November 22, 2006

Construction is risky business.  And while today’s construction projects may be safer than they were in the past, the financial risks continue to be great.  Today’s construction projects are bid under fierce competition with little margin and require the coordination of many trades under demanding conditions and challenging timeframes.  Often, everything does not go according to plan and the parties to the construction contract find themselves at odds. 

Many of the risks that owners and contractors face can affect construction time.  And the cost of a lost day on a construction project may be staggering.  Unfortunately, the effects on construction time can be difficult to isolate, identify, and quantify.  This is true despite the fact that the construction process has employed “modern” scheduling techniques for nearly half a century.  More surprisingly, even though the power and capabilities of scheduling software have increased considerably in recent years, identifying and accurately quantifying construction delays continues to challenge even the best project managers. 

While the parties’ management teams are able to analyze and assess most factors related to a change, the effect on construction time remains difficult to understand and accurately measure.  And so, even though the parties can often reach compromises related to most aspects of a change, it is the delay component that often prevents settlement. As a result, most construction claims include a component related to delays.  Because the expertise required to reliably and convincingly assess delays and delay damages often goes beyond that of the project participants, experts are hired to analyze delays for mediation and trial. 

Rule Change

For a party in a dispute involving delays, the process of choosing an expert may appear as risky as the project itself.  While this may seem like an exaggeration, in the last decade, this decision has become more confusing because, as the power and capabilities of scheduling software have increased, the rules related to analyzing delays have changed dramatically.  Gone are the days when we all knew that there could be no float on the critical path!  As a result, there is considerable disparity within the construction consulting community when it comes to delay analysis techniques and methods.  Yet, it is this methodology that will come under scrutiny and be challenged at trial.  Making the right choice becomes an essential aspect of winning the case.

As with any purchase, a knowledgeable consumer is more likely to make the right choice.  So, having a general knowledge of how construction delays are determined is essential to choosing the right expert.  Having such knowledge will enable you to ask the right questions and assess the answers, and you will be in a better position to understand the basis of your expert’s opinion.  Being able to gauge the reliability of the answer will give you a better sense of how the trial may turn out.

Thankfully, several truths remain.  All construction projects have a critical path.  This is true whether the parties develop a Critical Path Method (CPM) schedule or manage the project off the back of a napkin.  Also, only delays to activities on the critical path can delay the completion of the project.  The analysis techniques used to determine these critical project delays will differ depending upon the management tools employed on the project.  However, because the power of the CPM schedule offers advantages to the project managers of both the owner and the contractor, the CPM schedule has become commonplace on most construction projects.  And, if a CPM schedule was prepared for a project, it is the place that the delay analyst must start.

CPM Scheduling – The Basics

Having a general knowledge of how construction delays are determined begins with an understanding of CPM scheduling basics.

A CPM schedule consists of the activities necessary to perform the project work connected to one another by defined relationships.  The result is a network of interrelated paths of work.  In a CPM schedule, the critical path of a project is the longest path of activities through this network.  The duration of this longest path determines the duration of the project.  Only delays to activities on this longest path will delay the project, which is why these activities are considered “critical” and why delays to these activities are considered “critical delays.”

The data date of a schedule is the date chosen by the scheduler as the first workday.  In a schedule update, the dates prior to the data date are actual and the dates following the data date are calculated by the CPM schedule.  The CPM scheduling software calculates the earliest and latest dates that each activity can start and finish.  The early dates are calculated by adding the durations of each successive activity, beginning with the data date and working forward through each path of the network.  This process ends with the forecast project completion date.  The late dates are calculated by subtracting the durations of each preceding activity, beginning with the forecast completion date and working backward through each path of the network.

The term “float” refers to the difference in workdays between the early and late dates of an activity.   As non-critical activities experience delay, they will consume their float and, once all of their float is consumed, they may become critical.

While this all sounds simple and mundane, the latest scheduling software adds many new dimensions to this process.

Don't miss Part 2 of this article in next month's Construction Update newsletter that will be published on December 11, 2006.


William A Manginelli is the President of Trauner Consulting Services, Inc. in Philadelphia, PA.  Learn more about Trauner Consulting Services, Inc. at http://www.traunerconsulting.com. He can be reached at (215) 814-6400 or at [email protected].