Window of Opportunity
Published by RICS Construction Journal June-July 2012
Author: David Falkenstern
David Falkenstern looks at windows analysis and why contract drafters should specify different forms of delay analysis that are appropriate to use when a delay is being assessed.
For the past 10 years, the Society of Construction Law’s Delay and Disruption Protocol has been a valuable source of reference to the industry for contentious and non-contentious matters on projects of all sizes. The Society produced the Protocol to provide the industry with useful, balanced and viable guidance on how best to deal with delay and disruption issues.
However, in construction litigation, judges are increasingly inclined to consider an analysis of actual causes of delays rather than evidence based on a theoretical analysis of particular delay events. This means industry professionals must now move beyond the recommended approach in the Protocol, which has a number of limitations.
It recommends a prospective time impact analysis for post-completion disputes, as the most thorough method of analysis, although it is generally the most time-consuming and costly when performe forensically. This conclusion has been debated between experts over the years and many agree it is not the best method when performed retrospectively, noting that it does not sufficiently address what judges are most interested in, i.e. what actually delayed project completion.
While it makes sense to use a prospective method of analysis during the term of a project (as suggested by the Protocol and, for example, as required by the NEC3 form of contract) it does not adequately assist in a post-completion forensic analysis. This is because a prospective analysis relies on a hypothetical model of the effect of a particular delay event.
“Judges are increasingly inclined to consider an analysis of actual causes of delays rather than evidence based on a theoretical analysis”
To illustrate this point, consider the construction of a steel-frame building on a concrete slab foundation. During the construction of the slab, the owner changed the loading requirements which delayed the construction of the slab and was projected within the contractor’s programme to subsequently delay completion. Immediately after the notification of the change, the contractor prepared a prospective time impact analysis which reasonably demonstrated the delay and an entitlement to an extension of time. However, in the event, the contractor’s programme failed to allow sufficient time to fabricate the structural steel and the foundation slab was completed weeks before the steel arrived on site.
If the contractor failed to claim its extension of time request when the change was instructed and was forced to provide a post-completion forensic delay analysis, its claim would become much more tenuous. A retrospective review of the actual events would lead to the conclusion that the owner’s changes to the loading requirements did not actually delay completion as the slab works did not critically drive the successor steel works. Thus, the contractor would not be entitled to an extension of time for the delay event.
Furthermore, while the Protocol addresses several of the key methods of delay analysis (including as-planned v as-built, impacted as-planned, collapsed as-built and time impact analysis) it fails to address windows analysis. This is surprising given that many professionals consider windows analysis to be the most robust method for analysing actual project delay. Windows analysis is the only method that explains what factually delayed the completion of the works, as opposed to hypothetically. Also, windows analysis addresses what interested parties thought to be critical at the time of construction.
What makes completing a windows analysis difficult is its healthy appetite for contemporaneously produced records. Practitioners attempting to perform this method of analysis will require a comprehensive set of regularly produced and accurate programme updates in electronic format. They will also often have to rely on progress reports, daily site diaries, photographs, correspondence, meeting minutes, among other documentation. Frequently, it is difficult, time consuming and expensive to collect, organise and review a full set of the required information. Obviously, if the records are methodically produced and kept during the term of the works, considering them in a post-completion dispute becomes emphatically more efficient. It is also important that the parties set out what records are required and ensure that that they are, in fact, maintained during the progress of the works. Good record keeping has the added benefit of allowing the parties to maintain a good understanding of what is actually delaying the works which should help to limit disputes.
In addition, performing a windows analysis tends to be a time consuming and relatively expensive task. It does not offer the simplicity, as many methods do, of determining the effect of a single delay event in isolation of a detailed understanding of the majority of the construction activities. Windows analysis requires the practitioner to first determine the projects actual critical path, a time intensive exercise in its own right, and it is only then that a view can be taken as to whether the delay event in question caused any delay to completion by its existence on the critical path.
However, supporting the use of this approach is the recent publication of Keating on Construction Contracts, authored by distinguished experts in construction law, which provides advice on the application, advantages and disadvantages of windows analysis, among a range of other topics relating to construction law. Keating brings new opportunity and clarity for practitioners, programme experts and those drafting construction contracts because it lists windows analysis as a commonly considered method, which relies on actual causes of delay.
Keating describes the windows method of delay analysis as follows. There are two forms of windows analysis: time slice windows analysis and as-planned v as-built windows analysis, each of which seeks to establish the contemporaneous or actual critical path through the project. The project is broken down into manageable periods or windows in which to consider the critical path and the effects of delay events. A major advantage of the windows analysis methods is that they attempt to analyse the causes of delay contemporaneously and with a firm base in the as-built record of what actually happened on site within a particular window.
This point raises an important concern that drafters of construction contracts should consider, especially now with judges increased focus on actual causes of delay. If a construction contract is to prescribe a method for assessing delay, it should allow the parties to utilise different methods depending on when the delay is being assessed.
To address this issue, drafters of construction contracts can now use Keating as guidance and its outline of the available methods of delay analysis.
For analysing delays during the progress of the works, time impact analysis is the method of choice because, as stated in Keating, it seeks to analyse the position (and impact on) the project at the time of the relevant delay event being analysed. If it were considered appropriate in future construction contracts to prescribe any specific method for assessing delays, as they arise during the progress of the works, then the time impact method should be the preferred option.
However, it is illogical to rely on a prospective method of delay analysis once the works are complete. When the facts are known, a retrospective review of the as-built record is preferred to a prospective estimate of what could have happened.
Therefore, it would be logical for future construction contracts to prescribe a method which, as Keating describes, seeks to establish the contemporaneous or actual critical path through the project. Windows analysis satisfies this criterion by firmly establishing itself as the method that most relies on the factual record.
If a contract is to prescribe a method for assessing delay, it should allow the parties to utilise different methods depending on when the delay is being assessed.
It is often the case that two reputable independent programming experts representing opposing parties in a construction dispute will have significantly varied opinions as to the extent and cause of critical delay to a project. The experts selection of different methods of delay analysis is a major cause for such variations in opinion. This gap in opinion forces the parties in dispute to needlessly, and at great expense, address issues which will ultimately be defined as non-critical and therefore irrelevant. Appropriate contract form prescription of methods of delay analysis, appropriate for when the delay is being analysed, could go a long way to save on construction dispute costs.
Ten years on, practitioners are now looking beyond the Protocol for guidance on how best to analyse construction delay. With judges increased interest in analysis of actual causes of delays, windows analysis has emerged as the method of choice among many programming experts. This development towards a more comprehensive fact-based approach has been reflected in the recent publication of Keating. Now the issue is one for drafters of construction contracts to consider.
The Society of Construction Law Delay and Disruption Protocol is available to download from www.scl.org.uk/resources