Construction delay claim owner response, and the three questions to ask first

A construction delay claim owner response is usually written as an opinion about fault. It is answered better as three questions about the schedule, because the schedule decides most of it and opinions decide none of it.

What a delay claim asserts

A delay claim says three things at once, and they are frequently answered as though they were one.

First, that an event occurred. Second, that the event delayed the completion of the project. Third, that under the contract the consequence of that delay falls on the owner, as an extension of time, as money, or as both.

Those are separate assertions with separate evidence behind them, and a claim can be right about the first and wrong about the second.

An event that plainly happened, that plainly disrupted somebody work, and that plainly cost somebody money, may still not have delayed the completion of the project, because it happened on an activity with float.

That distinction is uncomfortable and it is the central one. Disruption and delay are different things and most claims conflate them, usually without intending to.

So the response starts by separating the three assertions rather than by forming a view about whether the contractor is being reasonable.

The three questions a construction delay claim owner response begins with

One. Was the affected activity on the critical path at the time? Not now, and not in the baseline. At the time the event occurred, in the schedule update current then. An activity with fifteen days of float that was delayed by nine days did not delay the project, however disruptive it was.

Two. What does the contract say about this category of event? Weather, differing site conditions, owner directed changes, late owner decisions and force majeure are each treated separately in most contracts, and several are excusable but not compensable, meaning time without money.

Three. Was notice given, and when? Most contracts require notice within a stated period from the event. Whether a late notice defeats a claim is a legal question for your counsel, but the date is a fact and it is worth establishing before anything else is discussed.

Those three questions are answerable from documents: the schedule updates, the contract and the correspondence. None requires a view about anybody conduct.

Most claims are resolved, in practice, by the answers to the first and third.

Why the schedule update matters more than the baseline

The baseline schedule describes the plan at the start. It is frequently the only schedule anybody looks at in a dispute, and it is the wrong document.

What matters is the critical path at the time of the event, which lives in the schedule update current when the event happened.

Projects move. An activity with three weeks of float in the baseline may have none by month eight, because other things consumed it. An activity that was critical in the baseline may have float by month eight because something else slipped further.

So a claim asserting that an event delayed the project has to be tested against the schedule as it was, and that requires the updates to have been produced, submitted and retained.

Where the updates do not exist, or where they were produced without preserving the original logic, the analysis becomes an argument between experts, which is expensive and uncertain for everybody.

That is the practical reason to require monthly updates that preserve logic, and it is the same reason float has to be tracked, which is set out in who owns float on a construction schedule.

A worked example

A contractor submits a claim for 26 days and $480,000, arising from a four week delay in owner approval of a facade mockup.

Question one. The schedule update current at the time shows the mockup approval activity with 19 days of total float. The delay was 28 days, so 9 days of it consumed float that existed and 19 days did not affect the completion date.

Question two. Late owner decisions are excusable and compensable under this contract, so the 9 days that did affect completion carry both time and money.

Question three. Notice was given 22 days after the event under a 14 day requirement. Whether that matters is a question for counsel and it changes the negotiating position either way.

Outcome: 9 days rather than 26, with the associated cost proportionate, and a conversation about notice that both sides would rather not have.

Nothing in that analysis required a view about whether anybody behaved well. It required three schedule updates, a contract and a date.

What a good response looks like

Written as an analysis rather than as a position, and structured the same way every time.

The event as described, accepted or disputed on the facts. The activity affected and its float in the schedule update current at the time, with the update identified by date. The effect on the completion date, stated in days. The contract category and what the contract provides for it. The notice date and the requirement. And the resulting position, in days and dollars.

Six paragraphs, sourced, and no adjectives.

A response in that form does two useful things. It is difficult to argue with, because every statement points at a document. And it sets the pattern for every subsequent claim on the project, which on a job with several is worth more than the outcome of the first one.

The alternative, a response that disputes the claim on general grounds, invites a reply in the same register and the two positions drift apart over several months until somebody involves lawyers.

Answering the first claim properly is therefore the cheapest thing an owner can do about the fourth one.

There is a tone question underneath all of this that is worth being deliberate about. A response written as an analysis is not a soft response. It can conclude that nine days are owed where twenty six were claimed, which is a firm position, and it arrives without any of the language that makes a firm position feel like an attack.

That matters because the project continues afterwards. The same people are on site next month, and a claim resolved on the documents leaves considerably less residue than one resolved by two parties telling each other what they think.

What to do before you sign

1. Require monthly schedule updates that preserve the original logic, as a contract deliverable.
2. Require float to be reported by path, not just the completion date.
3. Establish which categories of event are excusable, and which are also compensable.
4. Find the notice requirement for delay claims and the period it runs from.
5. Name who on the owner side receives and logs a notice, and who responds within the period.
6. Agree the method of delay analysis in the contract rather than arguing about it later.
7. Keep every schedule update, because the one you need is the one current at the time.

Item six is unusual and it is worth pressing for. Agreeing in advance how a delay will be analyzed removes the largest source of expert disagreement, and it costs nothing at signature because neither party knows yet which side of it they will be on.

Item one is the one that makes everything else possible. Without contemporaneous updates preserving logic, question one has no answer and the claim is decided by whoever argues better.

The scope options for this reading sit in the review packages.

What we do

We test a delay claim against the schedule update current at the time of the event, establish the float that existed and state the effect on the completion date in days. We set out what the contract provides for the category and what the notice record shows. We do not give a view on entitlement, which belongs to your counsel. The work is the schedule and procurement risk review.

Questions people ask