Defects and deficiencies in plans, specifications and other contract documents are current common causes of construction delay. When the issue of delay and bidding documents problems are connected, it is common for the design professional to become defensive about the design components. It (sometimes) results in "finger-pointing" and, in some instances, decision paralysis. It is important to find delay and its eventual causation is discovered as early as possible and that its consequences be terminated as soon as reasonably practicable. In the course of time a public entity and its knowledgeable employees will recognize that a defect and deficiency in the bidding documentation is going to be construed against the public entity and in favor of the contractor. Delays associated with design problems are typically compensable and are usually recognized as such by well trained public entity employees. The public entity involved must become directly and actively involved in the management of claims related to design error to facilitate early resolution of the problem and prevent wholly unnecessary delays to the work.
The public investment of time and resources expended on employee education, training and experience is wise and particularly productive in circumstances described herein. When the contractor's work is delayed for causes attributable to the public entity (e.g., a design defect or differing site condition), the public entity should take reasonable steps to minimize the contractor's losses resulting from non-productive "standby." When a delay event occurs suddenly and is of uncertain duration -- thus placing the contractor on standby -- it is presumed that he is unable to obtain replacement work to absorb his overhead expenses that accrue during the delay period. Thus, the public entity could incur substantial damages for each day the contractor is forced to stand by, awaiting resolution of the delay event. The ultimate savings enures to the public fisc.
There are several things a public entity may do to minimize the standby costs resulting from delays for which it is responsible. If the delay circumstance affects the whole project and is likely to require an extended period to resolve, the public entity should consider issuing a stop work order for a specific time period, thus allowing the contractor to demobilize from the site and perform other work during the delay period. The public entity will be responsible for the contractor's demobilization and remobilization costs, but may be able to reduce its exposure to delay damages if the contractor is able to perform "replacement work" during the suspension period.
Alternatively, and if the delay circumstance does not affect the entire project, the public entity should facilitate the contractor's performance of productive work in other areas at the site. Also, the public entity should grant the contractor a reasonable extension of the contract completion date, to avoid the potential for an additional claim for constructive acceleration costs (discussed below). The public entity should recognize that, on a typical public works project, the contractor is entitled to perform the work at the least cost to himself. Thus, if an owner-caused delay prevents the contractor from performing the work as he originally planned, the public entity may incur delay damages even if other work may be performed at the site.
In order to quantify a contractor's delay damages, make a comparison of his actual (as-built) schedule to his original (as-planned) schedule to define the duration of the delay attributable to the public entity. It will be helpful to know how the contractor planned to perform the work. For that reason, the contract should include a requirement that the contractor submit a schedule, to be approved by the owner, before work begins. The contractor's schedule may not need to be a detailed CPM; however, it should identify to the major work activities, the expected duration of each, and the contractor's planned sequence of the work. Depending upon the nature of the contract, it could be beneficial to require the contractor to identify anticipated completion dates for major contract milestones.
There are various other considerations for those involved. The persons responsible should look at other aspects of causation and the impact of delays. A contractor's recovery for delay damages may be affected to the extent that the owner-caused delay is concurrent with an additional and independent delay (affecting the critical path) which was not caused by the owner, e.g., weather delay or contractor-caused delay. Thus it is, that the identification and quantification of all factors affecting project completion may enable the public entity to reduce its exposure to delay damages. A reasonably short period after a damaging delay event happens, the well-positioned owner and contractor, with knowledge and confidence, should be able to work out their differences, if any, and overcome the problems with progress toward completion.