PURPOSE
The purpose of this Procedure is to provide guidelines for analyzing the cause and responsibility of delays and for granting time extensions to the Contractor. This Procedure will also outline the different types of delays and describe when the Contractor is entitled to damages or additional payments based on a City- or Owner-caused delay.
REFERENCES
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RESPONSIBILITIES
Project Manager (PM): The PM should monitor additions to the schedule duration and provide guidance to the Construction Manager on whether to accept delays or attempt to accelerate the project.
Construction Manager (CM): The CM is responsible for analyzing the cause and responsibility for project delays to determine if, according to the contract requirements, a time extension should be granted. All time extensions shall be documented by change order, even if non-compensatory.
PROCEDURE
It is inevitable that some construction activities may fall behind schedule for various reasons and consume project float time. However, consumption of float time does not necessarily adversely impact the construction schedule or completion date. These non-critical delays are not considered a contract or project delay. By the City’s specifications, float is a shared resource available to both the Contractor and the City. It is often described as joint float ownership. No time extensions will be granted nor delay damages paid, unless the delay impacts the critical path work and a time impact analysis proves the delay has already extended, or will extend the current contract completion date.
Once it is determined that the project is or will be delayed, the CM analyzes the current schedule to identify the cause of the delay. A delay can be identified by an occurrence that has happened in the past. For example, rain that affected critical path work, or planned work in the future, such as a scope increase change order that adds work to a critical path activity. The Contractor is responsible for submitting a Time Impact Analysis (TIA) for all delays it is requesting an adjustment to the project schedule. All delays should be identified in a contemporaneous manner and should be analyzed in chronological order. The CM should perform an independent delay analysis for all change orders and other potential causes of delay. This will facilitate the proper priorities for the CM staff.
Types of Delays
In general, there are three basic types of delays:
Excusable – Non-Compensatory (Concurrent)
Non-Excusable
Excusable - Compensatory
Excusable – Non-Compensatory Delays: These types of delays are caused by an event or party outside the control of the Contractor or the City (Owner). Examples of causes are: excessive inclement weather, labor strikes, riots, etc. A time extension change order with no cost should only be issued if the delay impacted the contract completion date. It should be noted that inclement weather may not necessarily impact the work if, for example, a project’s current critical path is on interior work. In addition, if an owner-caused delay takes place at the same time as a Contractor-caused delay, it is a “concurrent” delay. In this case, the Contractor is entitled to a time extension, but no compensation.
Non-Excusable Delays: These types of delays are determined to be the responsibility of the Contractor. Examples of causes are: insufficient manpower, lack of sub-contractors mobilizing and late material deliveries. The Contractor is responsible for making up non-excusable delays and providing a recovery schedule to indicate its recovery plan. Typical methods used are: working extra hours or shifts on critical path work, adding manpower, and re-sequencing work. If the Contractor actually finishes late as a result of non-excusable delays, liquidated damages may be assessed by the Board of Public Works (see Procedure 18.5), when included in the construction contract.
Excusable – Compensatory Delays: These types of delays are determined to be the responsibility of the City. Examples of causes are: issuance of change orders that impact the critical path, late return of submittals, or lateness in responding to Requests for Information (RFIs).
Upon approving a change order Time Impact Analysis (TIA) or authorizing the Contractor to proceed with a specified change (see Chapter 20), the approved change order schedule impact should be reflected in the next schedule update. (General Requirements Specification Section 01321 requires the Contractor to submit a TIA within fifteen (15) calendar days after a delay occurs or the issuance of a preliminary, time and material, emergency, or unilateral change order. The intent is to settle any time extension at the same time the change order cost proposal is being negotiated. At times, it is beneficial for the CM to defer the documentation of the change order schedule impact to a future change order. In this case, the subject change order should be finalized with the following statement inserted in Part 4, “The time impact of this change order will be negotiated at a later date and any compensatory time due to the Contractor will be paid for in a separate change order.” However, the CM should only allow a deferral of no more than fifteen (15) calendar days beyond the execution of the change order. Deferral beyond this period may result in other delays overlapping with the change order in question, thus complicating the analysis. Remember a TIA is a projection of a future or current delay on the project schedule, any option to mitigate the delay may be gone if the TIA is submitted at a later date.) The CM reviews all delay analyses for merit. The actual number of days of time extension will be granted to the Contractor, if the TIA has merit. For compensatory delays, the number of days the contract duration will be extended is multiplied by the Contractor’s extended field overhead rate at the time the delay occurred. The extended field overhead rate is determined by the time-related costs of the Contractor’s jobsite facilities and jobsite office personnel. The Contractor’s field overhead rate could vary over the course of construction, so it is important to verify the actual costs at the time of the delay. The change order granting a compensatory time extension should include the exact number of days the contract is being extended and the new contract completion date, as well as the field overhead cost associated with the delay. The change order(s) that caused the delay should be the same change order(s) that grants the time extension, except as noted above. If the field overhead rate cannot be agreed upon promptly, the CM should issue the change order with the corresponding time extension and state the number of days that are compensatory. Rules for establishing the Contractor’s field overhead rate are in Master Specifications, General Requirements Section 01254 – Change Orders. The extended overhead costs can be paid in a subsequent change order. In some cases, the CM may opt to pay to accelerate the work in order to offset some of the extended overhead costs.
RELATED PROCEDURES
LINKS / Attachments
Links
BOE Master Specifications, General Requirements Sections 01254 and 01321
BOE Master Specifications, General Conditions Articles 00400, 00401, 00402, 00408 and 00409
Attachments
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Comments