Establishing a Construction Delay Claim: Documenting the Critical Path

In a construction delay claim, the contractor has the burden to prove that the offending party’s actions affected activities on the critical path of the contractor’s performance of the contract. George Sollitt Const. Co. v. U.S., 64 Fed.Cl. 229 (Fed.Cl. 2005). To meet this burden, a contractor must initially establish the as-planned critical path. Moreover, the critical path needs to be diligently updated to adapt to the evolution of the construction project as it is actually built. Critical Path Method (CPM) schedules are the most often used and preferred way to create and document the critical path. See Id.

Determination of the critical path is crucial because only work on the critical path had an impact upon the time in which the project was completed. Many activities have float time, meaning they may be performed at any time within a given period without delaying the project. However, some activities have no float and must be performed on schedule; otherwise, the entire project will be delayed. These latter activities are on the “critical path.” A delay of work along the critical path will delay the entire project. While a delay which affects only those activities not on the critical path does not delay the completion of the project.

Essential to a determination that an activity belongs on the critical path of a schedule is an understanding of how that activity affects the other activities. For example, drywall installation cannot begin until the electrical conduits have been installed in the wall and paint cannot begin until the drywall has been installed. Therefore, a delay in electrical conduit installation may ultimately delay painting because both activities are linked to drywall installation. This interdependency link between preceding and succeeding activities is essential to determining the critical path. CPM schedules are created using this interdependency link.

In preparing to address potential delays, or in analyzing delay, it is important to establish the original as-planned critical path of the project. A delay claim analysis involves the comparison of the original as-planned critical path to the current as-built critical path. An after-the-fact critical path analysis may be of no value if the actual as-planned critical path is not established. Cases suggest that documents prepared solely for use at trial as the contactor’s estimate of activities that were on the critical path while the project was ongoing are, alone, insufficient. Therefore, it is critical that a contractor incorporate a detailed critical path schedule in his contracts. But creating the original as-planned schedule is not the end of it. An as-planned schedule may be discredited where it does not take into consideration factors which actually occurred.

Rarely does the construction of a complex project advance without variation to its original schedule. The project is impacted by design changes, change orders, weather, unforeseen conditions, late material deliveries, etc. Many contracts require the giving of notice or the making of a written request for time extension or extra costs. A contractor’s failure to request time extensions within a certain time from the event causing the delay, may waive the contractor’s claim for delay, impact, and lost efficiency. Accurate, informed assessments of the effect of delays upon critical path activities are possible only if up-to-date CPM schedules are faithfully maintained throughout the course of construction. Furthermore, CPM schedule updates produced during actual construction are better evidence of the critical path for establishing your delay claims, than a static as-planned schedule. And schedules created to accommodate a delay cannot be used against the contractor to estop his delay claim.

Of course, there are other benefits that arise when a construction schedule is routinely updated. Construction delays early in the schedule will have injurious effects upon subcontractors who perform their work later in the schedule. For example, the later-in-the-project subcontractor may be asked to “accelerate” his performance, by working overtime and adding additional inefficient manpower, in an effort to maintain the overall completion date of the project. Additionally, an accelerated time schedule may “stack trades” which increases touch-up work and creates a chaotic environment that decreases production efficiency. Since a contractor may be liable to subcontractors for these delays, another benefit to schedule updates is the prevention of delays.

Cases suggest that courts prefer the use of CPM schedules to document construction delay claims and the author has had great success utilizing CPM schedules. Essentially, CPM is an efficient way of organizing and scheduling a construction project which consists of numerous interrelated separate activities. Each activity is identified and classified as to the duration and precedence of the work (the interdependency link.) The data is then analyzed, usually by computer software such as Primavera Project Planner or Microsoft Project, to determine the most efficient schedule for the entire project, thereby establishing the critical path. The CPM software allows for easy updating and excellent documentation of progress of the work. And if a delay claim becomes required, CPM software provides effective presentation of the critical path for the delay analysis.

In sum, it is vital that a contractor utilize CPM software to create a detailed critical path schedule that will be attached to his contracts. And the prudent contractor doesn’t stop there, but makes updating the schedule part of his routine. From beginning to end, the contractor is documenting the critical path, so he’s prepared to establish a delay claim, should that day unfortunately come.