Proving or disproving a construction delay claim is a substantial undertaking in the best of circumstances. But the analysis of construction delays takes a major leap in difficulty when there are multiple sources or causes of delay with interrelated effects. Even on straightforward projects, numerous activities for innumerable reasons are not completed exactly as scheduled. Is every activity that is not completed when scheduled a "delay," or are many of these inconsequential when assessing liability in a delay claim context? Sorting the consequential from the inconsequential only begins with establishing the project's critical path through Critical Path Method analysis. While there are some more or less established rules of logic and law that have been developed for analyzing multiple and concurrent causes of delay, the task quickly becomes very difficult in the complex and convoluted factual situation typical of most major construction disputes. However, the basic principles as revealed by the case law can be readily stated.
The most straightforward situation involving multiple sources of delay is where there are two separate causes of delay to a single work activity. For example, an owner-directed change may have caused a particular activity to be less efficient, while at the same time the contractor may have used less efficient equipment than planned to perform it, or a smaller crew. How then is the extended duration of the activity to be apportioned between owner and contractor? Almost every delay claim contains issues of this nature. It may seem apparent that the owner-directed change had an adverse effect on the time to perform a particular activity, but whether the impact was substantial or insignificant is debatable, and it is a challenge for either side to quantify the effect specifically.
The only hard and indisputable fact in these situations is that the activity took longer to complete than planned -- and both parties will typically agree on that much. But did the owner's action cause the entire delay, was the contractor simply not diligent in pursuing the activity, or was its planned duration too short to being with? Even if the owner delayed the activity to some extent, did the contractor act properly to mitigate its losses? 1 Critical Path Method analysis does not answer these questions, and they are obviously dependant on the facts in each instance. The facts therefore determine entirely how the delay is apportioned between owner and contractor in these situations.
The level of complexity steps up considerably when the situation involves different causes of delay acting on different activities, whether at the same time or at different times during the course of the project. For example, take a building project where the owner has delayed structural steel delivery by making late design changes. On the other hand, the contractor has had difficulty excavating the site in order to begin the foundations. How is the overall project delay from these two causes to be apportioned between owner and contractor? Which one is really delaying the project, or are both causes delaying completion?
An example of a case where the court wrestled with the concept of multiple delays to multiple activities, with at best mixed success, is Merritt-Chapman & Scott Corp. v. United States.2 In that case, the U.S. Court of Claims had an opportunity to interpret an early version of the Suspension of Work clause. It found in favor of the contractor that entitlement under the Suspension of Work clause existed notwithstanding the fact that there was a clear concurrent delay to another critical activity from another cause. The government's delay was that it had failed to provide an access road to a portion of the work site. The absence of the road prevented the contractor from disposing of excavated material from the site. As a result, the work could not proceed until the road was available. At the Board of Contract Appeals hearing below, it was also found that adverse weather that same year caused a similar delay for independent reasons. Specifically, rain and winter weather (a non-compensable source of delay) would have prevented the contractor in any event from advancing the work, even if the road had been completed. The Board accordingly denied the contractor's Suspension of Work claim on that basis. The Court of Claims reversed, however, holding that concurrent causation was not a factor in the then-existing version of the Suspension of Work clause. The Court placed significance on the fact that the following language, present in later versions of the same clause, was absent:
No [monetary] adjustment shall be made to the extent that performance by the Contractor would have been prevented by other causes even if the work had not been suspended, delayed or interrupted.
The Court thus strongly implied that if this last sentence had been incorporated in the contract in the Merritt-Chapman & Scott case, the contractor's claim would have been denied. As such the Court of Claims rested its decision on the specific language of the then-current version of the Suspension of Work clause, rather than reaching any broader conclusions regarding the principles applicable to concurrent delay situations.
The key step when facing a multiple activity, multiple delay situation is to determine whether either delay is affecting the critical path, or if both of them are. If only one delay is affecting the critical path, and the other delay is only using up available float, then it follows that the non-critical delay is not delaying the project. The entirety of the project delay is due to whichever delay is affecting the critical path.3
This rule was first illustrated clearly by a 1976 government construction case involving the erection of 104 steel radio towers in the Philippines.4 In that decision, the Corps of Engineers Board of Contract Appeals considered a 161-day period of total delay, and held that 114 days of that period were the government's responsibility. The contractor's claim was based on the government placing a hold on work relating to a particular portion of the towers. The Board sought to determine the critical nature of the affected work by examining the impact of the suspension on the contractor's overall progress. The government's hold prevented the contractor from erecting prototype towers that had been planned for the purpose of proving out the contractor's fabrication and erection procedures. As a result, the contractor commenced construction of the production towers in advance of the planned prototypes -- entirely out of the planned sequence. Fabrication errors that otherwise would have been detected during the prototype stage were not discovered until a later point in the erection process. The government argued that the disruption and delays caused by these fabrication errors should be to the contractor's account. The Board disagreed. It found that the contractor "would have been equally prompt and aggressive [in the prototype phase] as it was in the [production phase] in devising remedial measures." The Board accordingly concluded that the design change by the government "was solely responsible for the frustration [of the contractor's] plan of attack on tower erection."
The Board also determined that the financial difficulties of one of the critical subcontractors prevented that subcontractor from performing any effective work, and that this represented a 37 day concurrent delay for which no compensation was allowable. The rest of the period when this subcontractor was having financial problems was not found to have affected project completion-- it was not on the critical path. The concurrent delay period ended when the contractor cured the subcontractor's problems by taking over the work itself.
Similarly, in a case involving the construction of an air refrigeration system at a Navy flight center,5 the government was responsible for furnishing the equipment necessary for final testing, balancing and start up of the system. The project schedule indicated that this equipment would be delivered to the site relatively early in the project, but its delivery was delayed -- a delay attributable to the government. The Federal Circuit, however, determined that in fact the government-furnished equipment was not required until the end of the project. Accordingly, the delay in its delivery did not impact the critical path. As such, the court determined that there "was no period in which the Government was the sole cause of the delay." In other words, notwithstanding what may have been indicated by the original schedule, the delivery of the government-furnished equipment was an activity with substantial float, and the float was not exceeded. Accordingly, the government escaped paying delay damages by showing that its delay used only float, and the delay to project completion was accordingly caused by the contractor's own problems.
While the rule that a delay that utilizes only float is not a concurrent delay is a simple and logical proposition, be forewarned that it is not as easy to apply in practice as it sounds.
If instead of utilizing available float time, both delays affect the critical path, then the delays can be accurately referred to as "concurrent." For example, in Smith v. United States,6 the contractor was denied delay damages notwithstanding government delay in resolving design issues early on in the project. The court found that the government-caused delays were not critical to performance because the contractor was not in a position to begin full-scale production at the time of the owner-caused delays. The court stated that "[the contractor's] delay claims require analysis as to the validity of [contractor's ] cited examples of government caused delay, and analysis of [contractor's] state of readiness at those times." While the government caused some delay, this delay was not critical in view of the contractor's failure to be in a "state of readiness" to proceed with the work at the time of the government's delay. Factors unrelated to the government would have prevented the contractor's timely performance in any event.
Note that in this instance, while the court's decision was worded in terms of the government's delay not being "critical", the premise of its decision is actually not that the government's delay used only float, but that the two sources of delay were in fact operating concurrently to delay completion. In other words, it could not be said that the project would have been advancing toward completion as planned "but for" the government's delay.
It is important to note that to be considered concurrent delays, the delays do not need to actually be taking place at the same time; in this respect the term is a misnomer. Legally, as a matter of the burden of persuasion, the burden is on the party claiming delay damages resulting from the delay to provide a reasonable basis for apportioning the effects of these concurrent delays between owner and contractor.7 If the concurrent delays are so intertwined as not to be segregable, or the contractor otherwise fails to provide a reasonable basis for apportionment, then the claim for delay damages may be found insufficient. This is because the claimant has effectively failed to demonstrate that the other parties' delay actually delayed project completion. Put another way, where the effects of concurrent delays cannot be segregated, it cannot be said that "but for" the other party's delay, the contract would have been completed earlier.
A case involving a contractor build-out of interior office space illustrates the situation of a potentially-valid delay claim being lost due to the failure to segregate out the effects of the delays by each party.8 The contractor alleged that changes to the government's build-out specifications and security requirements caused a delay in completion of approximately five months. The contractor asserted that the government had delayed in providing information concerning security and other requirements. The Board found, however, that the contractor had an unreasonable difficulty understanding the government's requirements. Apparently the contractor misinterpreted the government's soundproofing requirements and mistakenly thought he was required to tear out a substantial amount of drywall he had just installed. The Board also noted that the contractor had unreasonably delayed ordering the ballistic materials when clarification was needed with regard to only one particular item that could have been ordered separately. As none of these intertwined effects were segregated, the Board ultimately denied the delay claim entirely.
The reasoning that one cannot affirmatively recover damages for a period of unsegregated concurrent delay applies in both directions. The contractor cannot recover delay damages where it cannot segregate the owner's delays from its own. Similarly, the owner cannot enforce a claim for delay damages (which are generally liquidated damages) due to contractor delays that are not segregated from the owner's own delays.9 Accordingly, the rule generally is that where concurrent delays cannot be segregated, neither party may recover damages for the resulting project delays.10 In effect, concurrent delays are treated as if "excusable" but not "compensable," which amounts to an apportionment of the delay risk that is consistent with the treatment of delays like unusual adverse weather that are beyond the control of either party.
These are the basic legal principles that govern concurrent delay situations, and as should be apparent, they are both logical and simply stated. But applying them to the facts of a given case is rarely straightforward. Yet with few exceptions, this is where decided case law gives out as a source of guidance to judges and other finders of fact. However, in one other area there are a few additional cases that shed light on the principles of analyzing complex concurrent delay situations.
Despite the previously stated legal principles, there remains much confusion over just when separate delays can constitute true concurrent delay situations. In particular, it is often hard to distinguish between two truly independent sources of delay, both affecting the critical path, and delays that are dependent, in the sense that they have a cause and effect relationship to each other. For example, consider the situation of an owner delay to the foundation work for a building, followed by a contractor delay in the structural steel delivery. The contractor can argue that in the face of a known delay by the owner to the foundation work, it did not become concerned with a subcontractor's slippage in the structural steel delivery date. Why? Because the foundations were not going to be ready for the steel erection if the steel was delivered as originally scheduled in any event. In fact, on-time delivery of the steel would have only caused a storage problem until the site was ready for it. How is such an argument to be treated? A select number of cases have held that in such a situation, the burden shifts to the owner to demonstrate that the contractor's original schedule, which was not followed after an owner-caused delay, could not have been met even if the owner delay had not occurred.
In one such case, the Armed Services Board of Contract Appeals rejected a concurrent delay argument in a case involving a 3-month delay to the start of work.11 The bid documents provided the approximate date that the notice to proceed was to issue, and the contractor was required to begin performance within 10 days thereafter. The government issued the notice to proceed, but the building to be renovated continued to be occupied, preventing commencement of the work. Three months later the building was available, and the government issued a second notice to proceed. In defending against the resultant delay claim, the government argued that the contractor failed to obtain its bonds in a timely manner, and that this 3-month delay in obtaining bonds also prevented the start of work, and was concurrent with any government-caused delay. The Board rejected the government's position on the basis of the contracting officer's own testimony that the issuance of the second notice to proceed was not delayed because of the bond problems. Implicitly, the Board recognized that the contractor could have expedited the procurement of the bonds had the government been ready to permit the contractor to start work. In other words, the slowness in obtaining the bonds was a dependent delay. It was a result or downstream effect of the government's delay in making the work site available, and not an independent cause of delay by the contractor.
This point was addressed more clearly in a case involving construction of a subway station. There, the public owner's allegations of concurrent delays were dismissed on the basis that the alleged concurrent delays were really just a side effect of the owner's predominant critical path delay.12 Specifically, the contractor claimed an 88 day delay in its ability to drive piles for the station excavation, a critical path activity, due to its inability to close a traffic lane in the adjoining roadway until a suitable detour was designed, approved and installed. The owner alleged that the contractor was in no position to begin driving the piles as of the date when the alleged delay by the owner began, pointing to (among other things) the lack of approval of the contractor's support of excavation shop drawings, incomplete negotiations with the pile driving contractor, and the fact that the contractor had not begun the procurement of the piles themselves. The Board disagreed, referencing these alleged concurrent delays as "speculative or theoretical" under the circumstances. In particular, the Board noted that:
When a significant owner caused, construction delay such as the RW 11 design conflict occurs, the contractor is not necessarily required to conduct all of his other construction activities according to his pre-delay schedule, and without regard to the changed circumstances resulting from the delay.
The occurrence of a significant delay generally will affect related work, as the contractor's attention turns to overcome the delay rather than slavishly following its now meaningless schedule.
[The owner] is required to demonstrate that, but for the delay caused by [the owner], the contractor could not have performed the project in less time, and would necessarily have been delayed to the same extent in any case.
The Board thereby shifted to the owner, once a prima facie delay case was presented, the burden of proving that the contractor could not have avoided the alleged concurrent delay had the owner-caused delay not occurred. Since there was no evidence that the contractor could not have accomplished these allegedly delayed activities earlier if required to do so, the contractor's delay claim was upheld in full, without any reduction for concurrent delays.
Similarly, in a dispute involving the construction of a chlorination facility for a water treatment plant, 13 the D. C. Contract Appeals Board rejected the public owner's assertion that the contractor was responsible for concurrent delays. The Board found that there was a total 252-day critical path delay caused by the owner's failure to resolve defective design issues and failure to respond to the contractor's proposals relating to chlorine injection pumps and other major components of the project. The Board was able to segregate three specific periods of delay, finding all three to be the owner's fault and on the critical path. In defense, the owner argued that the contractor delayed roofing installation by 146 days by failing to timely execute the roofing subcontract and submit roofing shop drawings. The Board examined the owner's assertion of concurrency, observed that the build-up roof was delayed, but found that it was not on the critical path. The underlying roof was in place in a timely fashion which allowed the interior work to proceed in the dry and the contractor could have proceeded with the instrumentation work had it not been delayed by the owner. The Board concluded that the late completion of the built-up roofing did not delay any follow-on activities and had no effect on the project's critical path. This holding can thus be viewed as either holding that the alleged concurrent delay was not critical and thus irrelevant, or that the alleged concurrent delay was dependent and not independent.
The owner also asserted that difficulties with the instrumentation subcontractor had resulted in a 471-day concurrent delay. The Board concluded that these difficulties in large part were caused by the owner's design failures. The balance of the problems that the contractor had "prodding" its subcontractor to perform, the Board concluded, fell into the category of "why hurry up and wait" and simply did not affect project completion in view of the overriding owner-caused delays. In sum, the owner was unable to convince the Board that the contractor's delays would have occurred but for the other more serious owner-caused problems. Accordingly, when the contractor can demonstrate that it did not hurry up to complete work activities on time because it would then just be waiting on owner-delayed activities before proceeding further, it has effectively demonstrated that its delays were dependent and effectively a result of the owner's delay, and not an independent, concurrent cause of project delay.
On a closely related point, is also clear that the contractor need not address every possible delay issue once the contractor makes a prima facie showing of owner-caused delay that focuses on the critical delays.14 At that point the burden then shifts to the owner to show that even absent the owner-caused delays, the project would have been delayed. In other words, the owner must demonstrate that omitted events not addressed by the contractor have relevance and their omission affects the contractor's analysis. Moreover, the owner must offer "cogent, well developed evidence and arguments" regarding alleged concurrent causes of delay. 15
Untangling the effects of multiple causes of delay to multiple activities will always be highly complex factually and a difficult undertaking at best. Moreover, the legal principles will always be difficult to apply to particular factual situations and are likely to remain overly simplistic in their approach to real world fact patterns. However, the effort is critical to achieving an appropriate outcome to a complex delay case, and it typically requires a great deal of hard work and close cooperation of a highly capable delay analyst, supporting fact witnesses, and a skilled and experienced legal advocate.
1 Midwest Industrial Painting of Florida, Inc., 4 Cl. Ct. 124 (1983); Edwards Manufacturing, Inc., ASBCA No. 26936 84-1, BCA ? 17,205 (1984).
2 208 Ct. Cl. 639, 528 F.2d 1392 (1976).
3 See, Wiezel, Refining the Concept of Concurrent Delay, 21 Pub. Cont. L.J. 161, 163-64 (1991).
4 Fischbach & Moore International Corp, ASBCA No. 18,146, 77-1 BCA ? 12,300 (1976).
5 B. Kelso, II v. Kirk Brothers Mechanical Contractors, 16 F.3d 1173 (Fed. Cir 1994).
6 34 Fed. Cl. 313 (1995), appeal dismissed, 91 F.3d 165 (1996)
7 William F. Klingensmith, Inc. v. United States, 731 F.2d 805, 808-09 (Fed. Cir. 1984).
8 Green v. General Services Administration, GSBCA No. 12,621, 96-2 BCA ?28,306 (1996).
9 C.D. Murray Co., Inc., ENG BCA No. 5018, 89-1 BCA ? 21,275, at 107,291 (Government's burden, where seeking liquidated damages, to demonstrate relative effects of its delays as compared to contractor's). See also Finke, The Burden of Proof in Government Contract Schedule Delay Claims, 22 Pub. Cont. L.J. 125, 154-57 (1992).
10 Commerce International Co. v. United States, 167 Ct. Cl. 529, 338 F.2d 81 (1964). The history of this rule is further discussed in James, Concurrency and Apportioning Liability and Damages in Public Contract Adjudications, 20 Pub. Cont. L.J. 490, 498-503(1991).
11 C.E.R., Inc., ASBCA No. 42,767, 96-1 BCA ? 28,029 (1995).
12 John Driggs Co., ENG BCA Nos. 4926, 5061 and 5081, 87-2 BCA ? 19,833 (1987).
13 MCI Constructors, Inc., D.C.C.A.B. No. D-924, 1996 Westlaw 331212 (1996).
14 Bechtel Environmental, Inc., ENG BCA Nos. 6137, 6166, 1996 Eng. BCA LEXIS 24
15 Bechtel Environmental, supra. See, Utley-James, Inc., GSBCA No. 5370, 85-1 BCA ? 17,816, and the discussion of this issue in Wickwire, Hurlbut & Lerman, Use of Critical Path Method Techniques in Contract Claims: Issues and Developments, 1984 to 1988, 18 Pub. Cont. L.J. 338,381 (1989).