“With your experience, diligence, professionalism and personal determination we achieved a successful settlement.“
Mouchel Infrastructure Services
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G J Heywood FRSA
Heywood Real Estate Limited
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Galliford Try Partnerships Limited
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“Why failing to plan is planning to fail.”
Construction project programming has never been more important but is still not always given the emphasis it requires, says Simon Penrose.
All too often, we find that the absence of both proper programming and progress analysis and reliable contemporaneous records on construction projects, can lead to the outcome of dispute resolution becoming uncertain and costly.
Planning and programming is a fundamental activity in the management and execution of projects. From the outset it is vital for the success of any project that a well-considered and realistic programme is agreed with all the major stakeholders.
The programme should be a network based analysis which should identify key milestones for managing cost and resources along its critical path. It should establish activity float and risk and allocate responsibility to all the parties to the design and construction processes. It is also becoming increasingly important to include a form of resource scheduling.
With the complexities of today’s requirements upon contractors and clients you may consider the need of an expert that knows how to guide you through this process.
Many contractors carry in-house programming expertise but clients cannot rely on this when placing contracts because quite often these resources are limited and their allocation to a project will be a consideration of their tender.
It is most rare, almost unheard of, for clients to retain expertise in the construction programming field until a project falls into delay or dispute and when quite often “the horse has bolted”.
In particular, the NEC suite of contracts requires in-depth programme analysis to be applied at the very beginning of a project and then increasingly as work proceeds and changes occur. In such circumstances, it must be considered whether the client and his advisors are content to rely solely on the advice and skills of their contractor or if a more considered response is required from an expert within the client’s team. Much will no doubt depend upon relationships between the contractor and the client?
The very specific requirement of the Project Manager under NEC contracts means they have to formally “Accept” the contractor’s programme offering. Our experiences in dealing with such contracts that have fallen into dispute, is that all too often a degree of naivety within the PM’s team has led to the acceptance of a programme which is unsuitable for the purpose of measuring the effect of compensation events.
How many of us have experienced projects where the level of planning & programming is overly optimistic and the key issues have not been properly considered and inter-linked, and where invariably, the point of no return is reached whereby Construction begins: -
Without formal appointments and warranties agreed with the designers,
Without a formal Contract in place,
Without a fully defined scope of work and specification,
Without a defined logistics plan which has been agreed with the site’s neighbours and where crane over-sailing is subsequently not permitted and or the site access becomes unreasonably restricted due to Highway constraints,
Where the assignment of risk is improperly considered and left with a party who is not in a position to manage it,
The list goes on…..
Was it Sherlock Holmes who noted?
Most people, if you describe a train of events to them, will tell you what the result would be. They can put those events together in their minds, and argue from them that something will come to pass. There are few people, however, who, if you told them a result, would be able to evolve from their own inner consciousness what the steps were which led up to that result.
It is this reasoning; analyzing back from a known end date which requires a skilled and knowledgeable person to piece the plan together. Quite often, this will require the multi-disciplinary input of all the parties, Contractor, designers, and specialist Sub-Contractors to get to the correct result. It is vital that the planner pays close attention to the expertise and advice of all the parties to make sure that a realistic plan is produced. It is equally important that the plan includes a clear and accurate logic, and an allowance for all the parties’ risks.
The construction programme deals with time when time related costs are at their premium and the cost of change or indecision is at its greatest. Record keeping to both of the main parties to any construction Contract is absolutely vital. This will involve accurate recording of the start and finish dates of all of the construction activities on the agreed programme on a frequent basis throughout the course of the project.
Sadly, it is only when the plan fails that these records may be called upon and where a dispute arises.
Forensic Planning and Programming;
In the past dealing with extension of time disputes under the standard JCT forms of Contract has frequently been deferred to a later date when further and more detailed information has been presented by the Contractor who has been asked to provide some detail and further corroboration of his claim. Quite often, a Contractor will not be aware of the full effect of a delay event until long after the event has concluded. For this reason Contractors offerings tend to be extensive and retrospectively deal with many separate issues under the cover one over-arching submission. Employers will be faced with a very complex demanding response and a degree of further programme analysis for which they will invariably need to seek expert help.
A Developer was advised by Counsel at a recent meeting to which the writer was present, that the cost of settling a dispute with regard to an entitlement (or otherwise) to an extension of time is invariably very costly and more often than not subject to a significant degree of uncertainty with regard to outcome. This is, in our opinion, because historically client’s records have been sadly lacking in defense of contractor’s claims.
The measurement of time and delay in a dispute will need to consider the complex issues of concurrency and culpability. Whose or which event has caused the critical delay and to what extent was the other party in delay? These issues can be perplexing, and accurate and substantive records sufficient to produce an as-built programme will be required to support whichever form of delay analysis is proposed. The more complex the construction is the more onerous this task becomes.
Because more often than not, it is the contractor who possesses the most complete set of records the Employer is often at a disadvantage, and therefore it may well be time for project administrators to make sure that adequate records are held by both parties.
One of the inevitable questions for clients will be if programming expertise is required on its team, how will the cost be recovered? However, a more fitting question might be how will the cost be recovered if the project falls into (a delay) dispute and the client’s records are inadequate to properly respond to its contractor?
It is increasingly popular for Public Sector Employers to use the ECC form of construction contract. Unlike the JCT suite of Contracts, this requires a dynamic and progressive approach to dealing with the assessment of time for compensation (Employer) events. It begins with the very specific and express requirement for there to be an “Accepted Programme”. The employer will have two weeks in which to accept or reject the programme and will need to state reasons for any rejection in accordance with the Conditions. The early agreement of an Accepted Programme, common to the parties, is absolutely vital to the success of any project for which this form of contract is adopted.
The incidence of a compensation event will give rise to the requirement for a new Accepted Programme, and each compensation event will need to be analysed on its own merit, whilst also considering the Contractor’s progress at the time the event is impacted. That is, the issue of concurrent or culpable delay is dealt with as work proceeds.
If an interim agreement for a compensation event cannot be swiftly reached, disputes will have to be referred to a 3rd party resolution. This is potentially better for both Main contractors and Sub-Contractors who are not left wondering for many months what their entitlement is. But, and there is always a but, once the revised programme is “Accepted” it once again becomes the Contractors responsibility and the Compensation Event cannot be revisited. Therefore a degree of risk will need in-putting and agreeing as part of the process.
The issues for the Employer to consider can be complex and demanding. In particular, the management by both contractor and Project Manager on an NEC contract will require equally stringent demands in terms of record keeping, and programming expert advice at each interval that the programme is updated and the Completion Date revised.
At Brant Associates we realize that a realistic and well considered programme at the outset is the best way to have a successful project and realize your goals and avoid expensive litigation.
It should come as no surprise that the cost of a construction planning and programming service from the outset is likely to prove significantly cheaper than the employment of a forensic delay analyst if your project falls into an extension of time dispute.
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