forensic delay analysis - anglian-arbitrators.org.uk ciarb delay analysis...5.0 - delay analysis...

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

29 November 2018 4

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.

29 November 2018 5

https://legal-dictionary.thefreedictionary.com/

© 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

29 November 2018 6

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

29 November 2018 9

- 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

29 November 2018 11

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


© 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








Determined

Delay Impact


Time Impact AnalysisModelled / Additive /

Cause>EffectContemperanesouly Prospectively


>Updated programmes or progress records

to recreate them


© Arcadis 2015

7.3 - Collapsed As-Built Analysis

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ED

Baseline

As-Built

1. Identify Delay Event

2. Deduct From Programme


Delay

Event

NED

4. Record Contractor delay

© Arcadis 2015

Methodology







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

29 November 2018 15


Determined

Delay Impact


Collapsed As-Built AnalysisModelled / Subtractive

/ Cause>EffectRetrospectively Retrospectively

>Logic Linked As-built programme


© 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

3

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


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

29 November 2018 17

Methodology








Determined

Delay Impact



Observational /

Dynamic /

Effect>Cause

Contemperanesouly Retrospectively



to recreate them

© Arcadis 2015

7.5 - As-Planned vs. As-Built Windows Analysis

29 November 2018 18

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







7.5 - As-Planned vs. As-Built Windows Analysis

Strengths


• Suitable where baseline or updates are defective


• 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

29 November 2018 19


Determined

Delay Impact


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







7.6 - Longest Path Analysis

Strengths


• May be suitable where baseline or updates are defective


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

29 November 2018 21


Determined

Delay Impact


Longest Path AnalysisObservational / Static

/ Effect>CauseRetrospectively Retrospectively

>Baseline programme

>As-built programme

© Arcadis 2015

Summary – Methodologies


Determined

Delay Impact


Impacted As-Planned AnalysisModelled /Additive /

Cause>EffectProspectively Prospectively



Time Impact AnalysisModelled / Additive /

Cause>EffectContemperanesouly Prospectively



to recreate them


Collapsed As-Built AnalysisModelled / Subtractive

/ Cause>EffectRetrospectively Retrospectively

>Logic Linked As-built programme



Observational /

Dynamic /

Effect>Cause

Contemperanesouly Retrospectively



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

29 November 2018TfL 90748 Property Consultancy & Development - Framework Lot 5A 22

© 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

29 November 2018 24

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

29 November 2018 26

© 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:

[email protected]

mailto:[email protected]

Arcadis UK

Arcadis House

34 York Way

London

N1 9AB

T: 020 7812 2000

arcadis.com

forensic delay analysis - anglian-arbitrators.org.uk ciarb delay analysis...5.0 - delay analysis...

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