Dealing with delay claims:

a survey
S Scott
A survey was conducted in which interviews were
carried out with contractors and supervising engineers
to identify the extent to which claims for delay occur on
major contracts, and also to discover how such claims
are prepared and assessed. It appears from the survey
that claims for extensions of time occur on the majority
of major civil-engineering contracts, although acceleration
claims occur much less frequently. The main part of the
survey addressed the means by which contractors attempt
to justify their claims, and the methods of assessment
of these claims used by supervising engineers. This was
approached in a number of ways, and the paper presents
conclusions concerning attitudes towards such claims,
and also the mechanisms which are used to prepare and
evaluate them.
Keywords: delay claims, extensions of time, critical-path
method
Claims are generally considered to be an inevitable
feature of major projects that has to be dealt with on the
majority of contracts let. The project designer's accepted
inability to provide fully for all eventualities means that
changes are made to the contract as it proceeds, and,
where these involve additional work, adjusted payments
are necessary. Disagreements on the level of these pay-
ments are a typical source of claims. As well as causing
changes to the payments made, these variations
also often result in delays to the works. Where these
delays have a knock-on effect on the project as a whole,
they may give rise to extra costs resulting from the
contractor's prolonged presence on site, whereby he/
she incurs additional overhead costs for the extended
period. Not all delays stem from such changes, and it is
generally recognized that delays may be attributed to the
employer/owner, to the contractor, or to neither party.
The contract normally specifies a predetermined time
after which it must be substantially completed and avail-
able for use. In the absence of delays, failure to complete
substantially within this timeframe often means that
liquidated damages are deducted from the contractor.
These are at the level defined in the contract, and are
payable for the period by which the whole project is
delayed. Such damages should aim to compensate the
employer/owner for any lost profits or lost benefits stem-
ming from his/her inability to make use of the project at
the agreed date. Clearly, where delays have occurred dur-
ing the project which can be attributed to the employer/
owner and have delayed the contractor, these should be
taken into account before such damages are deducted.
The opportunities available in many contract conditions
to recognize a contractor' s right to have the time for the
completion of the contract extended reflect this accep-
tance of the more likely state of affairs.
By no means all of the changes to a contract delay the
project. Some involve changes in detail that merely affect
the nature of the work to be done without increasing its
difficulty, requirement for resources or duration. Other
changes actually reduce the work to be carried out. There
are typically, however, changes that do delay, increase
the duration of, or force a change in the sequence of, the
activities that make up the contractor' s programme. The
impact of such amendments on the total project time
cannot be easily predicted at the time at which the events
occur, and consideration must also be given to delays for
which the employer/owner is not responsible.
Delays to parts of the contractor's programme (which
may not necessarily cause delays in the project as a whole,
simply using up available float time) are most helpfully
categorized as those for which
the employer/owner or his/her supervising engineer is
responsible (E),
the contractor is responsible (C),
neither party to the contract is responsible (N).
Department of Civil Engineering, Cassie Building, University of
Newcastle upon Tyne, Newcastle upon Tyne NEI 7RU, UK
In the US literature, these are usually called compensable
(E), nonexcusable (C) and excusable (N), and some of
Vol 11 No 3 August 1993 0263-7863/93/030143-11 1993 Butterworth-Heinemann Ltd 143
Dealing with delay claims: a survey
the main reasons for del ay encount ered under these
subdivisions are, respectively,
changes to the contract document s, failure to provi de
land or information wi t hi n a reasonabl e time, and
failure to approve the cont r act or ' s met hod of worki ng
expeditiously,
inadequate supervision and technical support , late
agreements with subcontractors/suppliers, insufficient
labour/plant,
strikes, riots and exceptional adverse weather.
There appears to be a general consensus as to the rights
to additional time and payment for such delays (where
warranted) in all the cont ract forms encount ered by the
author. These are as follows:
Del ay type E: Award: ext ensi on of time plus ext ended
overhead costs.
Del ay type C: Award: no compensat i on.
Del ay type N: Award: extension of time wi t hout
extended overhead costs.
It should be stressed t hat it is dangerous t o generalize
on cont ract ual matters. For any part i cul ar cont ract , it
is the actual conditions used t hat must be consul t ed to
ascertain the liability for the delays. However, provi di ng
this is underst ood, this met hod of representing the
situation is a useful one.
A realistic delay-claim scenario on a complex project
may well cont ai n a number of delays of each of
these three types, affecting different activities in the
programme at different times. It is also quite likely t hat
a request for an extension of the cont ract time for
completion may be made part of the way t hr ough the
contract. Where the cont r act or has al ready requested
such an extension, and this has been t urned down, he/she
may now say that, as a result of this, he/she is havi ng t o
accelerate to complete on time. The supervising engineer
must consider the cont ract or' s claim in all its complexity,
and, depending on the t ype of claim, make a decision as
to whether an extension of the cont ract time shoul d be
given, or whether the cont r act or has had to accelerate,
and should be recompensed for any addi t i onal costs.
These are particularly difficult si t uat i ons to comprehend
fully and to make j udgment s on, and, in the UK in
particular, there is little gui dance t o assist in the process.
The aim of the survey was to at t empt to underst and how
professionals act ual l y deal with these si t uat i ons in the
absence of such guidance.
MAI N S URVEY
The survey was carried out in organi zat i ons operat i ng
as supervising engineers and cont ract ors on maj or con-
struction projects in the UK. Because of the complexity
of the area studied, it was consi dered to be not feasible
to use a mai l shot approach, and, instead, interviews were
held t hat were based on questionnaires. The question-
naires were piloted by carryi ng out interviews prior to
the mai n survey, and were edited to t ake account of the
findings from these interviews. Two questionnaires were
used: one for the supervising engineers, and one for the
contractors. In some questions, the responses were further
subdi vi ded i nt o the supervising engineer (engineer) and
his/her representative on site (RE), and the cont ract or' s
mai n engineer (agent), and his/her financial assistant
(QS).
The response rate for the mai n survey was 45%, and
this generat ed 22 interviews. Of these, 11 were conducted
with organizations t hat fulfilled the supervising engineer's
role, and 11 with cont ract ors. Some of the companies
appr oached did not respond at all, even after a reminder
was sent out , and one firm replied t hat it would not
become involved as it was its ' . . . policy not to discuss
commerci al mat t ers outside our own organization' .
Despite this viewpoint, which may have been the basis
for a number of nonresponses, those who did take part
did so enthusiastically. The interviews typically t ook 2 h
each to complete, and were conduct ed in the offices and
site hut s of the respondents.
The findings from these interviews clearly relate most
directly to the UK const ruct i on industry, but, because
of the similarities f ound in this area between the contract
condi t i ons used in the UK and those used in other
countries, it is believed t hat t hey have a wider relevance.
It is, however, recognized that more sophisticated systems
for deal i ng with del ay claims exist in the USA, and, for
US readers, it may be interesting to compare the two
approaches.
MAI N F I NDI NGS
For clarity, all the interviews conduct ed with the
quest i onnai re prepared for organi zat i ons fulfilling the
supervising-engineer role (i.e. local authorities and con-
suiting engineers) are referred to as engineer interviews.
Those carried out using the quest i onnai re designed for
cont ract ors are referred to as contractor interviews. The
findings are best considered under the headings (a) delay
claims: frequency of occurrence and award, (b) prep-
arat i on/ assessment of claims.
Delay claims: frequency of occurrence and award
The mai n quest i ons in this section follow a simple
pat t ern. Fi rst , the frequency of the extension of time
claims is addressed; this is t hen followed by questions
to det ermi ne the ext ent of awards for such claims. This
procedure is t hen repeated with acceleration claims.
The quant i t at i ve i nf or mat i on t hat resulted from these
questions is present ed in Table 1, and it is discussed in
detail below.
In trying to identify the frequency with which extension
of time claims are made, it was felt necessary to stipulate
t hat such claims shoul d only be recognized i f t hey are
submitted with supporting evidence. Often, letters are sent
by the cont r act or t hat state t hat an extension of time
may be needed as a result of some delay caused by the
empl oyer or supervising engineer, but t hat never act ual l y
lead to a claim. Instances such as these are not considered
to be real claims, and the use of the phrase ' . . . with
support i ng evidence' was i nt ended to make this clear t o
respondents. To elicit sensible i nformat i on regarding the
frequency of ext ensi on of time claims, two questions
were used. These were as follows:
144 I nt er nat i onal Journal of Project Management
S SCOTT
Ta b l e 1. Delay cl ai ms: f requency of oc c ur r e nc e and a wa r d
Short description of question Average responses
Engineer Cont r act or
Percentage of contracts on which extension-of-time claims wi t h support i ng
evidence are submitted 60 70
On these contracts, average number of extension-of-time claims made Two, may be rolled i nt o One claim, delays lumped
one claim t oget her
Percentage of extension-of-time claims made wi t hout subsequent at t empt
to recover overheads 10% or less Very few
How often extension-of-time claims granted: Time, % Cost, % Time, % Cost, %
In full 13 6 10 0
In part 71 76 70 95
How often are acceleration claims with support i ng evidence presented? Rare 26%
How often are such claims granted? Mor e t han 50% 70%
How frequently, if ever, are liquidated damages deducted? Rare Rare
Please state on what percentage of cont r act s ext ensi on
of time claims with supporting evi dence are submi t t ed.
On these cont ract s, what is t he aver age number of
ext ensi on of time claims made?
For the first question, most responses f r om bot h engineers
and cont r act or s indicated a figure of 50% or mor e, and,
f r om Tabl e 1, it can be seen t hat t he aver age per cent age
was 60% and 70%, respectively. On t he second quest i on,
bot h cont r act or s and engineers said t hat di fferent causes
of del ay were oft en lumped t oget her i nt o one claim,
al t hough the engineers also gave an average figure of t wo
causes of claim per cont ract .
To identify t he frequency wi t h whi ch claims are
paid, t wo quest i ons were again used. The first quest i on
addresses the possibility t hat some ext ensi on of t i me
claims may be submitted without any subsequent at t empt
to recover overheads, t hat is, t hat t he cont r act or request s
an ext ensi on of t i me purel y to del ay t he poi nt at whi ch
l i qui dat ed damages may be deduct ed. Thi s quest i on was
phr ased as follows:
Do you ever submi t claims for ext ensi on of time onl y,
i.e. wi t hout t hen or l at er following up wi t h a cl ai m f or
over head costs?
Responses f r om bot h engineers and cont r act or s were
in agr eement in recordi ng t hat this si t uat i on occurs at
best i nfrequent l y. Cont r act or s al most al ways back up
these claims with a request f or t he cost of financing t he
ext ensi on claimed. Gi ven t hat t he claims general l y
consi st of t wo elements: a claim f or t i me and a cl ai m
f or over head costs, the second quest i on was f r amed t o
i dent i fy t he ext ent t o whi ch these were accept ed. The
quest i on was as follows:
Of t he claims f or ext ensi on of t i me and over head cost s
submi t t ed with suppor t i ng evidence, how of t en are these
grant ed:
t i me cost s
in full
in par t
The average figures quot ed by bot h engi neers and
cont r act or s on this quest i on were fairly consistent. I t
appear s t hat the l i kel i hood t hat all t he cost s cited in such
claims will be pai d is ver y small ( 0- 6%) . The l i kel i hood
t hat all t he time demanded will be awar ded is slightly
higher, but is still onl y in t he r ange 10- 13%. Part i al
payment , or the accept ance of a ri ght t o an extension,
was set much hi gher t han this, wi t h figures of 70- 95%.
It seems t hat most claims t hat are t aken seriously by
the cont r act or and submi t t ed wi t h backup are likely t o
succeed, at least in part .
How oft en are accel er at i on claims wi t h suppor t i ng
evidence present ed?
Thi s quest i on pr oduced a numbe r of comment s, mai nl y
f r om cont r act or s. These were as follows:
' Accel erat i on claims are mai nl y t he resul t of liability
l at er accept ed by t he supervi si ng engi neer' (i.e. an
initial claim f or an ext ensi on of t i me is refused, and
accept ed at a l at er dat e, by whi ch t i me t he cont r act or
has accel erat ed hi s/ her wor k) .
' We don' t vol unt ari l y accelerate even t hough instructed
t o do so by the supervi si ng engi neer ( most cont r act or s
i gnore such i nst ruct i ons) - - we onl y vol unt ar i l y
accel erat e i f it is our own pr obl em' .
' The as-built pr ogr amme is t he accelerated programme;
t he supervising engi neer coul d i nst ruct accel erat i on' .
The onl y comment made in an engi neer' s interview
was t hat it woul d be necessary t o change the name of
the cl ai m t o a di sr upt i on cl ai m f or the supervising
engi neer t o pay it. Ther e appear s t o be some uncer t ai nt y
as t o the gr ound rules f or such claims, and this is
possibly a result of t he fact t hat t hey may be qui t e rare.
Indeed, t hat is what t he maj or i t y of t he engi neers said
in answer t o this quest i on. The cont r act or s' responses
pr oduced a mean val ue of 26%. Coul d t here be some
di sagreement as t o exact l y what const i t ut es an acceler-
at i on claim in the mi nds of supervising engineers and
cont r act or s?
When asked t o say how of t en accel erat i on claims are
grant ed, most r espondent s relied on experi ence of a ver y
few such claims, and some had never been i nvol ved in
one. The general feeling was t hat t hese claims woul d be
grant ed in most cases. One engi neer r espondent said t hat
t he cont r act or woul d not submi t such a claim unless he/
she had a good case. He/ she woul d find some al t ernat i ve
met hod of claiming.
Vol 11 No 3 August 1993 145
Dealing with delay claims: a survey
If the contractor on a project fails to complete within
the original or extended time for completion, the
employer typically has the right to deduct liquidated
damages for each day/week for which the project is late.
Such damages are usually written into a construction
contract, but it is not generally known to what extent
this right is ever invoked. A question put to both
engineers and contractors to determine this information
met with a similar response. The question was as follows.
How frequently, if ever, are liquidated damages deducted?
Some interviewees had never had any experience of
liquidated damages being deducted, but others confirmed
that it did happen, albeit very rarely. In all but one
instance, figures quoted to define the frequency of deduc-
tion were 10% or lower. It is not surprising, then, that
some sections of the industry are under the impression
that these damages are never collected.
Preparation/assessment of cl ai ms
A review of the literature of this area of contract
administration shows that much of what has been
written concerns the difficulty of assessing a contractor' s
claims for delay and disruption. In the USA, an under-
standing has developed of a generalized approach to
dealing with such problems, as reported by Wickwire
and Smith ~, but there appears to be no comparable
approach in the UK that is detailed in UK texts. The US
approach involves the preparation of full 'as-built' records
of exactly when the various activities in the project took
place, and when delays were effective. From this inform-
ation, a judgment is made on the right to extensions of
time by pulling out the delays for which the employer
is responsible, and assessing how long the contractor
would have taken to complete the job in the absence of
these delays.
Under the UK Institution of Civil Engineers Condi-
tions of Contract 2 regarding claims for extensions of
time, the supervising engineer is required to ' . . . make
an assessment of the extension of time (if any) to which
he considers the contractor entitled for the completion
of the works. . . ' . He/she must do this in a fair manner.
Exactly how this is to be done, however, is left to the
supervising engineer to decide. Texts relating to the UK
experience suggest that the application of the critical-
path method makes for a more just solution, but they
usually only give very simplistic examples to back this
u p .
The supervising engineer thus has little supporting
material to guide him/her in his/her deliberations on
such problems. In the absence of any substantial legal
precedent or recognized procedures, it is suggested that
the views of other professionals working in this field may
be the most useful guide that can be provided here. With
this in mind, those questions addressed to both con-
tractors and engineers specifically concerning the prep-
aration and assessment of claims are analysed. If general
areas of common agreement between these two main
parties can be recognized and accepted, this may help to
simplify the deliberations on some of these complicated
claims situations that have been found to occur so
frequently.
Tabl e 2. Assessment o f claims: general principles
Deci si on Engi neer Cont r a c t or
All Engi neer RE All Agent QS
There is no point in maki ng a claim f o r ext ended overhead costs unless
the time f o r completion is likely to be exceeded
Agr ee
Di sagr ee 11 7 4 11 5 6
Ot her
I f the contract programme (clause 14) shows completion in 18 months,
and the contractor actually completes in 18 months, no extended overhead
costs can ever be j ust i f i ed
Agr ee 2 1 I
Di sagr ee 8 5 3 11 5 6
Ot her 1 1
I f the engineer awards an extension o f time without costs f o r a delay
at t ri but ed to exceptional adverse weather, this prevents the contractor
f r o m j ust i f yi ng an extension o f time w#h recovery o f overhead costs f or
the same period
Agr ee 4 3 1 2 2
Di sagr ee 6 3 3 9 5 4
Ot her 1 1
Providing the engineer never actually instructs the contractor to accelerate,
no acceleration claim can be j ust i f i ed
Agr ee 3 3 3 2 1
Di sagr ee 7 4 3 7 2 5
Ot her I 1 1 1
General principles
As a first and rather crude attempt to determine attitudes
in this area, four statements were presented to the inter-
viewees. They were asked to say whether they agreed or
disagreed with the statements, and invited to comment
as they wished. The statements were selected, in part
to check whether certain principles discussed and
pronounced on in the literature were generally accepted
by the profession, but also to test out attitudes on
matters that have not been so widely considered. The
aim here, as in other parts of this section, is not only to
record and analyse decisions, but also to try to ascertain
on what basis such decisions are made. The results and
comments made on each statement are considered in
turn, and, to assist this process, the statements and
results have been tabulated in Table 2.
The first question suggests that a claim for extended
overhead costs should not succeed unless the time for
completion is likely to be exceeded. Opposing viewpoints
may be found in the literature. Support for the view
is recorded by Powell-Smith and Stephenson 3, although
the view is rejected by Abrahamson 4. The interviewees,
both engineers and contractors, were unequivocal in their
disagreement with this statement. Only two comments
were made: one by an engineer, who stated that a con-
tractor may be due an extension of time even if he/she
can still finish on time, and the other by a contractor,
stating that the time for completion affects only liquidated
damages. Whatever the views of writers and commenta-
tors on this issue, the industry appears to be quite clear
as to its opinion.
In the second statement, if a contractor's programme
shows completion in 18 months, and he/she actually com-
pletes in that time, the statement says that no extended
overhead costs can ever be justified. The supposition
behind this statement is that, having expected to pay
146 International Journal of Project Management
S SCOTT
overheads for the 18-month period, even if he/she could
have completed in (say) 16 months, but was delayed by
two months by the employer, the contractor has suffered
no loss. He/she has only had to pay overheads for the
time he/she expected to have to pay them. All the con-
tractor responses disagreed with this view. This might
have been expected, but a majority of the engineer
responses were against it too. Some of the comments
made show that some respondents would have con-
sidered not extended overhead costs, but additional
overhead costs for the 18-month period occasioned by
any additional work instructed by the supervising engin-
eer. There still, however, seems to be a general distrust
of the logic supporting this statement. A similar scenario
is shown in Figure 1.
The suggestion contained in the third statement
resulted from a discussion with a resident supervising
engineer during a visit to one of the sites on which the
preparatory work for the questionnaires was being con-
ducted. He related that, in the past, he had been involved
in a contract on which the supervising engineer had taken
the initiative to award an extension of time without costs
as a result of exceptionally adverse weather. This had
been done specifically to prevent the contractor from
claiming an extension of time with costs for some cause
that was the employer's responsibility. Irrespective of the
rights or wrongs of such action, this situation raises the
general issue of alternative critical paths and parallel
delays, and, for this reason, was felt to be worthy of
inclusion. Among the engineers, 60% disagreed, and
made comments suggesting that this would be somehow
underhand, while 40% agreed, some of these believing
that the contractor would find another way to recover
his/her costs. The contractors were much more strongly
opposed to this statement, with 82% disagreeing, and
only 18% agreeing. The comments made, however, did
not particularly attempt to disprove the statement, but
were general accounts of views on dealing with weather
in claims situations. Although the question is a rather
complex one, it was surprising that none of the com-
ments anticipated the possibility that a further extension
of time beyond the first might be awarded, this time with
costs. Also, the chance that another parallel path through
the network, much delayed by the employer, might super-
sede the impact of the path on which the weather delay
occurred was not considered. Is it possible that delays
to the contract are not seen, or perhaps not considered,
in this way?
The final question concerns acceleration claims, and
states that, providing the supervising engineer never
actually instructs the contractor to accelerate, no acceler-
ation claim can be justified. The responses from both
contractors and engineers were identical, with 70% of
the responses disagreeing with the statement, and 30%
agreeing. The comments showed a recognition by the
majority of the possibility of what is sometimes known
as 'constructive acceleration'. That is, if the supervising
engineer fails to award a properly deserved extension of
time during the period of the works, the contractor speeds
up to complete within the original time for completion,
and the supervising engineer later decides that the
extension should actually be awarded. In such a case, the
contractor has no need for the late extension, but may
have suffered additional costs as a result of having to
complete work at a faster rate than was reasonable. Such
costs should be recoverable by the contractor because
he/she had to accelerate, even though no specific order
to accelerate was given. This is a generally recognized
scenario, and perhaps the reason for a number of the
respondents not identifying it results from the fact that
so few acceleration claims are made.
Specific eases
As an alternative means of shedding light on the way in
which professionals in the industry consider delay claims,
it was decided to try to describe fully some particular
outcomes of contracts, and to ask the respondents to
recommend solutions. This was the approach used in
both questions in this section, although different methods
were used. In the first question, the whole scenario was
described in words, while in the second question, four
diagrams were drawn to chronicle the outcomes of four
contracts.
In the first question, the interviewee was asked to
make a decision on extension-of-time matters part of the
way through a contract on the basis of the following
statement.
Six months into the contract, it is clear that the employer
has delayed a part of the works in such a way that the
whole of the contract will be delayed by two months. The
time for completion is 24 months, and the contractor's
original programme showed completion in 20 months.
What should the contractor do?
78% of the engineers said that the contractor should
request an extension of time, and the rest said that he/she
should claim for a delay with costs. Of the contractor
responses, 60% said that the contractor should claim for
an extension of time, and 40% said that he/she should
claim for delay, and not an extension of time.
It is clear from the figures that, at the point of
consideration, no extension of time is needed. However,
if the contractor were to allow his/her programme to slip,
or further delays occurred, the situation would change.
An extension of time might then be necessary to defray
the deduction of liquidated damages. This fact was clearly
understood by the respondents, some of whom added
very interesting comments, as follows:
'Claim extension of time - - 20 months is the new time
for completion (we allow the contractor to decide the
time for completion)' (engineer).
'Ask for extension of time (some contractors make a
statement on their programme pointing to the time
between their early completion and the contract time
for completion and stating this to be a 'period for use
by the contractor for circumstances other than entitle-
ment to extension of time')' (engineer).
In assessing the effects of a delay part of the way through
a contract, the supervising engineer must attempt to
predict how the contract will proceed in the future. For
some delays, where (say) the whole site is brought to a
standstill as a result of the employer's actions, the effect
on the completion of the whole project is undeniable.
However, if the delay is not so wide-ranging, and yet, at
the time, it appears that it will necessarily delay the whole
Vol 11 No 3 August 1993 147
Dealing with delay claims: a survey
project, a later assessment mi ght pr ove t hat anot her pat h
t hr ough the net work has become critical. Thi s second
pat h might then cont rol t he compl et i on of t he proj ect ,
and mi ght onl y contain within it del ays f or whi ch the
cont r act or is responsible. In such a si t uat i on, awar di ng
an extension of time, r at her t han si mpl y recogni zi ng a
delay for which the employer is responsible and t hat coul d
lead to an extension of time, mi ght lose t he empl oyer the
right to deduct liquidated damages. The r ecogni t i on of
a fundament al delay to the proj ect r at her t han the award-
ing of an extension of time, however , was not f avour ed
by most supervising engineers. It appears t hat such delays
t end to be closely linked t o ideas of ext ensi ons of time.
In the second question, t he i nt ent i on was t o illustrate
a few simple yet interesting scenari os t hat mi ght have
to be dealt with in claims si t uat i ons. Ti me-scal ed CPM
diagrams were used f or this pur pose. Al t hough the
simplest cases were chosen, it was still f ound necessary
to clarify a number of points. Fo r this reason, a checklist
was devel oped to help expl ai n t he di agr ams bef or e t hey
were shown to the interviewee. The poi nt s on the checklist
were as follows:
For each case, two di agrams are shown: one showi ng
the cont ract or' s original pr ogr amme (planned), and one
showing the actual ' as-bui l t ' r ecor d of wor k (actual).
The diagrams use time-scaled act i vi t y-on-arrow format ,
in which the following symbol s are used. A rect angl e
with r ounded ends or a circle represent an event. A
double arrow indicates a critical activity, a single arrow
an activity, and a dot t ed line a float. A rect angl e with
a C over it means a del ay t hat is t he cont r act or ' s
responsibility, an E one t hat is t he empl oyer ' s respon-
sibility, and an N one t hat is t he responsi bi l i t y of
nei t her part y.
It is assumed t hroughout t hat t he existence of one delay
has not affected the dur at i on or t i mi ng of subsequent
delays. For instance, i f t he const r uct i on site is not
available at the st art of t he works, any cont r act or
del ay may be a result of t he cont r act or hol di ng back
his preparat i ons. Such effects are assumed not t o have
occurred.
It is t o be assumed t hat no accel erat i on has t aken
place.
In each case, the i nt ervi ewee' s views are sought on
the cont r act or ' s rights t o an ext ensi on of time, the
recovery of overhead costs, and t he empl oyer ' s rights
to deduct l i qui dat ed damages.
The actual di agrams used dur i ng the interviews were
A3-sized. These are shown in Fi gures 1-4. Summari es of
the results are given in Tabl es 3-6.
In Fi gure 1, the time f or compl et i on is f our weeks,
the cont r act or ' s pr ogr amme shows hi m finishing in f our
weeks, and he actually finishes in f our weeks, even t hough
the empl oyer has del ayed hi m f or one week. Ther e is
clearly no need for any l i qui dat ed damages t o be de-
duct ed, and all the r espondent s agreed on this. Al t hough
no ext ensi on of time is requi red t o def r ay t he deduct i on
of damages, al most 50% of t he engineers and 40% of
t he cont r act or s felt t hat one shoul d be awarded. As t o
whet her over head costs shoul d be pai d t o t he cont r act or ,
maj ori t i es of bot h t he engi neers and t he cont r act or s
f avour ed payi ng over head costs f or one week.
Time f or completion
t " 1
( >
2 5 4
; < )
Weeks
a
E
( ) o ;.
b
Figure 1. Delay-claim scenario I; (a) planned, Co)actual
[(a) The whol e pr oj ect consi st s o f one act i vi t y a. (b) At t he end o f the
second week, wor k is s us pended for one week (empl oyer-responsi bl e
del ay), but t he c ont r a c t or still compl et es on time.]
Thi s case has paral l el s with bot h the second st at ement
in t he first section, and wi t h the first quest i on in this
section. In t he second st at ement , even t hough the
cont r act or had al l owed f or t he amount of overheads t hat
Time f or completion )
0 2
( )
4 Weeks
( )
a
b
Figure 2. Delay-claim scenario 2; (a) planned, (b) actual
[(a) The whole project consists of one activity a. (b) Work cannot start
until the end of the second week when the site becomes available.
However, the contractor is not ready to start until the end of the first
week. The project is completed two weeks late.]
)
148 I nt er nat i onal J our nal of Proj ect Management
o 2
T i me f or completion
C
b
3
f - -
Wee ks
5
a
T
b
Figure 3. Delay-claim scenario 3; (a) planned, (b) actual
[(a) The whole project consists of two activities a and b t hat can
proceed simultaneously. When they are bot h complete, the project is
complete. (b) Delays due t o the employer (E) and t he cont ract or (C)
result in the project being completed two weeks late.]
S SCOTT
i T i me f or completion >~
0 I 2 3 4
8
Wee ks
5
J~ C
I
>
Figure 4. Delay-claim scenario 4; (a) planned, (b) actual
[(a) The whole project consists of two activities a and b t hat can
proceed simultaneously. When they are bot h complete, the project is
complete. (b) Delays due t o t he cont r act or (C) and to neither part y (N)
result in the project being completed two weeks late.]
Table 3. Results for delay-claim scenario 1
Number
of weeks Engineers Cont ract ors
All Engineers RE All Agent QS
Liquidated 0 11 7 4 11 5 6
damages 1
2
Extension 0 6 3 3 6 3 3
of time 1 5 4 1 4 2 2
2
Recovery 0 3 2 1 2 2
of overheads 1 8 5 3 9 5 4
2
Tabl e 5. Results for delay-claim scenario 3
Number
of weeks Engineers Cont ract ors
All Engineers RE All Agent QS
Li qui dat ed 0 I 1 7 4 11 5 6
damages 1
2
Extension 0
of time 1 1 1 I 1
2 10 6 4 10 5 5
Recovery 0
of overheads 1 3 2 1 1 1
2 6 3 3 8 5 3
Table 6. Results for delay-claim scenario 4
Number
of weeks Engineers Cont ract ors
All Engineers RE All Agent QS
Table 4. Results for delay-claim scenario 2
Number
of weeks Engineers Cont ract ors
All Engineers RE All Agent QS
Liquidated 0 10 7 3 10 5 5
damages 1 1 1 1 1
2
Extension 0
of time 1 4 2 2 2 2
2 7 5 2 9 5 4
Recovery 0
of overheads 1 8 6 2 5 2 3
2 3 1 2 6 3 3
Liquidated 0 l 1
damages 1 8 6 2 8 4 4
2 3 1 2 2 2
Extension 0 2 2 3 1 2
of time 1 9 7 2 8 4 4
2
Recovery 0 9 6 3 11 5 6
of overheads 1 2 1 I
2
Vo l 11 No 3 Au g u s t 1993 149
Dealing with delay claims: a survey
he/she eventually had to pay, the consensus seemed to be
t hat he/she ought to be rei mbursed the overheads for
any time for which the empl oyer had delayed hi m/ her.
This result is repeated here. In the first quest i on in this
section, most respondents felt t hat an extension of time
should be awarded, rat her t han simply a delay being
recognized for which the empl oyer was responsible. In
somewhat similar circumstances, but where there was
obviously no need for an extension of time, a number
of interviewees still want ed one to be awarded. There
appears to be a linkage in many of the respondent s'
minds between such delays and extensions of time. This
ignores any possibility t hat overheads may be recovered
wi t hout such an extension.
The remaining di agrams show a variety of ways in
which overlapping delays mi ght affect a project' s out-
come. The first of these, shown in Fi gure 2, cont ai ns
two delays of types E and C t hat bot h affect a single
activity a. Al most all of t hose interviewed replied t hat no
liquidated damages shoul d be deduct ed, wi t h majorities
of bot h the engineers and cont ract ors recommendi ng
a 2-week extension of time. The posi t i on on the recovery
of overheads, however, was not so clear-cut. Most
engineers felt t hat overhead costs shoul d be pai d for one
week only, while 60% of the cont ract ors felt t hat two
weeks' overhead costs shoul d be payable. The engineer' s
view in this case is identical to the solution t hat woul d
apply i f the US approach to these mat t ers was adopt ed,
t hat is, a 2-week extension of time shoul d be awarded,
but overhead costs shoul d be payabl e for onl y one of
those weeks. Furt her investigation of the cont ract ors'
response showed t hat the quant i t y surveyors' responses
were equally split between one and two weeks' overhead
recovery, with the agents being bullish about their rights
to two weeks' overheads.
Figure 3 is similar to Fi gure 2, in t hat it cont ai ns two
delays of types E and C, al t hough t hey affect different
activities. The delays are, in fact, on parallel paths. The
response was unani mous t hat no liquidated damages
should be deducted, and nearl y unani mous t hat a two
weeks' extension of time shoul d be awarded. It was less
conclusive in relation to the amount of overheads t hat
should be recovered, but most engineers and cont ract ors
still t hought t hat these shoul d be paid for two weeks.
I f an adjusted schedule were to be const ruct ed for this
situation, in line with the US approach, by removi ng
the employer-responsible delays, it woul d show. t hat the
cont ract or, in the absence of t ype-E delays, woul d not
be able to complete the project on time. He/ she would
be one week beyond the time for compl et i on, and thus
should, on this basis, have one week of liquidated
damages deducted. The ot her week shoul d be covered by
an extension of time, for which overhead costs shoul d be
paid. Bot h supervising engineers and cont ract ors dis-
agreed strongly with this view, and seemed to have simply
identified the critical pat h, and made their decisions on
the basis of the delays on t hat pat h alone.
The last di agram, shown in Fi gure 4, also cont ai ns
parallel delays, but t hey are of types C and N. Again, a
maj ori t y view can be defined for bot h engineers and
contractors. This is t hat there shoul d be an extension
of time for one week, l i qui dat ed damages shoul d be
deduct ed for one week, and there shoul d be no recovery
of overheads at all. An alternative view is t hat , as the
cont r act or del ayed the cont ract by two weeks by his own
act i ons, and finished two weeks late, he should be totally
responsible for this delay. By this argument , he should
have two weeks' liquidated damages deducted. The
respondent s were, however, more generous t han this.
They clearly felt t hat the cont ract or should benefit from
the fact t hat an ' act - of - God' type of delay would have
prevent ed hi m from compl et i ng on time, had he not been
del ayed himself. Dependi ng on which met hod of dealing
with concur r ent delays were adopt ed, the US response
on such an out come woul d be either t hat recommended
by the maj or i t y of respondents in this survey, or the
al t ernat i ve view expressed.
Compar i ng the responses given by supervising engin-
eers with those given by REs, little difference in their over-
all at t i t udes to these problems could be distinguished.
On the ot her hand, al t hough there was no great gul f
between the opi ni ons of the agents and those of the
quant i t y surveyors, the expectations of the quant i t y
surveyors t ended to be generally lower t han the agents'
expectations.
Claims procedure
This section collects the responses to the questions whose
purpose was t o i dent i fy particular procedures adopt ed
by bot h the cont ract ors and the supervising engineers
in prepari ng and assessing delay claims. Three basic
questions were asked. One was addressed to the engineers
only, one was addressed to bot h the cont ract ors and the
engineers, and the third was addressed onl y to contrac-
tors. The first of these was the mai n question, as follows.
What procedure do you adopt for assessing the validity
of claim for an extension of time on a complex project?
The responses received were varied, and ranged from
Analyse evidence, compare with our records and make a
decision based on those facts.
t o
Require demonstration that delay has occurred, secondly that
delay was critical to completion date; gets very complicated
--anything but straightforward.
There was a general recognition of the need to check the
facts as presented by the cont ract or against the RE' s
records, but ot her points made were as follows:
Just i fy t hat the delays could not have been expected.
Look at the claim as t hough one were maki ng it
oneself.
Try to establish anot her one or two ways to evaluate
the cost of the claim to get a feel for where the
set t l ement figure shoul d lie, and t hen negot i at e with
the cont ract or.
It is difficult t o specify a general procedure; it depends
on how the claim is presented.
Use the pr ogr amme, assess the links between the
activities, and t ake account of float.
Tr y to accept the cont ract or' s approach; i f not , use
one' s own met hods.
In the belief t hat this first question mi ght not elicit
responses t hat directly addressed the actual mechani sm
used to affirm or assess the i mpact of individual delays,
a second, more specific, quest i on was included. Thi s was
150 I nt er nat i onal Jour nal of Project Management
put to both the contractors and the engineers, and it was
as follows.
How do you show that/decide whether a delay to a par-
ticular activity has actually contributed towards delaying
the whole project?
64% of the engineers interviewed mentioned the critical
path or critical activities in their replies, some of them
recognizing that it may not always be easy to identify
this path. Two respondents used the word ' shunting' ,
referring to subsequent activities in the project being
moved along by the effect of the delay in question. There
was certainly a general belief that, where this ' shunting'
occurred on the critical path, an extension of time might
well be justified. Other comments made referred to
the need to check for float on the path affected,
the possibility of stalling to see if the path on which the
delay occurred was actually critical,
the fact that CPM programmes appear when such
claims are being made,
the fact that the programme should be used as a basis,
but then actual activities should be monitored, and
payment should only be agreed if real delay occurs,
the fact that criticality is judged from an understanding
of the sequence of activities,
the fact that, typically, the contractor identifies the
critical path and the engineer checks it.
The importance of critical paths and the shunting effect
of particular delays on activities on such paths were
also recognized by the contractors who answered this
question. Another important element was, however,
reported by 36% of the contractors that was not
mentioned by any of the engineers. This was the concept
of 'plugging' delays into the contract programme to
see their effects on the completion time. Some said that
they would use a software package for this. This is
particularly interesting, as it begins to appear that the
production of an 'as-built' programme is being described.
However, on further examination, this was seen not to
be the case. The contractors who used this approach
admitted that they would use the activity durations from
the original programme for this purpose, and make no
attempt to record the actual durations of the activities.
In fact, it was mentioned by one contractor that he
would extend actual delay durations used in this exercise
to those that would have occurred had he not increased
his resources to improve the situation. The contractors
explained their aim in using this approach as being to
demonstrate to the employer their 'entitlement'. Having
plugged in the delays to the initial contract programme
in this way, they would expect to show a completion time
beyond what they actually needed. They managed to
complete before this time, they would argue, because
they had been particularly expeditious in carrying out the
contract. This would then be followed by the expectation
that the employer would pay their costs, possibly with an
element of profit.
In some circumstances, a large number of site
instructions might cause considerable disruption to a
contractor' s performance. This might happen in such
a way that it was difficult for him/her to isolate and
S SCOTT
deal with each delay individually. A question was posed
to contractors that described this scenario as follows.
How do you formulate claims when the disruption to
progress is due to the effects of a large number of site
instructions and it is not possible to separate individual
causes of delay?
40% of the responses stated that this would be dealt with
as a combination of individual causes of delay, with the
respondents effectively saying that they would be able to
isolate individual delay effects. The others recommended
amassing information on the value of the instructions
together with information on total costs. By showing the
monies spent in comparison with the expected spend-
ing profile, these contractors aimed to show that the
increased expenditure was due to the disruptive effect of
the instructions.
Claims: miscellaneous
At the heart of the critical-path method of planning is the
idea that, a network of activities having been arranged
that represents the construction of a project, a longest
path through this network can be found that dictates
the minimum project time. This, of course, is the critical
path. At the planning stage, it is easy to identify this path
(there may be more than one), and to recognize its/their
significance. As soon as the project begins, this simple
model of progress is likely to be found wanting. Activities
will not always start and continue uninterrupted to com-
pletion, the overlapping of activities not shown on the
plan will occur, and, of course, there will be delays from
the various sources. Can the essential critical path for the
project still be recognized and identified in such circum-
stances? There will obviously be some projects that, by
their nature, consist of one main sequence of activities,
where the critical path is likely to be unchanging. How-
ever, where the network is more complex, with a number
of parallel paths, the identification of any critical path
may well be more difficult.
With this understanding of the real situation con-
fronting site engineers, two questions were put to both
the engineers and the contractors. These were as follows.
Does the critical path through the project usually change
as construction proceeds? (Choice: yes/no/don' t know)
Are you always able to identify the critical path for the
finished project? (Choice: yes/no/don' t know)
The responses to the first question were inconclusive.
33% of the engineers said that the critical path usually
changed, while 56% said that it did not. Comments
varied from 'very rare', to ' often-not unusual'. In com-
plete contrast, 90/0 of the contractors confirmed that
the path did usually change. Their comments were 'often'
and 'sometimes', with one interviewee saying that he
could not think of a job where it had not changed. It is
clearly possible that the engineers and contractors had
been involved in different types of scheme, and that this
was the reason for the mismatch in their replies. How-
ever, as most of them were relying on their experiences
on a number of past schemes in answering the questions,
this is unlikely. Other explanations are possible. It might
Vol 11 No 3 August 1993 151
Dealing with delay claims: a survey
be t hat the two parties have di fferent concept i ons of
what comprises a critical pat h on a live proj ect , or simply
t hat different i nformat i on is avai l abl e t o t hem. I f t he
critical pat h is not identified on t he cont r act pr ogr amme,
as it oft en is not, how is t he engi neer t o know whet her
it has changed?
Wi t h the second quest i on, t here was a r easonabl e
consensus between the cont r act or s and t he engineers.
Majorities of bot h felt t hat t hey woul d be able t o i dent i fy
the critical pat h, and a number of i nt erest i ng comment s
were made, as follows:
Engineer
Yes (I am able to identify the critical path), but it doesn' t
mean to say that I do.
Often with difficulty - - you can never be certain of analysing
the real critical path.
Contractor
With difficulty - - you are always going to have a critical path
through each structure (when more than one is built at once).
You may have more than one.
The first comment from t he cont r act or s seems t o suggest
a part i cul ar way of l ooki ng at t he real critical pat h.
Rat her t han identifying a pat h t hat is the longest t hr ough
the net work as a whole, this cont r act or appears t o identify
i mpor t ant pat hs t hrough each mai n par t of t he net wor k.
For him, the achi evement of each section is critical to t he
compl et i on of the proj ect as a whole. The fact t hat this
is not in line with our nor mal under st andi ng of t he t erm
' critical pat h' perhaps highlights a need to define bet t er
what is meant by t hat t erm when it relates t o a live
project.
The last question under this heading was also addressed
t o bot h the engineers and the cont r act or s.
Are you aware of the use of as-built CPM schedules
t o validate extension of t i me claims in Amer i can cour t
hearings?
Of all the replies, 77% were uncondi t i onal nos, 18% were
condi t i onal nos, and onl y 5% were yesses. One cont r ac-
t or who replied no added t hat he used as-bui l t pr o-
grammes; this was the same cont r act or whose appr oach
was descri bed above, and who was seen as demonst r at -
ing ' ent i t l ement ' . His view of t he as-built pr ogr amme
was t hat it made no at t empt t o i ncor por at e act ual
activity durat i ons, and simply used the dur at i ons f r om
the initial cont r act pr ogr amme. The responses her e were
a cl ear i ndi cat i on of the fact t hat t he est abl i shed pro-
cedur e adopt ed in the USA is al most unhear d of in the
UK. Fr om t he replies in t he pr evi ous section, it appear s
t hat this may also be t rue of t he phi l osophy t hat
underlies t he US appr oach.
CONCL US I ONS
Fr om t he first section of t he findings, t he mai n
concl usi on is t hat del ay claims have to be deal t with on
the maj or i t y of maj or UK const r uct i on sites. Thi s surely
makes t he val ue of research in this area of par t i cul ar
i mport ance. Two ot her general conclusions can be drawn
f r om this section. The first is t hat i nf or mat i on collected
about the f r equency of accel erat i on claims suggests t hat
t here may be some di screpancy bet ween t he cont r act or ' s
and the supervising engineer' s views of what constitutes
such a claim. Thi s is not at all surprising, as these claims
appear to occur ver y i nfrequent l y, and it is unusual for
any individual engi neer to have had much experience
of t hei r effects. The second concerns t he deduct i on of
l i qui dat ed damages. It is assumed by some t hat they are
never deduct ed. The survey cert ai nl y f ound t hat this
met hod of rest i t ut i on is rarel y i nvoked, but there were
undoubt edl y a number of engineers who had experienced
cont r act s on which t he damages had been taken.
In the second section, the mat eri al is considered in
t erms of t wo mai n themes: (a) the at t i t udes t o part i cul ar
claims situations, and (b) t he mechani sms t hat are used
in pr epar i ng and assessing these claims.
In t erms of t he first t heme, t he pri nci pal conclusions
t hat can be dr awn f r om the st udy are as follows:
Ther e appears to be good agr eement between bot h
t he engineers and the cont r act or s t hat a claim for
ext ended over head costs shoul d be able to succeed
despite t he fact t hat the time f or compl et i on has not
been exceeded. In this situation, however, a number of
t hose i nt ervi ewed woul d award an ext ensi on of time.
A st rong link seems t o exist in t he mi nds of many who
deal with del ay claims bet ween t he awardi ng of an
ext ensi on of time and the accept ance of a claim for
ext ended over head costs.
In t he claims si t uat i ons involving concur r ent delays,
the appr oach adopt ed by the engineers was generally
very fair t o t he cont r act or . No at t empt seemed t o have
been made by ei t her par t y t o r emove delays for which
the cont r act or was not responsible, and t hen to identify
how well t he cont r act or coul d have pr oceeded in the
absence of these delays.
In t erms of the second t heme, the basic appr oach
adopt ed by most engineers in assessing t he claims was as
follows:
Check the facts of the cont r act or ' s submission.
Ident i fy or veri fy the critical pat h.
Check whet her the delays on this pat h have had a
shunt i ng effect on t he activities.
I f some of the delays on t he critical pat h woul d have
caused an ext ensi on of time, t hen an ext ensi on of time
mi ght well be justified.
Similar views were expressed by the cont r act or s in
rel at i on t o t he ways in which t hey woul d t ry t o prove
t hei r rights t o an ext ensi on of time. A few of t hem sought
t o demonst r at e ' ent i t l ement ' , as descri bed above. It is
cl ear t hat , apar t f r om the ' ent i t l ement ' met hod, the inter-
viewees t ended to deal wi t h these pr obl ems on the basis
of the critical pat h alone. Ot her pat hs t hr ough the
net wor k were not likely t o be consi dered.
The f or egoi ng discussion assumes t hat a critical pat h
on a live cont r act can be identified, and t hat t he t erm has
some meani ng in this cont ext . At t he pl anni ng stage of
a proj ect , t he critical pat h is easily identified as t he pat h
with no fl oat when mi ni mum compl et i on time is
enforced. However , even wi t h good, accur at e records of
152 I nt er nat i onal Jour nal of Proj ect Management
S SCOTT
the activities in the contract, the critical path may still be
difficult to identify. When the contractor may start an
activity, stop for a while, and then restart, how is one to
view this gap in the activity's progress? Is it float? If so,
there may be no path through the network that does not
have some element of float within it. The questions in the
questionnaire concerning the critical path produced some
odd results. There was a decided disagreement between
the engineers and the contractors as to whether this path
usually changed during the course of the contract. On
the question of ability to identify the final critical path for
the contract, however, both parties confirmed that they
were able. Other comments expressed while answering
these questions gave the impression that either this was
not always easy to do, or that the respondents might not
have a common understanding of the critical path in these
circumstances. The suggestion, then, is that it might well
be necessary to provide an alternative definition for the
critical path when it relates to a live contract.
For disruption claims caused by a large number of
site instructions, two main responses were given by the
contractors interviewed. One response was that this
was not a special problem, and could be dealt with in
the same way as other delays. The other response was
to amass information on additional costs together with
information on the sources of disruption. By showing
these causes of delay and the purported effects of delay,
the contractors hoped to persuade the employer to pay
their increased costs. The second method is recognized
in the literature, and yet it fails to demonstrate any link
between cause and effect. It could be argued that, if some
contractors are able to cope with these situations, then
others should also be able to manage. The excuse for
adopting a less convincing approach to these problems
is undermined.
As stated above, the issue of delay claims is a difficult
one, and no universal remedies are likely to be found.
However, this does not mean that nothing can be done
to improve the situation. It is hoped that, if information
is made available about how these matters are dealt with
by others, some benefit can be derived. In the absence of
useful legal precedents in this area, the procedures used
by other professionals may be a valuable guide.
R E F E R E N C E S
1 Wickwire, J M and Smith, R F 'The use of critical
path method techniques in contract claims' Public
Contract Law J. Vol 7 No 1 (1974) pp 1-45
2 Conditions of Contract (5th Ed.) Stanhope Press, UK
(1979)
3 Powell-Smith, V and Stephenson, D Civil Engineering
Claims BSP Professional Books, UK (1989)
4 Abrahamson, M W Engineering Law and the I CE
Contracts (4th Ed.) Applied Science Publishers, UK
(1979)
Stephen Scot t graduated f r om the
University o f Manchester Institute
of Science and Technology, UK, in
civil engineering, and later com-
pl et ed an MSc in construction engin-
eering at Leeds University, UK.
Having spent 12 years working on
the design and construction o f major
road and bridge works schemes, he
now lectures on construction man-
agement in the Department o f Civil
Engineering at the University o f
Newcastle upon Tyne, UK. He
gained his doctorate in 1992.
Vol 11 No 3 August 1993 153