File Name: pickavance delay and disruption writer.zip
A comprehensive treatise on schedule delay analysis, the edition includes new cases since the update covering international disruption cases, in jurisdictions including Canada, the United Kingdom, Australia, and Hong Kong. The addition of the new delay and disruption cases brings the analysis totals to delay analysis method cases and disruption method cases, for a total of cases covered in the book material referencing specific methods for proving delay or disruption. This book is an invaluable guide offering expert advice, analysis, and insights for any lawyer, contractor, engineer or other professionals who deal with construction schedule delays and disruption.
Andrew was a member of Atkin Chambers from until , specialising primarily in construction and technology matters.
However, the term is ill-defined, and it is difficult to justify such claims within a legal process. Difficulties exist in defining all parts of a disruption claim, and such claims require definitional clarity of all parts of the construction contract, from the scope of the project, to the details of what constitutes disruption and permissible delay.
Within any construction project, a successful conclusion involves not only completion of the requisite work, but doing so within the time specified, within budget, and to the required technical standards.
As construction projects have become more complex, and require greater investment, they have taken on added commercial importance. Time and cost considerations have become paramount, and will be as important as technical considerations in decisions to award contracts.
The increased commercialization of construction contracts has placed ever greater pressure on contractors and clients to ensure projects proceed according to plan, and that all eventualities are adequately provided for in the contract. Lal has noted therefore that there is a clear need for methods of quantifying the cost and time effects of disruption to be developed, and for such quantification methods to be used in disruption claims by contractors.
There is little doubt that disruption claim are among the most difficult claims to quantify. Disruption occurring during work days leads to productivity losses. Productivity losses generally lead to cost and time overruns. If these losses exceed any built in leeway in a project, then they will lead to claims by the contractor for extra time or extra funds, or both. These will be requested by way of disruption claims by the contractor.
Lal notes the quantification difficulty at this point, stating,. A simple illustration of this is the fact that even if the time that workers must remain off site, and are prevented from working at all due to disruption, is easily measurable, the reduced productivity of workers after such periods can be missed completely Pickavance, Employers generally try to deal with the risk of delay by passing it on to contractors, and in turn, contractors principle method of dealing with the cost associated with delay by making disruption claims against the employer Gorse, Pickavance has given examples of a number of high profile construction projects in the UK in recent years that have suffered from severe cost and time overruns and have been subject to extensive disputes in relation to disruption claims.
The annual estimate figure for disruption claims in the UK is eight billion pounds Pickavance, Braimah has noted the challenge that disruption causes to the industry. On the one hand, contractors suffer higher overhead costs beyond what was budgeted for the contract, and on the other hand, employers are exposed to financial and economic risks including interest on finance and lost market opportunities.
The assignation of causation to losses, and the quantification of each item of loss is necessary to satisfy disruption claims fairly, resolve disputes, and enable planning and insurance mechanisms that can protect both the contractor and the employer.
The quantification process is often referred to as delay analysis and uses various methodologies and techniques, often critical path methods CPM , to assign responsibility and determine the cause of delay.
While disruption claims are routine, Pickavance and Gorse have discussed the difficulties that exist in not only quantifying claims, but also in proving them. The general formation of a disruption claim follows a logical interpretation of the events and actions leading up to the claim and the deduction of the losses from those actions and events.
Disruption claims generally are retrospective, and in many cases, the documentation and records available to the contractor will not be adequate to substantiate the claim Pickavance, Gorse has also discussed the difficulty of quantifying productivity losses.
In many cases, this will lead to the contractor being forced to submit a global or total loss claim that lacks specificity or itemization. This then means that there is little evidence available to the contractor to back up the claim, and also makes it difficult to determine if the disruption, or what elements of that disruption, are actually compensable under the contract.
Despite significant amounts of effort being put into developing standard form contracts, methods of calculating the actual costs of disruption, and greater degrees of consensus between the contractor and the employer so as to avoid conflict later on Pickavance, ; Braimah, , there has been a increase in the concern of contractors for the efficacy and success of their disruption claims.
There are steps that contractors can take to ensure that they are in a strong a position as possible when it comes to making a disruption claim however, and it is vital that contractors are taking these steps so that claims will be more effective. These steps will include ensuring that all relevant losses are covered for in the disruption clause of the contract, and that contractors keep track of the relevant documentation and data during a project, that will allow them to substantiate their claims following disruption.
By doing so, contractors will be in a better position to ensure that they can avoid the financial penalties that will be associated with budget overruns and missed deadlines that are in reality the fault not of the contractor, at least in part, but by disruption. Chappell, Powell-Smith and Sims define disruption claims as the assertion of a right, usually by the contractor, to an extension of the contract period and or to payment arising under the express or implied terms of the contract, due to events provided for under the contract.
Chappell, Powell-Smith and Sims set out four types of construction claims. These are firstly, contractual claims, which are a request for reimbursement of direct loss and or the cost occurring under provisions of the contract conditions. These can be requests for compensation resulting from a breach or a series of breaches under the contract. As Jayalath point out, the contractor is entitled to claim disruption compensation on a project where the overall completion is delayed even for short periods, or even when no delay is experienced, if the contractor has suffered substantial loss, particularly for labour and equipment.
Abdul-Malak and El-Saadi and Bramble and Callahan discuss the making of a claim, noting that they arise under the terms of the contract as approved by the project architect or engineer, and will be included in the interim certificate for payment, and a concurrent right under common law for damages for breach of contract. Claims are essentially productivity related Braimah, The principle elements contained in the claim will include an outline of the work affected, the manner in which it was affected, and the comparator and method of comparison to be used to ascertain the quantity of loss.
While there are many causes of delay in a construction project, such as strikes, low motivation, work rules, and technical difficulty, only some of them can be attributed under the contract to the employer, and will give rise to a claim for compensation for disruption. Even when the employer is responsible for a delay, the contractor can only claim for certain delays Jayalath, For example, stoppage of work for an unplanned site visit by the employer for a reasonable period of time would not ordinarily give rise to a disruption claim.
The contract should stipulate the events that will or will not give rise to claims, but disputes abound in this area and it is impossible for contracts to always account for every eventuality. Pickavance sets out the conditions that must be met if a contractor is to be eligible to make a claim from the employer.
Firstly, the work that has been affected must be clearly identified, and the work activities that were affected by the disruption must be specified. The extra expense incurred must be explained.
Secondly, the contractor must show that the event leading to the disruption and financial loss was either a breach of contract, or an event provided for in the contract for which the employer is to be made financially liable to the contractor.
Thirdly, it must be shown that actual work progress has been negatively impacted. It is not sufficient to show that planned future work has been impacted as such fears may never materialize.
Fourthly, the contractor must quantify the disruption costs using a selected method of quantification. The principle that applies is that the extra costs incurred, compared to the costs that would have occurred had the disruption not occurred, are recoverable by the contractor. This therefore requires fifthly that the contractor set out what the actual costs would have been had the disruption not occurred. This provides the comparator to be used in the calculation.
Sixthly, the contractor must show that he has taken all reasonable steps to mitigate his loss, such as returning hired machinery, working on other parts of the project that were not affected by the disruption where possible, and redeploying expensive resources where possible so that they are not unnecessarily sitting idle.
Quantification will rely heavily on expense reports prepared onsite directly at the time of the disruption. Williams et al go on to state,.
The terms disruption and delay, or delay and disruption are also often used to describe what has happened on such projects. However, although justifying the direct impact of disruptions and delays is relatively easy, there has been considerable difficulty in justifying and quantifying the claim for the indirect consequences. Our experience from working on a series of such claims is that some of the difficulty derives from ambiguity about the nature of disruption and delay.
Williams et al point out that a certain amount of disruption will be planned for at the bidding stage of a project. It will usually be expected on a complex project that a certain amount of rework will be required at various stages of the construction. Even when the project is going well, what are regarded as normal errors, made by both the contractor and the client, will involve a certain amount of rework and additional cost to rectify.
These costs however, are built into the initial bid and will be absorbed without affecting the time frame or budget Williams et al, Williams et al note that outside of these usual estimates, there are a number of disruption costs that should be automatically factored into contracts but that are in most cases overlooked by both the contractor and the employer.
They note,. Ackerman et al have noted the danger of estimates missing the link between risk assessment and risk as potential triggers for disruption. It is common for employers to interfere with the flow of construction. For example, an employer could easily give back a larger than expected number of comments on design than a contractor expected, requiring additional drawings to be reworked.
In either case, the extra time taken for the drawings will have to be made up by taking mitigating action elsewhere on the project, and this will have an impact on the overall feedback on the project from the employer. One of the most common causes of disruption is a variation or change order, coming from the employer, and amending what the contractor is required to do, or what the project is required to deliver. This can occur even after work has commenced. Variations can also occur as a result of the contractors themselves however.
For example, when a complex problem gives rise to a novel or unique solution, not infrequently will a contractor approve such a solution even though it is more costly than the solution provided for in the original plans. It is also possible that the contractor and employer have interpreted the plans differently, and so the requirement changes when the contractor becomes aware of the discrepancy and changes the plan to meet the employers interpretation. The possible causes of disruption can be classified and analysed with the same patterns normally used to classify project risk.
Castri notes that disruption occurs when risks become reality. Accordingly, causes of disruption can be broken down into either external or internal causes. They will include government acts such as the passing of new regulations or laws, changes to the taxation regime, and new development or investment programmes. Such events will generally involve certain rights of compensation to be passed on to the contractor. External causes can also result from acts of God, such as earthquakes, hurricanes, or a very cold winter.
Such risks can generally be insured against, and therefore the uncertainty that they would introduce into a project can be transformed into a certain insurance cost. The last type of external disruption relates to social or political events that disrupt normal societal functioning. This can include the outbreak of war, included non-declared war that nevertheless involves military or other disruptions to economic activity, rebellions, protests, and general strikes In many cases, these too will be insurable risks and so the uncertainty they involve can again be avoided.
Castri also notes the internal causes of disruption, which can be causally attributed to the project itself, its planning and design, and the manner in which the works are performed. Bramble and Callahan note the implications of disruption, which may include changes in the project scope, late completion, loss of possibility for early completion, and may be countered by acceleration of the work.
Acceleration and other changes in response to delay, such as alternation of the sequence of the work, loss in efficiency, and extra time determined overheads will all cut into the potential profits of the contractor. Delays will also deprive the employer of use of the completed project and profits that could be earned from it.
Delay will also place stress on the relationships between the owner, contractor, designer and other parties involved, and disputes will also result. Jayalath discuss the loss of expected benefit that a contractor will suffer from failing to finish at the anticipated time. There are also administrative costs associated with rescheduling and planning, and labour and equipment may sit idle if they are not needed at the initially planned time.
In many cases, it will be difficult for a contractor to reorganize projects in a way that does not cause waste of resources. Lal also notes the financial impact of trade stacking and idle labour and plant that can result from unscheduled delays.
Rescheduling will almost always lead to the same work being performed over a longer timeframe, and projects will have to wait on crucial steps to be performed before other lined up resources can be put to use. Delays can also lead to further complications such as time scales being pushed back into the winter, when work during inclement weather will be more difficult, more expensive, and slower. Gibbs and Hunt note the cost impact of changing the size or quantity of labour and plant required when disruption occurs.
As Bramble and Callahan point out, more labour and equipment, over a longer period of time, is being utilsed per unit of work as a result of disruption. One of the methods that contractors will employ to counteract the impact of disruption is to accelerate the work on the project Pickavance, This involves speeding up those aspects of the project that have potential to be sped up, either because of the nature of the task or because of the resources or capabilities of the contractor.
In either case, strengths of the contractor in one area are being used to compensate for weaknesses in another area.
Buy now. Delivery included to Germany. Andrew Burr editor Fifth edition. Delay and disruption in the course of construction impacts upon building projects of any scale. Whilst covering the manner in which delay and disruption should be considered at each stage of a construction project, from inception to completion and beyond, this book includes:. Paperback Published 06 Aug Paperback Published 28 Feb
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Construction Contract Claims
Delay and disruption in the course of construction impacts upon building projects of any scale. Whilst covering the manner in which delay and disruption should be considered at each stage of a construction project, from inception to completion and beyond, this book includes:. Enter your mobile number or email address below and we'll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer - no Kindle device required.
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