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Delay Claims in Road Construction: Best Practices for a Standard Delay Claims
Management System

Article  in  Journal of Legal Affairs and Dispute Resolution in Engineering and Construction · March 2016
DOI: 10.1061/(ASCE)LA.1943-4170.0000186

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 Forum

Delay Claims in Road Construction: Best Practices for

a Standard Delay Claims Management System
Mohammed S. Hashem M. Mehany, Ph.D., M.ASCE covers delay overhead costs, standby equipment, or some measure
Assistant Professor, Dept. of Technology and Construction Management, for delay compensability [TXDOT specifications (TXDOT 2004);
Missouri State Univ., Springfield, MO 65897 (corresponding author). MODOT specification (MODOT 2011)]. However, most DOT spec-
E-mial: [email protected] ifications are missing at least one, if not several important factors to
mitigate delay claims. For example, in the CDOT specification book,
Downloaded from ascelibrary.org by Colorado State Univ Lbrs on 09/07/16. Copyright ASCE. For personal use only; all rights reserved.

Neil Grigg, Ph.D., M.ASCE there is no standard method for delay claim analysis. As a result, this
puts delay analysis in a vulnerable situation that is subjected to
Professor, Dept. of Civil Engineering, Colorado State Univ., Fort Collins,
manipulation by using different schedule analysis techniques. When
CO 80523.
there are no clear standards in the contract specifications, one party
can manipulate the delay claims by using an advantageous delay
Forum papers are thought-provoking opinion pieces or essays analysis method to attain the most compensation for any arising de-
founded in fact, sometimes containing speculation, on a civil lay claim during the project (Hashem et al. 2015a, b).
engineering topic of general interest and relevance to the reader- A standardized delay claim management system should detect
ship of the journal. The views expressed in this Forum article do and document delays as soon as they happen. This requires a stand-
not necessarily reflect the views of ASCE or the Editorial Board of ardized process for owners and contractors with guidelines,
the journal. limitations, and obligations. This process should include the fol-
lowing main components listed below and represented in Fig. 1:
DOI: 10.1061/(ASCE)LA.1943-4170.0000186 • Outline scheduling specifications;
• Establish schedule evaluation standards;
• Define weather and unanticipated weather conditions;
Introduction • Identify a standard method for schedule delay analysis;
• Identify the requirements and inputs for this method;
Delay-caused claims are a major cause of cost overruns in infra-
• Address the float issues within the construction project sche-
structure projects, and providing management systems to control
dule, and specifically the float ownership and consumption
them are essential for cost control. By strengthening standards
privileges; and
and best practices for contracting and construction management,
• Document costs and schedule impacts associated with delays.
these claims can be reduced and infrastructure funds can be used
more productively. This paper presents a deducted discussion and
conclusions of a study for road construction projects managed by Outlines of Scheduling Specifications and Evaluation
the Colorado Department of Transportation (CDOT) with the goal Standards
to identify best practices and effective guidelines to control delay-
caused claims. The topics addressed include specifications, evalu- One of the main additions of this research is the first two main com-
ation of scheduling, weather conditions, schedule delay analysis, ponents represented in the scheduling specifications and evaluation
float issues, and documentation. The paper is contingent on pre- standards. These two components reinforce the right scheduling
vious work to identify delay causes and best management practices process as an inseparable part of the specifications and conse-
(Hashem et al. 2015a; Hashem and Mehany 2014) that were based quently, as part of the contract. Schedule specifications can be out-
on large data sets of projects (780 projects), claims (213 claims), lined as follows:
and a case study. On the basis of this past work, the paper intro- 1. The general contractor (GC) shall include and actively involve
duces a deducted comprehensive system for delay-claims manage- all the subcontractors and other stakeholders in schedule de-
ment to include in a DOT specification book and to strengthen velopment before and after submission of the original contract;
contractual procedures for infrastructure and specifically road proj- 2. Any physical access and availability restraints shall be incor-
ects. The datasets and case study reported previously serve as proof porated into the project schedule;
for the potential of this management system, and set the stage for 3. Any change orders that include additional work or other ac-
research to test the system in future projects that in turn, should tivities that can be perceived as a delay shall be included in the
validate this system efficiency after its use. schedule, and inclusion of this change order shall not be de-
pendent on reaching a cost agreement;
4. A schedule update for a change shall not wait for the official
Delay Claim Management System and Best approval if the project engineer (PE) who already signed for
Practices the change or verbally ordered the contractor to carry on with
the change;
Although guidelines are found in specification books for state de- 5. Resources including materials, owner-furnished equipment
partments of transportation (DOTs), they normally do not contain and labor should be included and incorporated as restricting
specific management systems for delay-based claims. For example, constraints on the project schedule to ensure a logical, depend-
Section 108 of the CDOT specification book addresses schedule able sequence when the schedule is carried out through the
guidelines under “Prosecution and Progress” but does not address project execution;
delay claims issues such as weather, floats, schedule evaluation, 6. All preconstruction activities including approval of shop
and others (CDOT 2011). Some DOTs might have more details that drawings and all material and contractual submittals as well

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Downloaded from ascelibrary.org by Colorado State Univ Lbrs on 09/07/16. Copyright ASCE. For personal use only; all rights reserved.

Fig. 1. Main components of the delay claims management systems

as testing durations should be included in the project schedule 1. In AP versus AB: Overestimating the duration of the delay
and treated as other activities in terms of updates and control of considering it is all from one party and failing to address the
the schedule; concurrent delays;
7. There shall be no limits on project schedule activities, which 2. In IAP: Failure to address the concurrent delays;
should address all levels of detail required by the project scope 3. In CAB: Basing the CPM network on as-built information that
of work; can be tweaked and manipulated to predisposed conclusion;
8. The contractor shall develop a summary schedule, updated on 4. In window analysis, despite its superiority over the above
a biweekly basis, or according to the project duration and mentioned techniques
phases; • The as-built schedule with its after-the-fact nature may be
9. All updated schedules and their narratives should be submitted subjected to errors and omissions that hinder accurate delay
prior to the project or the scheduling meeting, so that they can analysis;
be discussed during those meetings; • The window span being in the form of weeks or months, the
10. Rapid change orders authorized by the PE should be on the focus is on the critical paths that exist at the end of the win-
highest priority list and reflected on the schedule as soon as the dow time. Thus, the technique does not consider the fluctua-
PE approves it; and tions that occur in the critical paths as events evolve on site;
11. Neither party should modify the scheduling network logic other • As a consequence of the previous point, the technique loses
than as needed, unless agreed on or authorized by the owner. sensitivity to the time at which the owner/contractor causes
project delays within the window. Also, it loses sensitivity to
the events of speeding or slowdowns within the window; and
Schedule Delay Analysis Standards Method • The delay representation of existing software systems makes
Schedule analysis is the process of evaluating schedules by evalu- the application and automation of the windows technique a
ating the magnitude, impact and significance of the variation difficult task.
between the baseline and operating schedules along with quantify- Although the TIA is time-consuming, it is one of the most
ing the effect of delays impacts on a project schedule (Majerowicz accurate and comprehensive schedule delay analysis methods
2001; Arcuri and Hildreth 2007; Henschel and Hildreth 2007). (Hashem et al. 2015b). TIA is forward-looking and proactive be-
After evaluating several methods, the time impact analysis (TIA) cause it analyzes impacts of delays chronologically and can deal
procedure was recommended for use. The TIA method was se- with concurrent impacts within a window option (Calvey et al.
lected over several variations of some of the most well-known 2007). Also, the TIA method can be simplified and used effectively
methods like as-planned versus as-built (AP versus AB), impacted at the lowest levels possible. Even though it is time consuming, it is
as-planned (IAP), collapsed as-built (CAB) and schedule window not sophisticated as other complex computerized processes like
analysis. The main reason was that the TIA method avoids several cyclic modeling techniques. The TIA method is recommended
drawbacks in these methods such as the highlighted areas as in the but other proactive techniques can be used if the requirements and
following list (Alkass et al. 1995; Stumpf 2000; Trauner et al. 2009; inputs for the adopted technique can be clearly identified for the
Hegazy and Zhang 2005): different stakeholders.

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J. Leg. Aff. Dispute Resolut. Eng. Constr., 2016, 8(3): 02516001

 Requirements and Inputs for TIA Application (USACE 1991). The guideline uses the National Oceanic and
Atmospheric Administration (NOAA) data to identify adverse
Any scheduling analysis method has to have certain defined inputs
weather where the precipitation equals or exceeds 10 in. in a single
in order to be implemented. The TIA is a contemporaneous analysis
and it should capture the impact as soon as it happens and predict a day, the high temperature is 35° Fahrenheit or below, or the adverse
forensic change in the schedule based on that impact. It uses the weather prevented the contractor from working on critical activities
critical path method (CPM) or CPM-based scheduling analysis for 50% or more of the workday beyond his control (USACE 1991).
and requires a CPM schedule to show the calculations and differ- Most of the weather issues can be summarized in the following:
ences between an as-planned (AP) schedule and the impacted • The contractor has the obligation to study the weather history
schedule. It is based on the assumption that the most recent AP of the project site according to a reference that is agreed upon
schedule is updated to the last moment before the analysis. The from the owner’s side (e.g., NOAA) and also according to the
requirements can be summarized as follows: specification book’s weather limitations for different types of
1. The contractor and the PE should use a CPM-based schedule in work;
planning and scheduling the project; • The contractor has to provide the results of that study to the
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2. The contractor should update the schedule in a timely manner to owner and report its inclusion in the calendar days of the sub-
assure that if a delay occurs, the TIA will use the timeliest and mitted schedule that reflects those anticipated weather conditions;
most recent schedule. The contractor has to provide updated • The owner has to review and approve this as part of the schedule
schedules to the PE; submitted and include it in the work control plan to monitor
3. In the case of a delay, the contractor must implement a TIA those conditions;
immediately to assess it and take advantage of the proactive • Any unanticipated weather conditions that happen in excess
approach. The contractor must report the results of the TIA to of the durations that were accounted for in the original
the PE; schedule will be considered an excusable, noncompensable
4. For the Updated Schedule: delay; and
• Initial update is necessary if any changes or adjustments • In the case that one of the parties (owner or contractor) is re-
were made between the notice to proceed (NTP) and sche- sponsible for pushing the project into unanticipated weather
dule final approval; conditions based on their previous delays, then the compensa-
• Frequency of schedule updating should be on weekly basis bility of this weather delay has to be reviewed accordingly.
or in case of any major events;
• Obligatory joint update meetings should be incorporated in Float Issues, Ownership, and Privileges
the project weekly meetings along with other scheduling
issues so all parties are on the same page regarding the Float issues can be a very important parameter in scheduling analy-
schedule and the construction productivity pace; and sis and claims. The cost and schedule claims are affected by the
• SWOT analysis can be incorporated in the cases where the float ownership, the float allocation, and consumption privileges
project is behind schedule in order to exploit opportunities in (Sakka and Sayegh 2007). This is specific to each project or entity
the work sequence to get back on schedule and fix much of (e.g., CDOT) where the two parties have to agree contractually on
the threats to fall further behind and mitigate the negative the float ownership limitations so when a delay occurs, the float
impacts. consumption effect is already evaluated before evaluating the im-
5. An impact analysis meeting should be beneficial for both parties pact of the delay within the schedule. This section will summarize
to communicate information. This is not only helpful to take the the float issues by stating its types, and several ownership and
necessary measures to account for the upcoming claim, but also allocation scenarios where both parties can agree during the con-
to forecast and plan for future impacts and benefit from oppor- tracting time before the construction work starts, and then the sched-
tunities to cut on schedule or budget; and ule updates, delays, and impacts should be handled accordingly.
6. The TIA should include all the time and cost records to support The two major types of a schedule float are the total and free
the CPM analysis. float. In addition, other floats can be defined as in the following:
• Total float (TF) defines the maximum amount of time an activity
can be delayed without delaying the whole project duration,
Weather Issues while the
The weather conditions includes rain, snow, wind, and low or high • Free float (FF) defines the maximum amount of time an activity
temperatures that limit the construction process, slow it down, or can be delayed without delaying its immediate successors;
shut down and completely stop the work. For a dependable original • Negative float: In cases where the completion date will be later
AP schedule that should be used for future updates and time delay than the planned completion date. This means there is less time
impacts, the schedule had to include any foreseen weather condi- to finish the project than required; as a result the negative float
tions. This obligates the contractor to review historical weather data exists during the updating process; and
according to the project’s geographical location and determine the • Independent float: Similar to the FF. However, the previous ac-
anticipated weather conditions that should be included and planned tivity can be completed at its latest time where the minimum
for as part of the schedule. Any other unanticipated delays because amount of time available to complete the activity is greater than
of unforeseen weather conditions after these agreed-upon durations the duration of the activity itself, this time in excess is named an
can be considered excusable delays. independent float.
The definition of anticipated severe weather conditions should The float allocation scenarios can be different. Therefore, there is
be defined in general according to the weather severity. Most speci- no single best practice and it should be handled on a project by
fication books (e.g., CDOT 2011) specify only weather limitations project basis, but should not change within the project itself during
per type of work (e.g., concrete placement, landscape, etc.), but the construction process. The favored methods that can be used in the
there are no specifics that generally define adverse weather days. industry are described as in the following (Wickwire et al. 2003):
A good, simple, and usable major guidelines is the U.S. Army 1. The float belongs to the project and is available to the project
Corps of Engineers major guidelines on severe weather conditions parties on the basis that each party acts in good faith;

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 2. Simplified method of float allocation to individual activities Cost Documentation
along each path according to the equation, Float Allocated = The contractor should keep and maintain daily, detailed cost re-
Duration of activity/Total duration of activity path × TF on the cords. Among several categories of cost records, some of the most
path; and important are as follows:
3. Target or conditional dates method using software, where con- • The contractor has to clearly specify his budgeted labor burden
ditions like not earlier than, must start no later than, or must in the procurement stages along with submitting a cost break-
finish, can be used to impose limitations of the float usage on down structure (CBS) for the different activities in the pro-
activities between different project phases or between different ject scope;
subcontractors. • General daily production logs have to be maintained to empha-
Neither the contractor nor the owner should be allowed to use size the dollar values of the average daily work done;
the float suppression techniques, such as applying specific lags for • Labor wages and wage escalation issues have to be addressed in
logic constraints, extended buffer in activity times, or made up im- the contractual stage and monitored through the records;
posed dates, other than the factual constraints that are naturally re- • Material escalation issues have to be addressed in the contrac-
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quired under the scope of work related to the contract. Any use of tual stage and monitored through the records;
the previously mentioned float suppression techniques can be a • All equipment operation and idle costs have to be kept in an
cause for project schedule rejection. hourly records basis;
• All general conditions predetermined and submitted for ap-
proval by the owner have to be kept on a daily record basis
Delay Claim Documentation to track down any changes in costs;
Documentation is the backbone of any project whether it is related • The original budget has to be established and approved, then
to delays, costs, submittals, inspections, or any related item to the updated with any impacts in the same manner the as-planned
activities of the scope of work required to deliver the project. This is schedule is updated as previously mentioned in the “Schedule
because all of the monitoring and control processes use the project Documentation” section; and
documentation as a tool during the project. It is yet more important • All change orders, estimates, purchase orders, payroll records,
when it comes to delays and its compensations in a claim manage- and wage agreements with labor trades have to be kept on records.
ment system. The documentation related to the delay claims can be
divided into two dependent components: scheduling documenta-
tions and cost documentations. This section will address several Summary/Conclusion
guidelines and best practices that have to be maintained in order
to achieve detailed, accurate records that can serve as a solid The major benefit of a standard delay claim management system is
basis and foundation for delay claims that are acceptable and fair the reduction of ambiguity within the contractual period, which will
to both parties. in turn eliminate and mitigate claims and disputes and allow the
rapid and proactive resolution of claims at the lowest levels. Also,
Schedule Documentation it can eliminate the opportunity for manipulation that occurs when
The schedule documentation has to address several procedures and different claim analysis methods are used to gain advantage in a
guidelines as in the following: claim scenario during or after the project execution phases. The
• The contractor narrative attached to each schedule update must implementation of the seven main system components discussed
include all the details necessary, including but not limited to the earlier can foster a fundamentally sound, strong, and proactive de-
impacts on the schedule in terms of the immediate tasks of the lay claim management system. It can also yield continuing benefits
delay along with the impact of the total project, the reasons for in the construction management process from the preconstruction
the schedule variations, resources reallocation, critical path phase to project closing.
changes, and any other consequence related to the delay impacts Outlining the scheduling specification and evaluation standards
during the update; can encourage the parties not to rush preconstruction activities to
• Daily records should be kept in a way that a factual reconstruc- achieve unrealistic start dates. This obliges the contractor to submit
tion of the schedule can be observed from these records if a realistic schedule and the owner or his representative to give the
needed; contractor a more complete informative and sufficient set of plans
• The master summary schedule should be preserved and updated and specifications. Although this is sometimes difficult in heavy
so it can be used in periodic project meetings to represent the civil and public projects, it is a step forward to encourage a more
overall status of the project; accommodating and collaborative preconstruction environment.
• Documentation of any construction equipment usage hours This system can also encourage contractors to pay more atten-
and its idle time along with the reasons for those idle tion to detailed project studies such as site conditions and weather
times; issues that might affect their schedules instead of relying on dis-
• Documentation of any verbal or written change that have any putes and claims during the project based on ambiguous weather
effect on the schedule; clauses in the contract.
• Very accurate documentation of the daily weather conditions; This system can be an encouraging tool for better communica-
• Documentation of all inspections and testing and its duration tion because schedule communication and project status under this
specifics if the inspections caused any delay or disruption system have to be periodically reviewed and discussed frequently
time; and and on time. It also requires the contractors to update impacts in
• Record of percentage work per every active work item to real time and inform the owner that promote a healthy and proactive
account for the daily productivity for each work item and problem solving environment for the project stakeholders and saves
work crew. This is very important in case of disruptions costly after-the-fact solutions.
that causes lost productivity. It can also be used to monitor Finally, it is an effective set of practices and standards for docu-
the contractor productivity with reference to the industry mentation control and record keeping. These best standards can as-
average. sure the ability of a delay claim management system to document

© ASCE 02516001-4 J. Leg. Aff. Dispute Resolut. Eng. Constr.

J. Leg. Aff. Dispute Resolut. Eng. Constr., 2016, 8(3): 02516001

 the cost and schedule impact in the most efficient proactive manner. transportation projects.” J. Legal Affairs Dispute Resolut. Eng. Constr.,
Thus, enables the project control personnel to use current informa- 10.1061/(ASCE)LA.1943-4170.0000162, 04514006.
tion to update their schedules and act proactively to get their proj- Hashem, M., Mehany, M., and Grigg, N. (2015b). “Standardization of
ects back on track. This paper has laid the foundation for the best highway construction delay claim analysis—A highway bridge case
study.” J. Transp. Manage., in press.
practices and standards for a delay claim management system that
Hegazy, T., and Zhang, K. (2005). “Daily windows delay analysis.”
should create and encourage a healthy collaborative and proactive J. Constr. Eng. Manage., 10.1061/(ASCE)0733-9364(2005)131:5(505),
effort for the parties involved to resolve claims and avoid project 505–512.
disputes. Future research efforts are ongoing to use this system in Henschel, B. A., and Hildreth, J. C. (2007). “Schedule impact analysis
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based on a quantitative data. Blacksburg, VA.
Majerowicz, W. (2001). “Schedule analysis techniques.” 13th Annual Int.
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