(CDR-3043) Contractors Inability to Demonstrate Entitlement to Claim Additional Time and Cost on Extension of Time Claims
Author(s)/Presenter(s): Mojela K. Boshoga, Sr.
Demonstrating entitlement to claim for full additional time and/or cost due to delay events occurring during execution of a project seems to be an elusive concept to majorityou of contractors in the industry.
Furthermore, poor preparation, execution and administration of construction works on site, and at their head offices contribute significantly to the current standard that contractors adhere to when preparing and producing claim documents.
The contents of the paper will focus on the following;
1. Contractor's inabilities to adhere to provisions of the contract
2. Primary reasons leading to contractors producing sub-standard claim documents, resulting in them forfeiting their entitlement under the contract to claim for additional time and/or cost
3. Methods to be applied by contractors to improve the current standard of claim documents, i.e. affording them the opportunity to maximise their right to claim under the contract, and
4. Lessons learnt from other projects, where claims' preparation by contractors yielded a fair rate of success.
Additionally, the contents of the paper will demonstrate that; by considering the above mentioned, and by implementing the corrective action recommended, and the methods recommended as best practice in the paper, contractors will be in a better position to maximise their right to claim for additional time and/or cost, due to better planning, execution and administration of the works.
(CDR-3068) Evolution of Standards and Protocols for Establishing Loss of Productivity Claims
Author(s)/Presenter(s): Mark I. Anderson; Daniel O. Stewart; Ruangrote (Alec) Amaralikit
This article discusses loss of productivity claims and shift in accepted standards for cause and effect analysis in light of ever-increasing availability of integrated performance data in the electronic age of project management, project controls and scheduling systems. This article reviews the current standards and protocols for quantification of proof of loss under “measure mile” related theories. This article addresses how the advent of sophisticated earned value recording and measurement systems, including cost and resource loaded project schedules, job cost accounting systems, and variance analysis may be refining how cause and effect are established. This analytical data leads to increased accuracy and supportability of loss of productivity claims, and thereby reduces the level of subjectivity which often enters into these analyses, which make them the most hotly contested areas of expert dispute in our industry.
The article also explores how earned value measurement systems and forecasts of cost to complete have evolved in the construction industry, their origins in heavy industrial industries such as oil and gas, based on “rules of credit” for performance measurement, and how these sophisticated approaches are being applied in large scale commercial, infrastructure, transportation and Federal government construction programs. Finally, the article reviews how integration of adequately detailed data sources enables quality productivity analysis on a real-time basis, which may lessen the mystery and subjectivity of these types of loss of productivity claims in forensic claims analysis.
(CDR-3090) Summary As-Planned versus As-Built Analysis
Author(s)/Presenter(s): Lucia Vernon, PSP
There are a lot of different types of delay analysis which a delay analyst can use according to AACE Recommended practice 29R-03. The type of analysis that is suitable depends on the information which is available, mainly the baseline, monthly progress updates, the best being if they are in some type of software programme. If we have all of this it is easy to select the type of analysis, but what if the data are not available in the software? What if the results are not requested to be delivered in software? Recently there have been a lot of tribunals complaining that they cannot understand the results coming from the pages and pages of data produced from the software. The question should be as well, can we always rely on the data from the software?
One of possible solution which I came across could be Summary As-Planned versus As-Built analysis in Excel, where the critical path is selected based on logic and the nature of the project. The delay analyst has the option to decide and apply his experience instead of strictly following the programming tool. Or the summary delay analysis could be built if the data are available only from records such as weekly, monthly reports or from correspondence. The advantage is also that people who are not familiar with the programing tools and reading the results out of them, have a better chance to understand the story which the delay analyst is trying to tell and to ultimately decide in his favour. The simplicity of the presentation has the power to change decisions!
(CDR-3100) Criteria for Substantial Completion to be Recognized as Contract Completion
Author(s)/Presenter(s): Luis Otavio Rosa; Marlon Shigeru Ieiri
Completion date is an important and a frequent issue in construction contracts claims and disputes. When completion date is not sufficiently defined or agreed upon by the parties and such date is related to damages and penalties, substantial completion recognition and acceptance date can successfully replace such milestone in dispute analysis, during court and arbitration procedures. This paper identifies some guidance presented in AACE International recommended practices (RP) and other technical organizations about substantial completion and related works to be accomplished in order to reach completion date. This paper summarizes and proposes some criteria to accept and to recognize substantial completion as completion date for purposes of claims and penalties analysis.
(CDR-3110) Concurrency and Pacing – Does Intent Matter?
Author(s)/Presenter(s): John C. Livengood, Esq. CCP CFCC PSP FAACE
While concurrent delay and pacing are seldom actually found by triers-of-fact, concurrency theory, application, and its relationship to pacing remain major analytical and practical elements in forensic delay analysis. AACE’s 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 mis-applied by experts and triers-of-fact. This paper will review the current theory, application, and mis-comprehension of concurrency and pacing as reflected in expert literature and legal decisions. Further, the paper will explore whether a party’s intent concerning a concurrent or pacing delay makes a difference on a determination – or should make a difference in a determination on concurrency or pacing.
(CDR-3115) In 2019, Why Isn’t Software Helping More with Schedule Forensics?
Author(s)/Presenter(s): Brian Leach; Jacob Goins
Performing a forensic analysis on a schedule can be a difficult and time-consuming undertaking. A set of schedule snapshots is generally a very large data. The tools used to compare schedule snapshots reduce that data set to a smaller set of data, but it is still a large data set that must be searched and refined to reach an understanding of the “ground truth.” It is a time-consuming and costly process.
In this paper, we will present the results of our research into the use of software to answer these primary questions:
- When comparing the changes between two snapshots of the same schedule, how can software programmatically determine which changes have a negative (or positive) impact on schedule performance?
- Given a large list of changes that negatively (or positively) impact performance, what metrics can we use to quantify and prioritize the changes, avoiding the need to consider the entire list?
- Given a negative schedule trend (like a slipped milestone), how can software programmatically list of all of the schedule changes that explain the trend?
Our preliminary findings indicate that algorithms can be effectively applied to these problems beyond the scope of existing tools.
(CDR-3144) The Dance - Managing Scope Changes in Design-Build Contracts
Author(s)/Presenter(s): William A. Corn
There is a delicate dance regarding “Scope” for Design Build Projects. This dance involves the blending of three cultures (Contractors – Designers - Owners). All three have different motivations yet striving for the same target – A Compliant Project / Structure.
In reaching for the target, differing interpretations of the scope surface. (most significantly during the design phase.) Repeatedly these differing interpretations lead to protracted debates, often loosing the purpose of the debate entirely; resulting in significant delays to the project schedule and significant unintended increases in scope. These same differing interpretations also lead to substantial struggles in project closeout and irregularites in the administration of the Design-Build contract.
To address issues evenly and early, a mechanical protocol is required that looks at the contract requirements, facts, and if needed, elevates the issue timely to allow the project to move forward. Solving issues early, and fairly, will give the best chance to hit the target of a compliant project while meeting the motivations of all.
Developing this mechanical process requires buy in from all key stakeholders and a firm understanding of the motivation of all three. If the motivation of each are not addressed conflict is bound to arise - problems will grow, and cost and schedule will be second to winning the battle. This presentation will walk through the “steps” to develop a mechanical process that allows willing participants to solve their Design-Build scope change issues and keep the project moving forward. To compliment the analysis several examples of actual specification will be demonstrated to show the process. (With the owner’s permission)
(CDR-3145) Perfection the Fixed Perspective Delay Analysis
Author(s)/Presenter(s): John Jackson
With the variety of Delay Analysis Techniques available to schedule reviewers, it is difficult to know the most effective way of demonstrating a true and accurate impact calculation caused by delay. Each analysis method has strengths and weaknesses. The Windows Analysis is the method recommended within the Society of Construction Law Delay and Disruption Protocol. In this session, Mr. Jackson will discuss the Fixed Perspective Windows Delay Analysis method, which incorporates the strengths of the various retrospective methods, while minimizing, if not alleviating the weaknesses. The Fixed Perspective Windows Analysis identifies delay as well as mitigation and acceleration quantities. The result is an analysis that, when prepared correctly, is easy to calculate and easy to defend.
(CDR-3147) A New Role for Project Controls Professionals on Dispute Boards
Author(s)/Presenter(s): James G. Zack, Jr. CFCC FAACE Hon. Life
Dispute Resolution Boards (DRBs) came into the US construction industry in the 1970s yet many in the industry are not familiar with these Boards or the DRB process. This paper discusses the history, effectiveness and cost of this alternative dispute resolution (ADR) process. The paper also 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 (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-3151) Delay Analysis for the Complex Megaprojects
Author(s)/Presenter(s): Ahmed A. F. Sedky
Delay Analysis for the complex megaprojects is an area that is not widely explored. Most of the delay analysis sources do not address the delay analysis on complex projects and the different nature of these projects compared to other similar jobs. This paper tackles some of the best practices in carrying out the Delay Analysis techniques, namely Windows Analysis in mega complex projects. On such projects, significant changes have been made to the schedule during the project life cycle.
The paper describes the recommended practices to deal with the changes made to the project baseline and updates schedules during the lifetime of the project when carrying out the delay analysis using Window Analysis.
The recommended practices cover the changes made to schedules activities list, changes in Activity ID scope and description, changes in relationships between baseline and updates, change in original duration, original duration vs the as-built duration, activity completion forecast for ongoing activities.
The recommended practices are a result of my practical working experience working on delay analysis for megaprojects for more than 15 years, and a result of in-depth discussions with various experts in delay analysis field over the years. These practices are believed to deliver a fair and reasonable analysis results.
(CDR-3153) Determining Time Extensions for Quantity Overruns in Unit Price Contracts
Author(s)/Presenter(s): Emad Mofarej Kouchaki, CCP, PSP; Christopher W. Carson, CEP DRMP PSP FAACE
Unit price contracts are often used to expedite procurement and shorten the overall duration of a project since a detailed design and final quantity takeoffs are not necessary to enable a contractor and owner to agree on a contract to perform the construction work. Even when the actual quantities are finalized, variation in quantities still happen for a variety of reasons; perhaps late value engineering, Requests for Information, or simply due to designer’s oversight. Although most contracts include some Variation in Quantity Clause, this clause does not necessarily explain contractor’s entitlement to additional time due to increased quantities. This paper provides guidance to an owner that will facilitate collaborative and effective analysis of delays and resolution of entitlement to extensions of time due to variation in quantities.
The proven approach is aligned with AACE Recommended Practice No. 29R-03 and ensures that the analysis will not create any pitfalls at a later date should the issues require more formal dispute resolution. This process has been successfully implemented on multiple projects and the paper will include an example of how this approach works.
(CDR-3162) As-Built Critical Path in Nine Flavors
Author(s)/Presenter(s): Kenji P. Hoshino, CFCC PSP
In retrospective forensic schedule analysis, the as-built critical path is one of the most important subjects. Yet, as suggested by the 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 will greatly expand on the previous presentation by examining the as-built critical path as described and implied by the nine methodological prototypes contained in Recommended Practice 29R-03. It will further analyze the differences and similarities among the nine 'flavors' to determine whether a reconciliation of all the approaches is possible.
(CDR-3166) Delay Related Claims - How to Calculate a Reasonable Cost
Author(s)/Presenter(s): Praduman Maraj, PE PSP
One of the more common issues litigated is delays in construction contract performance. As a requirement of the contract, contractors often use CPM schedules as a primary vehicle to plan and sequence the work. A secondary role of the schedule is it may protect either party from liability for delay costs. It also permits one party to establish that another party was the cause of a claimed delay. Construction projects typically involve the 3 M’s-Men, Machines, and Methodology which require tremendous cost from payrolls, equipment rental, and overhead. Add the significant risks and liabilities associated with delays, there is a lot of money at stake when projects are late. This paper addresses the quantum aspect of delay related claims and is intended as a follow on to the presentations of the nine (9) methodologies presented for Time Impact Analysis and how to perform each. Having established that a project was delayed and the schedule analysis has calculated the number of days of delay, how does a practitioner “analyze” the cost of damages and recommend to the parties to the contract an amount with some degree of confidence to reach a settlement?
In attempting to answer the question the authors used their experience in analyzing over $200M worth of claims primarily related to transportation projects. Several well written publications are available on the components of a delay claim, however these publications do not provide guidelines for the claim reviewer to arrive at a settlement amount. Additionally, in productivity loss cases, the authors found little research for transportation related projects.
(CDR-3167) Home Office Overhead - Which Formula Should You Use?
Author(s)/Presenter(s): Mark F. Nagata, PSP
Home office overhead costs are a contractor’s time-related home office costs necessary to support all of its projects. Contractors allocate their home office overhead costs across their projects and, as their projects progress, the revenue they earn from these projects is used to pay their home office overhead costs. However, when a project is delayed the contractor is not always adequately compensated for its home office overhead costs during the project’s extended performance. Some contracts specify how a contractor’s extended home office overhead costs should be calculated, however most do not. While there are various home office overhead formulas (Eichleay, Canadian, Hudson, Manshul, etc.) are used to calculate a contractor’s unabsorbed and extended home office overhead costs, each is slightly different from the other and can often produce vastly 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 explain why they produce different results.
(CDR-3173) Defending Against Loss of Productivity Claims
Author(s)/Presenter(s): Dr. Tong Zhao, PE PSP; J. Mark Dungan; Xuyang Liu
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 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 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-3176) Benefits for Dispute Boards with the Application of AACE International Recommended Practices
Author(s)/Presenter(s): Luis Otavio Rosa
Dispute Board (DB) is a mechanism for avoidance and resolution of disputes in complex projects worldwide, with several variations concerning its establishment (begin of contract or ad-hoc) ans scope of decisions (assistance, review, resolution, adjudication and others). DB is usually formed by three impartial professionals with experience and knowledge in the type of the works of the contract. Some of AACE International (AACE) recommended practices (RP) are applicable for analysis of usual issues during DB progress in disciplines such planning, schedule control, costing, estimating and others. This paper identifies some of these AACE RPs and related benefits as a tool to avoid or mitigate claims and disputes.
(CDR-3178) Overhead Costs in Delay and Productivity Claims
Author(s)/Presenter(s): Christi Fu
Extended and expanded overhead costs are often submitted when construction projects experience delays and impacts. The 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. The paper will explore various contract language regarding allowability of delays and overhead costs. It will also explain how a contractor’s accounting system and bid documents can be used for evaluation. This paper will leave the reader with a better understanding of various overhead calculations and evaluations for delay and productivity claims.
(CDR-3179) Return to Basics: Best Practices of Project Documentation from an Expert Witness’ Perspective
Author(s)/Presenter(s): Christi Fu
Can you find a file from 3-years ago? There is not a shortage of documents in this digital age and there is a sense that we can find documents easily with various search options. Unfortunately, you only get out what you put into it. Bad project documentation can fly under the radar during construction but lights up like the Christmas Tree during disputes and claims. People take it for granted that proper project documentation is performed and that it is a job solely for the document control staff. This paper will discuss the importance of project documentation and the consequences of improper practices from the perspective of expert witnesses.
(CDR-3193) How to Best Prepare for and Navigate a Subcontractor Default Insurance (SDI) Claim
Author(s)/Presenter(s): Michael Oliveri, PSP; Joseph W. Wallwork, PE CCP CFCC PSP FAACE
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, the parallels and differences between SDI and standard default termination 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.
(CDR-3214) Understanding and Applying the Elements of Constructive Acceleration
Author(s)/Presenter(s): Cory R. Milburn, CFCC PSP; Brian J. Furniss, PE CFCC PSP
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) A Rapid and Auditable Method of Claims Assessment by the Stochastic Analysis of Disputed Facts
Author(s)/Presenter(s): Martin J. Gough, P.Eng.; Lisette England
Deterministic values for construction claims are eminently susceptible to challenge for reasons of assumptions, methodology and disputed facts.
This paper examines the weaknesses of the orthodox methods that generate a deterministic number and presents an alternate methodology that creates a realistic range of values. The alternate method 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 the potential success of claims and rebuttals that is completely auditable.
(CDR-3216) Using a Measured Mile Productivity Analysis to Increase Calculated Delay Quantum
Author(s)/Presenter(s): Glen R. Palmer, CFCC PSP; Christopher W. Carson, CEP DRMP PSP FAACE
Traditionally, productivity analyses and delay analyses have been treated separately, as two different methodologies and often prepared as separate work products. In reality, however, both analyses can address productivity issues. A Delay Analysis can be used, in part, as a measure of the inefficient use of time. A Productivity Analysis measures the inefficient use of resources. The authors of this paper draw correlations between the two products. These correlations can be used to increase the calculated delay quantum by using the results of a “Measured Mile” analysis to increase the number of days for which the time driven cost damages can be attributed. This presentation is a revision of a previous presentation approach on this subject.
The authors of this paper are widely experienced in all dispute resolution analyses and have testified as experts.
(CDR-3218) System Dynamics in Disruption and Delay Claims – A Case Study
Author(s)/Presenter(s): Dr. Sam G. Mattar; Alex Voigt; Moneer Khalaf; Adam Clements
In projects, changes are inevitable: they occur, and directly and indirectly affect all aspects of the project. In assessing their impact, there is invariably a cognitive bias that places an over-reliance on discrete analytical methods to separately assess delay and disruption (e.g., Time Impact Analysis or Measured Mile). These methods often have limited success in overcoming problems such as lack-of-fit, data issues (extent, consistency, validity), inadequate characterisation of events, lack of verification of results; which leads to inconsistent and uncertain results based on competing opinions.
The case study of an international arbitration, which awarded 100% recovery of disruption costs for a claim based on ‘System Dynamics’ (SD) analysis, highlights many issues and advantages of its use in assessing disruption (and delay): the analytical process (a) captured the impacts of many changes (some not amenable to existing analytical methods), (b) validated the data and the simulation model, (c) established a clear causal narrative linking changes to their impacts, and (d) set the confidence ranges surrounding the results obtained. These advantages, in turn, lead to consistent, verifiable and transparent results which, ideally, reduce uncertainty in claims and disputes. The prospects for SD in construction disruption and delay claims are promising indeed.
(CDR-3219) Delay Analysis Methodologies - Provision(s) Proposal for Bespoke Construction Contracts
Author(s)/Presenter(s): Feras Al Roumani
There are numbers of delay analysis methodology known in the construction field, each of which has its strengths and weakness. The selection of the delay analysis methodology is often not stipulated in the conditions of the contract; instead, it is kept for the contracting parties to agree on the implemented methodology for extension of time claims, assessment, and determination.
The selection of the most suitable delay analysis methodology depends on a number of factors, which include the availability of information, the existence of a baseline programme, the time of the analysis being carried out, and the time frame allowed to conduct the delay analysis.
The aim of this paper is to provide recommendations in terms of provision(s) which will stipulate, define, and recommend the use of a specific delay analysis methodology for implementation for the extension of time claims and assessment to:
1- Avoid disputes on the selection of the delay analysis methodology;
2- Improve the procedure of the extension of time claim submission, assessment, and determination; and
3- Protect the project stakeholders’ interests through the execution of the contract terms and conditions.
(CDR-3228) Expert Witness Hot Tubbing - Does It Work?
Author(s)/Presenter(s): James G. Zack, Jr. CFCC FAACE Hon. Life
Hot Tubbing, also known as Concurrent Evidence or the Tandem Expert Process, originated in Australia in the mid-1990s but has been imported to the U.S. in recent years. While hot tubbing has primarily been used in arbitration it is now moving into U.S. courtrooms. As initially formulated process was intended as a way to better control a case involving expert testimony. Generally, the process involves expert witnesses taking the witness stand to offer their opinions back to back on specific issues. Following each presentation, the experts may question one another and debate various responses. The judge or tribunal can also question each expert 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 information is bolstered by the results of a privately run survey of expert witnesses who have participated in matters involving hot tubbing. Each experienced expert was asked to address what they consider to be the benefits and the weaknesses of the process in order to answer the question – does hot tubbing work from the perspective of the testifying expert?
(CDR-3235) What Follows Notice? - The Longest Yard
Author(s)/Presenter(s): Donald F. McDonald, Jr. PE CCP PSP FAACE Hon. Life
Much claims avoidance advice is focused on a need for timely notice per the contract. That's good and necessary, but most people seem to act as if that is the end point. They gloss over the fact that notice is only a starting point for a lot of hard work on the project team’s part. Projects continually fail to meet contract requirements for the required contract follow through actions once notice is given.
This is not an issue solely at the feet of the contractor, but rather all participants in the engineering, procurement and construction process. Yes, the contractor carries the largest load in respect of the full change management process. However, the owner and third parties are also key to making sure there is early and equitable resolution within the confines of the contract. They have their own hard work. Otherwise the parties will find themselves in a prolonged and expense disputes resolution process that leaves no one satisfied.
Timely submission of a full cost and schedule change proposal and then the hard work necessary to turn that into approved change is not a trivial task. It often raises issues that the parties would rather not deal with immediately. The culture of project management is to avoid having difficult discussions earlier rather than later. Lack of follow through often results in accusations of hiding the ball until a there is a huge, nasty surprise that can't be properly mitigated in the time left, nor can the sympathy claim that inevitably follows be easily resolved.
This paper and presentation will provide guidance on steps all project participants should take to ensure timely resolution of change.
(CDR-3239) Quantification of Damages Arising from Adverse Weather in Construction
Author(s)/Presenter(s): Dr. Osama El Sayed Moselhi, P.Eng. FAACE
Adverse weather conditions can result in significant productivity losses and delays of construction operations, which frequently lead to costly disputes and claims. While such delays may be considered excusable but non compensable in building construction, that may not be the case in highway projects, where public owners and their agencies stipulate the expected number of delay days for each month of the year in a given location under their respective regions of operations. The paper will present a newly developed 3-step process for quantification of damages arising from adverse weather in highway construction projects, with a focus on earthmoving operations. The first step is to establish contractual basis for the claim through its weather impact related article(s). The second is to demonstrate causation, i.e. to demonstrate that the encountered adverse weather conditions considerably exceed the prevailing (i.e. average over a representative number of years) weather conditions in the region of operation. The third is to estimate the number of delay days. While the first and second steps can be carried out with relative ease, the third requires rigorous analysis and the development of a comprehensive computational framework. The developed method for estimating the number of delay days, in the third step, accounts for intensity of rain, humidity, wind speed, sky condition, and type of soil. The weather data used in the analysis is hourly as recorded by nearby weather stations in Canada or as recorded by the National Oceanic and Atmospheric Administration (NOAA) in the USA. The paper will also present the application of the developed method on two major projects; one in Canada and the second in the USA.
(CDR-3250) Practical and Legal Challenges to the Implementation of MIP 3.7 (Time Impact Analysis) Method of the AACE Recommended Practice 29R-03
Author(s)/Presenter(s): Waleed M. El Nemr; Hossam Eid Mohammed, EVP
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 (AACE’s RP), were developed to provide practitioners useful tools for implementation. AACE’s RP is comprised of numerous method implementation protocols (MIPs), among which is MIP 3.7, commonly known as the Time Impact Analysis (TIA). MIP 3.7 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, MIP 3.7 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: Process Framework for Prime Contractors
Author(s)/Presenter(s): Rahul S. Mulik, CCP
Infrastructure megaprojects are (a) Meta-organizations with government entities as Owners; (b) Complex Adaptive Systems involving large number of stakeholders having conflicting objectives and a common goal to establish an operational asset; (c) Capital Projects mostly procured on ‘Public Private Partnership’ or ‘(Lump-Sum) Design-Build’ basis; and (d) having 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 and erode parties’ capital efficiencies and hamper the partnering relationships essential for project success. Hence, claims avoidance is preferred by all contract parties at such megaprojects.
This paper briefly discusses ‘why infrastructure megaprojects fail to contain the number and scale of the claims’. For Prime (Design-Build) Contractors, it proposes an integrated framework of contract management, project controls, project governance, communications management and data management processes for avoidance of claims. This process framework for practical application is built upon lessons learnt at transit megaprojects (in the US, Middle East and Asia) and relevant AACE Publications.
(CDR-3256) Recommendations for Improvement of MIP 3.3 - Contemporaneous “-as-is” Period Analysis Schedule Delay Methodology
Author(s)/Presenter(s): Roberto Leandro; Anthony J. Gonzales; Katherine Hull; Marcelo Azambuja
Method Implementation Protocol (MIP) 3.3, described in AACE International (AACE®) Recommended Practice (RP) 29R-03 as Observational / Dynamic / Contemporaneous As-Is, is a retrospective method that involves dividing the total project duration into smaller periods and quantifying delays and gains for each period. AACE® RP29R-03 provides detailed implementation protocols for MIP 3.3. However, the current version contains various gaps that need to be addressed to improve understanding and proper implementation. Furthermore, it is AACE®’s intention to develop recommended practices for the independent implementation of AACE® RP29R-03’s nine MIPs.
This paper identifies gaps within the current MIP 3.3 implementation protocols and provides recommendations for improvement. The proposed recommendations are a step towards providing additional guidelines for the independent implementation of MIP 3.3.
(CDR-3260) Owner Must Prove Actual Harm – Otherwise Liquidated Damages are a Penalty
Author(s)/Presenter(s): Christopher J. Brasco; James G. Zack, Jr. CFCC FAACE Hon. Life; Kenjo P. Hoshino, CFCC PSP; Kathleen Olden Barnes
Virtually every construction contract contains a provision for liquidated damages in the case of delayed performance. As a guiding principle liquidated damages should not be a penalty, but rather a reasonable approximation of the damages the owner estimates it will incur due to contractor-caused delay. Liquidated damages are not intended to be a windfall or revenue stream to the owner that has suffered no loss due to contractor delay, or a mechanism to permit the owner to recover costs where concurrent delay or delay resulting from causes other than contractor delay prevent the owner’s beneficial use of the project.
Liquidated damages sit at the intersection of the basic principles of contract law that parties are free to negotiate and agree to any lawful terms, but remedies for contract breach are intended to restore the non-breaching party to the position they would have been in if the contract had been performed, but not to enrich them. This paper will address the concept of liquidated damages as it relates to the burden of proof to establish contractor-caused delay and that the owner has suffered actual harm. The paper also will offer contract language that may be negotiated to ensure that a contractor does not bear this burden and does not find itself paying liquidated damages when the owner has not suffered any damages – or simply put, a penalty.
(CDR-3267) The Enhanced Role of the Engineer in Assessing Claims under the 2017 FIDIC Standard Contract Conditions
Author(s)/Presenter(s): Mohamed-Asem U. Abdul-Malak; Salim N. Bou Hamdan
A number of standard forms of contract conditions call for a third-party assessment of the claims raised by the parties to the contract, to be normally made at an early stage of the claim evolution process. The names given to this third party include the initial decision maker, engineer, architect, contract administrator, or project manager. There have been concerns raised in the literature as to the capacity under which such professionals act in rendering the evaluations, assessments, and/or decisions expected of them, particularly in respect of the scope of their role and the degree of neutrality or impartial with which such roles are exercised. This paper sheds light on the enhanced role that the engineer is required to fulfill under the 2017 contract conditions that were newly released by the International Federation of Consulting Engineers (FIDIC). The analysis was performed in comparison with the roles originally prescribed under the earlier versions of these conditions. The findings indicated a more enhanced role for conducting consultations and rendering determinations. This enhanced role is found to be now exercised over a longer time-bar stipulation, and - yet - with a clearer and more explicit requirement of neutrality.
(CDR-3269) Decision-Making Governance Platforms for Claims/Disputes Progression
Author(s)/Presenter(s): Mohamed-Asem U. Abdul-Malak; Ali H. Srour
Contractual mechanisms devised for construction claims and disputes administration and tracking nowadays involve multiple gated stages. The progression of claims through such multiple gates is an indication that the disagreement between the parties to the construction contract is escalating to the level of a dispute. While it is recognized that both owners and contractors are expected to retain appropriate levels of staffing for handling the claim/dispute evolution process, there is lack of work describing how the involved staff can be grouped or organized to undertake the tasks needed along such a process. The aim of the work presented in this paper is to highlight the decision-making progression milestones that may typically be inherent to the claim/dispute administration mechanism and provide an analysis of the change in the topology of the governance platforms that are concerned with decision making at the various milestones. The findings revealed an expected shift of control from the concerned individuals assigned to function at the project level to those more senior managers and executives. Those are likely to be of higher competencies and located at the head-office level, and they end up taking custody of the process at the later stages of the resolution process.
(CDR-3277) Shortcomings of a Measured Mile Analysis and Methods to Improve it
Author(s)/Presenter(s): Gregory B. Lee, CCP PSP
When done correctly, a measured mile analysis is the most reliable and most widely accepted method to calculate the loss of productivity/efficiency. However, most contemporaneous construction documents are missing some of the key components necessary to perform an accurate analysis. In addition to the construction schedule, daily logs, and time records, there are specific recordkeeping enhancements that can fill in the voids and create a much more accurate analysis. This study will identify the typical shortcomings or voids in project records, and evaluate the best methods of addressing these issues. Enhanced record keeping is the best method to solidify a Measured Mile Analysis. When augmentations are added to contemporaneous records, the process of calculating the loss of productivity becomes much more precise. Furthermore, this paper will examine the effectiveness of other methodologies such as a hybrid or combined Earned Value Analysis / Measured Mile Analysis which can compensate for some missing components, and produce a precise and reliable loss of productivity analysis.