Project Delays

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Contents

Project Delays, Disruptions, and Changes2
TYPES OF PROJECT DELAYS2
Delays fall into three general categories:2
Excusable/Non-Compensable Delays2
Compensable (Owner Caused) Delay2
Non Excusable (Contractor Caused) Delay3
DOCUMENTATION OF DELAYS, DISRUPTIONS AND CHANGES3
The Current State of Washington Law Regarding Notice.3
Proposed procedure and process5
Proposed Legislation6
DAMAGES FOR DELAY - New Developments6
RCW 4.24.3606
In the Scoccolo case6
The City’s franchise agreement with Puget stated in part7 The TCI franchise agreement7
RESOLVING DISPUTES THROUGH MEDIATION AND ARBITRATION7
Tips For Mediating Disputes7
Arbitration8
Dispute Resolution Using Project Controls9
PROJECT CONTROL SYSTEMS9
Cost Control Systems9
Network Scheduling10
Time impact analysis10


Project Delays, Disruptions, and Changes

In a perfect world, all construction projects would finish on time, without changes or disruptions. Despite the common public perception that contractors cannot wait for the changes to start on a project because that is where they allegedly “make their money”, most contractors would prefer their projects to complete without changes. Changed work complicates a project, invites delays and increases the project cost — all things that make owners unhappy.

In reality, nearly all projects of any substantial size experience changes and/or delays, therefore the parties are well served by thinking about how they will handle changes and delays prior to the start of construction. Setting out a framework in the contract for dealing with this inevitability is in the interest of both the contractor and the owner.

TYPES OF PROJECT DELAYS

Delays fall into three general categories:

Excusable/Non-Compensable Delays.

In these situations neither party is responsible to the other for any costs associated with the delay. These delays are those that are typically included in force majeure clauses — abnormal weather, labor strikes, acts of God, acts of war, etc.

Compensable (Owner Caused) Delay.

Here, the owner is responsible for both the time and cost effect of the delay. The contractor may claim the owner interfered with the work, did not deliver owner-purchased equipment or supplies on site as promised, or that the owner’s actions or inaction caused other delays. An owner cannot contract out of its obligation to pay for compensable delay, although it may be able to limit its liability for such delays. See, RCW 4.24.360 below:

Any clause in a construction contract, as defined in RCW 4.24.370, which purports to waive, release, or extinguish the rights of a contractor, subcontractor, or supplier to damages or an equitable adjustment arising out of unreasonable delay in performance which delay is caused by the acts or omissions of the contractee or persons acting for the contractee is against public policy and is void and unenforceable.

This section shall not be construed to void any provision in a construction contract, as defined in RCW 4.24.370, which (1) requires notice of delays, (2) provides for arbitration or other procedure for settlement, or (3) provides for reasonable liquidated damages.  

Non Excusable (Contractor Caused) Delay.

Here the contractor bears the risk and responsibility for the delay and the owner may bring a claim against the contractor for the costs of the delay.

Owners’ claims for delay typically allege that the contractor failed to promptly start the project, failed to coordinate the work as required to maintain progress, failed to have supplies and equipment on site and/or failed to have enough workers on site.

Both owners and contractors often use concurrent delay as a defense to delay claims. On nearly all projects that are delayed, there is more than one cause of the delay. Where there are two or more independently causes of delays during the same time period, the delay is termed “concurrent.” In these situations, the...
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