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Concurrent delays and construction contracts

Concurrent delays and construction contracts

Karen Wenham - Director, Driver Trett Australia explains the realities of concurrent delays and the varied approaches and outcomes available through delay analysis.

 “First, different causes of delay may overlap, and this will be intellectually troublesome if one is an event justifying an extension and one not; e.g. information or access may not be available, but due to culpable delay or an event not justifying an extension, the contractor would not be able to take advantage of them if they had been"1.

Mr Duncan Wallace QC’s thoughts on concurrent delays appear as prescient in 2018 as they did in 1994. Almost 25 years later, concurrent delay – what it is and how it shall be treated – remains as “intellectually troublesome” as ever.

When dealing with concurrent delay, there are often two points of contention. The first point is the chasm between what we consider ‘true’ or ‘real’ concurrent delay to be, versus what concurrent delay is generally held to be.

The second point concerns how concurrent delay is to be treated. Not all construction contracts describe how concurrent delay is to be treated, and there are several different methods available to contract administrators and practitioners of delay analysis.

True concurrency is said to occur when two events, one an excusable event and the other not, occur at the same time – both starting and finishing on the same days – and the effects of each event are felt at the same time. Most people experienced in the delivery of construction projects will know that, in practice, true concurrency is exceedingly rare.

In the absence of what is true, it is generally held that concurrent delay occurs when the effects of two events, one an excusable event and the other not, are felt at the same time or overlap to some degree.

In Malmaison v Henry Boot, the leading case in England and Wales for the past 20 years, Dyson J decided that where two events, one relevant and the other not, are concurrent or overlap, the contractor’s extension of time (EOT) should not be reduced but it should not be entitled to its prolongation costs for the overlapping period, as it would have incurred those costs in any case. This is often referred to as the Malmaison approach, and was reinforced by Aikenhead J in the case of Walter Lilly v Mackay & DMW.

The Malmaison approach is also advocated by the latest editions of Hudson’s, Keating, and the Society of Construction Law (SCL) Delay and Disruption Protocol.

Concurrent delay is often alleged by both parties to avoid experiencing the full ramifications of culpable delay. Contractors may claim concurrent delay to receive an EOT, thus limiting its exposure to liquidated damages for its own delay. Alternately, an employer might claim concurrent delay to avoid paying the contractor its prolongation costs, incurred as a consequence of an excusable event. It is unsurprising that concurrent delay remains such a contentious subject.

Where concurrent delay has occurred, often one event will be more causative of critical delay than the others. To establish which event is the most causative of the delay (the ‘effective’ cause) a critical path analysis (CPA) will be required.

It seems that the actual point of contention may be whether concurrent delay can exist in a construction contract. If so, the answer can be found in the method of delay analysis described by the extension of time clause and by the capacity of that method to identify and quantify concurrent delay.

Extension of time clauses in many construction contracts, particularly standard form contracts, advocate a prospective approach to delay analysis. There are two types of prospective delay analysis:

  • As-Planned Impacted
  • Time Impact Analysis (TIA).

As-Planned Impacted uses the baseline programme to model the effects of a relevant event on completion. It does not consider the actual status of the work, or the critical path at the time the event occurred. As this method doesn’t consider the progress of the works, it doesn’t have the capacity to identify and quantify concurrent delay, bar the most exceptional circumstances.

Some contracts advocating a prospective approach to delay analysis describe a method consistent with TIA. TIA uses the approved construction programme, updated to reflect the actual progress of the works at or around the time that a relevant event has occurred, to model the impact of that event on the project’s critical path and completion date.

This approach is consistent with the approach advocated by Hudson’s, Keating, and the SCL for delay analysis, which cautions against a ‘wait and see’ approach to granting extensions of time during the normal course of a project.

If concurrent delay occurs when the effects of two events, one a relevant event and the other not, occur at the same time, the capacity of TIA to identify and quantify concurrent delay would be dependent upon the timing of the two events.

If the excusable event was to occur before the non-excusable event, and the effect of that event was to be felt some time in the future, it is unlikely that TIA could identify any concurrency with the effects of a contractor’s future culpable delay.

Retrospective methods of delay analysis are not strictly the domain of time-distant delay analysis for arbitration or litigation. Some contracts, particularly in the energy and resources sector, require the contractor to demonstrate actual delay, thus a retrospective method of delay analysis would be required.

Most people experienced in the delivery of construction projects will know that, in practice, true concurrency is exceedingly rare.

There are four retrospective methods of delay analysis:

  • Time Slice Windows Analysis
  • As-Planned versus As-built Windows Analysis
  • Retrospective Longest Path Analysis (RLPA)
  • Collapsed As-built Analysis

The two windows methods and RLPA are ‘effect and cause’ types of analysis. These methods are inherently forensic as they seek to identify critical delay and then attribute a cause (or causes) to that delay. Each of these three methods have the capacity to identify and quantify concurrent delay.

Collapsed As-built Analysis is a ‘cause and effect’ type of analysis. This method seeks to quantify the effect on completion of an identified relevant event. This method of delay analysis measures only incremental delay. The concurrent effects of any culpable delay will typically be taken into account without the need to explicitly identify and quantify effect.

The key distinguishing quality between the two windows methods and RLPA is how the critical path is determined. The two windows methods determine the critical path contemporaneously to the effects of the delay event, and thus would be suitable for use both during the normal course of the project and after the project is complete.

RLPA determines the critical path retrospectively which requires the project to be complete.

Not all methods of delay analysis are created equal, and the way in which each method determines the critical path may result in different outcomes. A delay analysis which determines the critical path contemporaneously will consider what was actually happening on the project at that time and the contractor’s responses to those circumstances. Thus, which event (relevant or not) was most causative of the delay. Such a method is more likely to return an outcome consistent with the parties’ understanding of what works were controlling completion at that time.

A critical path, determined retrospectively, may differ from a critical path, determined contemporaneously, to the event allowing for variations, changes in sequencing, or other delays to the project. This has the potential to create concurrent delay, where the contractor may have reduced the productivity of an unrelated non-critical activity to take advantage of float created in the schedule by a relevant event.

These are issues to consider when drafting EOT clauses. Employers wishing to describe the treatment of concurrent delays should consider whether the method described has the capacity to identify and quantify concurrent delay.

A key criticism of the Malmaison approach is that contractors are insulated from the effects of their own delays. Employers who desire to hold their contractor to account for its own delays may also reconsider the default prospective approach to delay analysis.

Similarly, contractors should take careful note of how EOT clauses describe the assessment of delay, in particular how the critical path is to be determined and whether the clause also describes how concurrent delay shall be treated. As demonstrated most recently by Fraser J in North Midland v Cyden Homes, where there is an express provision made in the contract for treating concurrent delay, the parties are likely to be held to their bargain. 

I. N. Duncan Wallace QC, Hudson’s Building and Engineering Contracts, 11th Edition 1994

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