Dueling Delays: How to Combat Concurrency Claims

Typically, the party that makes the concurrent delay argument often does so to mitigate, or even eliminate, its responsibility for delaying the project. Owners cite concurrent delays by the contractor to avoid issuing time extensions or avoid paying the contractor its extended general condition costs when owed a time extension. Similarly, contractors rely on concurrent delays to avoid responsibility for liquidated damages.    

So how can you successfully defend against a concurrent delay argument that could either prevent you from recovery of compensation if you’re a contractor, or prevent you from assessing liquidated damages if you’re an owner?

What Does the Contract Say?

The first thing to consider is, as with all construction disputes, what does the contract say. Contracts sometimes, albeit rarely, define concurrent delays and specify the contractor’s compensation when concurrent delays occur on a project. For instance, Section 1806.2.D, Concurrent Delays, of the Minnesota Department of Transportation Standard Specifications defines concurrent delays fairly clearly:

Concurrent delays are independent sources of delay that occur at the same time. When a non-excusable delay is concurrent with an excusable delay, the Contractor is not entitled to an extension of Contract Time for the period the non-excusable delay is concurrent with the excusable delay. When a non-compensable delay is concurrent with a compensable delay, the Contractor is entitled to an extension of Contract Time, but not entitled to compensation for the period the non-compensable delay is concurrent with the compensable delay.

Therefore, if your contract has a provision that specifically addresses situations that constitute concurrent delays, that provision should govern your analysis.

A Silent Contract

Unfortunately, few contracts include provisions that define concurrent delays and address the excusability and compensability of concurrent delays. If your contract is silent on concurrent delay, generally recognized principles within the construction industry govern.

An important recognized principle within the construction industry is that only delays to the critical path of the project can delay the project. Therefore, an initial analysis of whether the alleged delays are critical delays is required. If one of the delays is a critical-path delay, and the other is not, then you may not have a concurrent delay on your hands. This “lack of an actual concurrent delay” is your first line of defense to a concurrent delay argument. However, in the situation where the project may contain more than one critical path, or a secondary non-critical path is within only a few days of being critical, it may be reasonable to consider these paths to be concurrently critical and, thus, if they are delayed, they may be concurrent delays.

When both delays are considered critical delays, then next we must understand the nature of the delays themselves. Excusable delays are typically those that are either the owner’s responsibility or caused by some form of a force majeure event that was not the owner’s or the contractor’s responsibility. Non-excusable delays are typically delays that are the contractor’s responsibility and for which the contractor is not due any additional time or delay damage compensation.

For example, if an owner identifies a critical-path delay that resulted from the contractor’s failure to procure steel in time for its erection, that may be a non-excusable delay. However, if the contractor then, in turn, identifies a critical-path delay that resulted from a change order issued by the owner that altered the erection sequence of the steel, that may be an excusable delay. As such, it could be argued that these dueling delays could be concurrent.

Therefore, properly understanding the nature of the delays in question and categorizing them correctly is crucial to combatting a concurrent delay claim.

Compensable or Non-Compensable

While we talked mostly about excusable and non-excusable delays above, the categories of excusable delay also fall within another subset: excusable, compensable and excusable, non-compensable delays. Excusable, compensable delays are solely the responsibility of the owner and, as such, the contractor is entitled to recover its delay damages in addition to a time extension. Excusable non-compensable delays, however, are not the fault of either the owner or the contractor and generally are considered to be force majeure-type events (i.e., strikes, floods and fires, acts of God, unusually severe weather, etc.), for which the contractor is only due a time extension.

If not specified in the contract, when concurrent delays occur that are a combination of non-excusable, excusable/non-compensable, and excusable/compensable, these combinations can produce a variety of results regarding the excusability and compensability of the concurrent delays. An industry standard to help identify what these combinations of concurrent delays can be expected to produce is detailed in the table below, taken from AACEI’s Recommended Practice for Forensic Schedule Analysis (RP-FSA).

Again, being aware of which category your delay event falls into is critical to defining whether or not you have a true concurrent delay, and whether or not that concurrent delay will result in compensability for one side or the other.

Functional or Literal Concurrency

Now, let’s assume you are the owner described in our example above. You’ve alleged a critical-path, non-excusable delay resulting from the contractor’s material procurement delay. However, the contractor has a valid claim for an excusable, compensable delay due to the change order you issued for the steel erection sequence. The chart above would dictate that this situation would result in an excusable delay that was not compensable for either party. Despite this, you still feel that liquidated damages are appropriate. What do you do?

As discussed above, concurrent delays are considered to be delays that occur at the same time. While it may sound straightforward, the phrase “at the time same time” is an oft-debated subject. AACEI’s RP-FSA is an industry publication that attempts to provide some clarity to the concurrent-delay argument. It defines two categories of concurrency: functional and literal. Functional concurrency is defined as delays that “need to be occurring within the same analysis period.” Whereas literal concurrency is defined as delays that are “happening at the same time.” So, what’s the difference?

Functional concurrency is a much more liberal application of the concurrent-delay theory, allowing for the analyst to identify concurrent delays simply if the two delays occur within the same measurement period for the delay analysis. Typically, a delay-analysis measurement period is a month, or the time between schedule updates. Therefore, under functional concurrency, theoretically, a delay that occurred during the first 5 days of the month and a delay that occurred during the last 5 days of the month could be considered concurrent.

Literal concurrency is more restrictive and, as such, occurs much less frequently than functional concurrency. Literal concurrency requires that the delays occur at the exact same time. Therefore, for true literal concurrent delays to occur, the delays must start on the exact same date and will continue to be concurrent until one delay ceases.

If concurrent delay has been alleged, and each delay can be shown to have critically delayed the project, and the delays are the responsibility of different parties (i.e., an owner-caused delay and a contractor-caused delay), it may be necessary to approach the analysis under the literal concurrency theory.

For example, considering the example discussed above, the owner can show that the contractor’s structural steel procurement critically delayed the project. During the same time period, the contractor can show that the owner issued a change order re-sequencing steel erection, which also critically delayed the project. Under the functional concurrency theory, the contractor could argue that the delays were concurrent because they occurred during the time period. However, let’s say we know that the delay to the contractor’s material procurement occurred before the owner issued its change. Therefore, the contractor’s delay occurred first and, subsequently, the change order was issued at a later date.

This timing of events can be resolved by the principle known as “primacy of delay.” This principle states that whatever activity caused the delay first is the primary and sole driver of delay and creates float to the other paths of work (i.e., the erection sequence of the steel). In this scenario, the owner would want to analyze the delay using the literal concurrency theory that would state these delays were, in fact, not concurrent, and that the contractor is solely responsible for this delay and, as such, subject to liquidated damages.

Unfortunately, most concurrent delay circumstances are not this clear cut. As concurrent delay arguments have become prevalent in construction-delay disputes, the proper categorization and analysis of these delays is not well understood by many analysts. Therefore, before you concede to a concurrent delay argument, it is important to walk through the steps detailed above and determine if the alleged concurrent delay allegation is legitimate.