Time Related: Construction Claims Part 3
When it comes to construction projects, everyone involved with the job wants to see it completed on time and within budget. However, not everything goes smoothly during construction. Sometimes during a project, you may begin to see “delays in performance”.
A project not being complete on time is a common issue that project owners and contractors will face. As part of a blog series, we’ve been discussing the three major problems that come up in construction claim disputes. The main three issues are:
- Differing site conditions
- Deviation from original plans
- Time-related issues
For the third part of our series, we’re going to dive into time related construction issues. Let’s get started!
Time Related Construction Claim Issues
The success or failure of a construction project largely depends on if the work schedule is followed. When there are delays in a project, it can have a negative impact on a lot of people involved in the process. Project delays can financially cost the owner more money than they intended. Delays can cause increased cost of labor, material, and equipment that would otherwise not be needed if the work was completed on time. This issue generally leads to disputes, mechanic liens, surety bond claims, and other legal actions to try and resolve the issue, which no one wants to be a part of.
One way that contractors have been able to help mitigate project delays is with the use of CPM technology, but what exactly is that?
The Critical Path Method
The Critical Path Method (CPM) is a significant tool in planning and management of various types of construction projects. Basically, it represents a project’s plan through a network of actions in sequence that will be required by all parties involved in the project to produce the most efficient way to build the project. It allows for comparison and evaluation of construction methods, alternative work sequences, and various types of equipment.
As the project progresses, the CPM technology supplies the owner and contractors with accurate information on consequences of each delay or plan deviation so that the parties can correct the issue and get back on track.
Brief History of CPM
CPM has a rich history within the industry, even dating back to ancient Egypt. Records show that project management tools can be traced back over 5,000 years ago to the Great Pyramid of Giza. The pyramid was constructed using over two million blocks of stone, and required complex planning, organization and collaboration to install precisely in place. Egyptian records of that time indicate that thousands of skilled workers were methodically assembled into four construction teams, one for each face of the pyramid.
As technology evolved, so did our planning strategies. In 1956, CPM had officially been designed by the DuPont Chemical Company to help manage scheduling maintenance shutdowns and find optimal times to cut down costs. The CPM method ended up saving the company over a million dollars their first year.
Another method was designed called PERT, which stood for Program Evaluation and Review Technique. This program was used during the construction of the Polaris Submarine Missile. PERT was used to help the US Navy collaborate with multiple sectors, such as research firms, academia, and others located in various parts of the country. Unlike DuPont’s CPM program, PERT was used to show time restraints and cut down time instead of costs. The program ended up being credited for shaving two years off of development time for the missile.
Since then, these programs have taken off and have helped multiple industries, including construction, to find ways to shave off time and costs in projects. Of course delays can still happen, which is why some owners and contractors will include clauses in their contracts. What do these clauses look like?
Important Clauses to Remember
Since delays can be almost inevitable, depending on the size of the project, you’ll probably run into some clauses with different contractors and owners that will state who will be financially responsible for these issues. The first of these clauses is the “Time is of the Essence” clause.
The “Time is of the Essence” clause states that a specific time or date is important in completing the project. An owner will use this clause as a way to ensure contractors perform the job on time, and that any unanticipated costs or expenses required to maintain the schedule will be borne solely by the contractor. Contractors can also use this clause with subcontractors to ensure that they perform their duties in a timely and orderly manner.
Another clause that’s used frequently during the construction process is the “No Damage for Delay” clause. This clause allows project owners to avoid claims for delays and other time-related issues. Instead, contractors can be provided with time extensions to get the job done, but the owners won’t be held financially responsible for any delays that occur during the construction project.
When working on a construction project, it’s important to look through your contract and take note of any clauses that may appear. If so, you’ll want to read thoroughly and make sure you understand what you’ll be held responsible for, and how long you have to work on the project.
Working with project owners and contractors on a project can be a simple task, or a massive issue depending on how effective you are at time management. The construction project schedule serves several purposes for everyone involved in the job and provides solutions. It plans the progression of the work, helps utilize progress payments for work done, determines delays on your project and much more. Using these tools allows for work to be done more efficiently and with fewer errors.