Why construction projects are delayed and when contractors can claim for these delays.
Often construction projects are delayed. Sometimes the delay is due to the contractor – for instance poor planning, insufficient resources, or materials arriving late. Often the delay is due to weather which might include rain, wind and extreme temperatures, but weather events are normal and should be accounted for by the contractor. On occasion the delay is due to reasons that were specified in the contract document – such as the contractor having to work in and around the customer’s activities. Many times in this case the contractor has to recover the lost time at their own expense, as they either caused the delay themselves or they should have foreseen or known about the potential delays when they prepared and agreed to the project’s construction schedule.
However, delays often happen for reasons outside the control of the contractor, that couldn’t have been reasonably anticipated or allowed for by the contractor. In these cases, and depending on the terms of the project’s contract, the contractor will need to claim an extension of time so that the project’s completion date is extended. Delays invariably result in the contractor incurring additional costs as they remain longer on the project. Finishing a project late may entitle the customer to claim damages from the contractor. Furthermore, finishing a project late without a valid, approved reason can be damaging to the contractor’s reputation.
It’s therefore essential that contractors understand some of the reasons and causes that give them the right to claim an extension of time. An extension of time means that the project’s completion date is extended by the number of days approved in the claim. The contractor then can claim the additional costs associated with this longer approved construction period.
Reasons for extension of time
Some causes of project delays that entitle the contractor to submit an extension of time include:
- The customer (or their designated representative) issues an instruction to stop work for reasons unrelated to the contractor. The Instruction may be due to the customer changing their design, or to allow the customer’s work, or the work of their contractors, to proceed. In some cases customers may issue an Instruction to the contractor to stop work because of a fault by the contractor such as; unsafe working conditions, poor quality work, or failure to obtain design approvals or the required construction permits. In these cases the contractor can’t claim an extension of time unless they can prove that the customer (or their representative) was wrong to stop the work and that the contractor was in fact compliant.
- The customer provides construction information late. I’m sure we’ve all been on projects where the customer’s drawings have been issued late. If there’s an approved construction schedule the customer should know when information is required and there’s no excuse for it being issued late.
- Late access. Often contractors are dependent on the customer providing access to the work area in accordance with the agreed construction schedule. Care should be taken when accepting access to a work area that the area is safe and that the area given to the contractor meets the specified dimensions and heights as laid out in the contract document.
- Changes in specification. This is something that contractors don’t always detect until it’s too late. Change in specifications often increases the price of items, but the items with the new specifications could also have longer manufacturing times. In some cases specifications are changed after items have been ordered which means that the original order has to be cancelled and new orders placed which can significantly delay projects.
- Scope increases. Many projects increase in scope and contractors need to continually compare the actual scope with the scope they priced. Increased scope usually means we need more time to complete the project, or additional resources to complete it in the original time frame.
- The customer’s activities cause delays. Sometimes the contract document includes customer activities and constraints that the contractor has to work around and accept. In these cases the construction schedule should take these impacts into account. However, often during the course of construction the customer introduces new constraints.
- Additional quality tests and inspections. The customer’s quality managers, at times, can introduce additional tests or quality inspections which weren’t mentioned in the contract documents. These can add additional costs and cause delays. Some customers add in additional ‘hold’ or inspection points, or require 24 hour, or even 48 hour, notice periods for inspection which delay the project.
- Late drawing or design approval. The construction schedule and contract document should stipulate the maximum turn around time for the customer and their representatives to approve the contractor’s drawings and designs. Some customers exceed the times specified and cause delays to the project.
- The customer and their team don’t immediately respond to requests for information (RFI’s) and drawing queries. Unfortunately I’m sure we’ve all received drawings with missing or conflicting information. On occasion querying and receiving the corrected information can be a tedious and time consuming process which delays the project.
- Customers’ not providing facilities and utilities in the required quantities and in the time they were obligated to supply them.
- The customer’s other contractors impact and delay the contractor’s work. They may restrict access to the contractor’s work areas, damage completed work or hold-up the contractor’s work where they are required to interface with them. Even work outside the immediate work area could dramatically impact the contractor’s work blocking roads and access or interrupting the supply of water and power.
- The customer revises drawings which require the contractor to redo work which is already completed, or the contractor has to re-order materials or equipment, thus delaying the project while the items are procured.
- The customer changes the sequencing in the schedule because they want some sections of the project earlier and others later.
- Unforeseen project site conditions. These could include:
- Existing services (such as; water pipes, electrical and data cables, and gas mains) which weren’t known and couldn’t have been foreseen when the project was priced. These may require further detection and uncovering work as well as their relocation which can delay the scheduled work.
- Difficult ground conditions which weren’t known and couldn’t have been foreseen at bid stage. This could include:
- Rock which might be more difficult and slower to excavate.
- Unsuitable materials (such as clay) which have to be removed and replaced with better material.
- Contaminated ground containing materials such as asbestos or dangerous chemicals which have to be removed and disposed of by specialists.
- A high water table on the project site which impacts excavations which may be inundated by this water.
- Discovering an archaeological artefact on the project site which has to be protected, excavated and removed by a specialist.
- Uncovering of buried building rubble which has to be removed.
- Discovering previously unknown cavities – sink-holes or old mine workings. These may have to be filled or structures might have to be relocated to avoid the cavities.
- Extreme weather events, such as one in fifty year floods and catastrophic storms. The claimable weather conditions could be occasions when the weather is more severe than the average climate for the region. More rainfall, more snow, more windy days, more violent winds, or more extreme temperatures during construction than the average (for the same months) for the area where the project is.
- Items that the contractor specifically excluded in their bid submission and which were included as exclusions in the contract document.
- Change in legislation. This could include the country declaring a special holiday. Changed legislation could also result in a change in the building materials which might not, for instance, comply with new fire legislation.
- National strikes, work stoppages or a disruption which causes the contractor’s employees to stop working, or impacts the supply of critical materials, such as fuel. This could also include disruption by the customer’s employees which interrupts progress on the construction project.
- Customer supplied equipment or materials arriving late, being damaged when they arrive on the project, or not being fit for purpose.
- Errors on customer issued drawings which either result in work being redone, or causes delays while clashes, missing information and problems are resolved.
- Drawing coordination problems. Frequently Architect’s and Engineer’s drawings have conflicting information, or the mechanical, electrical and plumbing drawings have clashing services or utilities. Sometimes the designers haven’t allowed for the utility services, so holes have to be cored through concrete slabs or broken through walls. All of this rework and these clashes create delays and additional costs.
- The customer failing to obtain statutory permits which prevents the contractor from carrying out work.
It’s essential that contractors understand the project’s contract document and are aware of the delays they are entitled to claim. It’s imperative that contractors submit the extension of time claims as soon as they became aware of them, and certainly within the time period specified in the contract document. Late claims can be subject to being time-barred which will provide reason for the customer to reject the claim.
Of course the claim must be presented in a logical format outlying the reasons for the claim as well as mitigating actions taken by the contractor to prevent the claim. The claim should include all supporting documentation and clearly show the impact of the delay to the critical path of the approved construction schedule.