December 09, 2019

Concurrent Delays: Definitional and Procedural Considerations

Amin Terouhid

Concurrent delays frequently occur on construction projects, especially in complex construction projects in which various contracting parties implement and are responsible for a variety of work elements over the course of the project. Contractual, legal, and technical considerations add several layers of complexity to cases of concurrency; therefore, concurrent delay cases are among the most contentious and complex matters in construction claims.

Courts, boards of contract appeals, arbitration panels, and experts, however, are inconsistent in their approach to defining and assessing concurrent delays due partly to the fact that contracts are either silent or ambiguous about the matter of concurrency. These inconsistencies are often among the underlying reasons for disputes. As such, it is important that contracting parties pay close attention to incorporating well-thought-out contract provisions to minimize the likelihood of concurrency-related disputes in construction projects. Such clauses should properly assign the responsibility for managing concurrency-related risks and define considerations in assessing excusability and compensability of delays that seem to be concurrent. 

Although having properly written provisions to define concurrent delay and establishing procedures for resolving concurrency-related disputes are not adequate to prevent such disputes from arising, incorporating proper language in contracts plays a key role in increasing the likelihood of resolution of concurrency-related matters before they escalate. This article focuses on some of the key considerations in drafting contract provisions, with a focus on definitional and procedural considerations.

Definitional Considerations

Two or more delayed activities in a project network are identified to be concurrent when they, partly or wholly, overlap one another. Project networks, which are typically presented in some form of schedules, are intended to identify both project activities and their interdependencies. A project network functions as a basis and an essential input to the process of assessing concurrent delays.

Careful considerations should be given to drafting construction contracts to ensure the contract clearly characterizes cases of concurrency. Experts rely on various references for the definition of concurrent delays. In the United States, one of the technical references that is commonly-cited in delay claims is AACE International Recommended Practice (RP) 10S-90, entitled Cost Engineering Terminology. RP 10S-90, however, does not offer one single definition of concurrent delays. It, in fact, offers five definitions. Two of these definitions are provided below:

  1.  Two or more delays that take place or overlap during the same period, either of which occurring alone would have affected the ultimate completion date.
  2. Concurrent delays occur when there are two or more independent causes of delay during the same time period. The “same” time period from which concurrency is measured, however, is not always literally within the exact period of time.

Another commonly cited technical reference is AACE International RP 29R-03, entitled forensic schedule analysis. RP 29R-03 identifies that the following tests must be proven to ensure concurrent delays exist:

  1. Two or more unrelated, independent delays exist. One of these delays can be a delay arising from a force majeure event.
  2. None of the delays identified in Step 1 can be a voluntary delay.
  3. Not all delayed activities identified in Step 1 are the responsibility of only one contracting party.
  4. The project completion date would have been delayed in the absence of any of the delays identified in Step 1.
  5. The delayed work has to be substantial (i.e., not easily correctable).

The meaning of concurrent delay is different in the English law. The following are two excerpts that help illustrate the meaning of concurrent delay under the English law:

True concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor Risk Event, and the effects of which are felt at the same time… In contrast, a more common usage of the term ‘concurrent delay’ concerns the situation where two or more delay events arise at different times, but the effects of them are felt at the same time. In both cases, concurrent delay does not become an issue unless each of an Employer Risk Event and a Contractor Risk Event lead or will lead to Delay to Completion. Hence, for concurrent delay to exist, each of the Employer Risk Event and the Contractor Risk Event must be an effective cause of Delay to Completion (not merely incidental to the Delay to Completion). 
Concurrent delay is used to denote a period of project overrun which is caused by two or more effective causes of delay which are of approximately equal causative potency.

Concurrent delays typically entitle contractors to a time extension, but not time-related delay damages. Therefore, as part of definitional considerations, contract provisions are expected not only to specify how concurrent delays are defined but also to clearly define the boundaries of contract parties’ entitlements to time and monetary compensation in the event of concurrent delays.

Procedural Considerations

In the event of a concurrent delay, the time impact of a contractor-caused delay on a project’s critical path may be greater in magnitude than the time impact of an owner-caused delay. Under such circumstances, it is sound to expect that the owner be entitled to collect delay damages for the excess impact. Conversely, the time impact of an owner-caused delay on a project’s critical path may exceed the time impact of a contractor-caused delay. Thus, it is critical to perform a forensic schedule analysis and closely examine the cases of concurrency to properly allocate responsibilities for delays and specify proper entitlements.

Although definitions of concurrent delays exist in the literature, any assessment of concurrent delays has to start with performing a liability (i.e., entitlement) analysis based on contractual rights and duties of contract parties. As part of procedural considerations, the contract should specify how the cases of concurrency are supposed to be assessed and/or dealt with. It is recommended that these considerations be incorporated in construction contracts in the form of procedures that parties need to follow to prove or disprove the presence of concurrent delays, and to specify the steps that they need to take once such a determination is made. Examples of such procedures include the following:

  • contract administration systems that contract parties have to use to record, maintain, process, and report contemporaneous project records;
  • notice requirements that contract parties have to satisfy;
  • forensic techniques to be used in performing delay analysis; and
  • procedures for seeking time-related entitlements and/or monetary damages.

The lack of clear contractual procedures for concurrent delays increases the likelihood of delay-related disputes. Given the inconsistency of deciding tribunals and experts in their approach to characterizing and assessing concurrent delays, it is important that the parties exercise due diligence in preparing unambiguous contract language that facilitates successful resolution of delay-related matters before they result in conflicts.

If a party is in a position to negotiate the provisions of a contract, it is recommended that it negotiates to reach an agreement, prior to signing the contract, on definitions of and procedures for assessing various types of delays, including concurrent delays. Such definitions and procedures, combined with the use of sound forensic schedule analysis techniques, can play key roles in minimizing and/or successful resolution of delay-related disputes.

Conclusion

Concurrency of delays is among the most contentious and complex matters in construction claims. To overcome the challenges of assessing such complex cases, careful attention should be given to definitional and procedural considerations in preparing construction contracts. Definitional considerations focus on characterizing concurrent delays and defining the boundaries of entitlements to time and monetary compensation in the event of concurrent delays. Procedural considerations, however, focus on delineating the procedures that parties need to follow to prove or disprove the presence of concurrent delays. They also identify the steps to take once such a determination is made. Giving proper attention to these two areas is among the effective strategies that contract parties can use to avoid or minimize conflicts that may arise due to current delays. 

Entity:
Topic:

Amin Terouhid

Adroit Consultants, LLC, Cliffside Park, NJ