from a resource-
constrained CPM schedule (Kim and de la Garza, 2003). The original planned contract
duration was 13 days. The maximum available resource limits were two and one unit(s)
per day for resource types A and B, respectively (Figure 4.2). Both the as-planned and
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as-built schedules met the resource limits. The actual contract duration was 16 days as
shown on the hypothesized as-built schedule (Figure 4.3). The project was thus delayed
three days. There were four delays during the course of contract work. Like Mbabazi et
al. (2005), these delays are directly inserted in the corresponding delayed activities
(Figure 4.3). Responsibility for this three-day delay needs analyzing and apportioning.
ID Task Name Duration Predecessors
1 "Simple" Project 13 days
2 A 2 days
3 B 4 days 2
4 C 5 days 2
5 D 5 days 2
6 E 2 days 2
7 F 3 days 3
8 G 2 days 4,5,6,7
Type A
Type A
Type A
Type B
Type B
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
50%
100%
% Work Allocated:
Type A Overallocated: Allocated:
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
100%100% 100%100% 100% 50% 50% 50% 50%
50%
100%
% Work Allocated:
Type B
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
100% 100% 100% 100%100%
Overallocated: Allocated:
Planned completion time: 13 daysResource constraints: satisfied
Figure 4.2. As-planned resource-constrained schedule
4.4.2 Analysis of Delays
This section presents window analyses for the case study. For comparison purposes, both
current and enhanced window analyses described above are presented simultaneously.
Microsoft (MS) Project is used for the analyses. As previously discussed, enhanced
window analysis can employ existing CPM scheduling with resource constraints,
resource-constrained scheduling, or resource leveling in commercial scheduling software
packages for steps 1 and 4a. In this case study, we use CPM scheduling and resource
leveling in MS Project for the analyses.
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ID Task Name Duration
1 "Simple" Project 16 days
2 A 2 days
3 B 8 days
4 Compensable delays 4 days
5 B 4 days
6 C 7 days
7 Excusable delays 1 day
8 Inexcusable delays 1 day
9 C 5 days
10 D 12 days
11 D1 3 days
12 Inexcusable delays 6 days
13 D2 3 days
14 E 2 days
15 F 3 days
16 G 2 days
Type A
Type A
Type A
Type A
Type B
Type B
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
50%
100%
% Work Allocated:
Type A
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
50% 50% 50% 50% 50% 100%100%50% 100%100%50%
Overallocated: Allocated:
50%
100%
% Work Allocated:
Type B
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
100%100% 100%100%100%
Overallocated: Allocated:
Actual completion time: 16 daysTotal delays: 3 daysResource constraints: satisfied
Figure 4.3. Hypothesized as-built schedule
Step 0: Dissemination and consensus of resource allocation practice
Resource allocation practice was simply to meet the resource limits for both resource
types A and B. This practice and other technical constraints (e.g. precedence
relationships) remained unchanged during the course of work. The parties agreed on
these issues.
Step 1: Development of the as-planned CPM schedule considering resource allocation
practice
The as-planned resource-constrained CPM schedule was developed based on Kim and de
la Garza (2003) (Figure 4.2). The contract duration was 13 days.
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Step 2: Selection of meaningful window sizes
Both existing window analysis and enhanced window analysis use similar window
periods. Based on the as-built schedule (Figure 4.3), the project is divided in four
windows. Windows 1, 2, 3, and 4 are days 1 – 5, day 6, day 7, and days 8 – 16,
respectively. Guidelines for defining reasonable windows can be found in Finke (1999).
Steps 3 – 7: Apportionment of delays
The windows method is a repetitive process. To avoid unnecessary redundancy in
presentation, I describe the analyses from steps 3 to 7 in the same section. Schedule
analysis of windows 1 and 2 has graphical illustrations for representative purposes. Also,
only resource allocation graphs that do not satisfy resource allocation practices will be
presented and embedded in the corresponding schedule windows. Since the enhanced
window analysis ensures proper resource allocation for the remaining work after a
window period, resource allocation graphs are not encompassed in that window.
ID Task Name Duration
1 "Simple" Project 14 days
2 A 2 days
3 B 7 days
4 Compensable delays 3 days
5 B 4 days
6 C 5 days
7 C 5 days
8 D 6 days
9 D1 3 days
10 D2 3 days
11 E 2 days
12 F 3 days
13 G 2 days
Type A
Type A
Type A
Type A
Type B
Type B
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
100%
200%
% Work Allocated:
Type A
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
50% 50% 50% 100%150%150%100%50% 50%
Overallocated: Allocated:
Resource allocation: Type A is over-allocated at days 7 and 8 Over-allocation
Figure 4.4. Traditional window analysis: window #1
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ID Task Name Duration
1 "Simple" Project 15 days
2 A 2 days
3 B 7 days
4 Compensable delays 3 days
5 B 4 days
6 C 5 days
7 C 5 days
8 D 6 days
9 D1 3 days
10 D2 3 days
11 E 2 days
12 F 3 days
13 G 2 days
Type A
Type A
Type A
Type A
Type B
Type B
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Figure 4.5. Enhanced window analysis: window #1
Figures 4.4 and 4.5 display results of the first window by traditional and enhanced
window analyses, respectively. Traditional window analysis shows a one-day
compensable delay in this window period (days 1 – 5). However, the resource type A
would be over-allocated at days 7 and 8. This implies that compensable delays in this
period did not only delay the project 1 day but also make the initial resource allocation
for remaining work become impractical. Enhanced window analysis shows a two-day
compensable delay in the same period. Compared to the traditional window analysis, the
actual compensable delay is one more day (2 versus 1).
The analysis is similar for the other windows. Figures 6 and 7 depict the traditional and
enhanced window analyses for the second window, respectively. There is a one-day
concurrent delay (compensable and inexcusable) in this period under traditional analysis.
Again, the resource type A would be over-allocated at days 7 – 9. In contrast, the
enhanced window analysis shows that the project did not suffer any delay due to the
delays in this window. The excusable and inexcusable delays on activities C and D,
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respectively in the third window actually did not cause project delay by both traditional
and enhanced window analyses. However, the traditional analysis results in resource
over-allocation on days 8 – 10. Both the traditional and enhanced analyses for the fourth
and last window yield the same results, which show a one-day inexcusable delay.
ID Task Name Duration
1 "Simple" Project 15 days
2 A 2 days
3 B 8 days
4 Compensable delays 4 days
5 B 4 days
6 C 5 days
7 C 5 days
8 D 7 days
9 D1 3 days
10 Inexcusable delays 1 day
11 D2 3 days
12 E 2 days
13 F 3 days
14 G 2 days
Type A
Type A
Type A
Type A
Type B
Type B
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
100%
200%
% Work Allocated:
Type A
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
50% 50% 50% 150%150%150%100% 50%
Overallocated: Allocated:
Over-allocation
Resource allocation: Type A is over-allocated at days 7, 8 and 9
Figure 4.6. Traditional window analysis: window #2
ID Task Name Duration
1 "Simple" Project 15 days
2 A 2 days
3 B 8 days
4 Compensable delays 4 days
5 B 4 days
6 C 5 days
7 C 5 days
8 D 11 days
9 D1 3 days
10 Inexcusable delays 1 day
11 D2 3 days
12 E 2 days
13 F 3 days
14 G 2 days
Type A
Type A
Type A
Type A
Type B
Type B
-1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Figure 4.7. Enhanced window analysis: window #2
Table 4.2 summarizes results of the two schedule analyses. Compensable, concurrent
(compensable and inexcusable), and inexcusable delays are one, one, and one days,
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respectively under traditional window analysis. Enhanced window analysis results in two
days and one day for compensable and inexcusable delays, respectively. Comparing the
traditional analysis to the enhanced analysis, we see that there is a one-day delay shift
from the concurrent delay category to the compensable delay category. It should be
noted that contractors are normally entitled to time extensions for concurrent delays.
Consequently, the contractor would be penalized if resource allocation were neglected in
this case study.
Table 4.2. Schedule analysis summary Window Number
Window Period (date)
Completion Duration (days)
Delays (day)
Compensable Excusable Inexcusable Concurrent
1 1 – 5 15 (14)1 2 (1) - - - 2 6 15 (15) - - - 0 (1) 3 7 15 (15) - - - - 4 8 – 16 16 (16) - - 1 (1) -
1Results of enhanced window analysis (existing window analysis)
4.5 Discussion
This chapter demonstrates that resource allocation significantly affects results of schedule
delay analysis and apportionment of delay responsibility. This raises several interesting
issues for practitioners and researchers as follows.
4.5.1 Possible Extended Effect of Delays
Traditional schedule analysis evaluates whether an event, several or all events prolong
the critical path(s) of the project. This chapter shows that some delay can make
unrealistic resource allocation in downstream work, which in turn may further delay the
project. Available schedule analysis methods do not readily capture this possible
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extended effect of the delay. In other words, a schedule delay analysis that considers
resource allocation is able to evaluate the “forward” effects of a delay. This results in a
more trustworthy apportionment of delay responsibilities. Delay analysis aims at
measuring the time difference between the actual project completion date and when the
project would have ended but-for the owner-caused delays (Zack, 2000). Unfortunately,
the answer to “when the project would have ended but-for the owner-caused delays” will
be unreasonable unless the effect of resource allocation is addressed in that delay
analysis. Future research may develop systematic algorithms that can readily identify
whether a certain delaying event causes an extended effect and effectively quantify it, if
any.
4.5.2 Positive/#egative Effect of Resource Allocation on Delay Responsibility
The effect of adding resource allocation considerations to a traditional schedule analysis
can either increase or reduce the impact of a delaying event. That is, either owners (i.e.
in the motivating case) or contractors (i.e. in the case study) may face disadvantages in
apportionment of delays under existing schedule analysis. The key question is “under
what delay circumstances will contractors or owners face such disadvantages?” My
future research will continue on this issue.
4.5.3 Legal Acceptability
Available schedule analysis techniques have frequently not incorporated the effects of
resource allocation. Nevertheless, courts and review boards have supported delay claims
based upon rigorous analysis techniques, especially the schedule window analysis
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method. It is believed that the methodology presented herein is logical and rigorous and
will, over time, be acceptable to such bodies.
4.5.4 Implications of Applying the Enhanced Window Analysis
Undoubtedly, the enhanced method potentially yields more reliable results. It however
requires much more information from the project under dispute. Data collection for
traditional window analyses is already an arduous task. Together with project records
regarding delays (i.e. weather, change orders, etc.) as in the traditional method, the
enhanced method further requires project records regarding practices of resource
allocation. Although initial agreed resource allocation is important for the analysis,
actual resource allocation also needs to be recorded and used in the enhanced method.
The reason is that some planned resource allocation practices have to be changed to
accommodate uncertainties (including delay occurrences) that manifest during project
execution. Other allocation practices such as spatial resource constraints for a given
activity may rarely change over time.
Work methods can lead to changed resource allocation. For example, a shift from a
labor-intensive method on equipment-intensive one and vice versa may result in radical
changes in both resource allocation practices and project completion time. This raises an
interesting issue that unrealistic resource allocation in downstream work in certain
circumstance can be caused by either current delays as previously discussed or by current
changes in work methods. Thus, the status of work methods especially when differing
from original approved plans has to be recorded and addressed during delay analysis.
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The analysis also needs to separate changes in resource allocation due to delays from
those due to work method changes. This further emphasizes the importance of collecting
pertinent project records under the contexts of delays.
Recording project data for the enhanced window analysis can be less burdensome if
resource allocation practices are selectively collected. Only critical resources which
likely affect project schedule need to be tracked. They include, but are not limited to,
manpower, scarce and long-lead materials, and major equipment. Their status consists of
availability, delivery issues, technical and market constraints, planned versus actual
allocations, and so forth. A computer-aided tool such as a spreadsheet program may
facilitate tracking these resource allocation practices.
4.6 Summary
Resource allocation substantially influences project time performance. Impractical
allocation may account for the project delay. Unfortunately, current schedule analysis
often does not consider a project’s resource allocation. This chapter illustrates that
resource allocation can affect the results of a delay analysis. Performing a schedule
analysis without considering resource allocations may increase the owner’s or
contractor’s risk of assuming delay responsibility which is not his or her fault.
This chapter has proposed steps to ensure that delay analysis considers impacts of
resource allocation. They are embedded in the window analysis, which is currently the
most acceptable schedule analysis technique, to enhance its credibility. A case study was
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used to compare the analyses and results of the traditional and enhanced schedule
window analysis methods.
A delay analysis that includes the resource allocation used on the project is more
trustworthy. As such, the enhanced schedule window analysis technique is useful to both
industry professionals and researchers. It enables more reliable forensic schedule
analysis.
This initial investigation of the impacts of resource allocation reveals several needs to
improve the integrity of construction delay claims. Delay damages should be quantified
in the context of a delay. Ideally, they need to relate to the results of forensic schedule
analysis in a real-time manner. These are presented in the next chapter. Similarly, the
need for a new forensic schedule analysis technique that can holistically address not only
resource allocation but also other key schedule-related factors such as float, float
ownership, logic changes is apparent. Chapter 6 presents and discusses this technique.
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Chapter 5
Delay Damages and Schedule Window Analysis
The previous chapter shows the effects of resource allocation on delay analysis. This
chapter further argues that the context of delays significantly affects delay responsibility.
Among other things, recoverable damages for a delay should be related to the timing of
the corresponding delay and its effect on indirect costs. This chapter presents an
alternative and integrated approach for quantifying and apportioning delay responsibility.
It considers the context of a delay in terms of its timing and the degree of suspension
during the course of a project. The proposed approach allocates project site overhead
costs to schedule activities. It then helps track site overhead damages in a “real-time”
manner while schedule window analysis is employed to analyze the delay. A case study
is used to illustrate its application. Results suggest that the conventional daily overhead
rate-based method can cause double payments because conventional recovery may cover
parts of field overhead already paid from the original contract. This new approach also
enables the application of the comparative negligence doctrine when concurrent delays
occur by fairly sharing delay damages between the project parties.
5.1 Introduction
Current practice normally determines a uniform daily overhead rate based on estimates or
actual expenses to compensate for increased field overhead when compensable delays
occur. The daily overhead rate is either predetermined in contract documents or
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calculated in delay claims. Among other things, this practice has two major limitations.
Specifically, it does not properly consider (i) the timing of delays and (ii) the degree of
suspension (total or partial) in the calculation of the rate.
Because of those limitations this chapter proposes an analytical approach that integrates
schedule window analysis and an activity-specific field overhead allocation process
(ASAP) to fairly apportion delay days and field overhead damages between the project
parties in an ongoing basis. Delays and suspensions can incur both field overhead and
home office overhead. The proposed approach helps the project parties quantify field
overhead damages of delays and suspensions.
5.1.1 Delay Context versus Delay Responsibility
Successful delay claims require proper apportionment of delay responsibility.
Unfortunately, apportionment of delay responsibility is an arduous endeavor. Schedule
delay analysis methods such as as-planned vs. as-built, impacted as-planned, collapsed
as-built, time impact analysis, and schedule window analysis are used to apportion delay
days attributable to each project party. Project site overhead damages, unabsorbed
overhead, extended overhead, loss of profits, liquidated damages and so forth are
potentially recoverable damages for either the contractor or owner. However, current
delay analysis techniques solely focus on “time” criticality of schedule activities. That is,
1-day delay at the ith day and 1-day delay at the jth day during the course of work are
frequently treated the same.
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The premise of this research is that quantification of delay damages should consider the
context of a delay and suspensions, namely its timing and degree of suspension. Degree
of suspension means the proportion of work under a contract that is delayed, suspended,
or interrupted in a certain period of time; i.e. partial or total suspension. Timing of a
delay and relative importance, rather than duration, of the delayed activity can affect
delay responsibility. The relationship between project cost items and activities in CPM
schedules should be considered since this can be crucial, especially for evaluating the
impact of delays on the work (Overcash and Harris, 2005). Different portions of the
project need different types of managerial effort, which in turn have different costs
(Lankenau, 2003). In addition, the ultimate objective of delay-related disputes is to
identify who is responsible for the damages. As such, damages incurred at the time of a
delay should be timely estimated for recovery. In other words, an overhead rate that is
constant over the whole course of contract work is inappropriate. Also, although the
compensation based on a daily overhead rate may work for total suspensions, how the
compensation is determined based on this rate when the project only suffers partial
suspensions is not easy, if not arbitrary. That is, the percentage of the daily overhead rate
that the contractor is allowed to recover if only part of the contract work is delayed,
suspended, or interrupted is unclear.
Figure 5.1 presents the issue. The as-planned schedule has four activities A, B, C, and D.
Scenarios 1 and 2 show the as-built schedules under non-concurrent and concurrent
delays, respectively. In scenario 1, there are two 1-week delays by the owner and
contractor on activities A and D, respectively. It is straightforward to divide the 2-week
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project delays into 1-week compensability and 1-week inexcusability. Given that the
time-related overhead level fluctuates, these two 1-week delays cause different overhead
damages. Scott and Harris (2004) note that whether the level of overheads during the
extended period or that at the time of the delaying event should be paid is controversial.
This implies that the timing of delays really matters in apportioning delays and damages.
Figure 5.1. The context of delays versus delay responsibility
In scenario 2, the 2-week delay on activity B and 3-week delay on activity C are
concurrent (inexcusable and compensable delays, respectively). Current practice treats
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concurrent delays as excusable delays. Thus, the contractor would only be granted a time
extension and the parties would each bear their own damages.
“The contractor is barred from recovering delay damages to the extent that
concurrent contractor-caused delays offset owner-caused delays, and the owner
is barred from recovery of liquidated or actual delay damages to the extent that
concurrent owner-caused delays offset contractor-caused delays” (AACEI,
2007).
However, a recent trend advocates an equitable apportionment when compensable and
inexcusable concurrent delays occur. A party causing less impact of concurrent delays
should be permitted to recover damages from the other (Kelleher, 2005). This trend also
supports the view that sharing burdens between project parties makes expensive changes
less excruciating (Kasen and Oblas, 1996). Kraiem and Diekmann (1987) call such
equitable apportionment a “fair rule”. This rule is rooted in the doctrine of comparative
negligence, in contrast to the doctrine of contributory negligence, in tort law. For
instance, if two critical activities “roofing” and “landscaping” are simultaneously delayed
by a contractor and an owner, respectively, it is difficult to accept that their effects on
project indirect costs are similar.
Hughes and Ulwelling (1992) urged rejecting the rule “damages not be apportioned” in
concurrent delay situations. In practice a few cases have held that despite the difficulty
the parties incur trying to segregate damages or costs attributable to each cause. James
(1991) claims that forfeiture of such damages because of non-apportionability is
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excessively harsh. Courts often use a jury verdict method to apportion damages to each
party (James, 1991). This is very subjective and sometimes incorrect, and places the
project parties in a passive, reactive position. The parties do not have an effective way to
provide and demonstrate fair apportionment in front of the courts. Consequently, the
outcome of the jury verdict is what the parties will receive, which is highly speculative
and can be grossly inequitable. The project parties should therefore proactively apportion
damages in concurrent delays, ideally by employing a logical and systematic approach.
5.1.2 Field Overhead Damages
Project delays almost always cause damages – increased direct and/or indirect costs on a
project. When a project suffers a delay while substantial work is in progress,
construction job site support costs, such as trailers, supervision costs, maintenance,
utilities, tools, and equipment, will continue to accumulate unless these resources are
moved to another job site (Love, 2000). The detailed types of the delay damages for both
owners and contractors can be found elsewhere (e.g., Strogatz et al., 1997). However, the
trickiest part of construction cases is how to measure and present evidence on damages
(Overcash and Harris, 2005).
Field overhead damages require proper estimation although many practitioners agree that
damages of field overhead are less complicated than those of home office overhead.
Determination of daily field overhead is not difficult if the contractor maintains
reasonably good job cost records (Zack, 2001). Unfortunately, field overhead costs that
are determined by a stipulated or bid daily rate are potentially unfair. It assumes that all
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time-related costs are the fault of the owner and a complete extrapolation is foreseeable
by the owner (Lankenau, 2003). Delay claims need a more accurate approach for
calculating field overhead damages. The “one-size-fits-all” daily rate is often
unreasonable.
5.2 An Integrated Approach
The proposed approach starts at the beginning of a project. Efforts dedicated to the delay
claims process start at project commencement (Yates and Epstein, 2006). From the as-
planned schedule and the project’s cost estimate, direct costs, labor costs, and/or labor
hours are estimated and/or calculated for each activity in the as-planned schedule. This is
because items of the project’s cost estimate may not be schedule activities. The
calculation of activity-specific direct costs, labor costs, or labor hours is straightforward
and not discussed here. Current practice normally considers indirect costs or overhead at
the project and contract level, not the activity level. In contrast, our approach attempts to
allocate field overhead costs to each schedule activity based on a reasonable basis.
Current practice makes delay damages more difficult to derive when a delaying event
occurs. Project parties often have more serious disagreement over indirect costs than
direct costs.
ASAP is the key to quantifying field overhead damages on a real-time or ongoing basis.
This analytical method classifies field overhead into time-related and non-time-related
costs. Time-related overhead refers to overhead incurred through and directly connected
to the passage of time; e.g. supervision, administration, and utilities. It is associated with
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delay claims (Harris and Ainsworth, 2003). Time-related costs that are not allowed by
the contract or regulations must be excluded (Lankenau, 2003). Non-time-related
overhead includes, but is not limited to, temporary construction, bonds, insurance, and
project office supplies that are one-time expenses.
Accordingly, ASAP first divides project field overhead into time-related and non-time-
related overhead cost categories. Each is then allocated to schedule activities in direct
proportion to their direct costs, labor costs, labor hours, or whatever cost driver is
reasonable. ASAP will never be precisely accurate. Next, time-related and non-time-
related overheads per time unit (e.g., day, week, and month) are calculated for each
schedule activity based on the corresponding activity duration. This enables allocation
on the basis of an “as-planned” field overhead level throughout the course of the contract.
When a schedule activity is delayed, the activity duration is increased. This duration
extension in turn normally increases the field overhead cost of the corresponding activity
and then that of the project. Although the delayed activity’s non-time-related field
overhead will not change, its value per time duration unit will decrease due to the
increase in the activity duration. This is the basis for compensating field overhead
damages incurred by critical delays, which are drawn from a window analysis.
If a new activity is added to the schedule and extends the project duration, the markup of
the corresponding change order already includes the FOH increase. Thus, the above
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process should not be applied. Otherwise, FOH should be redistributed to update any
new schedule activity. Table 5.1 summarizes the necessary steps in this approach.
Table 5.1. ASAP’s steps for quantifying field overhead damages Step Description Basis/Formula
1 Estimate or calculate field overhead in the form of time-related (FOHt) and non-time-related (FOHn) costs.
% of direct costs, historical data, or actual project records
FOH = FOHt + FOHn
2 Allocate field overhead to schedule activities based on a selected cost driver (i.e. labor hour, labor cost, direct cost)
FOHti = FOHtxCDi CD
; FOHni =FOHnxCDi CD
CD: cost driver value; i: ith activity
3 Calculate time-related activity-specific field overhead per time duration unit for each activity (uFOHti)
uFOHti = FOHtiDi
; uFOHni = FOHni Di
uFOHti: FOHt for i per time unit
Di: ith activity duration
4 Perform a window analysis when a delaying event(s) occurs and identify the critically delayed activity(ies) in the analyzed window size (Wj).
iD: critically delayed activity I
iDo: owner-caused critically delayed activity i
Wj: jth window period
5 Extrapolate time-related field overhead as a function of the passage of time for critically delayed activity(ies) in the delay period (DP)
uFOHtiD = uFOHti
6 Calculate compensable field overhead damages (FOHC)Wj in the analyzed window size Wj, if any, by summing the time-related overhead occurring in the delay period in step 5 and in which the owner is responsible
(FOHC)Wj = iDo∑ uFOHtiDo x (DP)Wj
(FOHC)Wj: compensable FOH damages in window Wj
7 Update Steps 1-3 and repeat Steps 4-7 when delaying event(s) occur. Total compensable FOHC damages are the sum of compensable (FOHC)Wj damages in all window sizes
FOHC = Wj∑ (FOHC)Wj
FOHC: total compensable FOH damages
ASAP is based on the following assumptions:
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a. When the approach is used for forward pricing or project records are unavailable,
the contractor’s cost estimate is reasonable and/or acceptable. Otherwise, FOH
calculated in Step 1 should be from actual project cost records.
b. Field overhead can be classified and estimated as time-related field overhead
(FOHt) and non-time-related field overhead (FOHn). Only FOHt is affected by
delays and hence recovered (Lankenau, 2003; Harris and Ainsworth, 2003).
c. The contractor is unable to remobilize their resources to absorb overhead. Periods
of delays are relatively small or in short durations if the as-bid FOH is used in
Step 1. This is to ensure that cost extrapolations for calculating FOH damages are
plausible. A 10–25 percent increase in project duration is reasonable (Lankenau,
2003).
d. The project owns float. That is, float is used on a first-come, first-served basis.
e. Activity costs are uniform distributions across the duration of the activity.
5.3 Hypothetical Case Study
This case study is a home construction project in which as-planned schedule, as-built
schedule, and delaying events are adapted from Stumpf (2000). Detailed descriptions are
available in Stumpf (2000). The planned project duration was 16 weeks. Figure 5.2
illustrates the as-planned schedule, which includes twelve schedule activities. These
activities were to build the house and its garage.
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ID Task Name Duration Predecessors
1 Excavation 2 wks
2 Foundation 2 wks 1
3 Joining wall 1 wk 2
4 House w alls 4 wks 3
5 House roof 3 wks 4
6 Select f inishes 1 wk
7 Interior finishes 3 wks 5,6
8 Clean up 1 wk 7,12
9 Fab/del garage doors 6 wks
10 Garage w alls 3 wks 3
11 Garage roof 2 wks 10
12 Garage doors 2 wks 11,9
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Figure 5.2. As-planned schedule
Table 5.2 shows the project cost estimate. Items are also activities in the as-planned
schedule (Figure 5.2). The allowable overhead is 20 percent of total direct costs.
Overhead ($54,792) includes $15,000 HOOH and $39,792 FOH. In turn, FOH consists
of $19,792 time-related FOH and $20,000 non-time-related FOH. The average daily
time-related FOH rate is $1,237 per week ($19,792/16).
Table 5.2. Project cost estimate (in dollars) No. Item Unit Quantity Unit Cost Direct Cost
1 Excavation m3 122 106 12,960 2 Foundation Lump sum 1 15,000 15,000 3 Joining wall m2 42 431 18,000 4 House walls m2 109 431 46,800 5 House roof m2 67 323 21,600 6 Select finishes Lump sum 1 1,000 1,000 7 Interior finishes Lump sum 1 100,000 100,000 8 Clean up Lump sum 1 2,000 2,000 9 Fab/del garage doors door 2 3,000 6,000 10 Garage walls m2 88 431 37,800 11 Garage roof m2 33 323 10,800 12 Garage doors door 2 1,000 2,000 13 Subtotal 273,960 14 Overhead (OH) 20% of Direct Costs 54,792 15 Total cost 328,752
Figure 5.3 illustrates the as-built schedule. During construction the project is delayed.
The actual project duration was 24 weeks, 8 weeks longer than the original plan. Figure
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5.3 also illustrates the delaying events. Events with (o) are owner-caused delays, and (c)
are contractor-caused delays.
ID Task Name Duration
1 Excavation 5 wks
2 Start excavation 1 wk
3 Excavation delay (o) 3 wks
4 Complete excavation 1 wk
5 Foundation 2 wks
6 Joining wall 1 wk
7 House walls 7 wks
8 Start house w alls 2 wks
9 Reconsider w indow design (o) 2 wks
10 Replace carpenters (c) 3 wks
11 Complete house w alls 2 wks
12 House roof 3 wks
13 Se lect finishes 7 wks
14 Late selection of finishes (o) 6 wks
15 Select finishes 1 wk
16 Interior finishes 5 wks
17 Interior f inishes 3 wks
18 Extended f inishes duration (c) 2 wks
19 Clean up 1 wk
20 Fab/de l garage doors 10 wks
21 Late garage door order (c) 4 wks
22 Fab/del garage doors 6 wks
23 Garage walls 7 wks
24 Start garage w alls 2 wks
25 Complete garage w alls 1 wk
26 Extended duration of garage w alls (c) 1 wk
27 Garage roof 2 wks
28 Garage doors 6 wks
29 Revise garage doors (o) 4 wks
30 Garage doors 2 wks
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Figure 5.3. As-built schedule
A window analysis with five window periods apportions the 8-week project delay to 1
week of inexcusable, 2 weeks of excusable, and 5 weeks of compensable delays.
Specifically, the five window periods are weeks 1 – 4, 5 – 8, 9 – 13, 14 – 17, and 18 – 21.
Among them, the first, the third, and the fifth window periods experienced 3 weeks of
compensable delays (weeks 2, 3, 4), 2 weeks of concurrent delays (weeks 11 and 12) and
1 week of inexcusable delays (week 13), and 2 weeks of compensable delays (weeks 18
and 19), respectively. Periods 2 and 4 did not suffer schedule slippage. The window
periods herein are defined based on a suggestion that the beginning of each delay should
be the beginning of a window (Finke, 1999). The detailed schedule analysis of this case
can be found elsewhere (Stumpf, 2000; Hegazy and Zhang, 2005).
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After the delay days are apportioned among the parties, the question is how to properly
quantify and apportion delay damages, FOH and HOOH damages. For HOOH damages,
there are a variety of formulas available (Zack, 2001; Taam and Singh, 2003). FOH
damages are however calculated based on an average daily FOH rate or the mean of daily
overhead costs. As previously discussed, a uniform daily FOH rate fails to take into
account the context of delays. To consider the context of delays in quantifying damages,
ASAP distributes FOH to schedule activities. In this case it is assumed that the original
FOH estimates are reasonable and that actual overhead records are not available. The
method also works when actual project costs are well maintained as discussed later.
Table 5.3 shows the distribution of activity-specific FOH. In this example direct costs
are selected as the cost driver. That is, time-related (non-time-related) FOH for a certain
activity equals the ratio of the activity’s direct costs and total direct costs times the
corresponding project time-related (non-time-related) FOH. In Table 5.3, columns 6 and
9 present “as-planned” activity-specific non-time-related and time-related FOHs,
respectively. Similarly, columns 7 and 10 present “as-planned” activity-specific non-
time-related and time-related FOHs per time duration unit, respectively. Column 8
shows “as-built” activity-specific non-time-related FOH per time duration unit. Because
the activity-specific non-time-related FOH does not change due to delays, its “as-built”
value per time duration unit for delayed activities will be inversely proportional to the
ratio of the actual and planned activity durations. In contrast and as previously described,
activity-specific time-related FOH per time duration unit would remain unchanged.
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Table 5.3. Distributed activity-specific field overhead (in dollars) No. Item Duration Direct Non-Time-Related FOH Time-Related FOH
Planned Actual Cost Total Plan/wk Actual/wk Total FOHt/wk
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1 Excavation 2 5 12,960 946 473 189 936 468 2 Foundation 2 2 15,000 1,095 548 548 1,084 542 3 Joining
wall 1 1 18,000 1,314 1,314 1,314 1,300 1,300 4 House
walls 4 7 46,800 3,417 854 488 3,381 845 5 House roof 3 3 21,600 1,577 526 526 1,560 520 6 Select
finishes 1 7 1,000 73 73 10 72 72 7 Interior
finishes 3 5 100,000 7,300 2,433 1,460 7,224 2,408 8 Clean up 1 1 2,000 146 146 146 144 144 9 Fab/del
garage doors
6 10 6,000 438 73 44 433 72
10 Garage walls 3 7 37,800 2,760 920 394 2,731 910
11 Garage roof 2 2 10,800 788 394 394 780 390 12 Garage
doors 2 6 2,000 146 73 24 144 72 13 Total Direct Costs 273,960 14 Overhead (OH) 54,792 15 Home Office OH (HOOH) 15,000
16 Field OH (FOH) 39,792 17 Non-Time-Related FOH 20,000
18 Time-Related FOH 19,792
Figure 5.4 shows the time-related FOHs over time. They are based on the values in
column 10 (Table 5.3) and the timing of the activities in the as-planned and as-built
schedules (Figures 5.2 and 5.3). In other words, FOH for a certain week equals the sum
of time-related FOH per week for all activities performed (either planned or actual) in
that week. Obviously, both “as-planned” and “as-built” time-related FOHs fluctuate
considerably over the course of the contract. This explains why the uniform daily
overhead rate for compensating delay damages is inappropriate. It should be noted that
we call these FOH costs “as-built” because they are distributed to activities based on their
timing in the as-built schedule.
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$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Week
"As-Planned" Time-Related FOH "As-Built" Time-Related FOH
Figure 5.4. Time plot for time-related field overhead versus week
Table 5.4 summarizes the compensable FOH delay damages under the conventional,
daily rate method and the analytical method proposed in this paper. The results are
significantly different. Total FOH delay damages for the two methods are $6,185 and
$1,548, respectively. It should be noted that in this example liquidated damages are
stipulated by the contract and hence similar for the two methods if inexcusable delays
occur. This demonstrates the value of computing FOH damages by our proposed
approach. If a liquidated damages provision does not exists – though this is rarely true –
owner’s actual economic losses will replace the liquated damages in the above analysis.
Table 5.4. Field overhead delay damages (in dollars) Window (Week) Daily FOH Rate ASAP Remark
1 (1 – 4) 1,237 x 3 = 3,711 468 + 468 + 468 = 1,404 3-week compensable delays 2 (5 – 8) 0 0 No delay 3 (9 – 13) 0 0 1-week Liquidated Damages 4 (14 -17) 0 0 No delay 5 (18 – 21) 1,237 x 2 = 2,474 72 + 72 = 144 2-week compensable delays Total FOH Damages 6,185 1,548
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5.4 Discussion
From the analytical approach and the case study presented, some issues need to be
discussed:
5.4.1 Estimated FOH versus Actual FOH
The applicability of the proposed method does not depend on the availability of project
field overhead records. The case study illustrates the use of the method when project cost
records are not available or verifiable. However, the project parties have to agree on the
original estimate, which is a fair assumption since they entered into a contract that was
based on that original estimate. In this circumstance the method can quantify FOH
damages, if any, in a real-time manner whenever a delaying event occurs without waiting
for the actual project cost documentation. For after-the-fact delay analysis, the method
may use actual FOH costs instead. The analytical process is the same as presented in
Table 5.1, except that project FOHs in Step 1 obtains data from actual records.
Accordingly, an actual time-related FOH level can replace the “as-built” one in Figure
5.4.
5.4.2 Degree of Suspension
This new approach considers the degree of suspension in calculating FOH damages.
FOH delay damages are typically paid based on a daily overhead rate when a delay is
compensable. However, a daily rate-based indemnification may cover some parts of
FOH already paid in the original contract. In other words, an average daily FOH rate for
compensating damages potentially causes a “double payment.” For instance, week 19 in
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the above project was similar to a partial suspension. The schedule analysis indicated
that there was a 1-week compensable delay at week 19. Under the daily overhead rate
method the contractor was automatically compensated for FOH damages for the whole
week. The as-built schedule however reflects that the activity “interior finishes” was still
performed in week 19 and hence its overhead was already included in the as-bid FOH
price. As such the daily FOH rate-based compensation in this circumstance is unable to
differentiate FOH delay damages from FOH already approved. By allocating FOH to
schedule activities and evaluating damages at the activity level the proposed method can
avoid any double-payment problem, especially in the event of a partial suspension.
5.4.3 Apportionment for Concurrent Delays
Analysis of concurrent delays raises various issues, because both owners and contractors
employ concurrent delays as a strong defense tool against each other (Baram, 2000). As
previously discussed, the “shield” rule, which grants the contractor time but no money
and the owner no liquidated damages in the situation of concurrent delays, should be
replaced by equitable apportionments (Hughes and Ulwelling, 1992). Kelleher (2005)
noted that apportionment analysis may yield fairer results than non-apportionment.
The approach presented here enables such equitable apportionments. FOH delay
damages are now calculated at the schedule activity level. Thus a project party may only
be responsible for activities for which he/she causes critical delays. In other words,
he/she may only pay for FOH damages incurred by critical delays on those activities. If,
for example, the contractor and the owner caused concurrent delays on activities B and C,
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respectively (Scenario 2, Figure 5.1), the owner would be responsible for a 2-week time-
related FOH increase of activity C while the contractor would be responsible for 2 weeks
of liquidated damages. In other circumstances, owners and contractors may cause
concurrent delays on the same activities. A 2-week concurrent delay at weeks 11 and 12
of the case project is an example. This concurrent delay delayed the activity “house
walls” and increased project costs by $1690 ($845/week x 2 weeks) of time-related FOH.
The parties can equally share this amount of damages. Therefore, the owner would owe
the contractor $845 while the contractor would owe the owner 2 weeks of liquidated
damages. It should be noted that HOOH damages can be equally shared when concurrent
delays truly do exist. Discussion of this issue is beyond the scope of this dissertation.
5.4.4 Float Ownership
With some modification the proposed approach can work in different types of float
ownership. As previously mentioned ASAP assumes that the project owns float. In other
words, float is used on a first-come, first-served basis. The other scenarios are float
owned by owner or contractor or shared by these two parties. On the one hand, float
ownership defines when an event is considered a delay, the type of delay, and whether
damages associated with the delay are assessed to the responsible party. On the other
hand, the key concept of our approach is to allocate FOH to specific schedule activities
and to assess FOH damages at the activity level. As such, if float ownership helps
classify a delay on certain activity, the proposed method is able to calculate if any FOH
damages are caused by the corresponding delay. For instance when float is owned by the
contractor, any owner-caused delay on an activity is excusable and compensable whether
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or not it is critical. The increased time-related FOH of the corresponding activity due to
this delay is damages for which the owner is responsible. Accordingly, steps 4 and 5 in
Table 5.1 need to be modified to reflect this view of float ownership. Float ownership
will be addressed in the next chapter.
5.4.5 Statistical Implications
The daily overhead rate-based method can be traced to the concept “mean” (or average)
in statistics. Statistically speaking, the mean is not always a good measure of data. At
best, the mean is a proper summary for data with symmetric and unimodal distributions.
Figure 5.5 depicts the histogram of the as-planned FOHt per week of the case project
from Figure 5.4. The mean of these data (and also the daily FOHt rate) is $1,237/week.
The histogram however shows that the distribution of the data is actually skewed and
asymmetric. The median value ($1073/week) is a better measure in this case. A fairer
weekly FOH rate for delay period should therefore be $1073/week for total suspensions
or similar circumstances. As a result, calculation of FOH damages using an average daily
rate is often unreasonable.
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Figure 5.5. Histogram of per-week time-related field overhead
5.4.6 Difficulties in Using the Proposed Method
Some issues may arise when the proposed method is employed. Segregation of FOH and
HOOH and proper classification of FOH costs may be problematic. This is because
definition of these terms is sometimes different from one contractor to another (Holland
and Hobson, 1999). Parties may need to write contracts more carefully, specifying the
different types of overhead. In addition, some time-related FOH damages, i.e. utilities,
may not be reasonably calculated as being directly proportional to the passage of time.
These types of time-related FOH should be treated separately if their amounts are
considerable. Selecting the right cost driver among labor hours, labor costs, direct costs,
and so forth to allocate FOH into schedule activities is also not simple. Ideally, the
parties should agree on the cost driver in advance.
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A cost driver-based FOH allocation may be another source of unbalanced bids. For
instance, a contractor may inflate direct costs, labor costs and/or labor hours for certain
activities that will likely be delayed by his/her owner. Current strategies for preventing
unbalanced bids also work in this situation.
5.5 Summary
This chapter argues that apportionment of delay responsibility according to the context of
delays is essential. In addition, the calculation of field overhead damages based on a
daily rate is far from reasonable. A “one-size-fits-all” method neglects the relative
importance of delayed activities and the fluctuating nature of overhead levels during the
course of contract work. Double payment of field overhead may occur if a project suffers
a partial suspension. It also indirectly hinders the application of the “fair rule” or the
comparative negligence doctrine to apportionment for concurrent delays.
The analytical approach, ASAP, proposed in this chapter takes into account the timing of
delays and the degree of suspensions in quantifying field overhead damages. It
realistically allocates field overhead to schedule activities. Field overhead delay
damages, if any and/or allowable, are calculated based on activity-specific field overhead.
When integrated with schedule window analysis, the proposed approach is able to
produce a reasonable damage computation in a real-time manner. For that reason this
approach can be used very effectively in forward pricing and negotiation of delay
compensation. Finally, it can also be a practical and systematic approach that enables
equitable apportionments for concurrent delays. When the proposed method is applied to
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the case study project, its result differed substantially from that of the daily rate method.
The case study illustrates that the daily rate-based method may cause double payments
when the recovery probably covers some parts of field overhead already included in the
as-bid price.
ASAP is useful for both practitioners and researchers. It facilitates systematic
apportionment analysis in delay claims. Practitioners are more proactive in measuring
and presenting delay damages. Researchers should benefit from exploring insights into
its application and implementation in the real world. The next chapter presents a novel
forensic schedule analysis technique which is later integrated with ASAP to form a new
framework for analyzing schedule delays and their associated damages.
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Chapter 6
#ovel Forensic Schedule Analysis Technique
Although factors such as float ownership, logic change, and resource allocation affect
results of delay analysis, existing delay analysis techniques tend to ignore them. Chapter
4 discusses the initial investigation of one of these important factors – resource
allocation. To systematically address this insufficiency this chapter proposes a new
schedule analysis technique called FLORA that simultaneously captures the dynamics of
float, logic and resource allocation (FLORA) in its analyses. FLORA analyzes not only
the direct impact of a delay but also its “secondary” effect. The analysis process follows
ten rules that are flexible and customizable. A case study is employed to illustrate its
application. FLORA yields different and more reasonable outcomes compared to the
window analysis technique, each single analysis of which may yield different or even
conflicting results. By properly dealing with the current issues of schedule analysis,
FLORA can produce more reliable results.
6.1 Introduction
Time impact analysis in schedule delay situations is not simple. Various events caused
by different parties occur during the course of contract work. These events may impact
project schedules and costs, positively or negatively. They can delay, disrupt, or
accelerate project completion. Thus a reliable forensic schedule analysis technique that
helps evaluate the extent of project delay or acceleration of an event and its responsible
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party is very essential. Proper and accurate analysis of delays is also requisite to allocate
time-related costs to the responsible parties (Hegazy and Zhang, 2005). Unfortunately,
today’s preferred techniques such as but-for and window analysis techniques have
substantial limitations and require improvement (Mohan and Al-Gahtani, 2006). In
addition, industry practitioners do not agree which schedule analysis technique is
preferable (Arditi and Pattanakitchamroon, 2006; Zack, 2006).
This chapter presents a new schedule analysis technique called FLORA that
simultaneously and comprehensively captures the dynamics of float, logic and resource
allocation (this explains the name FLORA) during the course of work and thus analysis.
The total float (TF) of an activity in a project schedule may change over time. Critical
paths/activities are therefore time-dependent. Float ownership is another issue which has
increasingly concerned project participants (Peterman, 1979; Ponce de Leon, 1986;
Householder and Rutland, 1990; Al-Gahtani and Mohan, 2007). Some logical sequences
between activities can also be changed to accommodate new progress and information.
These are known as soft logic. Tamimi and Diekmann (1988) assert the need for
reflecting the impact of logic change on project schedule. However, how logic change
affects the results of schedule analysis is frequently ignored in current techniques. The
previous chapter, Chapter 4, identifies possible extended effects of delays due to the
disturbance of resource allocation in downstream work. FLORA solves these various
problems in an integrated and interactive manner.
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6.2 Issues in Forensic Schedule Analysis
A variety of schedule analysis techniques are available in the industry. Different
techniques generally give different results for project parties (Stumpf, 2000). Thus
extensive effort has been made to improve schedule analysis (i.e. Alkass et al., 1996; Shi
et al., 2001; Kim et al., 2005; Mbabazi et al., 2005; Al-Gahtani and Mohan, 2007).
Various issues have also been raised such as concurrent delays, pacing delays, fair
treatment of non-critical activities, real time analysis, float ownership, scheduling
options, resource allocation (Zack, 2000; Arditi and Pattanakitchamroon, 2006; Mohan
and Al-Gahtani, 2006; Nguyen and Ibbs, 2006; Ibbs and Nguyen, 2007a). Current
methods and their improvements can only solve one or some of these issues. The
improved window analysis technique proposed in Chapter 4, for example, only addresses
resource allocation. In addition, the impact of logic change on delay responsibility has
really not been addressed in these previous studies. The following sections will discuss
critical issues and then show their relationship in forensic schedule analysis.
6.2.1 Float and Float Ownership
In the critical path method total float or slack is defined as the total amount of time that
an activity can be delayed without delaying the project completion date. Since float is a
critical asset the question “who owns float?” has increasingly concerned contractual
parties. The result of schedule delay analysis can be affected by the various views
regarding who owns float (Arditi and Pattanakitchamroon, 2006). Consequently, float
ownership and its use can be a major source of dispute when the project suffers from
delay (Prateapusanond, 2003). For example, it is impossible to identify who is
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responsible for the 2-week project delay in the case shown in Figure 6.1(a) unless the
parties have agreed on float ownership. It should be noted that owner caused-,
contractor-caused, and third party-caused, inexcusable, excusable/compensable, and
excusable/non-compensable delays are denoted as (o), (c), (t), IE, EC, and EN,
respectively, in this dissertation.
Several studies have proposed different alternatives for total float ownership, sharing,
and/or management. Householder and Rutland (1990) propose that the party who loses
or gains as a result of fluctuation in the project cost should own and use float as a
resource. de la Garza et al. (1991) suggest that the contractor owns float but has to trade
it on demand by the owner. Zack (1993) recommends the use of a joint-ownership-of-
float provision and a systematic time-impact analysis of each delay event. Pasiphol and
Popescu (1994) allocate total float to individual activities on the paths such that all
activities are critical. Gong (1997) calculates “safe float”, which can be used without
severely affecting the risk of project delay. Sakka and El-Sayegh (2007) propose a
method that quantifies the impact of float loss on project schedule and cost. Detailed
discussion of these studies can be found elsewhere (i.e. Prateapusanond, 2003; Arditi and
Pattanakitchamroon, 2006; de la Garza et al., 2007). In general, while these studies
recommend how float should be allocated and managed they do not provide a practical
and systematic approach that can be used in forensic schedule analysis.
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Figure 6.1. The dynamics of float, logic, and resource allocation
A few approaches to total float management for schedule delay analysis have been
proposed in recent years. Prateapusanond (2003) suggests that the owner and the
contractor each own half (50-50) of total float available on any activity, namely
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“allowable total float” (ATF). In addition, the number of delayed days that a party is held
responsible for (RDD) equal the minimum value of: (i) the total delayed days of the
entire project (TDD) and; (ii) the difference between the number of days that the party
delays on the affected activity path (PDD) and its allowable total float. That is,
RDD = Min (TDD, PDD – ATF)
This concept of 50-50 pre-allocation of total float is a workable and interesting idea. In
the survey (Prateapusanond, 2003), the fact that most participants generally agreed this
concept is evident. However, this concept alone is impractical if applied to delay analysis
because it cannot capture the changing nature of activity paths during the course of work
such as changes in critical paths and in logical sequences. In addition, six different
examples used in Prateapusanond (2003) to illustrate the application of this delay analysis
methodology are not representative. There is no activity that belongs to two or more
paths – a common situation in construction schedules. In such a situation the use of that
proposed method can be impossible or problematic.
Al-Gahtani and Mohan (2007) proposes a new total float management technique for
delay analysis. It sets fairly reasonable rules for the entitlements of total float. If total
float changes due to delay events the responsible party will be discredited total float for
delays to the affected activity and will gain or lose total float of successor activities.
However, the apportionment of concurrent delay in this method is arbitrary since it only
considers the number of delays caused by each party rather than the degree of importance
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of different paths and/or activities on which these delays occur. Proper consideration of
this degree in fairly apportioning concurrent delays is essential as presented in Chapter 5
and in Ibbs and Nguyen (2007b). The calculation of owner- and contractor-caused delay
days is also questionable. For instance, the fact that the sum of excusable/compensable
delays and inexcusable delays can be greater than total project delays is difficult to accept
in the industry.
6.2.2 Hard Logic vs. Soft Logic
Relationships involving both hard and soft logic are one of the key elements in project
scheduling. Four factors that govern the sequencing of activities are physical
relationships among project components, trade interaction, path interference, and code
regulations (Echeverry et al., 1991). In addition, sequencing constraints can be flexible
or inflexible (Echeverry et al., 1991). Accordingly, hard or fixed logic is network logic
requiring an “only link” definition due to inflexible constraints while soft, preferential, or
discretionary logic is network logic configured with more flexible constraints.
Soft logic draws extensive research which mostly focuses on schedule updates. Logic
change is inevitable and complicated when a schedule contains soft logic. Soft logic in
network scheduling is unfortunately typical. Several models have been proposed to
handle the soft logic in schedule updating (i.e., Tamimi and Diekmann, 1988; El-Sersy,
1992; Hanks, 1999; Fan et al., 2002; Fan and Tserng, 2006). The impact of soft logic on
the project duration and critical paths is also significant (Wang, 2005).
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No schedule analysis technique properly addresses the impact of logic change on delay
responsibility. This impact may be considerable since the logic change is caused by
different sources which can be ultimately traced to the contractual parties. Before
applying the delay events of the next time period, the “isolated delay type” (IDT)
technique (Alkass et al., 1996) only requires incorporating any changes to the as-planned
schedule logic that occurred beyond the previous time period. This can be insufficient
and inappropriate. The reason is discussed next.
Figure 6.1(b) illustrates the effect of logic change on delay responsibility. The as-
planned schedule is 10 weeks. The project is delayed 2 weeks. At week one there is a 2-
week owner-caused delay on activity A. Up to this point the 2-week project delay is
excusable and compensable. At week eight the contractor causes a 3-week delay on the
same activity. This would delay the project for another three weeks. However, the
contractor changes the soft logic of activities B and C from Finish-Start (FS) to Start-
Start (SS). The result is no additional 3-week project delay. In this situation it would be
unfair to conclude that the 2-week project delay is excusable and compensable given that
the contractor delays activity A more than the owner does. As a result logic change
should be considered when assigning delay responsibility.
6.2.3 Resource Allocation
Resource allocation can also affect delay responsibility. The need for incorporating
resource allocation in schedule delay analysis has been known for years. Pinnell (1992)
suggests that the work plan in the form of a bar chart or network diagram should be
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“resource loaded.” An ideal delay analysis method should consider real resource
allocation profiles (Mohan and Al-Gahtani, 2006). Until recently though schedule
analysis explicitly and separately incorporated resource allocation. Chapter 4 proposes
steps to enhance window analysis by incorporating resource analysis inherently in the
delay calculation. Among other things, it includes the possible extended effect of delays
due to changes in resource allocation and the positive/negative effect of resource
allocation on delay responsibility.
6.2.4 The Dynamics of Float, Logic, and Resource Allocation
The previous sections demonstrate that float and its ownership, logical sequences, and
resource allocation really affect delay responsibility. These three issues are discussed
separately. To improve the reliability of schedule analysis, they clearly should be
considered. Whether they should be treated discretely or jointly in schedule analysis
needs to be further considered.
The premise of this research, as the reader might discern, is that float, logic, and resource
allocation have interrelationships that require them to be considered in an integrated
fashion in any schedule analysis. Resource leveling is traditionally neglected in the
calculation of float (Householder and Rutland, 1990). Nevertheless a non-critical activity
may be “resource critical” because it will extend project duration if it does not release
resources on time (Fondahl, 1991). In addition the use of soft or preferential logics,
artificial activity durations, or constraints can sequester total float (Prateapusanond,
2003). Thus fair float ownership specification also requires non-sequestering of float.
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Schedule analysis should therefore address the dynamics of float, logic, and resource
allocation in an integrated manner.
Figure 6.1(c) depicts the dynamics of float, logic, and resource allocation in schedule
analysis. The as-planned project duration is nine weeks with four activities A, B, C, and
D. The maximum allowable number of workers on this site is ten. At week 5 the owner
issues a change order that extends activity D three weeks. The project would not be
delayed since the change order only consumes float of activity D. However the required
number of workers during weeks 6 – 8 would be 12, which exceed the allowable
allocation of workers. To accommodate this problem the contractor has to reschedule
activity C by removing the FS logic between A and C and adding FS logic between D
and C. This logic change delays the project two weeks. Consequently, the change order
does not simply consume time float but alters the schedule’s downstream logic and
resource allocation and delays the project. Forensic schedule analysis should capture this
dynamic properly to provide a more reasonable result. FLORA attempts to fulfill this
need.
6.3 #ovel Forensic Schedule Analysis Technique
As a new time impact analysis technique FLORA addresses the dynamics of float, logic,
and resource allocation in its analyses. It considers ownership and use of float in
apportioning delay responsibility. Float is shared based upon prior agreements between
the owner and contractor. For instance, the owner and the contractor may mutually agree
that each owns half (50-50) of the total float available on any activity (Prateapusanond,
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2003). FLORA evaluates not only the direct impact of a delay on project schedule but
also its “secondary” effect. The secondary effect of a delay may be a mandatory logic
change and/or the disturbance of resource allocation in downstream activities caused by
the corresponding delay.
Table 6.1. FLORA’s rules for time impact analysis
Rule Description
1 Real-time analysis chooses the as-planned schedule as a baseline schedule. After-the-fact analysis develops a baseline schedule based on the as-planned and as-built schedules after changing errors found in the as-planned schedule.
2 Total float of each activity is shared between the owner and contractor, namely owner’s total float (TFo) and contractor’s total float (TFc), based on the agreed basis (e.g. 0-100, 50-50, 100-0). Total float of new activities which are added later to project schedules will also be shared in the same manner.
3 An analysis may cover the whole time span of a delay event or logic change. If two or more delays occur in the same timeframe, the analysis in this overlapping timeframe will include all of these delays.
4 If the owner or contractor causes a delay or acceleration event, any increase (decrease) in the total float of an activity will add to (deduct from) the responsible party’s total float of the corresponding activity.
5 If the third party causes a delay event such as force majeure, any increase (decrease) in the total float of an activity will add to (deduct from) the owner’s total float of the corresponding activity.
6 Any increase (decrease) in the total float of an activity due to an approved logic change will be shared on the agreed basis.
7 Float is an expiring resource. A party may freely use the other party’s total float if the other does not use it and this “free ride” does not subsequently cause project delay. Otherwise, the party has to hold delay responsibility for total float he/she has overused.
8 Any increase (decrease) in the total float of an activity due to the secondary effect of a delay or acceleration will add to (deduct from) the responsible party’s total float of the corresponding activity.
9 Total float of an activity for a certain party will be increased accordingly if the consumption of this float contributes to project delays.
10 Any project delay or acceleration due to an approved logic change will be shared between the parties on the agreed basis.
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FLORA uses a set of general rules, called FLORA’s rules, for time impact analysis
(Table 6.1). These ten rules are flexible and enable contractual parties to customize them
to fit a specific context. Most are straightforward. For instance, Rule 4 follows the
principle of the total float entitlement in Al-Gahtani and Mohan (2007). That is, the
responsible party will be discredited any change of total float on the affected activity and
gain or lose in the total float of successor activities (Al-Gahtani and Mohan, 2007). Rule
5 is codification of the current general practice that the owner will grant the contractor a
time extension if there is a third party-caused delay and the owner will gain or lose total
float for excusable and non-compensable delays. Due to the flexibility of FLORA’s
rules, however, the project parties may agree to assign any change in total float for
excusable and non-compensable delays to the contractor.
Figure 6.2 illustrates the decision logic of FLORA for forensic schedule analysis.
FLORA can apply to either “real-time” or “after-the-fact” analysis. A real-time analysis
activates when a delay event or a logic change occurs while an after-the-fact analysis is
performed for each delay event or logic change in chronological order. FLORA first
defines the baseline schedule by following Rule 1. It then allocates total float of all
activities in the baseline schedule to the owner and contractor based on the second rule.
If a delay event or logic change occurs, a primary analysis and secondary analysis, if
necessary, will start. Rules 3 – 8 will be applied in these analyses. Assigning project
delay days to the responsible party and updating owner-owned and contractor-owned
total floats can be carried out simultaneously. If there is a delay event or logic change
that has not been addressed, the analysis will continue. Otherwise final delay
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responsibility of each project party will be determined by summing all delay days he/she
has caused in the above analyses. The following case study demonstrates the application
of FLORA.
Figure 6.2. FLORA process flowchart for “real-time” analysis
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6.4 Case Study
The project has eight activities and is planned to finish in 12 days. Figure 6.3 depicts the
as-planned schedule in the form of the linked bar charts. Resource constraints are
omitted for simplicity. Its owner and contractor agree to the FLORA rules (Table 6.1)
without any modification. Rule 2 is also specified by equally shared total float of all
activities. This equally shared float ownership is considered “fair” by many practitioners
(Prateapusanond, 2003). Accordingly, total float is distributed 50-50 to owner’s total
float (TFo) and contractor’s total float (TFc) (Figure 6.3). Finally, total float and project
schedule changes due to an approved logic change are equally shared between the owner
and the contractor.
Act Du Pre TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12
Legend: Act - Activity; Du - Duration; Pre - Predecessor; TF - Total Float
A 2 - 0
B 3 A 0
B 0
0 0
0 0
0 0
C 4 A 1 0.5 0.5
E 2
F 3 E 0
D 3 A 3
F 0
0 0
1.5 1.5
0 0
G 4 C,D 2 1 1
H 2
Figure 6.3. As-planned schedule
Several delay events occur during construction. FLORA with its rules (Table 6.1) and
process (Figure 6.2) helps apportion delay responsibility between the owner and the
contractor. Real-time forensic schedule analysis under FLORA will apply to this case.
Results of the window analysis technique are also given for comparisons. Table 6.2
summarizes delay events during the course of work.
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6.4.1 Day 2: One-Day Contractor-Caused Delay on Activity A
Activity A is delayed one day by the contractor on day 2. This delay would extend the
project one day, from 12 days to 13 days. To recover this one-day delay the contractor
changes the soft logic between activities E and F from finish-start to start-start and adds a
new logic finish-start between E and H. These changes ensure the project completion in
12 days. Thus by using a delay analysis technique like window analysis the contractor
has no responsibility for his/her delay on activity A.
Table 6.2. Delay events and their secondary effects
Day Description
2 The contractor delays one day on activity A. To bring the schedule back as planned, the contractor changes some logical relationships by altering the relationship between activities E and F from finish-start to start-start and adding a new finish-start relationship between activity E and H.
4 The owner fails to allow activity B to proceed on time. Activity B now takes 4 days.
5 The contractor fails to mobilize resources to start activity B until day 6.
5 and 6 The owner does not respond to the request for information (RFI) on activity C timely. This inaction delays activity C two days.
6 The contractor stops the work on activity D without any reasonable excuse.
7 and 8 Activity D continues being stopped due to inclement weather.
10 and 11
The owner makes a change order which extend activities E and G two more days. Activity F requires a lot of workers to finish on its last day (day 12). This means that activities E, F, and H cannot be performed concurrently on day 12 since the contractor is unable to send adequate workers in such a fast change and notice. As a result, the contractor has to temporarily stop activity G on day 12 and restarts it as soon as activities E and F finish.
Figure 6.4 illustrates the analyses for this delay and the corresponding logic changes
using FLORA. The ∆TF column shows any difference in total float that an activity has
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after and before the occurrence of the corresponding event and analysis. For instance, the
∆TF in Figure 6.4(a) is determined by subtracting total float of an activity after the delay
on activity A occurs (the schedule in Figure 6.4(a)) from that of the same activity before
the delay on activity A occurs (the baseline schedule in Figure 6.3).
Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13
(a) First analysis for 1-day contractor-caused delay on A
Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12
(b) Secondary analysis for changed logics:E & F (FS→SS);E & H (FS)
Legend: Contractor-caused
A 0 0 0 0
B 0 0 0 0
E 0 0 0 0
C 1 0 0.5 0.5
F 0 0 0 0
D 3 0 1.5 1.5
H 0 0 0 0
G 2 0 1 1
A 0 0 0 0
B 1 1 0.5 0.5
E 1 1 0.5 0.5
C 0 -1 0 0
F 0 0 0 0
D 2 -1 1 1
H 0 0 0 0
G 1 -1 0.5 0.5
Figure 6.4. Analyses for the contractor-caused delay on activity A at day 2
Figure 6.4 shows two analyses. The first analysis is the direct impact of the delay on
project schedule (Figure 6.4(a)). The project is delayed one day for which the contractor
is responsible. This delay does not change total float of any activity. Next, the contractor
has to revise some construction sequencing as a result of this delay. Figure 6.4(b)
portrays the secondary analysis. These changes of the relationships help accelerate the
project one day. Total floats of several activities are changed as well. Specifically, the
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total floats of activities B and E are increased one day while those of activities C, D, and
G are decreased one day. FLORA’s Rule 6 ensures these changes in total float are shared
between the owner and the contractor. Similarly, the one-day project acceleration due to
the logic changes is equally shared between the two parties (Rule 10). That is, each party
accelerates 0.5 day or delays -0.5 day. In sum, with the one-day delay on activity A at
day 2 and its secondary effect, the contractor is responsible for 0.5 delay day while the
owner is responsible for -0.5 delay day. This result is different from the one derived from
the window analysis previously mentioned. Importantly, the secondary analysis can also
be considered an independent analysis without affecting or changing the results of delay
responsibility.
6.4.2 Day 4: One-Day Owner-Caused Delay on Activity B
The owner delays a day on activity B at day 4 (Figure 6.5). This delay does not delay the
project since activity B is a non-critical activity. Instead it consumes the whole one-day
total float of this activity and makes activities B and E become critical. Activity E is now
critical because the early start of activity E cannot delay unless F and hence the project,
are delayed. Following FLORA’s Rule 4 the owner will be responsible for this decrease
in total float of activities B and E. For that reason, TFo of these activities will be
deducted, from 0.5 day to -0.5 day. The owner has no responsibility at the moment since
this delay event does not cause any project delay. In terms of delay responsibility, a
window analysis would derive the same conclusion.
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Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12
Legend: Contractor-caused Owner-caused
1 0 0.5 0.5G
0 0 0 0H
2 0 1 1D
0 0 0 0F
0 0 0 0C
0 -1 0.5 -0.5E
0 -1 0.5 -0.5B
0 0 0 0A
Figure 6.5. Analysis for the owner-caused delay on activity B at day 4
6.4.3 Day 5: One-Day Concurrent Delays, Contractor- and Owner-Caused, on
Activities B and C
Concurrent delays occur on day 5. The contractor causes a delay to activity B while the
owner delays activity C. Although the owner delays activity C by two days (days 5 and
6), Rule 3 dictates that these two days be analyzed separately. The project is extended
one day from 12 days to 13 days for the events occurring until day 5.
Figure 6.6 shows the analysis of the concurrent delays. The project is delayed one day.
Notably, total float of activities B and C is zero in the updated schedules on day 4 (Figure
6.5) and day 5 (Figure 6.6). In other words, both activities B and C are critical before and
after the concurrent delays occur on day 5. Each single delay event would have caused
project delay if the other had not occurred. As such, both contractor and owner are
responsible for this one-day project delay. Window analysis would yield one-day
concurrent delays, where the contractor is typically granted a time extension but not delay
damages.
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Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13
Legend: Contractor-caused Owner-caused
1 0 0.5 0.5G
0 0 0 0H
3 1 1.5 1.5D
0 0 0 0F
0 0 0 0C
0 0 0.5 -0.5E
0 0 0 0B
0 0 0 0A
Figure 6.6. Analysis for concurrent delays on B and C at day 5
FLORA goes an extra step in this scenario. Activity B is delayed by two days, one day
by the owner at day 4 and the other day by the contractor at day 5. While the delay event
at day 4 does not directly result in the project delay as analyzed above, it contributes to
the one-day project delay in the present analysis. The contractor-caused delay on activity
B at day 5 would not have made activity B critical if the owner-caused delay on activity
B at day 4 had not existed. It is therefore unfair to neglect this owner-caused delay in the
analysis.
Float ownership plays a role in this apportionment. The contractor has owned a half-day
of total float of activity B until day 5 while the owner overuses a half-day of that due to
his/her one-day delay at day 4 (Figure 6.5). Thus the contractor only overuses a half-day
of total float of this activity due to her one-day delay at day 5. Following Rule 7, the
owner has to be held responsible for the total float she has overused. That is, the one-day
delays of the owner on day 4 and the contractor on day 5 on activity B each include a
half-day consuming total float and a half-day causing the project delay. Therefore,
together with the owner-caused delay on activity C at day 5 FLORA divides the one-day
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project delay at day 5 into a half-day of the concurrent delays and a half-day of the
excusable and compensable delay. This result differs from the window analysis result,
which treats the whole one day project extension as a concurrent delay. In addition, TFc
and TFo of activity B will be increased a half day from -0.5 to 0 based on Rule 9 (Figure
6.6).
6.4.4 Day 6: One-Day Concurrent Delays, Owner- and Contractor-Caused, on
Activities C and D
Concurrent delays also occur at day 6. The owner continues delaying activity C. The
contractor delays activity D on the same day. Consequently, the project is delayed one
day (Figure 6.7). The delay on activity D however does not cause the project delay. This
contractor-caused delay only consumes total float since the contractor owns 1.5 of total
float of activity D before the current analysis at day 6. TFc of activity D is deducted from
1.5 to 0.5, which is still positive. In contrast, the owner-caused delay on activity B solely
extends the project one day. That is, the one-day project delay is an excusable and
compensable delay. Window analysis would provide the same result.
Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Legend: Contractor-caused Owner-caused
A 0 0 0 0
B 1 1 0 1
E 1 1 0.5 0.5
C 0 0 0 0
F 0 0 0 0
D 3 0 0.5 2.5
H 0 0 0 0
G 1 0 0.5 0.5
Figure 6.7. Analysis for concurrent delays on C and D at day 6
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Total floats (TF, TFc, and TFo) need updating. The owner-caused delay on activity C
increases the total float of activities B and E. Rule 4 allocates the increase to TFo for the
same activities. TFo of B and E gains one day from 0 to 1 and from -0.5 to 0.5,
respectively (Figure 6.7). Although TF of activity D does not change, TFc and TFo of this
activity are changed. This can be explained that the contractor-caused delay on activity
D consumes total float while the owner-caused delay on activity C adds to total float of
activity D. This cancels out the change in total float of activity D. Based on Rule 4,
however, one day is shifted from TFc (1.5 to 0.5) to TFo (1.5 to 2.5).
6.4.5 Days 7 and 8: Two-Day Third Party-Caused Delay on Activity D
Unexpected inclement weather delays activity D at days 7 and 8. The project completion
date is not affected by this delay (Figure 6.8). That is, the delay only consumes the total
float of activity D. Following Rule 5, TFo of activity D is deducted 2 days due to this
float consumption. Window analysis would also yield no critical delay in the period of
days 7 and 8.
Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Legend: Contractor-caused Owner-caused Third party-caused
A 0 0 0 0
B 1 0 0 1
E 1 0 0.5 0.5
C 0 0 0 0
F 0 0 0 0
D 1 -2 0.5 0.5
H 0 0 0 0
G 1 0 0.5 0.5
Figure 6.8. Analysis for the third party-caused delay on D at days 7 and 8
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6.4.6 Days 10 and 11: Two-Day Owner-Caused Delays on Activities E and G
The owner issues a change order which extend activities E and G two more days (Table
6.2). Figure 6.9(a) illustrates the direct impact of these delays on the project schedule.
The project is delayed one day, from 14 days to 15 days. This is an excusable and
compensable delay. Window analysis for the same time period would give the same
result. The delays also cause changes in total float of activities D, F, G, and H. The
owner’s total float of activity F and H will gain one day while that of activity G will lose
one day (Rule 4). It should be noted that TFc and TFo of activities B and D become zero
because these activities completely finish at the current analysis. This follows Rule 7
which treats total float as an expiring resource.
Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
`
(a) First analysis for owner-caused delays on E and G at days 10 and 11
Act TF ∆TF TFc TFo 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
L.
(b) Secondary analysis for infeasible resource allocation/changed logics at day 11
Legend: Contractor-caused Owner-caused Third party-caused
0 0 0.5 -0.5G
2 1 0 2H
0 0 0 0D
2 1 0 2F
1 1 0 1C
2 1 0.5 1.5E
2 1 0 0B
0 0 0 0A
0 -1 0.5 -0.5G
1 1 0 1H
0 -1 0 0D
1 1 0 1F
0 0 0 0C
1 0 0.5 0.5E
1 0 0 0B
0 0 0 0A
Figure 6.9. Analyses for the owner-caused delays on E and G at days 10 and 11
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The secondary effect of these delays is the infeasibility of the planned resource
allocation. As described in Table 6.2, activity F requires an excessive number of workers
to finish on its last day (day 12). The contractor has to temporarily stop activity G for
one day and restart at day 13 when E and F are completed. As a result the project is
delayed one more day. If the dynamics of logic and resource allocation are not
considered, which is the case in traditional window analysis, this one-day project delay
would be an inexcusable delay.
FLORA provides the secondary analysis for this infeasible resource allocation and
changed logic situation (Figure 6.9(b)). Two new relationships are added as dotted
arrows. This secondary analysis demonstrates that the owner is responsible for this
additional one-day project delay. In other words, this delay is excusable and
compensable instead of inexcusable, as computed by traditional window analysis.
Table 6.3 summarizes the results of FLORA and the window analysis technique. From
the four-day project delay, window analysis would show one-day inexcusable, one-day
concurrent, and two-day excusable and compensable delays. Half-day inexcusable, half-
day concurrent, and three-day excusable and compensable delays are indicated by
FLORA. Each single analysis may also yield different or even conflicting outcomes.
This confirms that project progress factors play a significant role in forensic schedule
analysis.
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Table 6.3. Summary of forensic schedule analysis
Analysis/ Window (Date)
Project Duration (Day)
Type of Delays (Day)
Excusable/ Compensable
Excusable/ Non-compensable
Inexcusable Concurrent
2 12 -0.5 (0)a – 0.5 (0) – 4 12 – – – – 5 13 0.5 (0) – – 0.5 (1) 6 14 1 (1) – – – 7-8 14 – – – – 10-11 16 2 (1) – 0 (1) – Total 16 3 (2) – 0.5 (1) 0.5 (1) aResults of FLORA (window analysis technique).
The differences between the two results derived from FLORA and the window analysis
technique are significant. The one-day difference of excusable and compensable delays
is really considerable given that the project is only delayed four days. This difference
leads to the change in damages paid (recovered) by the owner (the contractor). Other
differences in the results of inexcusable delays and concurrent delays also affect resultant
damages. In a single analysis, at day 5 for instance, FLORA yields half-day excusable
and compensable and half-day concurrent delays while the window analysis technique
does one-day concurrent delays. A shift in a half day from concurrent delay to excusable
and compensable delay apparently changes the associated damages. This is because the
contractor is typically granted time extension only for concurrent delays whereas he/she
receives delay damages for excusable and compensable delays. As such, the outcomes of
delay claims and disputes are impacted by the project progress factors.
6.5 Discussion
FLORA solves various issues in forensic schedule analysis. By capturing the dynamics
of float, logic, and resource allocation, it also helps solve other schedule analysis
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dilemmas such as pacing delays, acceleration, concurrent delays, sequestering of float,
fair treatment of non-critical activities, and real time analysis. A pacing delay is the
deceleration of the work by the contractor (owner) due to a delay to the end date of the
project caused by the owner (contractor) to maintain balanced progress with the updated
project schedule (Zack, 2000). Zack (2000) notes that pacing delays relieve the owner
(contractor) of some delay damages it otherwise may have owed to the contractor
(owner) since they can cause concurrent delays and/or float consumption. FLORA
indirectly considers this issue in analyses because its rules clearly address float ownership
and consumption. Additionally, the rules weigh acceleration as equally important as
delay. That is why FLORA is characterized as a new time impact analysis or forensic
schedule analysis technique rather than a delay analysis technique per se. The proper
treatment of logic change in such analyses enables FLORA to deal with any sequestering
of total float in project schedules. Prior approved float sharing and clear rules for float
consumption helps treat non-critical activities fairly. Finally, FLORA can work for both
real-time and after-the-fact schedule analyses.
The rules of FLORA are flexible. A flexible and more accurate delay analysis technique
is valuable (Alkass et al., 1996). Project parties may follow a certain view of float
ownership and allocation in their specific project as long as the view is agreed by the
parties. That is, total float can be owned by the owner or the contractor or shared
between the two (Rule 2). Instead of being assigned to the owner, changes in total float
due to third-party-caused delays can alternatively be assigned to the contractor or shared
between the parties (Rule 5). In addition, total float changes and delay or acceleration
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due to approved logic changes can be shared based on any ratio rather than equally
shared between the project parties (Rules 6 and 10).
In addition to inheriting strengths of available delay analysis techniques FLORA is by
and large more advantageous. The window snapshot and traditional time impact analysis
techniques do not directly capture the impacts of float ownership, logic changes, and
resource allocation on delay responsibility. The comparison in the above case study
makes this evident. The “isolated delay type” technique (Alkass et al., 1996) does not
deal with logic changes properly. The fact that the IDT technique incorporates delays in
one shot in each window period is not practical (Mohan and Al-Gahtani, 2006). As
previously discussed, the pre-allocation of total float (Prateapusanond, 2003) is
unrealistic since the critical path(s) and, hence the total float of each activity, can change
during the course of work. A total float management technique (Al-Gahtani and Mohan,
2007) only addresses float ownership not the other problems discussed above.
FLORA has several weaknesses. It is somewhat more complicated than window
analysis. Window analysis however becomes arduous if the window sizes are set to
small time periods to gain more accuracy. By incorporating the secondary effect of
delays, FLORA requires project records about logic changes and resource allocation
together with delay and acceleration events. Fortunately, these records can be readily
obtained if the project team updates and documents project progress.
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Finally, its analysis takes more effort since schedule delay or acceleration and the impacts
on different types of total floats (TF, ∆TF, TFc, and TFo) must be computed.
6.6 Summary
Various factors affect the results of delay analysis. Different views of float, float
ownership, logic change, concurrent delays, resource allocation, and so on may lead to
different results. They should therefore be considered in schedule analyses to ensure
more reliable outcomes. Current delay analysis techniques tend to overlook most if not
all of them. While achieving modest success, recently proposed techniques try to
incorporate some of these factors. They mainly deal with concurrent delays and float
ownership.
FLORA addresses various issues that remain unsolved and/or neglected in forensic
schedule analysis. It effectively captures the dynamics of float, logic and resource
allocation. It can be used for either real-time or after-the-fact analysis. The analysis
processes are based on ten rules, which are flexible and customizable. A case study is
used to illustrate its application. FLORA may yield different results compared to other
available schedule analysis techniques like window analysis because it is more inclusive
of project progress factors. By properly dealing with the issues of schedule analysis,
FLORA can be more reliable. Finally, its outcomes can be easily accepted by the project
parties since they are enabled to specify and agree FLORA’s rules for schedule analysis
in advance.
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Thus far, the current analyses of delays and their damages reveal considerable limitations.
This chapter and the last two chapters reveal the impacts of various factors on the
analysis of causation and quantum in construction delay claims. They also present new
approaches to improve the reliability of delay claims. However, whether or not the
proposed approaches can work together is another issue. The next chapter explores and
discusses the integration of these approaches.
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Chapter 7
Integrated Framework of Schedule and Damage Analyses
This chapter presents a new framework to improve the analyses of the causation and
quantum of construction delay claims. The framework is the integration of the two
approaches, namely ASAP and FLORA, presented in the last two chapters. ASAP and
FLORA are able to work in a real-time and interactive manner. A case study developed
from the case project in Chapter 6 demonstrates application of the framework. The case
study shows that the framework works well and improves the reliability and acceptance
of construction delay claims.
7.1 Introduction
The two previous chapters separately propose novel techniques for analyzing schedule
delays and their damages. Chapter 5 presents ASAP for quantifying delay damages while
Chapter 6 presents FLORA as a new forensic schedule analysis technique. As previously
discussed, FLORA is able to capture the dynamics of float, logic, and resource allocation
during schedule analysis. In Chapter 5, ASAP has been embedded in the window
analysis technique, not FLORA. Chapter 6 however shows that FLORA is more credible
than the window analysis technique. In addition, ASAP is superior to the conventional
daily overhead rate-based method. Thus, a new framework for simultaneously analyzing
schedule delays and their associated damages would make construction delay claims
more acceptable among the project parties.
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For that reason, this chapter presents that new framework by integrating ASAP and
FLORA. FLORA plays the role of a new forensic schedule analysis technique whereas
ASAP quantifies field overhead damages based on the ongoing output of FLORA.
Similar to each single method, this framework can be employed in either real-time or
after-the-fact delay analysis. A case study will demonstrate the application of this new
integrated framework.
7.2 Framework Description
Figure 7.1 illustrates the integrated framework for analyzing schedule delays and their
field overhead damages. Basically, the left-hand and right-hand sides are from FLORA
and ASAP, respectively. These are discussed in Chapters 5 and 6. A dotted link is
established between these two processes from “assign any project delay day(s) to the
responsible party” on the left-hand side to the conditional node “is the owner solely
responsible for the delay day(s) (DDj)” on the other side (Figure 7.1).
These two processes can work in an interactive manner. FLORA will signify ASAP via
the dotted link when FLORA identifies any project delay. That is, compensable FOH
damages can be assessed when any project delay day actually occurs. If a schedule
analysis identifies the owner solely responsible for the delay, FOHC in the current
analysis equals the product of the delay day(s) (DDj) and the time-related FOH of the
owner-caused critically delayed activity(ies) (uFOHtiDo). If the delay day(s) is(are)
negative, due to acceleration or logic change for example, uFOHtiDo is substituted by
time-related FOH of the activity(ies) affected by the corresponding cause.
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Figure 7.1. Integrated framework for schedule and damages analyses
ASAP requires some modification to successfully work with FLORA. The first three
steps and step 7 (Table 5.1) are still the same. Steps 4 – 6 are slightly changed since
FLORA now replaces the window analysis technique. The delay period (DP)Wj and the
jth window period Wj are substituted by the delay day(s) DDj and the jth analysis for
which the owner is responsible for the delay, respectively (Figure 7.1). At the outset, j is
set at zero.
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The framework also simplifies several elements in quantifying damages. It only focuses
on compensable field overhead damages. Home office overhead damages and liquidated
damages are not explicit (Figure 7.1). The reason is that HOOH cannot be reasonably
allocated to schedule activities and is normally assessed by markups or Eichleay-like
formulas which are straightforward. Also, liquidated damages are easily calculated as
long as the liquidated damages clause is inclusive and FLORA pinpoints schedule
analysis results.
7.3 Case Study
7.3.1. Applications of the #ew Framework to a Case Study
The case project in Chapter 6 is reused to demonstrate the practicality of the proposed
framework. Table 7.1 further provides the field overhead allocation based on the first
three steps of ASAP. It should be noted that these steps are discussed in Chapter 5.
Similar to the case study in Chapter 5, this case chooses direct costs as the cost driver.
Overhead is 20 percent of the project direct costs. This overhead includes $13,000 of
home office overhead and $30,000 of field overhead. The field overhead consists of
time-related field overhead ($20,000) and non-time-related field overhead ($10,000).
The project was delayed 4 days. Table 6.2 describes the delaying events during the
course of project work. As discussed in Chapter 6, FLORA and the window analysis
technique provide different results. The window analysis yields 2, 1, and 1 days as
excusable/compensable, inexcusable, and concurrent delays, respectively while FLORA
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yields 3, 0.5, and 0.5 for the same delays (Table 6.3). Similarly, ASAP and the daily
rate-based method provide different results of field overhead damages.
Table 7.1. Activity-specific allocation of field overhead (in dollars) No Activity Duration (Day) Direct
Cost Non-Time-Related FOH Time-Related FOH
Planned Actual Total Plan/day Actual/day Total FOHt/day
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1 A 2 3 20,000 930 465 310 1,860 930
2 B 3 5 18,000 837 279 167 1,674 558
3 C 4 6 30,000 1,395 349 233 2,791 698
4 D 3 6 24,000 1,116 372 186 2,233 744
5 E 2 4 30,000 1,395 698 349 2,791 1,395
6 F 3 3 45,000 2,093 698 698 4,186 1,395
7 G 4 6 20,000 930 233 155 1,860 465
8 H 2 6 28,000 1,302 651 217 2,605 1,302
9 Total Direct Costs 215,000
10 Overhead (OH) 43,000
11 Home Office OH (HOOH) 13,000
12 Field Overhead (FOH) 30,000
13 Non-Time-Related FOH 10,000
14 Time-Related FOH 20,000
Table 7.2 presents compensable field overhead damages by employing different methods.
In general, the methods for calculating field overhead damages (daily rate-based, ASAP)
are based on the outputs of the forensic schedule analysis techniques (window analysis,
FLORA). Thus, there are four combinations where the new integrated framework is used
in the last right column which is indicated by FLORA and ASAP (Table 7.2). The
liquidated damages and extensions of time are not discussed here since their calculations
are straightforward.
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Table 7.2. Field overhead delay damages (in dollars) under different methods Analysis/Window Daily FOH Rate ASAP
(Date) Window Analysis FLORA Window Analysis FLORA
2 0 1,667x(-0.5)= -834 0 930x(-0.5)= -465
4 0 0 0 0
5 0 1,667x0.5=834 0 558x0.5=279
6 1,667x1=1,667 1,667x1=1,667 698 698
7-8 0 0 0 0
10-11 1,667x1=1,667 1,667x2=3,334 1,395+465=1,860 1,395+465+465
Total FOH Damages 3,334 5,001 2,558 2,837
With the results of delay analyses (Table 6.3), the daily rate-based method yields $3,334
and $5,001 as compensable field overhead damages under window analysis and FLORA,
respectively. Noticeably, the daily rate equals to the time-related field overhead divided
by the scheduled project duration ($20,000/12 = $1,667/day). Reasons why the daily
rate-based method can be unacceptable are discussed in Chapter 5. The second to last
column is based on the combination of ASAP and the window analysis technique. Table
5.1 presents the procedures of this combination.
The last column on the right illustrates the results of the new integrated framework. On
day 2 FLORA analyzes and identifies -0.5 delay day (or 0.5 acceleration day) (Section
6.5.1 and Table 6.3). Thus, the right-hand side of the framework (Figure 7.1) is activated
and yields -$465. The negative sign means that the contractor owes the owner. The same
process will apply to other analyses until all delay events are analyzed.
FOH damages associated with the excusable and compensable delays on days 11 and 12
in the last analysis should be calculated separately and differently. On the one hand, the
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owner causes critical project delay on day 11 on both activities E and G (Figure 6.9(a)).
Accordingly, field overhead damages are the time-related field overhead of these two
activities, that is, $1395 + $465. On the other hand, the secondary analysis (Figure
6.9(b)) indicates that only activity G is delayed (suspended) on day 12 due to infeasible
resource allocation and changed logics. Its corresponding field overhead damages are
therefore the time-related field overhead of activity G ($465).
7.3.2 Discussion
The above case study demonstrates that the framework works well and provides more
credible outcomes. It yields different results compared to current methods. There are
two reasons for this. First, the forensic schedule analyses between FLORA and the
window analysis technique can be different. A case study in Chapter 6 shows and
discusses this issue. Second, the calculations of field overhead damages based on the
daily rate based method and ASAP are different (Chapter 5). The framework is the
integration of the two new and more plausible methods.
7.4 Summary
This chapter demonstrates that with minor modifications ASAP and FLORA can work
together to provide a better framework for analyzing schedule delays and field overhead
damages in construction delay claims. The outcomes of this framework when being
applied to the case study differ from those of the traditional analysis techniques and
calculations. The framework can work in either real-time or after-the-fact delay analysis.
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Chapter 8
Conclusions and Recommendations
This chapter summarizes research findings and contributions, presents recommendations
to practitioners and researchers, and discusses limitations and future research. These are
separately described in the three following sections.
8.1 Conclusions and Contributions
This section discusses major research findings and contributions.
8.1.1 The Effect of Resource Allocation on Forensic Schedule Analysis
The practice of resource allocation in a disputed project usually impacts the outcome of
forensic schedule analysis. This research confirms that some delay can make unrealistic
resource allocation in downstream work, which in turn may further delay the project.
Available forensic schedule analysis techniques do not address this possible extended
effect of the delay. That is, schedule delay analysis that considers resource allocation can
capture the “forward” effects of delays. The incorporation of resource-allocation
considerations into a traditional schedule analysis can either increase or reduce the impact
of a delaying event. Either owners or contractors may suffer disadvantages in the
apportionment of delays under the existing schedule analysis techniques.
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8.1.2 The Enhanced Schedule Window Analysis Technique
The best available schedule analysis technique is enhanced to take into account the effect
of resource allocation. This research embeds necessary steps in the current window
analysis technique to improve its reliability. This is to ensure that forensic scheduling
includes the impacts of resource allocation. A case study was used to compare and
evaluate the analyses and results of the current and enhanced analysis methods. One
major benefit of this enhanced window analysis technique is that claims analysts do not
have to get acquainted with a totally new method to increase the reliability of their delay
claims. However, the enhanced method is not able to capture other major schedule-
related factors that potentially affect its analysis.
8.1.3 ASAP as a #ew Approach for Quantifying Field Overhead Damages
The analysis of delay responsibility in line with the context of delays should be
indispensable. The traditional calculation of field overhead damages based on a daily
rate is far from logical. A “one-size-fits-all” method undermines the relative importance
of delayed activities and the fluctuating nature of overhead levels during the course of
project work. In addition, the “one-size-fits-all” method indirectly impedes the
application of the “fair rule” or the comparative negligence doctrine to apportionment for
concurrent delays.
The analytical approach, ASAP, proposed in this dissertation takes into account the
timing of delays and the degree of suspensions in quantifying field overhead damages. It
realistically allocates field overhead to schedule activities. Field overhead delay
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damages, if any and/or allowable, are calculated based on activity-specific field overhead.
ASAP can be used effectively in forward pricing practice and the negotiation of delay
compensation. It is also a realistic and systemic approach that enables equitable
apportionments for concurrent delays. When ASAP is applied to the case study project,
the results differ considerably from those of the daily rate-based method. The case study
illustrates that the daily rate-based method may cause double payments when the
recovery covers some parts of field overhead already included in the as-bid price.
8.1.4 FLORA as a #ovel Forensic Schedule Analysis Technique
A variety of factors affect the results of forensic schedule analysis. Different views of
float, float ownership, logic change, concurrent delays, resource allocation, and so on
may lead to different results. As such, these factors should be considered in forensic
schedule analyses to ensure more reliable outcomes. Current techniques tend to overlook
these factors.
FLORA solves various issues in forensic schedule analysis. The rules of FLORA are
flexible and customizable. By addressing the dynamics of float, logic, and resource
allocation, it also helps solve other schedule analysis related issues such as pacing delays,
acceleration, concurrent delays, sequestering of float, fair treatment of non-critical
activities, and real-time analysis. FLORA indirectly considers pacing delays in analyses
because its rules clearly address float ownership and consumption. Additionally, the
rules weigh acceleration as equally significant as delay. That is why FLORA is
characterized as a novel forensic schedule analysis technique rather than a delay analysis
149
technique. The appropriate handling of changes in logic in such analyses enables
FLORA to deal with any sequestering of total float in project schedules. Prior approved
float sharing and coherent rules of float consumption help treat non-critical activities
fairly. FLORA can work for both real-time and after-the-fact schedule analyses. Lastly,
its outcomes can be easily accepted by the project parties since they are able to specify
and agree FLORA’s rules for forensic schedule analysis in advance.
FLORA has several weaknesses. By incorporating the secondary effect of delays,
FLORA additionally requires project records regarding logical changes and resource
allocation together with delay and acceleration events. Fortunately, these records can be
readily obtained if the project team updates and documents project progress well.
FLORA requires more effort since schedule delay or acceleration and the impacts on
different types of total floats must be computed and/or updated in any single analysis.
8.1.5 #ew Integrated Framework for Analyzing Schedule Delays and Damages
This dissertation proposes a new framework for analyzing the causation and quantum of
construction delay claims. The framework is the integration of ASAP and FLORA.
When applied to a case study, ASAP and FLORA are shown to work in a real-time and
interactive manner. The case study shows the framework works well and can provide
more convincing outcomes. It yields different and superior results compared to those of
the current methods.
150
8.2 Recommendations
8.2.1 Schedule Analysis Considering Resource Allocation
Schedule analysis should consider resource allocation. This research shows the potential
effects of resource allocation on delay analysis. The consideration of resource allocation
ensures that schedule delays are quantified and divided reasonably. That is, a certain
party can avoid assuming delay responsibility caused by the other party. The outcome of
the analysis is therefore more acceptable. Previously available schedule analysis
techniques have frequently not incorporated the effects of resource allocation.
Nevertheless, courts and review boards have supported delay claims based upon rigorous
analysis techniques, especially the schedule window analysis method. The techniques
developed herein are logical and rigorous and will, over time, be acceptable to such
bodies. At a starting point, the enhanced schedule window analysis method presented in
this dissertation facilitates schedule analysis under the effect of resource allocation. It is
easy to use since window analysis has been frequently employed by claims analysts.
8.2.2 Schedule Analysis Capturing the Dynamics of Float, Logic, and Resource
Allocation
In addition to resource allocation, other schedule-related factors such as float and logic
affect forensic schedule analysis. These factors should be simultaneously addressed
during the analysis. Project parties should answer the question “who owns float?” in
advance. Float can be owned by the owner, the contractor, or shared between the two.
Clear float ownership specifications enable forensic schedule analysis to reasonably
capture the dynamics of float, logic, and resource allocation. Changes in logic should
151
also be taken into consideration in forensic schedule analysis. This is to avoid the
sequestering of float by parties who prepare and update project schedules. If these
factors are addressed properly, other schedule-analysis-related issues such as pacing
delays, acceleration, and the fair treatment of non- and near-critical activities can also be
considered in the analysis. FLORA developed in this research is an example of such a
solution.
8.2.3 The Context of a Delay Addressed in Calculating Delay Damages
The quantification of delay damages should consider the context of a delay in terms of
the timing of the delay and degree of suspension. Current methods and formulas are
prone to ignore this context. That is, a “one-size-fits-all” approach is normally used in
the industry. By defining the context of a delay, delay damages can be logically traced to
certain specific delaying events. As such, the damages can be calculated more accurately
and fairly. Double overhead payment, for example, can be avoided if the calculating
process of delay damages addresses the delay context. For quantifying field overhead
damages, ASAP provides much more plausible results compared to those of current
practice.
8.2.4 Apportionment for Concurrent Delays
Concurrent delays need to be apportioned in terms of their damages. Equitable
apportionments should replace the current practice which grants the contractor time but
no money and the owner no liquidated damages in the circumstances of concurrent
delays. Equitable apportionments follow a fairer and more modern doctrine, namely
comparative negligence, instead of contributory negligence. Specifically, ASAP
152
proposed in this research enables such equitable apportionments. In ASAP, a project
party may only be responsible for activities for which he/she causes critical delays and
pay for delay damages incurred by those critical delays on those activities.
8.2.5 Applications of ASAP and FLORA in the Industry
ASAP and FLORA are useful for both practitioners and researchers. ASAP facilitates
systematic apportionment analysis in delay claims. It helps practitioners be more
proactive in measuring and presenting delay damages. FLORA enables practitioners to
capture the dynamics of float, logic, and resource allocation in forensic schedule analysis.
As such, these techniques should be applied to actual projects to obtain more realistic and
acceptable results from the analysis. Project parties may employ the integrated
framework for analyzing delaying/accelerating events and quantifying their associated
financial consequences in their delay claims. Researchers should benefit from exploring
insights into their application and implementation in the real world. .
8.3 Limitations and Future Research
Research should continue investigating conditions that traditional forensic schedule
analysis provides incorrect delay responsibility. This research indicates that schedule
analysis without considering resource allocations may increase the owner’s or
contractor’s risk of assuming delay responsibility which is not his or her fault. The key
question is “under what delay circumstances will contractors or owners face such
disadvantages?” This current research does not fully answer this question and future
research is needed. In addition, future research may develop systematic algorithms that
153
can readily identify whether a certain delaying event causes an extended effect and
effectively quantify it, if any.
The specifications of issues such as float ownership, changes in logic, and pacing delays
need elaborating in the industry. This research proposes flexible techniques to cope with
different views of these issues. However, it does not propose their appropriate and
workable specifications which can fit in a certain circumstance. In the case of float
ownership for example, whether the owner should own float, the contractor should own
float, the project should own float, or the owner and contractor should share float are not
discussed and analyzed in this dissertation. That is, this research itself does not propose
best practices regarding those issues. Future research may investigate the right views
and/or practices for a given scenario. This will help practitioners and professionals
readily find and adopt them for their specific project. The techniques developed in this
research can then be employed for delay claims based on the adopted views/practices.
Further research is needed to develop a proper and realistic approach for fairly
calculating delay damages for home office overhead. This research develops ASAP
which helps quantify field-overhead damages. As pointed out in the literature review,
Eichleay-type formulas and percentage markup multipliers can be and are used in some
circumstances. Their rationale and accuracy are questionable though. A more logical
approach for quantifying extended and unabsorbed home office overhead is therefore
needed. Apportionment for concurrent delays should also be considered in that research.
154
Future research may concentrate on increasing the usability, credibility, and acceptability
of forensic schedule analysis considering the dynamics of float, logic, and resource
allocation by project stakeholders. For instance FLORA and/or its concepts should be
applied in the industry and improved, if required. This is to increasingly reduce the gap
in accuracy between the traditional and proposed forensic schedule analyses.
A new mindset of forensic scheduling analysis may be required in today’s emerging
contractual environments. Forensic schedule analysis is typically used in traditional
contracting where a certain party is solely responsible for a certain process/activity. In
recent innovative contracting where project stakeholders work in a collaborative
environment (i.e. partnering, lean project delivery system), delay responsibility can be
more difficult to apportion. However, a project may suffer delay in such an environment.
Current forensic schedule analysis techniques may need to be modified to work in that
context. Alternatively, a new paradigm for forensic scheduling may be needed. Legal
issues such as contract forms and clauses may differ from those of the traditional
contracting practice. Future studies should investigate these issues.
155
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