Pacing
Pacing, which involves intentionally slowing down the pace of work, occurs when a decision is made to deliberately delay the completion of an activity. This decision is typically prompted by a concurrent delay experienced in parallel with another independent activity.
In scenarios where a delay, not directly attributed to the contractor, impacts some activities, creating margin of delay for tasks within their responsibility, the contractor holds the right to adapt their work pace. If a decision is made to extend the duration of an activity, this will consume the available buffer time generated by the delay.
In order to justify that the delay in completing a task is due to a voluntary slowdown, it is essential to communicate this decision beforehand. Properly managed, this measured slowdown can potentially yield cost savings for the contractor and leave the project schedule unaffected.
Concurrent Delays
Concurrent delays materialize when multiple delays overlap, impacting the project in similar ways. In other words, this means that even if any one of these delays hadn’t occurred, the project’s end date would remain unchanged due to the influence of the other delay(s). A pacing delay, caused by a deliberate pace reduction, qualifies as a concurrent delay since it happens simultaneously with delays beyond the contractor’s control. Typically, concurrent delays are managed through time extensions, though they do not lead to prolongation costs.
Benefits
The contractor’s choice to slow down their work is primarily driven by the aim to maximize profits, although this can also prove advantageous for the owner. Recognizing it as a concurrent delay (excusable non-compensable) diminishes the potential compensable damages for the contractor. This strategic approach seeks to balance both parties’ interests while adhering to project timelines.
Disruption
Disruption refers to a decline in operational efficiency triggered by unforeseen circumstances. In the context of a construction project, disruption arises when the contractor’s work deviates from the originally planned efficiency. This situation can be the result of various events, such as workflow interruptions, task sequence changes, or work schedule changes.
Disruption typically results in an increased workload or man hours for the direct resources involved in the affected task. When the disruption is caused by the client, the contractor is entitled to compensation for the productivity loss. This can lead to the contractor filing claims to recover additional expenses incurred due to the lost productivity. Claims include additional expenses incurred due to increased time spent for direct labor and equipment.
Understanding the difference between disruption and delay is important. Delay involves to a postponement in the job’s completion date, while disruption relates to a decline in productivity during the execution of a task. However, a delay can be the cause of a disruption and vice versa.
When labor and machinery costs exceed the planned budget, pursuing a disruption claim becomes a viable option to recover lost productivity expenses. However, the feasibility of such a claim hinge on an initial assessment of the realism of the original plan. If the plan was unrealistic from the outset, it cannot serve as a valid benchmark for measuring the impact of the disruption.
To prove any claim, it is necessary to have contemporary and reliable documentary support. Specifically, in the case of a disruption claim, the following evidence and documentation must be provided:
- The progress of the activities that have been affected.
- Work periods impacted and not impacted by disruptive events.
- Additional equipment and labor implemented in the affected activities.
- An assessment of the variance between the planned and executed work, or preferably between unaffected and affected periods.
- Identification of the specific events responsible for the loss of productivity.
Therefore, it is very important to meticulously generate and maintain high-quality, contemporaneous project records from the project start to completion. A disruption claim is considered difficult to establish, quantify and prove. However, this is mainly due to the inability of the contractors to generate and maintain sufficient information during the course of the project. Loss of productivity is typically not recognized in real-time but rather becomes evident when substantial disparities emerge between actual and planned costs. The key to making a successful claim is “records, records and records”.
Failure by the contractor to adhere to the contractual notice provisions may lead to claim denial. Therefore, it is good practice to establish a systematic procedure for gathering essential information and submitting requisite notifications. While the consequences of events may always be subject to dispute, the diligent recording of events should never be in question.
Disruptive events
The events that can impact productivity and generate interruptions are diverse depending on the type of project, management or location, among many others. Some examples are:
- Irregular work patterns.
- Difficulty in accessing the pit.
- Densely populated workspaces.
- Long work hours.
- Lack of quality supervision.
- Poor communication between workers.
- Perform jobs out of sequence.
- Slow responses to requests for information (RFIs).
- Shortage or delay in the delivery of materials.
- Change orders
Common methodologies to quantify disruption
- Earned value analysis.
- Analysis of the measured mile.
Costs
Typically, disruptive events tend to impact sub-critical activities that fall outside of the critical path and therefore outside of a delay analysis. When negotiating a time extension, it’s essential to understand that this approach does not enable the recovery of losses stemming from the disruption-affected activities.
It is important to know the difference between a delay and an interruption. A delay typically refers to a setback in the project’s overall completion date, typically affecting critical path activities. On the other hand, an interruption in progress may or may not result in a delay in project completion but invariably leads to increased direct costs.
In simpler terms, a time extension claim serves to alleviate the burden of liquidated damages and covers expenses linked to indirect remedies and general overheads. However, to recover the higher costs produced by direct resources it is necessary to make a claim for disruption.
