NAVIGANT.. Construction ForunY Building on che lessons learned in construction dispute avoidance and resolution: Concurrent Delay - The Owner's Newest Defense’ James G. Zack, Jr., CCM, CFCC, FAACEI, FRICS, PMP? Emily R. Federico, PSP® ABSTRACT - When owners impose liquidated damages at the end of a delayed project contractors often respond with allegations of concurrent delay. That is, contractors argue that some or all of the project delay was actually caused either by the owner or an external force, concurrent with the contractor's delays, and therefore liquidated damages should be forgiven or excused. As owners generally do not impose liquidated damages until the end of the project, frequently a contractor's claim of concurrent delay is not submitted until the project is complete. This paper explores mechanisms, based on recent court ‘concurrent delay defense" rulings that owners employ to defeat a contractor's Introduction This paper explores the issue of how concurrent delay is commonly used by contractors to defend against the imposition of liquidated damages when a project is completed late. Further, the paper examines two recent court decisions which serve to remind The opinions and information provided herein are provided with the understanding that the opinions and information are general in nature, do not relate to any specific project or matter and do not necessarily reflect the official policy or position of Navigant Consulting, Inc. Because each project and matter is unique and professionals may differ in their opinions, the information presented herein should not be construed as being relevant or true for any individual project or matter. Navigant Consulting, Inc. makes no representations or warranties, expressed or implied, and is not responsible for the reader's use of, or reliance upon, this paper, nor any decisions made based on this paper. 2 Executive Director, Navigant Construction Forum™, “The industry's resource for thought leadership and best practices on avoidance and resolution of project disputes globally”, based in Irvine, CA. » Associate Director, Navigant Consulting, Inc,, Fairfield, CT. ‘Navigant Consulting, Inc. - 2011 Page 1NAVIGANT.. Construction ForunY Building on che lessons learned in construction dispute avoidance and resolution: owners that legal defenses can be employed to overcome allegations of concurrent delay, if those allegations are raised, for the first time, at the end of a project after the owner imposes liquidate damages due to late completion. What is “Concurrent Delay’ The term “concurrent delay” has numerous definitions in the construction industry, in general, and in the scheduling profession, more specifically. AACE's definition of this term, as contained in Recommended Practice 10S-90, is quite lengthy, and is as follows: “CONCURRENT DELAY (1) Two or more delays that take place or overlap during the same period, either of which occurring alone would have affected the ultimate completion date... 2) Concurrent delays occur when there are two or more independent causes of delay during the same time period. The “same” time period from which concurrency is measured, however, is not always literally within the exact period of time. For delays to be considered concurrent, most courts do not require that the period of concurrent delay precisely match. The period of “concurrency” of the delays can be related by circumstances, even though the circumstances may not have occurred during exactly the same time period. (3) True concurrent delay is the occurrence of two or more delay events at the same time, one an employer risk event, the other a contractor risk event and the effects of which are felt at the same time. The term ‘concurrent delay’ is often used to describe the situation where two or more delay events arise at different times, but the effects of them are felt (in whole or in part) at the same time... ‘Navigant Consulting, Inc. - 2011 Page 2NAVIGANT.. Construction ForunY Building on che lessons learned in construction dispute avoidance and resolution: (4) Concurrent delay occurs when both the owner and contractor delay the project or when either party delays the project during an excusable but non-compensable delay (e.g, abnormal weather). The delays need not occur simultaneously but can be on two parallel critical path chains..."* The “Doctrine of Concurrent Delay’ One in depth article on the issue of concurrent delay examined the origins of the doctrine of concurrent delay. The authors summarized the history of concurrent delay as follows: _..it is evident that the modern doctrine of concurrent delay is premised not on the equitable resolution of construction delays, but is instead based on past litigants’ failure or inability to effectively prove their cases and the older courts’ hostility toward liquidated damages ... Over time, these factors merged and evolved into the legal doctrine of ‘concurrent delay.” After several years, the later courts stopped delving into the ‘real’ analyses of these early courts, and instead rotely applied these early courts’ resolutions of concurrent delay as a ‘rule’ for resolving. all overlapping, construction delays.”* The legal concept of concurrent delay is not new. Perhaps the first case in the United States addressing the issue of concurrent delay is Stewart v. Keteltas® an 1867 case in which a New York court ruled on a claim for late completion damages by noting that while the contractor completed the project late, some of the delay was caused by other contractors, employed separately by the owner, working on the same building. The * Recommended Practice No, 108.90, Cost Enginecring Terminology, AACE Intemational, Morgantown, W.V., Rev, December 13, 2011. Pages 19 - 20. (Footnotes omitted.) * Bidgood, James K., Steven L. Reed, and James B. Taylor, Cutting the Knot on Concurrent Delay, Construction Briefings No, 2007-02, Thomson/West, February, 2008, © 36 N.Y. 388, 1867 WL 6457 (1867), 2 Transe. App. 288 (1867). ‘Navigant Consulting, Inc. - 2011 Page 3