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FORENSIC DELAY ANALYSIS - anglian-arbitrators.org.uk CIArb Delay Analysis...5.0 - Delay Analysis...
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FORENSIC DELAY ANALYSIS
CIArb East Anglia and London Event
November 2018
Alan Whaley Bsc (Hons) APA Dip. (Adj.) LL.M MCIOB FRICS FCIArb MAE RICS Accredited Expert Witness
Director – Forensic Delay Analysis
© Arcadis 2015
Introductions and Agenda
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Contract Solutions, what do we do?
Dispute Report 2018
What is ‘Forensic Delay Analysis’?
Critical and Non-Critical Delays
Delay Analysis Methodologies
Categories of Delay Analysis
Common Methodologies
Which methodology is appropriate?
Summary / Conclusions
Questions
<None>
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Contract Solutions, what do we do?
Dispute Report 2018
What is ‘Forensic Delay Analysis’?
Critical and Non-Critical Delays
Delay Analysis Methodologies
Categories of Delay Analysis
Common Methodologies
Which methodology is appropriate?
Summary / Conclusions
Questions
<None>
© Arcadis 2015 29 November 20183
1.0 - Contract Solutions | UK
OUR SERVICES
➢ Project support on:
✓ Planning and programme management
✓ Interim extension of time awards and applications for payment
✓ Valuation of variations
✓ Final extension of time awards
✓ Final certificate / final account disputes
✓ Extent and valuation of incomplete and defective work during defects period
✓ Procurement issues
✓ Contract management training
➢ Dispute / Expert Witness services in relation to:
✓ Acting as Arbitrator
✓ Acting as Adjudicator / Dispute Adjudication Board
✓ Expert Witness Evidence
✓ Arbitration Claim or Defence Support
✓ Delay and disruption and extension of time
✓ Valuation of variations, loss and / or expense
✓ Valuation of defective work
✓ Valuation of post loss remedial schemes after an event (such as fire or water damage)
© Arcadis 2015
2.0 – Disputes Report 2018
• The overall dispute cause remains at being due to failure to properly administer the contract
• The highest value dispute handled by the team in 2017 was US$400 million
• For 60.5% of cases, project participant conduct was very often found to be at the heart of the dispute’s outcome (34.8% in 2016)
• Contract and specification reviews were considered the most effective claims avoidance technique
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What has changed?
© Arcadis 2015
3.0 - What is Forensic Delay Analysis?
• Probably obvious, but worth a brief reflection:
• Delay: the situation in which you have to wait longer than expected for something to happen, or
the time that you have to wait (Cambridge English Dictionary, 2018)
• Forensic Analysis: the application of scientific knowledge and methodology to legal problems... (https://legal-dictionary.thefreedictionary.com, 2018)
T he app l i ca t i on o f cons t r uc t i on know ledge and ana l ys i s t echn iques t o
de t e rm ine causes o f de lays t o comp le t i on o f a P ro j ec t
• Our findings assist dispute resolvers in determining whether Contractor’s have
entitlement to EOT (relief from LDs), or delay related costs.
• Has application in most industries, but key to resolving construction disputes concerning
matters relating to delay.
• Forensic Delay Analysis skills/techniques are also applicable to non-contentious issues,
such as determination of Contractor’s claims.
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© Arcadis 2015
4.0 - Critical and Non-Critical Delays
• The majority of disputes over time (should) concern ‘critical’ delays to completion. Why?
• Critical Delay: A delay affecting the Critical Path of a Project.
• Critical Path: The longest sequence of activities through a project, the sum of whose durations
determines the overall project duration (SCL DDP 2nd Edition, 2017)
Only Critical Delays can be said to have actually caused delay to completion of a
project. Non-critical Delays are delays to activities that are not on the Critical Path,
and have no causative impact on completion of a project
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Categories of Critical Delay
Specific to contract, but generally
comprise the following:
© Arcadis 2015
5.0 - Delay Analysis Methodologies
• So, Forensic Delay Analysis is (mostly) concerned with
determining the causes of critical delays.
• We do this:
• By applying delay analysis methodologies to the facts of a
project
• With the aim of breaking down the overall delay, to attribute
periods of delay to specific causes.
• But before looking at some methodologies, it’s crucial to
understand some theory.
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© Arcadis 2015
6.0 - Categories of Delay Analysis
Causation & DelayApproach
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Modelled Methods
Cause>Effect • Additive Modelling • Subtractive Modelling
• Based on ‘modelling’ delays using dynamic programming methods (e.g.
software)
• Essentially involves manipulation of a software programmes to
determine ‘impacts’ of discrete delay events (Cause > Effect)
• Modelled methods are (by their nature) somewhat theoretical. therefore,
care must be taken to ensure conclusions do not offend common sense
/ correspond with the wider matrix of fact.
Critical path determination
Prospective • Contemporaneous • Retrospective
• Prospective: The forward looking critical path, based on the plan for
remaining work
• Contemporaneous: The actual critical path prevailing in a period of ,
taking into account current progress and strategy for the works
(determined progressively through time)
• Retrospective: The critical path determined based on as-built durations
+ sequence alone. May differ from the contemporaneous critical path
Observational Methods
Effect>Cause • Static Logic • Dynamic Logic
• Based on review of documents and records to ‘discover’ delays – not reliant on electronic programmes.
• Involves firstly identifying the critical path and critical delays, and then determining the causes of delay (Effect>Cause)
• Observational methods tend to be more factual, but can be subject to criticism for being impressionistic.
• Again, care must be taken to ensure conclusions do not offend common sense / correspond with the wider matrix of fact.
Delay impact determination
Prospective • Retrospective
• Prospectively: Determining the possible impact of delays on completion of the work, based only on the future plan for the work
• Retrospectively: Determining the actual impact of delays on completion of the work, taking account of the actual sequence/duration of work for impacted activities
© Arcadis 2015
7.0 - Common Methodologies
• The theory we have just looked at underpinning delay analysis
methodologies is crucial to understand the strengths/weaknesses
of any method of analysis
• Lets take a look at the most ‘recognised’ methodologies in the
construction industry:
• Impacted As-Planned Analysis
• Time Impact Analysis
• Time Slice Windows Analysis
• As-Planned vs. As-Built Windows Analysis
• Collapsed As-Built Analysis
• Longest Path Analysis
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- SCL DDP 2nd
Edition, 2017
- AACE RP 29R3,
2017
© Arcadis 2015
7.1 - Impacted As Planned Analysis
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ED
Baseline
Delay Event
Impacted
2. Impact the programme
2. Record Employer delay
2. Identify Baseline
© Arcadis 2015
7.1 - Impacted As Planned Analysis
Strengths
• Simple, easy to perform
• Requires limited records
Weaknesses
• Dynamic method – assumes correct baseline logic
• Ignores progress/ actual sequence of work
• Typically only accounts for Excusable delays
• Almost always highly theoretical results
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Methodology
Impacted As-Planned Analysis
Time Impact Analysis
Collapsed As-Built Analysis
Time Slice Windows Analysis
As-Planned vs. As-Built Windows Analysis
Longest Path Analysis
Methodology Anaysis TypeCritical Path
Determined
Delay Impact
DeterminedInformation required
Impacted As-Planned AnalysisModelled /Additive /
Cause>EffectProspectively Prospectively
>Logic Linked Baseline programme
>Selection of delay events to be modelled
© Arcadis 2015
7.2 - Time Impact Analysis
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ED
Baseline
Delay Event
Updated /
Impacted
Progress
Before Event
NED
1. Update the programme
2. Record Contractor delay
3. Impact the programme
4. Record Employer delay
© Arcadis 2015
7.2 - Time Impact Analysis
Strengths
• Relatively simple, easy to perform
• Principles easy to understand by non-specialists
• Partially accounts for non-excusable delays (i.e. delays before each event)
Weaknesses
• Dynamic method – assumes correct baseline/updated programme logic
• Can be time consuming (lot’s of software work)
• Can ignore future progress/sequence unless ‘forecast’ element of critical path checked against as-built records/later updates
• Partially accounts for non-excusable delays (i.e. delays before each event)
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Methodology
Impacted As-Planned Analysis
Time Impact Analysis
Collapsed As-Built Analysis
Time Slice Windows Analysis
As-Planned vs. As-Built Windows Analysis
Longest Path Analysis
Methodology Anaysis TypeCritical Path
Determined
Delay Impact
DeterminedInformation required
Time Impact AnalysisModelled / Additive /
Cause>EffectContemperanesouly Prospectively
>Logic Linked Baseline programme
>Updated programmes or progress records
to recreate them
>Selection of delay events to be modelled
© Arcadis 2015
7.3 - Collapsed As-Built Analysis
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Baseline
As-Built
1. Identify Delay Event
2. Deduct From Programme
3. Record Employer delay
Delay
Event
NED
4. Record Contractor delay
© Arcadis 2015
Methodology
Impacted As-Planned Analysis
Time Impact Analysis
Collapsed As-Built Analysis
Time Slice Windows Analysis
As-Planned vs. As-Built Windows Analysis
Longest Path Analysis
7.4 - Collapsed As-Built Analysis
Strengths
• Does not require complete programme updates
• May be suitable where baseline or updates are defective
• Accounts for non-excusable delays
Weaknesses
• Extremely time consuming (lot’s of software work to create model of as-built)
• Results based on accuracy of as-built and logic links, therefore easy to challenge
• Ignores reality of construction progress and incremental impacts of delays
• Ignores re-sequencing and mitigation
• Whilst this method has a veneer of fact, it typically produces theoretical results
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Methodology Anaysis TypeCritical Path
Determined
Delay Impact
DeterminedInformation required
Collapsed As-Built AnalysisModelled / Subtractive
/ Cause>EffectRetrospectively Retrospectively
>Logic Linked As-built programme
>Selection of delay events to be modelled
© Arcadis 2015
7.4 - Time Slice Windows Analysis
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As-Planned
Window 1 As-Built
1. Inspect programmes in window to identify critical path / delay
2. Repeat step 1 for each window
3. Investigate causes of delay
Window 2 As-Built
Window 3 As-Built
Total As-Built
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2
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WINDOW 1 WINDOW 2 WINDOW 3
1 2 3
Delay
© Arcadis 2015
7.4 - Time Slice Windows Analysis
Strengths
• Relies on contemporaneous records of progress/programme updates
• Relatively simple to perform
• Accounts for non-excusable delays
Weaknesses
• Dynamic method (if relying on updated programmes) – assumes updated programmes include correct logic/durations/reasonable forecasts
• Requires complete progress records/programme updates
• Can be time consuming (lot’s of software work)
• Can produce theoretical results unless properly implemented / guided by common sense
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Methodology
Impacted As-Planned Analysis
Time Impact Analysis
Collapsed As-Built Analysis
Time Slice Windows Analysis
As-Planned vs. As-Built Windows Analysis
Longest Path Analysis
Methodology Anaysis TypeCritical Path
Determined
Delay Impact
DeterminedInformation required
Time Slice Windows Analysis
Observational /
Dynamic /
Effect>Cause
Contemperanesouly Retrospectively
>Logic Linked Baseline programme
>Updated programmes or progress records
to recreate them
© Arcadis 2015
7.5 - As-Planned vs. As-Built Windows Analysis
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As-Planned
As-Built
1. Determine baseline
2. Determine as-built/critical path
3. Determine delay/causes of delay
Window 1
5d aheadWindow 2
25d (30d)Window 3
30d (5d)
Window 4
35d (5d)
Window 5
37d (2d)
© Arcadis 2015
Methodology
Impacted As-Planned Analysis
Time Impact Analysis
Collapsed As-Built Analysis
Time Slice Windows Analysis
As-Planned vs. As-Built Windows Analysis
Longest Path Analysis
7.5 - As-Planned vs. As-Built Windows Analysis
Strengths
• Does not require complete programme updates
• Suitable where baseline or updates are defective
• Accounts for non-excusable delays
• Findings based principally on facts
Weaknesses
• Difficult to perform, requires expertise in construction sequencing, delay analysis and forensic investigation
• Time consuming, requires detailed review of all relevant records
• Can be impressionistic unless supported by robust analysis
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Methodology Anaysis TypeCritical Path
Determined
Delay Impact
DeterminedInformation required
As-Planned vs. As-Built Windows AnalysisObservational / Static
/ Effect>CauseContemperanesouly Retrospectively
>Baseline programme
>As-built programme
© Arcadis 2015
7.6 Longest Path Analysis
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As-Planned
As-Built
1. Determine as-built/critical path
2. Review baseline
3. Determine delay/causes of delay
Window 1
20dWindow 2
28d (8d)
Window 3
35d (7d)
Window 4
37d delay (2d further
delay)
Retrospective
© Arcadis 2015
Methodology
Impacted As-Planned Analysis
Time Impact Analysis
Collapsed As-Built Analysis
Time Slice Windows Analysis
As-Planned vs. As-Built Windows Analysis
Longest Path Analysis
7.6 - Longest Path Analysis
Strengths
• Does not require complete programme updates
• May be suitable where baseline or updates are defective
• Accounts for non-excusable delays
Weaknesses
• Ignores reality of construction progress and incremental impacts of delays
• Ignores re-sequencing and mitigation
• Whilst this method has a veneer of fact, it typically produces theoretical results
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Methodology Anaysis TypeCritical Path
Determined
Delay Impact
DeterminedInformation required
Longest Path AnalysisObservational / Static
/ Effect>CauseRetrospectively Retrospectively
>Baseline programme
>As-built programme
© Arcadis 2015
Summary – Methodologies
Methodology Anaysis TypeCritical Path
Determined
Delay Impact
DeterminedInformation required
Impacted As-Planned AnalysisModelled /Additive /
Cause>EffectProspectively Prospectively
>Logic Linked Baseline programme
>Selection of delay events to be modelled
Time Impact AnalysisModelled / Additive /
Cause>EffectContemperanesouly Prospectively
>Logic Linked Baseline programme
>Updated programmes or progress records
to recreate them
>Selection of delay events to be modelled
Collapsed As-Built AnalysisModelled / Subtractive
/ Cause>EffectRetrospectively Retrospectively
>Logic Linked As-built programme
>Selection of delay events to be modelled
Time Slice Windows Analysis
Observational /
Dynamic /
Effect>Cause
Contemperanesouly Retrospectively
>Logic Linked Baseline programme
>Updated programmes or progress records
to recreate them
As-Planned vs. As-Built Windows AnalysisObservational / Static
/ Effect>CauseContemperanesouly Retrospectively
>Baseline programme
>As-built programme
Longest Path AnalysisObservational / Static
/ Effect>CauseRetrospectively Retrospectively
>Baseline programme
>As-built programme
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© Arcadis 2015
8.0 - Which methodology is appropriate?
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Contractual requirements? – Differences between Fidic vs. NEC3 forms for instance
The context for the analysis – during construction / after completion?
What is the question being asked?
What information is (or is not) available?
Do time / cost constraints preclude any methodologies
S e l e c t i o n c r i t e r i a :
What works best in a dispute environment….?
© Arcadis 2015
8.1 - Problems with Modelled and Prospective Analysis
Modelled Analysis:
Based on determining ‘impact’ through a computer model (CPM network), rather than ‘discovering’ actual causes of delay through investigation
• Reliant on computer simulation -substantial effort invested into operating software instead of investigating facts
• Conditional on assumptions inputted into model, i.e. software logic
• Often theoretical and detached from reality
• Therefore, our preference is for observational methodologies
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Prospective Analysis:
If works are incomplete and an event has recently occurred, then determining a critical path or delay impact prospectively is necessary.
• But more typically, forensic delay analysis is applied after the event/completion of the works.
• In these cases, it is not appropriate to determine delay impacts prospectively.
• Why?
• “Why look in the crystal ball, when you can read the book?” (Nye Bevan)
• “With the light before him, why should [the arbitrator] shut his eyes and grope in the dark?” (Lord Macnaghten, Bwllfa and Merthyr Dare Steam Collieries, HL 1903)
• Under most contracts (and at law), prolongation costs can only be recovered for actual delay, not likely delay
© Arcadis 2015
The importance of retrospective delay impact determination
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Completion is or Will Be Delayed?Did that event really delay completion?
1.5m
3.2m
Delay Event
Baseline
Progress
As Built
Critical
Key:
© Arcadis 2015
8.2 – Problems with Retrospective Critical Path Determination
• Changes to the critical path of a project can and do occur
• Retrospective critical path determination often fails to take
account of changes to the critical path
• May identify earlier activities as critical as a result of future,
unrelated delays
• May not correspond with actual events / common sense
• Therefore, our preference is for contemporaneous critical path
determination
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© Arcadis 2015
As-Planned vs As-Built Windows Analysis vs. Longest Path Analysis
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LPA
APvAB
Retrospective
Review of progress/ common sense suggests critical path changed through project
Retrospective view suggests second path critical throughout project
Contemporaneous
© Arcadis 2015
9.0 - Summary / Conclusions
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All methods fall into the following categories:
Approach: Modelled/Observational
Critical Path: Prospective/Contemporaneous/Retrospective
Delay Impact: Prospective/Retrospective
Selecting an appropriate methodology requires consideration of the contract, information availability and time/resource constraints
However in most cases of forensicdelay analysis, our preference is for:
Fact based investigation (Observational methodologies)
Contemporaneous Critical Path determination
Retrospective Delay Impact determination
So, our preference is for observational, contemporaneous critical path analysis and retrospective delay impact determination, e.g. One of the ‘Windows’ Analyses
Using this approach, detailed records to determine actual/as-built sequence and timing of the work is key
The most important thing to all methodologies is the application of common sense!
© Arcadis 2015
Questions?
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Contact Alan for further information: