Carolina Construction Blog

CPM Scheduling Concepts: The Critical Path

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Jan 112015

The critical path method (CPM) scheduling was formally developed in the late 1950’s to address the challenges of better planning, scheduling and managing complex projects. It is the most-used scheduling technique in the construction industry and is also used extensively in aerospace, software development, product development and engineering.

By modeling activity durations, logical relationships and the end point (completion milestone) of the project, CPM scheduling allows one to determine which activities are “critical” to the completion of the project. With the term “critical activity” meaning those activities that must be performed on their earliest planned start and finish dates to avoid causing a delay to the overall end date of the project. By definition, the critical path of the project is the longest path through the network that establishes the minimum overall project duration. Thus, each time the schedule is updated the critical path can be be calculated to determine the anticipated project completion date. Knowing which activities are critical allows the project team to stay focused on progressing the work along the critical path. Knowing if the end date has slipped allows the project team to analyze the critical path and come up with a recovery plan to accelerate the work along the critical path. Critical path analysis is also used to perform delay analysis and to justify time-extension requests. Non-critical activities can be monitored to ensure they do not become critical and potentially delay the project.

For the classical schedule calculation, the critical path is the continuous chain of activities through the network schedule with zero total float. Total float is an important characteristic of CPM scheduling because it indicates the amount of time an activity can start from its planned start date without delaying the project. Total float and the critical path can be identified using the following parameters:

Forward Pass:
- Calculates an activities “early dates.”
- ES – Early Start: The earliest date an activity can start based on the completion of its predecessor activities.
- EF – Early Finish: The earliest date an activity can finish based on the ES date.
- ES + Duration – 1 = EF

Backward Pass:
- Calculates an activities “late dates.”
- LS – Late Start: The latest date an activity can start without delaying the end date of the project.
- LF – Late Finish: The latest date an activity can finish without delaying the end date of the project.
- LF – Duration + 1 = LS

Total Float:
- The amount of time an activity can slip from its early start (ES) without delaying the project.
- The amount of time between an activity’s late dates and early dates.
- For classical schedule calculations, activities with zero total float are critical
- LS – ES = Total Float
- LF – EF = Total Float

Every time you schedule a project using CPM scheduling software such as Oracle-Primavera, the scheduling algorithm performs a forward and backwards pass and calculates the total float for each activity. You cannot edit an activities float value directly. Primavera allows users to choose whether to calculate the critical path by total float or by the longest path. The difference between the longest path and total float is that the longest path calculation will always identify the activities that are truly critical and driving the end date of the project. Total float calculations can sometimes be affected by constraints and differences in project calendars that can yield total float values where the path(s) with zero or negative float may not be the true critical path of the project. Therefore, it is always recommended to schedule a project using the Longest Path and not Total Float when determining the critical path of the project.

Diligent monitoring of the critical path is key to keeping your team focused on timely project delivery and allow them to quickly address issues and delays as they occur. Disregarding the critical path can lead to costly delays and delay claims.

Carolina Consultants is a Raleigh, NC based consulting firm providing a variety of CPM planning, scheduling and forensic delay analysis services. For true expertise from a reliable, experienced source, trust Carolina Consultants to help you with your CPM scheduling needs.

Differing Site Conditions Decision is a Major Win for General Contractors

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Aug 302014

A recent Federal Circuit decision will likely have a major impact on future schedule delay claims and disputes. Metcalf Construction entered into a contract agreement with the Navy to build 212 duplex housing units in Hawaii. The contract included a standard differing site condition (DSC) clause with a independent duty provision for the contractor to perform its own pre-bid soil investigation. After award, Metcalf performed a soil investigation that found highly expansive soils which could have posed a significant risk of slab-on-grade failure if the duplexes were built in accordance with the Navy’s original design. The design had to be altered and Metcalf submitted two formal DSC claims to the government requesting additional compensation for direct costs and delay damages. The Contracting Officer denied the claims. Metcalf proceeded with the changed design and performed the work in accordance with the new geotechnical recommendations to properly deal with the expansive soils. Needless to say, the project and ran into significant cost overruns due to the DSC and schedule delays. The Navy paid Metcalf $49 million, but Metcalf’s actual costs exceeded $76 million.

DSC’s are typically characterized as one of two types: (1) the conditions encountered at the site differ materially from those indicated in the contract (Type I), or (2) the conditions encountered at the site differ materially from those normally encountered (Type II).

Type I Differing Site Conditions Claims

An owner may be required to provide an equitable adjustment for a Type I differing site condition if: (1) the contract indicated the conditions that the contractor could expect to find at the site; (2) the conditions indicated in the contract differed materially from the actual conditions; (3) the actual conditions were reasonably unforeseeable based upon all the information available to the contractor at the time of bidding; (4) the contractor acted as a reasonably prudent contractor in interpreting the contract documents; (5) the contractor reasonably relied on its interpretation of the contract and contract-related documents; and (6) the contractor incurred additional costs as a result of the difference between the expected conditions and the actual conditions.

Court Decision

In the original court case, the Court of Federal Claims found in favor of the government. It determined that the Metcalf case did not meet the threshold of a Type 1 differing site condition and that the DSC clause’s requirement for Metcalf to perform its own pre-bid soil investigation shifted all of the risk of the DSC to Metcalf. In early 2014, the U.S. Federal Circuit Court of Appeals reversed the original Court of Federal Claims decision citing that the DSC clause did not fully shift all risk to Metcalf.

Potential Consequences

The potential consequences of the Federal Court’s reversal could be significant. The Federal Circuit ruled that the Court of Claims had applied the wrong legal standard and misinterpreted certain provisions of the contract. The judges ruling is summarized as follows:

Even requirements for pre-bid inspection by the contractor have been interpreted cautiously regarding conditions that are hard to identify accurately before work begins, so that the duty to make an inspection of the site does not negate the changed conditions clause by putting the contractor at peril to discover hidden subsurface conditions or those beyond the limits of an inspection appropriate to the time available.

The Metcalf appeal should be seen as a major win for general contractor and will likely have a significant influence over contract documents and dispute resolution proceedings in the future.

Strong Project Management Requires an Understanding of Critical Path Scheduling

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Dec 282013

This guest post is by construction attorney David Adelstein (photo). David is a Florida Board Certified Construction Attorney with the law firm of Kirwin Norris, P.A. He maintains the website Florida Construction Legal Updates where he blogs about various legal issues that pertain to the construction industry.

Enter David Adelstein:

Strong project management is critical to prime / general contractors in furtherance of ensuring the successful and profitable completion of a project. Among other things, strong project management involves understanding the scope of work activities that drive the timely completion of the project. Having a good plan at the beginning (that is peer reviewed) as detailed in a baseline schedule will enable project management to best coordinate and sequence trades knowing the total float for the project and the float identified for non-critical path trades. The baseline schedule is not written in stone. If it was, it would never need to be updated. But, construction involves unanticipated and unforeseen issues and risks that make it virtually impossible for the baseline schedule to be followed to the tee. No matter the size or complexity of the project, there are always variables that will require the re-sequencing of activities (and their start and finish dates) that will push different activities on and off the critical path. The more complex the project the more likely there will be variables that a strong project management team will need to address and work through.

One way project management can be proactive is to have a scheduling consultant on the front end. The consultant can be used in numerous roles including preparing the baseline schedule with the input from the contractor’s project management and subcontractors regarding the appropriate duration for activities. The consultant can assist in a peer review capacity to understand the scheduling plan and perform an objective check of the schedule. Or, the consultant can be used to assist in updating the schedule once the project gets going and variables are encountered. As the idiom goes, “An ounce of prevention is worth a pound of cure.” Utilizing the appropriate assistance to ensure (i) a good plan is in place from the get-go, (ii) that the plan is actually implemented and followed, and (iii) that there are plans in place when variables are encountered, is worth it instead of trying to deal with a bad plan after-the-fact or a good plan that is never actually implemented.

When consultants get involved, they will want to know and understand the project’s critical path. If the consultant gets involved on the front-end, they can assist in determining the critical path based on the project management’s plan. If they get involved after-the-fact, they will want to understand the plan by tracking the baseline schedule with updates that reflect as-built conditions. This will help determine where time impacts / delays occurred. The consultant can then take this information as to those activities that impacted the critical path to figure out why. Was there a bad plan from the get-go? Was there a good plan that was never actually implemented and followed? Were there design errors and omissions that resulted in numerous RFIs, supplemental instructions, or revisions to the plans? Were there numerous changes, whether owner-directed or due to design errors and omissions? Did a trade subcontractor simply struggle with quality control or sticking to durations? These are all issues that will be analyzed in connection with the schedules to best determine why time impacts occurred. Now, when the consultant gets involved after-the-fact, there is a little recreating of history (or revisionist history) since the consultant needs to reinterpret events and schedules after they already occurred. However, if the consultant is utilized from the get-go, hopefully, the time schedule impacts and documentation / evidence is being reviewed and organized to best capture the time impacts. This is valuable because it will allow project management to timely notify the owner of the time impacts and the appropriate extension of time and additional compensation to request. (Keep in mind that most contracts provide that a failure to timely notify the owner results in a waiver of the additional time or cost.) This is also valuable, as explained above, to best determine how to update the schedule and potentially re-sequence scope of work activities and coordinate the trades.

The critical path becomes a very important issue when the project is not going to be completed by the original substantial completion date. Because contracts allow the owner to assess liquidated damages due to delays (or actual damages if there is not a liquidated damages provision), the contractor will need to prove that any delays to the critical path are not its fault, not only to offset any assessment of liquidated damages, but also to establish an affirmative entitlement to extended general conditions. This is why the contractor will want to timely submit a claim for time impacts that include an appropriate amount of time to rebound from the impact. Also, in the event time impacts were in fact caused by the contractor, it will want to know which trade subcontractors contributed to the impact in order to flow down liquidated damages and its own extended general conditions.

Typically, contractors have the burden in proving delays attributable to the owner which will require it to establish the critical path. See Daewoo Engineering and Const. Co., Ltd. v. U.S., 73 Fed.Cl. 547 (Fed.Cl. 2006); accord George Sollitt Const. Co. v. U.S., 64 Fed.Cl. 229 (Fed.Cl. 2005); Morrison Knudsen Corp. v. Fireman’s Fund Ins. Co., 175 F.3d 1221 (10th Cir. 1999); U.S. Fidelity & Guar. Co. v. Orlando Utilities Com’n, 564 F.Supp. 962 (M.D.Fla. 1983). This type of proof will require a witness–really, an expert witness–that understands scheduling and the software used to develop the schedules to explain the critical path and the impacts to the critical path of the project. This will require testimony of the baseline schedule or plan along with the as-built conditions. Without this proof, the contractor is not going to be able to specifically prove that the delay(s) to the substantial completion date was caused by the owner and its consultants. The proof should entail the witness proving the time period in which the impact occurred and the issues that caused this impact (i.e., design error or omission, delay in design professional responding to RFI, design revisions, change order work, etc.). The same burden will be required when the contractor tries to flow down liquidated damages or seek its extended general conditions from a subcontractor that caused the time impacts.

Time impacts, however, cannot be perceived in a vacuum. In other words, time impacts are not always so clean that one discrete issue undeniably caused the delay. Because there are many activities taking place at the same time and many balls being juggled during the course of construction, oftentimes multiple issues that occurred around the same time period need to be analyzed. The reason for this is to determine whether there was a concurrent delay where both parties to the dispute (whether owner verses contractor or contractor verses subcontractor) contributed to the same delay time period, and thus, neither should recover from the other. “The doctrine of concurrent delay involves the premise that where both parties to the litigation caused delays then neither party can recover damages for that period of time when both parties were at fault.” Broward County v. Russell, Inc., 589 So.2d 983, 984 (Fla. 4th DCA 1991); accord Blinderman Const. Co., Inc. v. U.S., 695 F.2d 552 (Fed.Cir. 1982). Hence, if there is a concurrent delay, neither party will be able to recover (which, sometimes, this is what a contractor is seeking to simply offset liquidated damages exposure) unless the contractor can apportion the delay attributable to each party during the concurrent delay time period. See George Sollitt Const. Co. v. U.S., 64 Fed.Cl. 229 (Fed.Cl. 2005); accord Smith v. U.S., 34 Fed.Cl. 313 (Fed.Cl. 1995); William F. Klingensmith, Inc. v. U.S., 731 F.2d 805 (Fed.Cir. 1984).

There is much more to critical path scheduling and proving delays then discussed here. The bottom line is having strong project management requires an understanding of scheduling or utilizing the appropriate scheduling consultant to best achieve the successful and profitable completion of a project.

David Adelstein practices construction law throughout the Southeast. He has represented contractors, subcontractors, design professionals, developers, associations, suppliers, sureties, and owners in a myriad of construction matters including, without limitation, construction / design defect claims, schedule-based claims (including inefficiency, lost productivity, and acceleration claims), bid protests, payment disputes, lien and bond claims, liability and property insurance issues, and a host of other issues that affect the construction industry. He can be reached as follows:

Website: http://www.floridaconstructionlegalupdates.com/

Address: Kirwin Norris, P.A.
110 East Broward Boulevard, Suite 1570
Fort Lauderdale, Florida 33301

Email: dma@kirwinnorris.com

Phone: (954) 759-0026
Fax : (954) 759-0028

Five Tips for Better Construction Project Documentation

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Nov 252013

When it comes to claims and disputes, I have often heard the proverbial advice that “you should document everything.” However, in reality this is rarely done and it is often impossible to accomplish. Normally, the folks on a construction project simply don’t have the time to write down everything that’s going on at the site and at every project meeting and then respond to every email and phone call. In fact, I would not advise you to try! Doing so would be frustrating at best and counterproductive at worst. Your management team should be focused on managing the project. This is especially true on a troubled project, where you have to put out one fire after another. Your team’s efforts should be focused on using their time in the office wisely and making sure that the important items are properly documented. So, how are they supposed to know which of the items are the most important to document? This article attempts to answer that question by establishing some rules and by providing an objective framework that can be used when deciding how and what to document.

1. SUPPORT YOUR POSITION

Spend the time to write the letters or emails that support your position and explain why your position is correct. This should be the overall framework from which you are focusing your documentation efforts. Document the issues and events as they occur; take a photo, write an email, or put an extra note in the daily report that explains the event or occurrence from your perspective. Pay particular attention to items that delay or disrupt the critical path work on the project, such as: design errors and omissions, missing information (such as unanswered RFI’s), differing site conditions, changes that disrupt the critical work, critical path delays (inability to start or finish work in the critical areas of the project), loss of productivity (interference or additional mobilizations to complete work in the critical areas) and acceleration (working overtime to make up lost time or compression of work or stacking of trades in a schedule). In general your documentation efforts should be focused on those things occurring on the project that results in a growth of cost and that could not have been anticipated at the time of bid. Make sure there is evidence in the file that supports and explains your position as to why the growth in cost occurred. Connect the dots between the event or issue and the actual growth in cost. You’d be surprised how the resolution of an issue was won or lost based on the existence or absence of a crucial piece of documentation in the file.

2. RESPOND TO EVERY LETTER

When is it necessary to write a letter? When someone writes one to you. It is not necessary to engage in a letter-writing campaign (it is simply not true that the person with the highest stack of letters automatically “wins”). But, for each letter that’s written to you make sure there is a written response in the file. One solid letter for each issue is a good rule of thumb. Get your points documented, keeping in mind tip #1, above.

3. BE PROFESSIONAL

In your written correspondence, always be professional and stick to the facts. Be objective, rational and unemotional. There is no need to tell the owner’s rep that he’s an idiot (even if he is). Many people may be involved in the resolution of the dispute after the project is over and they may never meet you. People are going to form their opinions of you based on what you say and how you say it.

4. GIVE NOTICE

Notice provisions are written into contracts for a reason. Their purpose is to give the other party time to investigate, mitigate expenses, and track costs. Read your contract and make sure you are complying with the notice requirements. To make giving notice easier, we recommend that our clients develop form notices. At a minimum, we suggest having form notices available for each of the following situations: (a) Excusable Delay / Request for Time Extension, (b) Differing Site Condition, (c) Conflicting Specifications, (d) Acceleration (Directed or Constructive), (e) Disruption of Work Force, and (f) A/E Change. Have your lawyer review the notices before using them in the field.

5. RESERVE YOUR RIGHTS

I have been involved in several lawsuits in which the judge upheld signed releases on payment applications and change orders, and barred recovery for delay / disruption damages. Have your lawyer review the release language on any document before you sign it. At a minimum, cross out the offending language, or simply write that you are reserving your right to additional money or time for the impact encountered on the project or as a result of the change.

Knowing how and what to document will keep your team focused on managing the project and put your company in a much better position when it comes to resolving disputes when they arise.

Proving Lost Labor Productivity in Construction Claims

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Sep 032013

Construction claims can be costly for all parties involved. There are the costs of attorney’s and expert witness fees and potentially years of waiting without resolution. There are also more hidden costs to deal with, such as lost management time, impacts on the company’s reputation, and the decreases in team morale as the claim remains unresolved.

It is critical to make sure the damages in a construction claim are calculated and presented correctly to ensure your best chances at negotiating a quick and reasonable settlement. This article deals with the application of some of the most common methods used to prove damages in one of the most common types of claims faced by contractors on construction projects – lost labor productivity claims.

Total Cost Method

With the total cost method, lost labor productivity damages are calculated by comparing the actual costs with the expected or bid costs. The difference between the actual and expected costs is presented as the claimed amount.

It’s also possible to modify the total cost claim by subtracting for bid errors and cost overruns that were not the fault of the other party. This “modified total cost” method is often cited as being more credible than the unmodified version.

Be aware that the total cost method is controversial and sometimes disfavored by courts and boards. To use the total cost method effectively, it should only be used when

It is impractical to measure losses directly
The bid price was reasonable
The actual costs were reasonable (and accurately recorded)
None of the overruns were the responsibility of the party making the claim

Discrete Cost Approach

With the discrete cost approach, labor costs are tracked and attributed to specific events (using cost codes, labor codes, etc.) and then combined into a lost productivity claim. Compared to other approaches for pricing lost labor productivity damages, discrete methods are generally preferable, provided that the requisite project cost data was collected on the project.

When using the discrete approach, care should be taken to segregate damages (unanticipated or increased costs) from the normal project costs. Discrete approaches are highly effective in pricing direct impact costs but less effective in measuring and estimating the indirect costs associated with certain types of claims.

Measured Mile Method

The measured mile method is the preferred approach to pricing lost labor productivity claims. This method contrasts the contractor’s performance during an impacted period with the contractor’s performance during an unimpacted period on the same project. Labor productivity is measured and calculated for both periods (i.e., square feet of drywall per labor hour, linear feet of underground piping per crew day). The main advantage of the measured mile method is that it does not rely on the bid estimate or “as planned” labor productivity. It measures the actual productivity that was achieved on the project and uses that level as the benchmark in the comparison.

With the measured mile method, care must be taken to ensure that the condition under which the measured work is performed is identical except for the impact on the work that is being blamed for the lost productivity. If a reasonable unimpacted period cannot be identified in the same project (i.e., because the project was at least partially impacted in all areas and at all times), then the analyst may look to comparable projects to draw a comparison.

As with the discrete approach, the measure mile method requires robust project productivity data, which may or may not be available. Care should also be taken to account for other factors that could be affecting productivity such as learning curve, ramp up effects, or weather.

Industry Studies

Industry studies, industry benchmarking, and other similar approaches are generally seen as being less effective than the other methods described above. These approaches are sometimes useful for claims in which the comparative labor costs are non-specialized or highly repetitive, or as objective references when estimating lost productivity on a forward-pricing basis.

Choosing the correct method for calculating damages in a construction claim is a challenging but an essential part of the claim process. It involves collecting, categorizing, and analyzing project costs using the proper methodology to prove the accuracy of the costs being claimed. It also requires a superior understanding of the behavior of costs on a construction project so that the correct and relevant costs are identified and documented.

As discussed above, it is important to take into account the effectiveness and acceptability of the method being used to calculate lost labor productivity claim damages. Since each method has its own strengths and weaknesses, and is accepted to a greater or lesser degree, going with the wrong method for a particular claim can mean a less-than-favorable result. At Carolina Consultants, we are often retained by contractors to review their records and help them choose the best method for calculating lost labor productivity damages on a construction project. If you have a delay or productivity claim contact us today and speak with one of our construction claim specialists. Our claim specialists have focused their careers on solving the most complex construction problems and disputes. Let us put our experience to work to help you find successful resolution to your construction claim.

How to Update a Construction Schedule – Part 2

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Aug 182013

In How to Update a Construction Schedule – Part 1, we examined why schedules are updated, what a baseline is, and the why the frequency of schedule updates are determined by project complexity, unexpected events, and contract requirements. In Part 2, we will explore the actual steps in properly updating a construction schedule.

Step by step procedure for updating a construction schedule

Updating a construction project schedule is a systematic, step-by-step process that includes the following steps:

Gathering activity status information
Inputting the activity information
Reviewing and analyzing the schedule status
Modifying and revising the schedule to reflect the current plan
Publishing and implementing the updated schedule

The first step in updating a construction schedule is to gather the activity status information. This involves gathering and estimating the following information about each activity in the project schedule:

Actual Start Date
Completion Status
Remaining Duration
Actual Finish Date

Actual Start Date The Actual Start Date is when meaningful work will began on the activity. Note: this may not be the first day that work was performed on an activity. Typically, it’s the day that work is started with the intention of working continuously until the activity is completed.

Completion Status At the time of the schedule update, some activities will not have started, some will be in progress, and other activities will have been completed. The activities that are in progress at the time of the schedule update should receive the most attention.

Remaining Duration For any in-progress activities, the remaining duration should be estimated based on (a) how much of the planned work is completed and (b) how much longer it will take to complete the activity. This requires a review of the level of productivity being achieved.

Actual Finish Date Like the actual start date, the actual finish date may not be the last day work was performed on a particular activity. The actual finish date is generally defined as the day when the successor activity can begin and continue without being hindered by any remaining minor work of the predecessor activity being reviewed.

Activity status information can be gathered from a variety of sources, such as:

Walking the jobsite and directly observing the work
Conducting update meetings with subcontractors
Reviewing field reports such as the superintendent’s and subcontractor’s daily progress reports
Generating and distributing update worksheets to the various superintendents, project managers and foremen to fill out and provide the required activity status information.

Once the activity status information is gathered, the information is input into the scheduling software, the status/data date is adjusted, and the schedule is recalculated. The recalculated schedule at this step in the process is often referred to as a “half-step” schedule – that is, the baseline schedule updated with the status information with no changes to logic, original durations or any activities added or deleted.

This half-step schedule can be used to review and analyze the project status. During this review and analysis, the project team should address certain key situations and events, such as:

Discrepancies between the new forecast completion and the contractual completion date. If there is a large discrepancy between the forecast and contractual dates, the baseline and updated schedule should be compared and analyzed to determine the cause of the discrepancy.

Shifts in the critical path. If a critical path shift has occurred, the baseline and updated schedule should be compared and analyzed to determine the cause of the shift and, depending on the reason for the shift, whether corrective action is needed.

Significant changes in float. The reason for any significant changes in float for individual activities should be determined and analyzed. Special attention should be paid to near critical activities.

Scope of work changes. If there have been changes to the scope of work, then activities should be added or deleted as needed and appropriate logic ties made to the un-changed work.

Delays or other impacts. Impacts such as weather, lack of manpower, lower-than-expected productivity, design deficiencies, etc. should be taken into account and the schedule adjusted accordingly.

If the construction project has proceeded as planned and none of the above situations have affected the schedule, then the update process is complete and the schedule can be published and implemented. However, as is usually the case, the schedule will need to be modified and revised as a result of changes in the anticipated conditions. These revisions and modifications take the schedule from a half step to a full and complete schedule update.

Generally, revisions made to the updated schedule to reflect current project status can be categorized as follows:

Revisions to logic
Revisions to activity durations
Adding or deleting activities

The updated project schedule should reflect the way in which the project team plans to complete the project. Once the updated schedule is complete, the final step is to publish and implement the schedule – that is, use it to plan and manage the ongoing and upcoming work onsite.

The above steps for how to update a construction schedule are vital to keeping an accurately updated project schedule. An incorrectly updated schedule can result in a tool that is less useful to the project team as it manages the completion of the project. The information above and in Part 1 is meant as a guideline and not a foolproof plan for success. For true expertise from a reliable, experienced source, trust Carolina Consultants to help you get your construction project off the ground, properly planned and completed on time and within budget.

How to Update a Construction Schedule – Part 1

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Jul 262013

Things change rapidly on construction projects: the site changes; the weather changes; personnel and equipment change; the design changes. Impacts and challenges occur that must be overcome. The original plan for the project may quickly become obsolete. As a result, on nearly all construction projects the schedule needs to be updated on a regular basis to ensure that it reflects the team’s current plan for completing the project.

This article provides a step-by-step method for updating and modifying a construction project schedule to reflect the current project status.

Why schedules are updated

Schedules are updated at regular intervals in order to:

Evaluate a project’s status
Predict the completion date
Create a historical record of the project

The most important reason for a schedule is to track and monitor project status. The status of each activity should be evaluated independently in order to serve as the basis of evaluating the project’s overall status.

Almost all construction projects require that the project be substantially completed by a specified date or within a specified duration of calendar days. If a contractor fails to complete the project on time, the contractor may be charged liquidated damages or be liable for actual damages for each day the project is late. Thus, it is very important that the team know the currently-forecasted completion date so that the plan can be adjusted as necessary to mitigate delayed completion.

Historical update information can be used as a basis to plan and schedule future projects. It can also be a useful in a claims situation or if a forensic schedule analysis is needed to analyze and identify liability for project delays.

Establishing a baseline schedule

In order to be meaningful, there has to be an official baseline schedule to compare against in order to determine a project’s status. The baseline schedule is the starting point in preparing a schedule’s update. The current baseline is the contemporaneous schedule in effect since the last time the schedule was updated. The baseline schedule is the schedule that progress and the affect of changes since the last update are measured against and analyzed.

Frequency of updates

The frequency of updates should be determined by:

The project’s complexity
The frequency of unexpected events
As specified by the contract

The more complex a project, the greater need for more frequent updates. Complex projects have more entities working at the same time, thus they require more coordination.

When an unexpected event occurs that will impact the ability to complete the project on time, the schedule should be updated. The updated schedule will become a valuable tool in order to develop strategies to overcome and mitigate the impact of the unexpected event.

At a minimum, the schedule should be updated as specified in the contract documents. For most projects, the schedule is updated monthly to correspond with the contractor’s pay applications. Monthly updates are normally sufficient, however some sophisticated owners require weekly or bi-monthly schedule updates.

Carolina Consultants seeks to educate and inform by way of our blog. We choose such topics because we know them, inside and out. If you have further questions about how to update a project’s schedule, this post will be continued in Part 2, where we outline the step-by-step procedures.. We’re also available via phone and form for your questions or comments!

Understanding the Statute of Limitations for Construction Defects in Florida

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Jul 162013

At a recent industry event, someone asked me about the statute of limitation in Florida for a construction defect claim. My answer was “I’m not a lawyer but I’m pretty sure it’s four years.” The question prompted me to look it up and make sure I was right.

According to the International Risk Management Institute, Inc. (IRMI) a construction defect is defined as:

“A deficiency in the design or construction of a building or structure resulting from a failure to design or construct in a reasonably workmanlike manner, and/or in accordance with a buyer’s reasonable expectation.” The most dangerous defects have the capacity to fail, resulting in physical injury or damage to people or property.

Some examples of a potentially dangerous construction defect include things that can cause physical injury or damage to the property, things like:

Structural issues related to hold downs (the brackets that tie the concrete to the framing)
Improper design details of roof, curtain wall, or window assemblies
Foundational cracks in concrete
Moisture or water intrusion resulting in mold and mildew

According to IRMI, many defects aren’t dangerous but can cause harm in the form of deprecation in the value of the property and extra expenses. For example:

Sloping floor substrates
Cracks in walls or even mechanical or plumbing systems caused by overloading the structure

Turns out, it is four years. The statute of limitations for construction defect disputes in Florida is defined in Florida Statute §95.11(3)(c). Under the law an owner has four years to initiate a lawsuit, with the clock starting on the latest of the following four dates:

The date the owner took possession of the property
The date the certificate of occupancy was issued by the building department
If the project was not completed, the date the project was abandoned by the contractor, or
The date the contractor’s contract was terminated by the owner.

However, if the construction defect is latent (not readily visible or obvious), the statute of limitations commences on the date the latent defect was discovered. But, according to the statute, under no circumstances can an owner initiate a lawsuit more than ten years after the dates/factors identified above. This 10-year cap is referred to as the Statute of Repose.

If you are considering filing a construct defect claim or if you are a contractor, subcontractor or supplier facing a defect claim, give us a call. Carolina Consultants’ thorough and expert knowledge of handling a construction defect claim in Florida can help you along the way.

Demand for Alternative Project Delivery Rising in NC

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Jun 242013

While the more traditional project plan of design-bid-build is still popular in North Carolina, lately there has a sharp increase in the demand for alternate project delivery methods l. These alternative project delivery methods include:

Design-Build
Integrated Project Delivery (IPD)
Public-Private Partnerships (P3)
Construction Manager at Risk (CM-at-Risk)

More and more owners are seeking these alternative methods because they offer greater efficiencies and less risk in the construction process. Even state government agencies have begun using more alternate project delivery methods, especially design-build and CM-at-Risk.

The maturation of new delivery technologies is also increasing demand for alternative project delivery methods. Some such technologies include:

Building Information Modeling (BIM)
Virtual Design and Construction (VDC)
Lean Planning
4-D Scheduling

These technologies work best in collaborative settings, where all parties involved in the construction process have input from the start of the project. Owners who are looking for this type of setup will search for a team that has previous experience with these technologies and team organizations.

From 2009-2011, North Carolina experienced a significant decrease in the amount of design-build projects, as the decline in the economy gave owners a strong incentive to save money by using the more traditional hard-bid design-bid-build project method. But over the last six months we have seen a dramatic resurgence in alternate project delivery proposals and more qualifications-based selections. Price is no longer the deciding factor in many projects in North Carolina and owners are free to choose the most qualified teams for their specific needs.

In the future, we expect to see an increase of all alternative project delivery methods, especially with integrated project delivery (IPD). With IPD, the owner, designers, contractor, and major subs all agree to sign a single contract between all the parties and share the risks and rewards on the project. This has been rare in North Carolina up until recently, when some very sophisticated owners in North Carolina have procured large projects using IPD. Although many of the players are still learning the process “on the fly,” we should expect to see more of IPD, especially as it becomes more familiar to owners and construction firms in Florida.

At Carolina Consultants, we are experienced in IPD methods as well as the other alternative project delivery methods. If you are a contractor we can help you with the new delivery technologies, such as Lean Planning and 4D Scheduling. If you’re an owner, we can help you to choose method that will work best for your project and see it through to the end. Contact us today for a free consultation.

The Dangers of Certain Delay Analysis Methods

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Jun 162013

It is common for construction projects to experience delays throughout the life of the project, which can cause serious financial losses. In some cases, delay claims are asserted to make up for some or all of the expenses incurred. Experts are often retained to look into documents, methods, schedules, and events that affected the construction project in order to determine if the claim is valid and to identify the issues that caused the delay.

There are many different delay analysis methods, to say the least. It’s imperative to know which analysis method the expert is using because some have serious flaws and inherent weaknesses. They have many different names and it can be confusing:

Total Time
Impacted As-Planned
Windows Analysis
As Built Critical Path
Collapsed As-Built
Time Impact Analysis
Fragnet Analysis
Contemporaneous Period Analysis

For example, in an important ruling by the Armed Services Board of Contract Appeals (ASBCA) in Haney v. United States (ASBCA No. 23392) the expert’s impacted as-planned delay analysis method was rejected for being “inherently biased, and could lead to but one predictable outcome.”

Thus one must be wary of which method the supposed expert is using. Why pay an expert thousands of dollars to perform an analysis only to have it rejected by the court or board?

There are two delay analysis methods that are both widely accepted and recommended, Time Impact Analysis and Contemporaneous Period Analysis.

Time Impact Analysis

Sometimes called “fragnet analysis,” Time Impact Analysis (TIA) is appropriate as a forward-looking method for analyzing delays before the event occurs. That means that it is used during the project to estimate and evaluate the time impact of changed or added work so it can be compared with the current schedule.

In this method, the analyst updates the project schedule as of the day the change or added work was scheduled to occur. The analyst then develops a “fragnet” or fragmented network of activities that represent the changed or added work. An example of a fragnet might be the following activities, all linked with finish-to-start relationships:

Submit RFI #5 – 1 workday

Government Response to RFI#5 – 15 workdays

Contractor Review Government’s Response to RFI#5 – 1 workday

Complete Change Work – 7 workdays

The fragnet is then inserted into the updated schedule and a comparison can be made to the forecast completion or milestone date to determine the time impact, if any. TIA is required by contract on most federal government construction projects.

Contemporaneous Period Analysis

Contemporaneous period analysis is typically used in a forensic schedule analysis conducted after the project is completed. This method uses the contemporaneous project schedules that were developed and maintained during the project.

The critical path is the main focus of this analysis. The critical path is followed day-by-day to the project’s completion date, while taking into account the progress (and lack thereof) of all of the activities in the schedule. Its strength is in how the dynamic nature of network scheduling is recognized and handled. This method not only identifies the magnitude of every delay or gain along the critical path, but it identifies when the critical path shifts and why the shift occurred.

Another important aspect of contemporaneous period analysis is that it identifies and isolates delays or gains caused by changes or revisions to the schedule during the update process. For example, sometimes changes are made to schedule logic and durations in order to mask a critical path delay that has occurred. So even if there is no readily-apparent delay shown in a published schedule update, contemporaneous period analysis can uncover these changes and identify separately the delays due to lack of progress and changes made to the schedule logic to mask those delays.

Contemporaneous period analysis is often referred to as an “observational” method, as the analyst is using the schedules as they are. This is the biggest difference from TIA and other delay analysis methods, as he or she is not creating, inserting, or deleting activities in the schedule.

The main idea behind contemporaneous period analysis is to retroactively adopt the perspective of the personnel onsite as the delay occurred. Thus, delays are measured using the actual schedules that the project team and the owner used to make decisions.

Steps for performing a contemporaneous period analysis:

Identify delays and gains between updates
Chronologically track progress along the critical path
Assess each activity separately
With each delay, adjust the succeeding planned activities, taking these delays into account

Delay claims are some of the most complicated types of claims to analyze, as construction projects have many moving parts and opportunities for the critical path to change or slip. If you’re considering having an analyst perform a delay analysis on a project, ensure that he or she is using a well-respected method to avoid having the product of your time and money rejected in court.

At Carolina Consultants, we are confident in the validity and reliability of our results and use only the most established and accepted methods of delay analysis. Contact us today for more information or with any questions you may have.

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