S P R I N G
2 0 1 5
THIS ISSUE Concurrent Delay: Often Claimed, Harder to Pin Down MBP and The Plan Consulting Group Form Glidenet Healthcare Mid-Atlantic, LLC Keeping Americaâ€™s Infrastructure Debate in Perspective
NAVFAC Far East, Japan: MBP is providing construction management and surveillance services for various construction projects in Yokosuka, Atsugi, and Okinawa, Japan.
OFTEN CLAIMED, HARDER TO PIN DOWN BY CHRISTOPHER J. PAYNE, PE, CCM
Few topics in construction schedule delay analysis are as difficult to assess as concurrent delay. While the notion of a concurrent delay—generally two delays by different parties (such as an owner and a contractor) each delaying overall completion—is a simple one, the application of this basic principle is quite complicated in practice. Is concurrent delay something that “you know it when you see it” or can it be rigorously isolated? First, some basic background. In construction, delays are common and often controversial. A contractor may perceive that its performance is delayed by design changes or unexpected site conditions that are the responsibility of the owner. Alternatively, an owner may be frustrated to witness slow progress by the contractor, delaying the
longest chain of related activities leading to overall completion, so if the critical path is delayed, so is the overall project is as well. Where the concept of concurrent delay arises is when multiple delays affect the critical path or paths at the same time or within the same time period. A general legal principle of construction delay analysis, supported by decades of U.S. case law, is that if an owner and a contractor concurrently delay the project, neither party will owe delay-related damages to the other but the contract duration will be extended to cover the delay. On the surface, this principle provides a tidy solution to cases of concurrent delay, but that’s where the difficult questions really start.
The first question is, what is meant by “concurrent”? The practical related question is, Is concurrent delay something that do concurrent delays really “you know it when you see it” or need to occur simultaneously, can it be rigorously isolated?” or can they occur at different times but in such a way overall completion of the project and that the resulting impact occurs the owner’s ability to use its new at the same time? Many industry capital investment. Delays create unexpected expenses to all parties on participants have explored these questions without a clear consensus a project—primarily the owner and the contractor. A key issue is always to emerging. determine which party is responsible for delay and therefore responsible for The most common situation is when there are independent paying for the costs associated with delays affecting different schedule the delay. paths, both affecting the overall completion date. The resolution of In construction schedule delay this situation requires interpreting analysis, delay is customarily unclear definitions of concurrency defined as events or circumstances and applying these interpretations to that impact the critical path of the particulars of the case. Various construction. The critical path is the 2 |
courts and forums have attempted to define concurrent delay in an effort to resolve confusion, but in essence have created even more. AACE International, a professional association focused on total cost management on construction programs, has attempted to define concurrent delay, drawing largely from other published sources1. Even within this single document, there are several alternative definitions that potentially serve to confuse the issue rather than resolve it: Two or more delays in the same time frame or which have an independent effect on the end date…This may also refer to two or more delays by the same party during a single time period. Two or more delays that take place or overlap during the same period, either of which occurring alone would have affected the ultimate completion date. Concurrent delays occur when there are two or more independent causes of delay during the same time period…The period of “concurrency” of the delays can be related by circumstances, even though the circumstances may not have occurred during exactly the same time of period. Concurrent delay occurs when both the owner and contractor delay the project or when either party delays the project during an excusable but non‐compensable delay (e.g., abnormal weather).The delays need
not occur simultaneously but can be on two parallel critical path chains. The term “concurrent delay” is often used to describe the situation where two or more delay events arise at different times, but the effects of them are felt (in whole or in part) at the same time. To avoid confusion, this is more correctly termed the “concurrent effect” of sequential delay events. While it may seem that the issue of concurrent delay might be an esoteric debate over semantics, the significance is huge on projects where there is substantial delay and there exists the possibility of concurrency. That is because disagreements over construction delay are almost always in reality disagreements over money. While a prototypical construction delay dispute most often stems from disagreement as to the responsibility for delay, in cases involving concurrent delay, the parties may agree that delay occurred and on the party responsible, but disagree as to whether the delays by each party are concurrent. At stake is whether either party is responsible for paying potentially large sums in delay-related costs. Perhaps the primary difficulty in defining concurrent delay is an intrinsic conceptual conflict in the most common notions of delay and concurrent delay. As discussed earlier, a generic “delay” is generally understood to mean a delay that is on the critical path of construction. However, the commonly understood abbreviated definition of concurrent delay involving two delays “either of which occurring alone would have affected the ultimate completion date” implies that a non-critical delay can be considered concurrent. To illustrate, consider the following example based on an actual dispute over delay: A contractor is to complete repairs at two bridges, one over a highway, the other over an active railroad. The work over the railroad requires a railroad flagger
to be present during the work, and it is the responsibility of the owner to arrange for the flagger, an activity that is estimated to take two weeks. Each bridge is scheduled to take one month to repair, with Bridge 1 being repaired first, followed by Bridge 2. The contractor takes two months to repair the first bridge, suggesting to a delay in starting Bridge 2. However, in the meantime, the owner takes more than two months to arrange for the flagger, such that the work on PLANNED SCHEDULE
the railroad bridge cannot begin until midway through the third month. The contractor argues compensable delay due to the flagger delay while the owner argues that the late completion of Bridge 1 constituted a concurrent delay and thus no delay damages are due to the contractor. In this instance, a straightforward critical path analysis might conclude that the critical path of actual performance was to arrange for the flagger, followed by the repair of Bridge 2. The contractor would be entitled to delay damages. By traditional schedule analysis, the late completion of Bridge 1 does not matter because the protracted
period to arrange for the flagger created float in Bridge 1 work. However, by the above definition of concurrent delay (that either delay on its own would affect the completion date) the late completion of Bridge 1 could be considered a delay since that delay alone would correspond with a month delay to overall completion, absent the flagger delay. This suggests two possible outcomes depending on how one interprets the definition of concurrency.
AACE International, in its Recommended Practice No. 29R03, Forensic Schedule Analysis, has recognized the potential for two different interpretations of concurrency, which it has termed “Least Float vs. Negative Float”. Under a negative float theory, where any delay extending the original completion date is considered as potentially concurrent, the longerthan-planned performance of Bridge 1 results in a concurrent delay. Under the “least float” or longest path approach, only delays on the longest ultimate path are considered, and Continued on page 4..
OUTLOOK | 3
CONCURRENT DELAY – OFTEN CLAIMED, HARDER TO PIN DOWN CONTINUED... ▪▪ Updates not being used. ▪▪ Lack of resolution regarding delay. ▪▪ Limited or inaccurate progress reporting.
contemporaneous schedules illustrating the delays and their concurrency are helpful. ▪▪ Analyze potential concurrency periods in bite-size chunks. A common error in analyzing delay through Through our practice, we have come to recognize is for the certain best approaches in analyzing concurrent delay.” fragnets analyst to portray several weeks or even months form of analysis, elsewhere the of delated-related events in a Clearly, analyzing and proving a practice recognizes the longest path single fragnet without recognizing concurrent delay is very difficult, approach as preferred. Coupling that such events were unfolding due to inconsistent definitions, the the longest path philosophy with gradually over time. A much more potential for pacing and real-world concurrent delay, in this example, accurate analysis will result from limitations in scheduling practice. we would conclude that the flagger consider smaller time periods and However, given the important delay was the controlling delay and assessing what was known about ramifications in determining whether that there is no concurrent (critical) the delays at each point in time. concurrent delays occurred, it is often delay since the Bridge 1 delay was necessary to perform such an analysis. ▪▪ Determine the as-built critical not on the critical path. As such, Through our practice, we have come path through analysis of the contractor would be entitled to to recognize certain best approaches performance. An as-built critical additional time and associated delayin analyzing concurrent delay. path can be an excellent tool in related compensation. evaluating and explaining what ▪▪ Use actual records of events. happened and in evaluating delay. Concurrent delay arguments As if the various definitional However, as indicated in the are often raised based on a very distinctions were not complicated prior comments and particularly general, high-level analysis of enough, additional real-world factors in assessing concurrent delay, performance. More detailed further complicate these analyses. it should be corroborated analysis based on actual records The most significant of these is the contemporaneous knowledge can provide immense help concept of “pacing”. In light of an and shorter, incremental analysis in isolating the performance ongoing recognized owner delay, is it periods. or non-performance of work acceptable for the contractor to slow being considered, determining down its performance (thus “pacing” As can be seen throughout this whether pacing occurred, and the work)? If, in the example above, discussion, the apparently simple understanding what really drove the contractor intentionally slowed concept of concurrent delay is fraught the delays being analyzed. progress on Bridge 1 to keep fewer with complication due to this unique workers busy while waiting for Bridge ▪▪ Use contemporaneous knowledge. recipe: Combine complicated and 2, can it be assigned concurrent One factor in assessing whether a conflicting definitions, complex fact delay? Most practitioners agree that delay was truly concurrent is the patterns and inconsistent theories the contractor has no obligation to behavior of the parties in reacting in identifying concurrency. Overlay “hurry up and wait” when faced with to the delay at the time. It is with the context of major financial an owner delay. However, to prevail meaningful to determine whether implications to a project. What in a pacing argument and overcome a delay was actually perceived as often emerges is confusion and the recognition of concurrent delay, being concurrent at the time of disagreement. However, through the contractor generally must show it occurrence or whether other careful application of the approaches that it was capable of meeting the factors were recognized as the listed above, it is possible to evaluate original schedule and would not have actual critical path. Therefore, it concurrent delay successfully and independently delayed the project. is best to address the concurrent unravel this difficult topic. delay dispute as soon as possible Other complicating factors include: following its occurrence. Chris Payne is Executive Vice President ▪▪ Lack of agreement on projected of MBP and can be reached at ▪▪ Use actual schedule updates critical path and as-built critical firstname.lastname@example.org. and correctly developed delay path. fragnets. Analyses of concurrency ▪▪ Lack of agreement on causes of should be based in large part what 1AACE International Recommended Practice delay. can be shown to have been critical No. 10S-90, Cost Engineering Terminology, November 2014. at a given point of time and thus ▪▪ Inaccurate schedules/updates. thus only the flagger delay would be considered the prevailing delay and it would be considered compensable. While this recommended practice guide offers two alternatives to this
NEW TEAM MEMBERS PROMOTIONS
RALEIGH, NC Jonathan Ely joined our Raleigh team as Engineer Technician. He has experience providing construction inspection, quality control, and quality assurance service on large highway and bridge construction projects. He has a Bachelors in Civil Engineering from Old Dominion University. PHILADELPHIA, PA Vincent Bendinelli, joined our Philadelphia team as Branch Operations Manager. Mr. Bendinelli has 25 years of professional experience in the construction and engineering industries while holding key positions at the executive, project management, and design engineering levels. He has managed consulting engineering programs for public transportation clients within mass transit, as well as various projects involving Class A freight railroads. Prior to joining MBP, he founded and operated a project and program management firm serving as ownerâ€™s representative and providing agency construction management for commercial and residential construction.
Chris Payne, PE, CCM has been promoted to Executive Vice President. Chris has been with MBP since 1993 and is a shareholder, most recently serving as Senior Vice President and Regional Manager. In his new role, Chris is managing technical and administrative operations for the firm companywide. Mairav Mintz, PE is our Regional Manager/Vice President providing oversight for the National Capital region which includes offices in Fairfax, Virginia and Columbia, Maryland. Mairav has been with MBP for 23 years and is also a shareholder of the firm. Mike Bagshaw, PE, CCM, LEED AP has been promoted to Branch Manager in our Columbia, Maryland office. He has more than 20 years of construction management/program management experience working with federal, state and municipal clients, and
Douglas Bachman joined MBP as Senior Commissioning Agent. He brings more than 22 years of project management in educational, commercial, and industrial construction. He works with federal, state, and private owners performing commissioning services for industrial, museums, hospitals, laboratories, education, office buildings, data centers, hotels, and commercial facilities. Eric Buckwalter, EIT, Commissioning Technician, has experience in documentation control, project reporting, site inspections, and project closeout. He evaluates building designs using building codes and zoning regulations; performs basic surveying operations and tests on materials such as concrete, metals, and wood; and produces working drawings for buildings using computer-aided drafting software.
previously served as Branch Operations Manager. Mike has been with MBP since June 1, 2000 and is a shareholder. Don Young, PE, CCM, F.SAME, Regional Manager/ Senior Vice President, is managing our Virginia region which includes Chesapeake, Richmond and Roanoke, Virginia offices. Don is a Senior Vice President and shareholder who has been with the firm since 2006. Kevin Bocock, PE, CCM has been promoted to Regional Operations Manager of our Virginia region. He has been with MBP since 1996 and is a Vice President and shareholder. He has been providing program management for transportation clients throughout Virginia and is active in disputes resolution assignments.
OUTLOOK | 5
1000 F Street Office Building, Washington, DC: MBP is providing existing condition documentation services prior to construction commencing.
National Park Service, Denver Service Center, Lakeland, CO: MBP is providing construction management services in support of the project delivery team for various projects throughout the U.S.
Loudoun County Silver Line, Loudoun County, VA: MBP is developing and maintaining an integrated master schedule for the county. Route 7/659 Interchange, Ashburn, VA: MBP will perform construction engineering and inspection services for the $50 million project. Southwest/Northwest Regions Operations Construction and Intelligent Transportation Systems Installation/Construction, Roanoke, VA: The Virginia Department of Transportation has selected the firm to provide construction engineering and inspection services.
MARYLAND Colonial Pipeline Company, Woodbine, MD: MBP is providing commissioning services for construction of two new prefabricated buildings to include a pump house and an equipment storage building.
NORTH CAROLINA Jefferson Standard Building, Greensboro, NC: MBP is providing cost estimating, constructibility review, and commissioning services for the $50 million interior renovation of this building currently on the National Register of Historic Places.
Raleigh Union Station, Raleigh, NC: The firm is providing enhanced commissioning services on behalf of the City of Raleigh during the design, construction, acceptance, and occupancy phases of the project. Duke Health and Wellness Center, Durham, NC: MBP managed the commissioning process on behalf of Duke University during the design, construction, acceptance and occupancy phases of the project. 911 Emergency Operations Call Center, Hertford County, NC: The firm is providing cost estimating services at the design development and construction document phases of the project.
INTERNATIONAL NAVFAC Far East, Japan: The firm is providing construction management and surveillance services for various construction projects in Yokosuka, Atsugi, and Okinawa, Japan.
MBP AND THE PLAN CONSULTING GROUP FORM GLIDENET HEALTHCARE MID-ATLANTIC, LLC MBP is pleased to announce the formation of Glidenet Healthcare Mid-Atlantic, LLC, a strategic team with The Plan Consulting Group (TPCG). Both firms provide more than 50 years of collective experience serving clients in the healthcare market. Glidenet focuses on cost optimization in the technical operations components of a hospital’s total operating expenses. By analyzing and re-engineering non-clinical service functions along with integrating portions of the supply chain, Glidenet partners with clients to significantly reduce major costs such as facilities and clinical engineering services as well as hospitality (food, security, etc.) and business support services. The firm creates measurable improvements in the client’s technical operations budgets while generating acceptable internal rates of return. These initiatives focus on maximizing net present value (NPV) through sustainable cost reduction in a time compressed implementation. “We are excited to create a collaborative business model with Glidenet that has a focus on healthcare,” states Senior Vice President James Peck, PE, CCM, CEM. “For a cost-challenged sector representing 16% of the U.S. Gross Domestic Product, our service offerings can have a major impact on healthcare system operations.” For more information on Glidenet and the firm’s service offerings, please visit www.glidenetmidatlantic.com. 6 |
KEEPING AMERICA’S INFRASTRUCTURE DEBATE IN PERSPECTIVE BY KAY BAKHTAR, PH.D.
Describing the state of the nation’s infrastructure in terms of such pessimistic jargon as “shoddy”, “crumbling”, “deteriorating”, and “in disrepair”, appears to receive a high level of popularity in the media and elsewhere. Ironically, the majority of the steadfast skeptics do not offer any concrete remedial solutions to the problem other than urging the Government to inject billions of dollars into the construction without considering the viability and sustainability of such a program. Fortunately, at the other end of the spectrum, there are personalities, experts and think-tanks who— while acknowledging both the shortcomings of the system and the need for corrective action— intellectually and passionately strive to seek means to address the issues surrounding this fundamental national interest. And, in between, there are those who unceasingly work in the trenches to keep the infrastructure system functional and advancing. Considering the complexities inherent in the national infrastructure debate, we need to transcend the customary mindset that funding is the panacea for America’s Infrastructure deficiencies and present a more comprehensive view of the topic. Instead of focusing on a singular “road map” for the transformation of America’s national infrastructure into the 21st century, it would be more effective to shift paradigms into a “systems thinking” approach, where one considers the system holistically, with the emphasis on both the significance of the whole and the interdependence of its parts, in order to keep the debate in proper perspective.
Ideally, a re-envisioned National Infrastructure Plan would: ▪▪ Assess and analyze the state of the United States’ 2015 infrastructure and compare with the planned performance. ▪▪ Assess the United States’ infrastructure needs now and for the long term future. ▪▪ Determine and articulate transparently the national strategic visioning for America’s infrastructure. ▪▪ Set out the Government’s overall approach for each sector and each area of the country, define strategic objectives and expected milestone and outcomes. ▪▪ Provide an overview and realistic strategies for the level of public and private investment for the next 10, 20 and 30 years. ▪▪ Outline Government’s approach to prioritizing and justification for that policy approach. ▪▪ Set out a comprehensive procedure for infrastructure delivery. Every ten years, the proposed National Infrastructure Commission (NIC) would produce a National Infrastructure Assessment in order to identify the next 30-year infrastructure needs and vision. After all, “You have to learn the rules of the game,” said Albert Einstein. “And then you have to play better than anyone else.” To read the full article in its entirety, visit www.mbpce.com. Kay Bakhtar is a Senior Consultant with MBP and can be reached at email@example.com. OUTLOOK | 7