When it comes to claims for project delay, most disputes are backward looking. Delay claims are predicated on identifying the project’s critical path and isolating those activities that caused the critical path to extend. Usually this involves comparing the original project duration to the final project timeline. For example, the original project schedule was 100 days, the work was completed in 125 days, and that 25-day difference is used to calculate the contractor’s damages, often as a function of a daily rate. Often, the dispute comes down to who is responsible for that 25-day difference and whether there were any concurrent delays.
Many projects contemporaneously track construction progress, of course, usually through monthly schedule updates that compare various activities against the baseline schedule. Despite this tracking, it could be argued that a delay claim cannot be proven until the work is complete because behind-schedule activities could always catch up before the end of the project. Manpower could be added or work could be re-sequenced. Waiting until the close of the project, however, may require a contractor to endure months, or even years, of behind-schedule work, likely hemorrhaging cash while doing so.
A recent decision from the Civilian Board of Contract Appeals, CTA I, LLC v. Department of Veterans Affairs, suggests that contractors need not wait until the end of the project to assert a delay claim. In this case, the contractor, CTA, asserted a $2 million delay and inefficiency claim in August of 2017, despite the fact that the project was not set for completion until November of 2018. The agency moved for a stay on the grounds that until the contract was complete, the true delay impact could not be known.
The CBCA denied the stay request, affirming that “CTA is entitled to try to prove at this juncture that the VA caused compensable delay to activities on the critical path up to and including September 30, 2016, thereby delaying the future completion date. CTA need not wait until contract completion to litigate its delay claim for that completed, discrete period. Indeed, the very thing that defines work on the critical path is that work has no leeway and must be performed on schedule; otherwise, the entire project will be delayed.”
Nothing in the applicable Federal Acquisition Regulations prohibited the contractor from submitting a claim before the end of the project, and, as the CBCA noted, the “Suspension of Work” clause in the parties’ contract required the submission of a delay claim “as soon as practicable.” Thus, if the contractor waited to assert its claim, it did so at its peril.
In arguing for the stay, the VA asserted that it was not possible to prove that the government “delayed project completion as a whole” until after the close of the project. The CBCA rejected this, holding that proving the delay was up the contractor, which it could either do or not do, but “we need not wait until CTA’s performance has ended to find out.” As a practical matter, however, how might a delay claim be demonstrated prior to the completion of construction? Many delay claims are quantified by comparing the as-built project schedule to the as-planned project schedule, either in a pure “as-built vs. as-planned” analysis or some variation. There are alternatives for capturing delay claims, however.
One such method is a “window” analysis, which involves an interim assessment of delay on updated schedules at specific periods of the project. Typically, the project is divided into a number of periods, usually based around major changes or milestones, and then each “window” is assessed to determine if there is a delay. A variant is a “time impact analysis,” which focuses on a specific delaying event. The project is analyzed each time there is a delay situation, and then the new schedule is projected out to establish a new completion date.
The “window” and “time impact analysis” approaches may be used to analyze delays in real time, while the project is ongoing. There are limitations to each approach, not the least of which is that they are contingent on accurate, complete project records. In the right circumstances, however, alternatives may be available to the traditional as-built v. as-planned framework.
Identifying and applying the appropriate methodology to a potential delay claim requires significant expertise, likely both from an outside scheduling expert and an experienced construction law practitioner. If a contractor is currently dealing with a delayed project, however, it may be beneficial to receive expert input sooner rather than later. A delay claim might be available now, and waiting for the project to end may not be required.
