Allocating Concurrent Delays by Establishing Primacy

The simple definition of a concurrent delay on a construction project is the occurrence of two or more independent delay events within the same period of time or delay period.[i]  See previous post on the same topic: Allocation of Concurrent Delay Damages on Construction Projects.  Concurrent delays can affect both the Owner and Contractor or the Contractor and a Subcontractor.  The delay events can then relate to one activity or multiple activities.  Concurrent delays may affect a Contractor’s or Subcontractor’s claim if one delay event is excusable (as in an event for which a time extension is provided, but no damages are due – i.e. a weather event) and the other is not (as in an event for which compensable is due – i.e. a change in scope).

According to the Association for the Advancement of Cost Engineering International (“AACE”), a leading authority on forensic schedule analysis, concurrent delays must have the following characteristics:

  • They must be critical, i.e. causing the length of the overall project to increase.
  • They must be caused by different parties to the contract, or caused by at least one of the contract parties, plus a third party or outside cause such as government agencies or by a force majeure event.
  • They must be unrelated to each other in terms of their initial costs.
  • They must be independent of other concurrent delays in terms of when they start and end.
  • They must be caused unintentionally, and thus, distinguish from pacing delays (activities that are purposefully delayed due to the fact that a preceding delay has occurred).

When allocating responsibility for concurrent delays, AACE focuses on the concept called “primacy of delay,” which is that only delays to the critical path of the project can extend the project’s length (completion date) and that a delay to the critical path creates float in other, non-critical paths.  The primacy of delay dictates that when progress occurs in one concurrent critical path, then that path is no longer critical because float is created by the remaining critical path or paths that have not progressed.  This is an example of the dynamic nature of critical path scheduling and one reason why concurrent delay arguments are often contentious, misapplied, and improperly supported.  Many times, the CPM analyst fails to consider the dynamic nature of critical path scheduling and, in doing so, introduces subjectivity into the process of calculating or apportioning responsibility for concurrent delays.

Courts have generally taken one of two approaches when contract performance is delayed due to concurrent causes.

  • A traditional view has been that if delays were inextricably intertwined, there is no recovery.  For example, generally, an Owner is precluded from assessing liquidated damages against the Contractor where both the Contractor and Owner are responsible for a concurrent delay event.  The Contractor is similarly not entitled to damages where weather delays and extra work issues concurrently delay the project.
  • The modern approach is to determine whether the delay can be apportioned between the parties.  If the delay can be allocated among the parties, the courts will allow proportionate fault to govern recovery akin to a comparative fault analysis.  This type of analysis requires a network or Critical Path Method (CPM) type of analysis to identify and determine critical paths and the parties responsible for those delays.  With the assistance of a critical path expert, the courts can segregate the delays along the critical path and allocate the delay to the responsible party.  A common analysis technique is to subdivide the period of alleged concurrent delay into smaller time increments.  When primacy of delay can be established, the process of apportioning responsibility for delay is relatively straightforward.  It is somewhat paradoxical that for a concurrent delay argument to be persuasive, the position to an extent relies on the inherent limitation of schedules under review and the absence of useful information to explain the delays or the parties’ actions.  In other words, because the analyst cannot reasonably establish primacy of delay based on the available schedules and the as-built information, he/she concludes that the delays are concurrently critical.  However, if more detailed analysis or as-built records are available, or if the project could be analyzed in smaller increments of time, then perhaps apportionment could be performed with greater clarity.

Comment:  A few points to keep in mind when evaluating the risk of pursuing concurrent delay claims:

(1) If you are in a concurrent delay situation, a CPM analyst is essential to prove your case.  A claim that is well supported by contemporaneous records, but lacks corresponding schedule support is unlikely to be successful in demonstrating concurrent delay or entitlement to delay damages.

(2) If apportionment of responsibility for concurrent delays has not or cannot be performed, but it can be shown that the claimant has substantially caused or contributed to the delays, then the claimant risks being liable for paying all of the resulting delay damage.  The Contractor pursuing a delay claim against an Owner takes what it believes to be a reasonable position by conceding that it was responsible for causing a small portion of the delay, but if the analysis shows they were concurrent delays, there is a trap for the Contractor.  The court could reject the Contractor’s concurrent delay argument disregard attempts to a portion of delays and issue a judgment for the entirety of the delay damages, even when there are several causes, against the Contractor based on the Contractor’s substantial contribution to the delay (the substantial factor test).

(3) The most effective strategy for overcoming concurrent delay arguments is to adopt best practices in scheduling and project management by adhering to the contract, using a realistic, regularly updated CPM schedule, providing timely notice of delays, and properly managing critical path activities.

[i] W. DeFlaminis, Practical Tips on Concurrent Delay, ABA Section of Litigation, February 9, 2015.

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