Delay Analysis

Construction delays result from a multitude of sources – unforeseen conditions, owner impacts, architect/engineer impacts, contractor impacts, weather, material shortages, labor strikes, etc. The ability to analyze construction delays by determining the primary source or cause of a delay, its resultant cost to each party, and the loss and impact beyond conjecture is a specialty of Hanna Consulting. Some of the most common techniques employed by HCG for analysis of delay claims are explained on this page, namely:

• As-Built Schedule Analysis
• Collapsed As-Built Schedule Analysis
• Contemporaneous Period Analysis
• CPM Analysis
• Delay Cost Impact Analysis
  • Field Overhead
  • Home Office Overhead

As-Built Schedule Analysis

An As-Built schedule analysis considers the actual schedule of work for a project as it was actually built. Each day or even hour of work is accounted for, including all days of delay, exceptional performance, and impacted work. The schedule is then examined to determine the sources of the identified delay period(s)and equitable adjustments are generated.

Collapsed As-Built Schedule Analysis

A frequently utilized extension of an As-Built analysis is a Collapsed As-Built schedule analysis. A Collapsed As-Built analysis simply uses the developed As-Built schedule as mentioned above, but removes all periods of delay. The removed delays are then categorized according to their sources – typically as owner-caused or contractor-caused. The appropriate days of delay from the opposing party are then removed, the schedule is “collapsed” with the owner-caused delays removed, and the result is a schedule that could have been achieved “but-for” the owner-caused delay. Equitable adjustment calculations are generated from the identified delay to ensure fairness in allocation of delay costs.

Contemporaneous Period Analysis

In a contemporaneous period analysis, a meaningful window of project duration is selected and the as-planned schedule is prepared for this period. The actual progress and delay activities are added to a copy of the as-planned schedule using a contemporaneous project window. The schedule windows are then analyzed and the owner-caused, contractor-caused, and concurrent delays are calculated. The process of period selection and analysis is repeated for each meaningful window through the end of the project. The total delays are then appropriately allocated for equitable adjustments. The key to performing a contemporaneous period analysis is the proper selection of the project windows to accurately determine project delays.

CPM Analysis

CPM, or Critical Path Method, is one of many methods used in scheduling work activities for projects. CPM uses estimated activity durations along with the preceding and succeeding activity relationships of each work task to determine the critical path of a project. The critical path of a project identifies the sequence of critical activities where, if any one activity along the critical path is delayed, the end date of the project will be delayed. With CPM analysis HCG can establish sources of delay and prepare impact claims. Additionally, due to liquidated damages and extension penalties, contractors typically prefer to accelerate delayed activities rather than extend the end of a project. These acceleration techniques link impact costs to a contractor, who should be monetarily compensated for the losses if not at fault for the delay. HCG can perform the impact cost calculations and help in proving the fault of an opposing party, whether it is an owner, contractor, A/E, or a combination of parties. Though CPM analysis is a useful tool in understanding impact claims, it is the method least often used by HCG.

Delay Cost Impact Analysis

The presence of delay often prompts a contractor to accelerate work via overtime, overmanning, and extra shifts to maintain the scheduled end-date. While the impacts of acceleration work are often a result of delay, they are not a direct cost of delay in and of themselves. Costs of delay commonly include extended field overhead, home office overhead, and possibly show-up time costs for days of unexpected delay or work stoppage. In analyzing the cost of delay, HCG uses the established techniques for quantifying field and home office overhead.

Field Overhead

Field overhead is fairly simple to compute as it is just the individual cost rates of the field overhead items. Field overhead items usually include such items as indirect job labor, site facilities, storage costs, construction signs, site fence, office trailer and equipment, and temporary facilities.

Home Office Overhead

Home office overhead is more difficult to compute as more than just the delayed project is typically underway in accounting for home office overhead costs. To calculate home office overhead several methodologies have been developed, such as the Eichleay Formula, which calculates a project’s allocable overhead from the total company overhead expenditures for the project duration, prepares a daily allocable overhead rate, and provides home office overhead damages from the determined daily rate and total days of delay.