Construction Delay Analysis – Principle No. 5 of 5
Delay Analysis Principle No. 5:
Activity delay and project delay are not the same thing.
Too often, contractors and analysts submit time extension requests, or delay claims, that attempt to measure or calculate “project delay” by comparing how much later an activity starts or finishes, compared to when it was depicted to start or finish in the project’s schedule, without regard to whether the activity is even on the critical path.
As noted in Delay Analysis Principle No. 1, and reiterated in Principle Nos. 2 through 4, “only delays to the project’s critical path will delay the project.” The proper way to think about activity and project delay is that a delay to a critical activity is what causes the delay to the project. Conceptually, activity delay is the “cause” and the project delay is the “effect.”
So, when a critical activity starts late, finishes late, or progresses more slowly than expected, that activity delay could cause a delay to the project’s completion date, which is the “project delay.” It is this project delay that is the ultimate result of a critical activity’s late start, late finish, or slow progress.
More importantly, when a project includes an incentive/disincentive clause or a liquidated damages clause, the payment for the earned incentive, the assessment of the disincentive amounts, or the liquidated damages are calculated from a specific contract milestone date. Therefore, when calculating project delay to a specific contract milestone, the analyst should calculate the delay by measuring how many days late the milestone completes – not by measuring how many days late an activity starts or finishes.
Similarly, if a critical path activity starts early, finishes early, or makes better-than-expected progress, the result may be a corresponding savings to the project’s completion date.
Again, activity delay causes project delay, and the granting of time extensions and the assessment of liquidated damages is based on the measurement of project delay.
For more on this or any other topic, please call me at 215-814-6400 or email me at mark.nagata@traunerconsulting.com.
