The construction industry is significantly affected by several disputes, and one of the most prevalent and substantial causes of such disputes is the delay in the successful completion of a project for various reasons. In the construction industry, a project getting completed within contractual time without any dispute is not less than any miracle.
Delay means that the work intended for the scheduled time period was not accomplished, which could have serious financial consequences and stymie the project’s overall viability. Delay analysis is a critical component of the contract management system for identifying the causes of delays and resolving conflicts.
As one of the leading contract and claim management companies, we share useful insights on delay analysis:
Why is delay analysis pivotal for contract management?
When construction projects are delayed or prolonged for a substantial period, cost overruns occur. It is essential to analyse the causes of the delays and identify who is responsible for such delays so that the innocent party is not saddled with additional unforeseen and unexpected costs.
Whereas in the construction industry, projects are rarely completed within the scheduled completion period, the concept of proper delay analysis is becoming a more active integral part of claim management in order to be fairly compensated for adverse activities not directly attributable to the contractor.
Why construction projects get delayed
Construction delays are caused by a variety of factors, some of which are listed below:
- Budget constraints
- Challenges regarding resource management
- Political instability
- Dealy in receipt of requisite approvals
- Subcontractor schedules and compliance
- Ineffective communication
- Unfavourable weather conditions
- Frequent changes in the Client’s decision and respective scope of work
- Work-front unavailability
Principles and methods for delay analysis
The purpose of a delay analysis is to determine why delays occur on a construction project and what impact they will have on the overall project. In a contract management system, different sorts of delay analysis methodologies are used. Delay analysis techniques can be broadly divided into two categories, namely
- Schedule Based Analysis
- Non-schedule Based Analysis
Schedule Based Analysis
Schedule delay analysis events using scheduling methods to identify the cause and extent of delays and to resolve construction delay claims through negotiations or legal proceedings. The following are some of the most common methodologies used in the schedule-based analysis:
- Prospective TIA (Time Impact Analysis): The technique forecasts the delay caused by an event or a change in the future before the affected or changed work is performed. The client and contractor will agree to an estimated value of work, prior to the work being performed. This technique has nearly universal industry approval as the best way to forecast the delay.
- ii) Retrospective TIA: As the name suggests, this retrospective analysis is the one, prepared after the delaying event(s) or change work has been performed. After the affected or revised work is completed, the approach detects the delays that have happened in the past. After the work is completed, the contractor will establish the actual cost of the job plus a markup for submission to the client for approval. Regrettably, there is no consensus or adoption of this technique as the best tool to determine the delay. There are other numerous approaches for the retrospective TIA delay analysis, which are listed below:
- Planned vs As-Built Analysis: The analyst needs this method to determine the reasons for the project’s late completion by comparing the As-Planned (Baseline) Schedule to the As-Built Performance. This analysis is normally done at the WBS (Work Breakdown Structure) level of the Project Schedule.
- It is simple to comprehend and convey because it does not go into detail.
- This analysis may reveal noncritical path delays that the Contractor is entitled to a time extension for.
- This technique will not be able to discover and measure delays if the project is carried out in a different order than intended.
- This method lacks the ability to recognise and address concurrent delays
Impacted As Planned Analysis: In this technique, a frag-net for each delay event is created and entered into the baseline schedule, named as “Impacted As-Planned Schedule”, after which the schedule is re-run. Its project completion date will be compared against the As-Planned Schedule’s project completion date (Baseline). The delay measured as a result of delay frag-nets incorporated into the schedule is the difference in project finish dates. This approach is followed by most construction businesses since it exaggerates the delay and can be used to justify a time extension to the client. The delay mitigation plan is not part of this technique.
Collapsed As-Built Analysis:
- It’s just the opposite of Impacted As-Planned Analysis. The As-Built Schedule will be prepared as fully as feasible using this process, which is based on the current project documents. The analyst then subtracts activities or shortens the duration of delayed work items that have impacted the project, as evaluated by the analyst. The difference in days between the as-built and collapsed as-built end dates is due to a delay caused by certain tasks that were eliminated. This is a highly subjective analysis that is prone to inaccuracy and manipulation. The analyst can design an as-built timeline that supports a predetermined result with minimum effort.
But for Analysis:
- When there is no contemporaneous schedule to support the contractor’s delay argument, they may employ a “But for” analysis. The contractor may argue that if the Owner’s delays were not factored into the initial project timeline, he could have completed the job considerably sooner. The gap between the actual completion date and the “but for” timetable is then used to calculate the amount of time the Client has caused delays.
- In this technique, the analyst examines delays during the project in discrete time intervals or “windows.” Analysts usually base the window on the time period in which a specific controlling operation is crucial. When the controlling activity becomes crucial for the first time, the window will begin. Likewise, the window must close when the controlling activity is completed or no longer critical.
Non-Schedule Based Analysis
Under the ambit of the non-scheduled based delay analysis, there are two approaches presently available viz. i) Analysis based on Dollar, ii) S-Curves. Non-Schedule Based Analysis is not recommended in the construction sector due to its arbitrary and unreliable analysis process.
Looking for a contract and claim management company?
Delays in the construction industry can lead to various disputes and if not managed, it can affect the project, both in terms of time and money. In such a scenario, a contract and claim management company like Contract Square can help. We can manage day-to-day contract management services for all types of infrastructure projects to safeguard the contractor’s interests in the future.
- Our well-experienced engineers prepare claims for the contractor by using the proper method of delay analysis, which can act as a backbone of the claims. This will not only strengthen the claims but also prepare the future path for a favourable adjudication procedure and shall sustain judicial scrutiny.
- Contract Square can come up with unique and effective solutions based on our extensive experience in delay analysis, as a result of our significant handling and preparation of claim management for the construction industry.
- If needed, well-versed solicitors with strong technical backgrounds can help in future legal processes, and their contributions will be valued throughout contract management services on a day-to-day basis.
In a brief overview, our aim is to take over all the paperwork, fill the gap between delays and claims, and help our clients execute the contract with complete financial stability and profitability. To know how we can help your construction company, call us at 9051739355 to explore more about our expert services.