Construction Delay Claim Management:
A Better Strategic Approach

No matter what best practices of project controls are put in place, unfortunately delay and disruption especially on large and / or complex projects are almost inevitable….and most construction claims are delay based.

Petrocontracts consider that Planning and Scheduling has a major role to play in the project management of projects.

Petrocontracts provide support and monitoring of projects from inception through to completion, and post contract. We offer project audits, providing independent monitoring and reporting including delay claim analysis & preparation.

Petrocontracts provide robust delay and schedule analysis for prospective, and retrospective, extension of time entitlements and for the analysis of delay, acceleration, disruption, and loss of productivity by employing following techniques:

• Critical path analysis; is more widely used for construction programme development and management.
• Linear Scheduling analysis; is more widely used for linear projects (i.e., highway, pipeline, bridge, railway, tunnelling projects)
• Earned value analysis
• Monte Carlo simulation
• Programme evaluation and review techniques (PERT)
• S curves
• Time impact analysis / Windows analysis / As built vs as planned / As built but for analysis
• Dispute resolution

Delay & Disruption – Commonly used terminologies and their distinctions

Petrocontracts consider that though delay and disruption often occur together, but they are quite distinct issues.

• Delay, as it sounds, is being late.
  • It is generally accepted that for a contractor to be entitled to an extension of time for completion of works, an event for which the client is responsible must have had an impact on the critical path of the works — in so far as it requires that the date for completion be amended or that activities are accelerated to meet deadlines.
  • Delays may also cause a prolongation cost claim and which can be defined as the contractual mechanism for the recovery of additional time related costs that have been properly incurred due to compensable delay(s) to the completion of the works.
• Often, the term “compensable” delay is used. Following will make an understanding on the distinction between the terminology “compensable” delay as opposed to “excusable” delay and “concurrent” delays; and “disruption”.
  • Compensable delay – These are events that give rise to an entitlement to extension of time to the project completion date and an entitlement to recovery of prolongation costs.
  • Excusable delay – These are events that give rise to an entitlement to extension of time to the project completion date (and therefore relief to liquidated damages) but not necessarily an entitlement to the recovery of prolongation costs, for example neutral events such as Force Majeure like adverse weather conditions whereby typically the parties bear their own costs.
  • Concurrent delays – Two or more events occurring within the same time period, each independently affecting the Completion Date. As suggested, concurrency will affect the Contractor’s entitlement to prolongation costs where a Contractor culpable delay runs concurrent with compensable delay. Any prolongation cost claim that includes costs attributable to Contractor culpable delays, concurrent delays, the occurrence of Contractor’s risk events or neutral events (e.g., Force Majeure) is likely to be rejected in principle by the Employer as the Contractor usually has no entitlement to the recovery of time related costs under such circumstances.
  • Disruption – There are a variety of events that may impact on cost but do not necessarily trigger any entitlement to extension of time to the project completion date and therefore no prolongation costs. Such events can be classified as disruption as opposed to delay. A disruption has been suffered where the work is carried out less efficiently than it would have otherwise been, had the disrupting event have not occurred. If the client has caused the disruption, the contractor may claim the additional costs he suffers as a result of the inefficient working. Rarely is this claim an express contractual entitlement, and it usually arises as a breach of contract claim. It is an implied term of the contract that the client will not prevent the contractor carrying out the works he is contracted to do

Our experts have a hands on and managerial experience in determining a delay causation and its analysis and provide their recommendation in mitigating the delay / disruption costs.