Technical Program Abstracts

(CDR) Claims and Dispute Resolution

NOTE: Program Subject to Change

(CDR-3110) Concurrency and Pacing -  Does Intent Matter?

Author(s)/Presenters(s): Josh Chittick; John C. Livengood, Esq. CCP CFCC PSP FAACE

Time/Room: MON 10:15-11:15/Room 8

Abstract:

While concurrent delay and pacing are seldom explicitly found by triers-of-fact, concurrency theory application and its relationship to pacing remains a major analytical and practical element in forensic delay analysis. AACE International’s (AACE) RP29R-03 (2011) and the more recent Society of Construction Law Delay and Disruption Protocol (2017) both address these topics in some detail, but significant issues remain poorly understood and commonly misapplied by experts and triers-of-fact. This paper reviews the current theory, application, and miscomprehension of concurrency and pacing as reflected in expert literature and legal decisions. Further, the paper explores whether a party’s intent concerning a concurrent or pacing delay makes a difference – or should make a difference – in a determination on concurrency or pacing.

 

(CDR-3145) Perfecting the Fixed Perspective Windows Delay Analysis

Author(s)/Presenters(s): John Jackson

Time/Room: SUN 4:00-5:00/Room 8

Abstract:

With the variety of Delay Analysis Techniques available to schedule reviewers and analysts, it is difficult to know and implement the most reliable and effective way of demonstrating an accurate impact calculation caused by delay.  Contractual requirements for time extension requests using the common term, “Time Impact Analysis”, are increasingly appearing throughout the construction industry.  The AACE International’s Recommended Practices (29R-03) lists nine (9) different analysis methods that are commonly labeled as “Time Impact Analysis”.  While each methodology may have its appropriate implementation, certain methodologies can be combined to produce a more reliable and accurate result.  In the following paragraphs the Fixed Perspective Windows Delay Analysis (“Analysis”) method will be presented, which incorporates the strengths of various retrospective methods, while minimizing, if not alleviating the weaknesses.  The result is an analysis that, when prepared correctly, is simple to calculate and easy to defend.

 

(CDR-3147) A New Role for Project Control Professionals on Dispute Boards

Author(s)/Presenters(s): James G. Zack, Jr. CFCC FAACE Hon. Life

Time/Room: SUN 2:15-3:15/Room 8

Abstract:

Dispute Resolution Boards (DRBs) came into the U.S. construction industry in the 1970s.  Yet many in the industry are not familiar with these Boards or the DRB process.  The paper discusses the history, effectiveness and cost of this alternative dispute resolution (ADR) process.  The paper summarizes the typical DRB process.  Project controls professionals (schedulers, estimators, cost control professionals) have long participated in the DRB process by assisting clients with preparation for or presentations at dispute hearings.  Traditionally, Dispute Boards have been made up of an owner, a contractor, and a design professional or specialty consultant depending upon the nature of the project.  The paper explores whether project controls professionals – specifically AACE certified members - can help make Dispute Boards more effective.  The paper identifies ways that AACE certified members can add value to the DRB process and help contribute to dispute resolution on many projects as members of Dispute Resolution Boards.

 

(CDR-3162) Identifying the As‐Built Critical Path Using Recommended Practice 29R-03

Author(s)/Presenters(s): Andrew Avalon, PE PSP; Christopher W. Carson, CEP DRMP PSP FAACE; John J. Ciccarelli, PE CCP PSP FAACE; Kenji P. Hoshino, CFCC PSP; John C. Livengood, Esq. CCP CFCC PSP FAACE; Mark C. Sanders, PE CCP CFCC PSP

Time/Room: MON 2:15-3:15/Room 8

Abstract:

In retrospective forensic schedule analysis, the as-built critical path is one of the most important subjects. Yet, as suggested by one author's previous AACE presentation (Portland, 2002), "Catching the Elusive As-Built Critical Path," identification of the as-built critical path is not an easy task even for the most seasoned analyst. This paper examines whether the nine method implementation protocols (MIP) contained in AACE International Recommended Practice 29R 03, Forensic Schedule Analysis, (RP) are capable of identifying the as-built critical path (ABCP) and relates the authors’ findings to the different methods discussed in the current 2011 revision of the RP regarding the identification of the ABCP.

 

(CDR-3167) Home Office Overhead - Which Formula Should You Use?

Author(s)/Presenters(s): Mark F. Nagata, PSP

Time/Room: WED 8:00-9:00/Room 8

Abstract:

Unabsorbed home office overhead is a well-known, but not well-understood delay damage.  Like extended field office overhead, it is only recoverable by a contractor that has experienced an excusable, compensable delay.  Typically, contractors allocate their home office overhead costs across their projects using some formula, often based in some way on the size of the project.  But when a project is delayed, the contractor may not always be able to generate adequate compensation from each project to cover its home office overhead costs.  Some contracts specify how a contractor’s extended home office overhead costs should be calculated, but most do not.  While there are various home office overhead formulas (Eichleay, Canadian, Manshul, Allegheny, etc.) used to calculate a contractor’s unabsorbed and extended home office overhead costs, each is slightly different from the other and can produce very different results.  This paper will describe the difference between unabsorbed and extended home office overhead costs, detail how the various home office overhead formulas calculate a contractor’s home office overhead costs, and identify how each of the methods calculate a contractor’s unabsorbed or extended home office overhead costs differently from one another using an owner-directed suspension example and an extended project duration example.

 

(CDR-3173) Defending Against Loss of Productivity Claims

Author(s)/Presenters(s): Dr. Tong Zhao, PE PSP; J. Mark Dungan; Xuyang Liu

Time/Room: TUE 10:15-11:15/Room 8

Abstract:

Construction labor productivity represents how efficient a contractor is in applying labor resource to produce output.  Labor productivity is susceptible to many factors during construction.  Some of them may be attributable to the owner, such as those caused by owner changes and directed acceleration; while others are within the contractor’s control.  When it cannot meet its planned productivity, the contractor’s profit margin shrinks, or it could even suffer a loss.  It is not uncommon that owners become targets for loss of productivity claims.  While loss of productivity is one of the most contentious subjects in construction disputes, it is a challenging task to defend against such a claim, especially for inexperienced owners.  In this paper the basic information related to loss of productivity claims is first set forth.  And then the defense against loss of productivity claims from the aspects of entitlement, causation and quantum is discussed.  This paper also provides suggestions on how to prevent, mitigate, and manage loss of productivity claims, especially for inexperienced owners.

 

(CDR-3178) Overhead Costs in Delay and Productivity Claims

Author(s)/Presenters(s): Christi Fu, PE

Time/Room: SUN 1:00-2:00/Room 8

Abstract:

Project overhead cost claims are often submitted when construction projects experience delays and productivity impacts.  The claimed costs often include both home and field overhead costs and is the contractor’s attempt to recover damages.  This paper will discuss methodologies to calculate and evaluate these costs, including identification of common pitfalls and mistakes, and advantages and disadvantages of each method.  It will also explain how a contractor’s accounting system and bid documents can be used for evaluation of these claims. This paper will provide the reader with a better understanding of various overhead calculations and evaluations for delay and productivity claims.

 

(CDR-3193) How to Best Prepare for and Navigate a Subcontractor Default Insurance (SDI) Claim

Author(s)/Presenters(s): Michael Oliveri, PSP; Joseph W. Wallwork, PE CCP CFCC PSP FAACE

Time/Room: TUE 4:00-5:00/Room 2

Abstract:

Subcontractor default insurance (SDI) policies are more frequently being carried in lieu of standard payment and performance bonds.  While there are many advantages to utilizing SDI, it is a common misconception with these policies that when a default occurs, reimbursement for costs incurred are instantaneous and simple. 

Navigating the completion of work, mitigation of loss, compliance with policy and contractual obligations, and reimbursement of costs in a subcontractor default scenario can be very challenging yet greatly facilitated by comprehensive project controls and contract administration.  This article will outline the circumstances of SDI claims, different types of costs that may result from their occurrence, and the necessary measures to implement before, during, and after to ensure the most optimal outcome for all parties.  The article is written as a guide to a contractor but is essentially also an indication to the SDI carriers what they can and should expect from an insured.

 

(CDR-3214) Understanding and Applying the Elements of Constructive Acceleration

Author(s)/Presenters(s): Cory R. Milburn, CFCC PSP; Brian J. Furniss, PE CFCC PSP

Time/Room: MON 11:30-12:30/Room 8

Abstract:

Constructive acceleration happens far more often than realized and may cause substantial consequences to both contractors and owners. This paper highlights the various elements of constructive acceleration, explains the “why” behind each of those elements, discusses considerations regarding compensation for delays, and applies real-life case studies where these elements were brought to light. While describing each element, the authors will address common errors made in analyzing and responding to constructive acceleration scenarios. In addition, and perhaps most importantly, this paper will include recommendations for preventing constructive acceleration claims for on-going projects.

 

(CDR-3215) Claims Assessment by the Stochastic Analysis of Disputed Facts

Author(s)/Presenters(s): Martin J. Gough, P.Eng.; Lisette England

Time/Room: TUE 5:15-6:15/Room 8

Abstract:

Deterministic values for construction claims are eminently susceptible to challenge for reasons of assumptions, methodology and disputed facts. This paper acknowledges the weaknesses of orthodox methods that generate a deterministic number and presents an alternate methodology that creates a realistic range of values. The alternate method proposed superimposes stochastic analysis on the nexus of contract, facts and circumstances to assess the prospect of success for the hurdles of event, cause, notice, entitlement and quantum.  The alternate method can accommodate less than perfect project documentation and disputed facts. It can be conducted at any stage of a project and for any type of dispute to provide a rapid indication of potential success of claims and rebuttals that is completely auditable.

 

(CDR-3228) Hot Tubbing Expert Witnesses – Does It Work?

Author(s)/Presenters(s): James G. Zack, Jr. CFCC FAACE Hon. Life

Time/Room: TUE 4:00-5:00/Room 8

Abstract:

Hot tubbing, also known as concurrent evidence, the tandem expert process, or dueling experts, originated in Australia in the 1970s and has been exported to Canada, Hong Kong, New Zealand, the U.K., and more recently, to the U.S. While hot tubbing has primarily been used in arbitration it is now being imported to courtrooms. As initially formulated the process was intended as a way to better control cases involving expert testimony. The process involves experts taking the witness stand to offer their opinions back to back on specific issues. Following each presentation, experts may question one another and debate various responses. The judge or tribunal may also question experts directly to clarify issues in their minds. As is to be expected, there are perceived good and bad points concerning the process. This paper is based in part on a literature review concerning hot tubbing. This review has been bolstered by the results of a privately run survey of expert witnesses who have participated in hot tubbing. Each experienced expert was asked to address what they consider to be the benefits and the weaknesses of the process to help answer the question – does hot tubbing work from the perspective of testifying experts?

 

(CDR-3250) Practical and Legal Challenges to the Implementation of the Time Impact Analysis Method

Author(s)/Presenters(s): Dr. Waleed M. El Nemr; Hossam Eid Mohamed, EVP

Time/Room: WED 9:15-10:15/Room 8

Abstract:

Delay analysis techniques have been a frequent topic of discussion in construction law literature. Delay analysis guidelines, such as The Society of Construction Law Delay and Disruption Protocol, and forensic schedule analysis guidelines, such as AACE International’s Recommended Practice 29R-03 Forensic Schedule Analysis [1] (“RP 29R-03”), were developed to provide practitioners useful tools for implementation.  RP 29R-03 is comprised of numerous method implementation protocols (MIPs), among which is MIP 3.7, commonly known as the Time Impact Analysis (TIA).  While MIP 3.7 addresses the retrospective application of a TIA method, Recommended Practice 52R-06 [2] (“RP 52R-06”) addresses the prospective application of the method. The TIA method has been used extensively in the United States and worldwide and can arguably be considered one of the most popular and renowned implemented delay analysis methods.    Despite its prevalent use, the TIA method, whether used retrospectively or prospectively, contains numerous technical and legal pitfalls that pose challenges to its users.  This paper sheds light on these practical and legal challenges and concludes with recommendations in an attempt to overcome, or at least mitigate, these technical and legal challenges.  A case study is presented to illustrate the practical and legal challenges highlighted in this paper.

 

(CDR-3254) Claims Avoidance in Infrastructure Megaprojects: A Process Framework for Design-Build Contractors

Author(s)/Presenters(s): Rahul S. Mulik, CCP

Time/Room: WED 10:30-11:30/Room 8

Abstract:

Infrastructure megaprojects (a) are Complex Adaptive Systems involving large number of stakeholders having conflicting objectives and a common goal (to establish an operational asset), (b) are almost always procured by government entities on Public Private Partnership or Lump Sum Design-Build basis, and (c) have Strategic Asset Planning stages stretched over years (if not decades) enduring political, regulatory and public scrutiny and biases. These characteristics make the infrastructure megaprojects highly prone for changes during Project Implementation stages. Changes not resolved among contract parties result in claims. Claims erode parties’ capital efficiencies and hamper the partnering relationships essential for project success. Hence, contract parties at megaprojects prefer to avoid claims.

This paper briefly discusses challenges faced in infrastructure megaprojects to contain the number and scale of the claims, and proposes an integrated framework of contract management, project controls (time and cost) management, subcontract management, data management and training and skill development processes for avoidance of claims. This paper is built upon lessons learnt at transit megaprojects (in the US, Asia and Middle East) and relevant AACE International Publications.

 

(CDR-3260) Damages Without a Cause: Liquidated Damages Are a Penalty When Owners Recover Damages for Their Own Delay

Author(s)/Presenters(s): Christopher J. Brasco; Kathleen Olden Barnes; James G. Zack, Jr. CFCC FAACE Hon. Life; Kenji P. Hoshino, CFCC PSP; Matthew D. Baker

Time/Room: TUE 2:15-3:15/Room 8

Abstract:

An owner’s delay has traditionally been recognized as either an absolute or partial contractor defense against an assessment of liquidated damages.  However, owners are increasingly employing contractual provisions and arguments that seek to prevent contractors from raising owner-caused or an owner’s concurrent delay as a defense to the assessment of liquidated damages.  The law has long declined to enforce liquidated damages provisions which function as penalties.  Attempts to preclude contractors from raising owner-caused delay as a defense render the assessment of liquidated damages a penalty.

The paper will discuss the fundamental legal principals related to the enforcement of liquidated damages provisions including the law’s evolving approach to apportioning liquidated damages assessments in the face of the owners’ delay, concurrent or otherwise.  Standard defenses against assessments of liquidated damages will be discussed.  In addition, a legal framework for contractors to challenge arguments that they have waived their ability to raise the owner’s concurrent delay as a defense to an assessment of liquidated damages will be presented.  The paper also will provide recommendations for how contractors can best position themselves to defeat an assessment of liquidated damages.

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