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Construction is risky business. And, the financial risks are great. Construction projects are bid under fierce competition with small margins. Even simple projects require the coordination of many trades under demanding conditions and challenging timeframes. This is rendered all the more challenging because most projects do not go exactly according to plan. The competition, the big risks, the small margins, and the project complexity are a recipe for conflict.
One of the biggest risks is that the project will not complete on time. The cost of a lost day on a construction project can be staggering. Unfortunately, even the most sophisticated practitioners can find it difficult to identify and quantify delays. This is true despite the fact that we have ever more sophisticated scheduling tools available to plan and manage project time.
While the parties’ management teams are able to analyze and assess most factors related to a change, delays remain difficult for the parties to the construction project to understand and accurately measure. Consequently, even though the parties can often reach compromises related to most aspects of a change, the delay component sometimes keeps them from reaching resolution. As a result, most construction claims include a component related to delays. Because the expertise required to reliably and convincingly assess delays and delay damages often goes beyond that of the participants, experts are hired to analyze delays to help the parties resolve their difference, prepare for mediation, and prepare for arbitration or trial.
This book addresses the topic of construction delays, the resulting effects, and damages. This is a timely subject, since the failure to meet schedules can result in serious consequences with unprecedented cost implications. The financial significance of delays demands that the project owner, general contractor, construction manager, designer, subcontractors, and suppliers educate themselves regarding delays and the associated added costs. This book is designed to serve as a primer for that education process. All too many texts on this subject focus on the legal perspective, in legal language. This book is intended as a practical, hands-on guide to an area of construction that is not well understood.
All construction industry professionals should know the basic types of delays and understand the situations that give rise to entitlement to additional compensation for delay. Most importantly, they should understand how a project schedule and project documentation can be used to determine whether a delay occurred, quantify the delay, and assess the cause of the delay. They should also be able to assess the delay’s effects on the project and quantify any costs or damages.
Many techniques are used to analyze delays. Some of these methods have inherent weaknesses and should be avoided. This book points out the shortcomings of these faulty methods and explains how a delay analysis should be performed. This book describes—specifically—how the analysis is done with Critical Path Method (CPM) schedules. The discussion will cover the subtleties of the process, such as shifts in the critical path, and noncritical delays.
The subject of damages is covered in detail, including the major categories of extended field overhead and unabsorbed home office overhead costs. Likewise, the damages suffered by the owner, either actual or liquidated, are also explained.
Chapters are devoted to managing the risk of delays and time extensions from the viewpoints of the various parties to a construction project and to common contract provisions governing time and the cost of time. A discussion of early completion schedules, concurrent delays, inefficiency, and constructive acceleration is also included.
The authors’ substantial experience in analyzing delays and quantifying damages provides the readers with numerous benefits, including:
- A clear, concise definition of the major types of delays
- A simple, practical explanation of how delays must be analyzed
- A detailed explanation of how delays are defined and quantified for projects with CPM schedules, bar charts, or no schedule at all
- A glimpse of some of the less obvious problems associated with delays, such as delays to noncritical activities
- An understanding of the shortcomings of some delay analysis methods that may not provide reliable results
- A detailed understanding of the many areas where costs can increase and how to calculate these costs
- An understanding of the risks that delays present to various parties to the Project, and how each of those parties can manage those risks
- Examples of common contract provisions related to scheduling, delays, and delay costs
An explanation of delays and delay costs, presented in a straightforward, accessible manner, should be useful to public and private owners, construction managers, general contractors, subcontractors, designers, suppliers, and their attorneys.
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- Features greatly expanded discussion of the project management concerns related to construction delays, including a more comprehensive discussion of the development and review of the project schedule
- Offers a detailed analysis of the strengths and weaknesses of the most common construction delay approaches and how they should be properly deployed or avoided
- Includes significant discussion of the contract provisions governing scheduling, the measurement of delays and payments for delay
- Includes numerous real world case studies
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