DELAY ANALYSIS AND ITS POTENTIAL TO REDUCE

SITUATIONS RESULTING IN CLAIMS AND LOSSES

Marais D1, Martin L2

1
Department of the Built Environment, Cape Peninsula University of Technology, PO Box 652, Cape Town 8000,
[email protected]
2
Department of the Built Environment, Cape Peninsula University of Technology, , PO Box 652, Cape Town 8000,
[email protected], Tel No 021 460 3033

ABSTRACT

Purpose of this paper – Delays within construction projects are common. Delays due to inclement
weather conditions are usually planned for. However not sufficient allowance is made for the extent
(progress and cost related) of such delays. The research is aimed at improving the understanding
and the usage of programming methods dealing with anticipated weather delays.

Methodology/Scope – By means of a literature review various delay analysis methods and the state
of the art of programming methods, incorporating unknown events, have been identified.
Subsequently interviews with a small sample of industry role players, based in the Western Cape,
were held. These were aimed at determining the preferred method of programming and approaches
taken to allow for delays due to predicted inclement weather conditions.

Findings – Although many theoretical approaches to allow and plan for anticipated delays exist,
contractors do not make use of these methods. An improved method for programming construction
projects, considering possible delays due to inclement weather, has to be developed.

Research limitations – A pilot study to determine the existing usage of programming methods was
done. The sample taken was based in the Western Cape with an emphasis on the Joint Building
Contracts Committees (JBCC) agreement. An extrapolation from this explorative pilot study to the
wider South African construction industry, and climatic regions, would have to be underpinned by
further research.

Practical implications – In order to allow contractors to make more accurate assumptions for the
input data regarding inclement weather, a standardization of contract documentation has to be
considered. This would reduce the number of unsatisfying situations resulting in claims. Improved,
simplified methods and rules have to be developed in conjunction with the role players, clients and
contractors alike.

Value – Enabling a better understanding of delays will allow the construction industry to reduce the
number of unsatisfactory claims. An approved and modified approach to programming for
inclement weather, such as the presented approach, will result in increased planning certainty
amongst contractual parties.

Keywords: Delay analysis, program planning, claims, inclement weather

1 INTRODUCTION

Delays in construction projects are common occurrences accompanied by increased costs for
projects (Alkass et al 1995). Weather is classified as a “problem source” as adverse weather
conditions result in construction time delays and budget overruns (Moselhi & El-Rayes 2002).
McDonald (2000) categorized weather as an “excusable non-compensable” delay. Generally delays
falling within this category allow contractors to claim for extensions of time, however not for
financial compensation for the cost impact thereof (Kartam 1999). The main construction contracts
used within the South African building industry are following the same principal.

An attempt to minimize the delaying effects of weather on building sites is the most common means
of “compensating” for not being able to control weather. The main construction contracts used
within South Africa require contractors to make allowance for normally expected weather
conditions in their contract programme. This is done by means of weather contingencies built into
the programme. The question of “what are normally expected weather conditions?” arises.
Currently no structured or formal method to judge weather conditions and its effects on construction
programmes exists. Contractors in the Cape Peninsula appear to make time related weather
contingencies based on perceived risks. Chan & Au (2006) established that contractors seldom
make provisions, in terms of cost, for the effects of inclement weather. The provisions made will
rather depend on the contactors estimate of the anticipated risk on the project.

Good client-contractor relationships are important to both parties for the success of a project and
anticipated future work. Semple et al. (1994) found that making provisions in a construction
programme for events such as weather delays reduces disputes. Cost and time claims, especially
those which are difficult to quantify, regularly result in disputes between the contractual parties.
Weather contingencies are very seldom adequate, in terms of progress and cost, due to the use of
heterogeneous methods used in the industry for weather contingency calculations. This results in
adverse client-contractor relationships.

This research endeavour is aimed at improving the understanding and the usage of programming
methods in dealing with anticipated weather delays, both progress and cost related. An improved
method, which could be further developed for an uniform industry wide usage, can then be
developed.

2 PROGRAMMING, SCHEDULING, DELAY ANALYSIS & WEATHER

ALLOWANCES

2.1 Programming and scheduling

Construction programmes are of utmost importance for a successful timely delivery of buildings or
infrastructure projects. Accompanying these programmes the required resources have to be
identified and managed accordingly. Various methods for scheduling projects are used. Yamin &
Harmelink (2001) identified four planning techniques currently in use in the world wide
construction industry, namely: Bar charts, Activity on arrow, Activity on node, and Line of balance
(linear scheduling). The Activity on arrow and Activity on node techniques are also known as
network scheduling techniques.

The bar chart was developed in the 1900’s by Mr Henry L. Gantt and is the simplest of all
scheduling techniques (Eggleston 1997). The bar chart consists of a horizontal (time) and a vertical
(activity) axis. Each activity within a project is represented by a horizontal bar with its duration
represented by the length of the bar. The logical sequence of the work, as decided by the planner, is
indicated by lines linking the activity bars. The main advantage of the bar chart is its simple
visualisation of a project and its activities. Yet in order to derive such visualisation the sole use of
the bar chart technique tends to be unsuitable. Here the bar chart can be combined with network
scheduling. This technique allows a better planning of interconnected and inter-depending
activities.

Stevens (1990) defined network scheduling as:

 “... a method of scheduling activities by joining them in a series of interconnected links
which reflect relationships of activities as assigned by the planner”

A critical path can be established by both of the above mentioned network scheduling techniques.
The critical path determines the shortest time in which the construction work can be completed
(Carnell 2000). Activities on the critical path have no float whereas activities not on the critical
path have float. Float is the amount of time by which an activity can be delayed without delaying
the anticipated end date of the project (Cormican 1985).

The biggest shortfall of the bar chart is thus overcome by creating a bar chart through network
scheduling, producing a visually strong programme with a critical path and floats determined by the
interconnected links/relationships between activities.

2.2 Delay analysis techniques

Delay analysis is merely applying the planning techniques used to plan the project all over again.
There are various delay analysis techniques used. These include: the Global Impact Method, the As-
planned Method, the As-planned vs. as-built Schedule Analysis, the Modified as-built Method, the
Impact as-planned Method, and the Collapsed as-built Method.

These methods adopt a variety of different approaches to analyze the effect a delay has on the
contract completion date. The most inaccurate method is the “Global impact method”. Here the
sum of all the delay durations is regarded as the total project delay, irrespective if floats were used
or not.

The other techniques highlight many interesting, important and useful facts about a project. The
critical path of a project continuously changes as the project proceeds. As the Critical path has no
floats within the activities, a delay to an activity on the critical path causes a project delay. Some
techniques do however ignore the critical path and/or the changing nature thereof. With the “As-
planned method” and the “impact as-planned method” delays are incorporated into the base
programme in the form of “events with durations” (Gothand 2003) which is particularly suitable for
weather delays and its consequential delays. The “as-planned vs. as-built technique” makes use of
contract documents at project completion to identify and analyze delays on the project. The
“modified as-built method” analyzes delays in pre-determined windows (time periods) with each
delay being allocated to a responsible party (contractor, owner etc.) – making it a useful tool for
claim adjudication.

2.3 Weather allowances

Although there are currently various techniques by which the delaying effects of weather can be
allowed for in a contract programme, anecdotal evidence suggests that these techniques deliver
unsatisfactory results. According to McDonald (2000) the location of the project, the type of work,
and the time of the year in which the work is to be executed plays an important role in quantifying
the allowance to be made for weather in contract programmes. The latter is certainly the case for the
Cape Peninsula with its varying weather conditions, with heavy rains in winter and dry windy
summers.

Harris (1978) cites Moder & Phillips (1970) who suggest two methods for including weather
allowances in a contract programme. The first is to add one weather activity at the end of the
project programme. The second is to predict which activities will be affected by weather and to
increase their durations. These suggested methods however purely rely on the planner’s attitude
towards and understanding of weather delays.

Another method suggested by McDonald (2000) is to create a weather sensitive calendar which is
incorporated into a scheduling software programme and linked to all weather sensitive activities.
This method however ignores the weather sensitivity of each activity and the varying weather
across a country, making it difficult to implement uniformly on a bigger scale.

3 CONTRACT LAW AND INCLEMENT WEATHER CLAIMS

The four main construction contracts, as also recommended by the Construction Industry
Development Board (CIDB 2004), used in the South African construction industry are the JBCC
Principal building agreement, International Federation of Consulting Engineers (FIDIC), New
Engineering Contract (NEC) and General Conditions of Contract for Works of Civil Engineering
Construction (GCC).

While the JBCC agreement makes no provision for the contractor having to prepare a contract
programme, the GCC, FIDIC and NEC clearly state in clause 12.2, 8.3 and 31.1 respectively that
the contractor is obligated to provide a realistic contract programme in line with the planning and
scheduling techniques discussed earlier. The FIDIC document further requires the contractor to
inform the engineer of future events, such as weather, which could affect the works. The NEC gives
the engineer the authority to reject a programme should he/she feel it is unrealistic.

With regards to claiming for weather delays, the JBCC allows for an extension of time for a delay
caused by “inclement weather” but does not allow for a financial compensation, such as
Preliminaries & General (P&G) claims. The GCC makes provision for a reasonable time extension
for delays due to “abnormal climatic conditions” plus financial compensation for time-related
general items (P&G). FIDIC allows for an extension of time but no financial compensation for
“exceptional adverse climatic conditions”. The NEC makes provision for an extension of time for
certain compensation events. Here inclement weather occurring less than once every 10 years
qualifies for being such a compensation event.

It is evident that the four main contracts require the contractor to make reasonable allowance for
weather delays in contract programmes, as extensions of time are usually only granted for abnormal
weather conditions. Financial compensation for weather related delays is only granted when using
the GCC form of contract.

4 RESEARCH METHODOLOGY

A desktop research and literature review were conducted. The aim was to identify the state of the art
in programming and scheduling techniques, delay analysis techniques and methods of incorporating
unknown events in contract programmes – as also discussed above. This formed the base for a later
investigation of current practices within the industry by means of a pilot study like set-up.

The small pilot study was conducted by means of interviews, combined with site visits, with a small
sample of industry role players representing the bigger contractors within the Cape Peninsula. For
the pilot study three of the major contractors were approached. An emphasis was placed on the
building sector and the JBCC agreement as opposed to the engineering, civil sector of the industry.
The interviews aimed to determine the preferred method of programming and delay analysis in the
industry. Further the approaches taken for the prediction of inclement weather conditions and of
their effects on differing building sites were explored. The interviews were semi-structured in
nature. A broad outline of the interview and questions were e-mailed or faxed to the interviewees in
advance. The interviews were recorded, transcribed, and thereafter analyzed and cross-checked
with each other.

Based on the review and the fieldwork some suggestions for an improved method for drawing up
transparent contract programmes, taking inclement weather delays into account, are made.
5 SUMMARY OF FIELDWORK AND FINDINGS

5.1 Effects of weather on building construction sites

Commonly mentioned by the interviewees, the critical path of a project would usually run through
the earthworks, structure, wet trades and internal finishes. The magnitude of the delaying effect of
weather largely depends on the intensity of the weather occurrence, the characteristics of the site
(surrounding buildings, drainage characteristics etc.), and the type of construction operation. For
example, a certain amount of rainfall will result in a greater delay during earthworks (with
consequential delays) than with internal finishes. Likewise, wind of 40km/h will have a greater
delaying effect on crane dependent operations than on operations not dependent on crane time.
Weather conditions also affect the productivity of equipment and labour. It determines which
building activities can take place and usually also impacts on safety measures to be taken at the
time.

The consent of the interviewees was that each site must be viewed as an individual “entity” based
on the unique characteristics of the structure to be erected, its location, its surroundings and the
expected weather conditions in that area. This is in accordance with findings of McDonald (2000).
The loss in equipment and labour productivity and more stringent safety requirements have to be
taken into account.

5.2 Contract review

The JBCC principal building agreement is used on the majority of the building projects tendered on
in Cape Peninsula. The results of the interviews reflect the findings from the literature review with
regards to weather related delays in terms of the JBCC (i.e. extension of time but no financial
compensation). In most cases reported on, the wording of the standard weather clause of the JBCC
agreement (Clause 29.1.1) is changed from “inclement weather” to “exceptional inclement weather”
forcing the contractor to make some allowance for normally anticipated weather related delays.
With this change in wording the professional quantity surveyors usually state, as part of the Bill of
Quantities, the allowance a contractor must make in his programme in terms of weather delay days.
This retains the competitive nature of the tendering process with predetermined risks to be
considered. In practice this allowance is however not always found to be accurate and the contractor
mostly has the option of qualifying his tender on the original contract wording or any alternative
wording.
Yet, the freedom to change this contract clause wording, and the qualifying of tenders were
identified as contributors to the inaccuracy of weather “contingencies” in contract programmes –
with its potential for disputes.

5.3 Programming and scheduling

Many contractors make use of the “Site plan” module of the CCS (Construction Computer
Software) Candy and MS Project software programmes which are based on the bar chart and
network analysis techniques. During the pilot study it emerged that the most important factor
planners focus on during the planning of a project, is to ensure that the logic sequences within the
project is correct and sound; and secondly that the durations of the activities are as accurate and
realistic as possible. According to planners, the most risk lies in the logic of the programme rather
than in inaccurate activity durations.

Many assumptions are made during tender planning. This is due to limited information provided
creating some degree of uncertainty in activity durations. Evidence of the problem of uncertainty in
activity durations were also found in the literature (e.g. Hendrickson 2003). Based mostly on their
experience, contract planners have developed numerous ways in overcoming this uncertainty.

The two main factors thus contributing to the accuracy of any programme are therefore the
programming knowledge of planners and the extent of the information provided at tender stage.
5.4 Delay analysis
According to the interviewed industry professionals (senior planners), an accurate and realistic
contract programme in itself is the best delay analysis tool. The focus tends to be on the critical path
activities during such delay analysis. It is generally assumed that any delay to a critical activity
results in a delay to the contract completion equalling in duration to the initial delay experienced.
This view expressed by the interviewees ignores the possibility of a delay changing a non-critical
activity into a critical activity once all float has been consumed. It also might indicate the level of
understanding of construction professionals of the process of the delay analysis per se.

Focusing on delays to critical activities is the preferred approach by the interviewees, as opposed to
extending the duration of all affected activities. It must however be noted that the latter is a time
consuming and expensive process.

5.5 Incorporating unknown events (weather) into contract programmes

Contractors generally act in accordance with the tender documentation with regards to weather
contingencies. However varying points of view and interpretations on this matter exist amongst
contractors, clients and quantity surveyors. The provision of contingencies for weather depends on
the state of the industry (availability of work), the weather allowance stated in the Bill of Quantities
and/or the timing and quantity of weather delays experienced on previous contracts. Even though
guides are given in contract documents, contractors often qualify their tenders on their own weather
contingency. Often no contingency at all are qualified in which case all delays over and above the
stipulated allowance warrants an extension of time. This is also reflected in findings from Chan &
Au (2007) derived from a survey amongst Hong Kong contractors. A similar approach for claims
due to consequential weather delays is adopted. However, a fair assessment of this kind of delays is
crucial in order to settle such claims; an undertaking with its inbred difficulties.

Historical records are available from which valuable information can be obtained for the calculation
of the timing and quantity of any weather contingencies. This method is however uneconomical for
contractors as it requires technical and time consuming calculations when accommodating these
weather events in the contract programmes.

Contractors currently use four methods of allowing for weather delays in contract programmes:
Adding a weather activity at the end of the programme, as also suggested by Moder & Philips
(1970); Adding non working days into the calendar of the software programme, similar to
McDonalds (2000) approach; Lengthen the duration of critical activities; and Crash and Re-analyze
critical activities after the contract has been awarded to shorten the actual contract duration.

Even with all these methods of creating weather contingencies in programmes, the ultimate decision
on the contract duration lies with senior management using a base programme, which is indicative
at best.

6 DEVELOPMENT OF AN IMPROVED METHOD

Based on the desktop research and the findings from the fieldwork a first step towards an improved
method of dealing with weather delays in a more transparent manner is taken. The improved
method consists of two elements. The first being the accurate calculation of input data (timing and
quantity of anticipated weather related delays) and the other being the method whereby the input
data is transparently incorporated into the contract programme.

In order to achieve a high acceptance within industry an improved method should be based on the
preferred software programme (CCS – linked bar chart), should be visually clear, easy to
understand and interpret, and show logical links between activities.
Guidelines with regards to input data should be developed. These should be specific, clear and
unambiguous. It should guide the contractor in a precise manner in determining how wind, rain and
safety as a result of weather could delay each activity of a project. Due to the technical nature of
the subject, expertise and time involved in converting historical site and weather data into such
input data, and also the need for uniformity required for each contract, such guidelines for
calculating the input data should be developed by the JBCC. This body represents the important
industry role players and such guideline should be made part of the JBCC series, thus getting the
commitment of contractual parties to use such guidelines. The overall guidelines, affecting not only
programming but also contract law, will have to be underpinned by further comprehensive research.

An improved method should treat each activity on its own merit and should take the following
activities and characteristic of the site into consideration:
ƒ Timing of the activity (time of the year)
ƒ Geographic and physical location of the site
ƒ Position of the site relative to the surrounding buildings and areas
ƒ Soil characteristic of the site and the accompanied drainage characteristics of the site
ƒ Stage of construction
ƒ Changes in the productivity of labour and equipment as a result of weather
ƒ Intensity of the weather anticipated
ƒ Effect of weather events experienced simultaneously (wind and rain at the same time), and
ƒ the State of the industry.

An improved method of incorporating the calculated input data into the contract programme could
be based on the principals of the “as-planned schedule analysis” technique whereby delays are
represented by activities with durations. Each activity in the work breakdown structure of the
project should be represented by a minimum of one bar chart bar and a maximum of four bar chart
bars. The minimum of one bar is the estimated duration of the activity itself. The other three bars
would be successors of the “duration” bar with finish to start relationships and would include any of
the following (see also Figure 1):

ƒ Wind delay bar – represents the expected extent to which wind will delay the activity
ƒ Rain delay bar – ditto but with regards to rain
ƒ Safety delay bar – ditto but with regards to wind and rain induced safety delays

Figure 1: Visual image of concept for improved method

Only the weather delays expected to affect the specific activity should be considered in such
guidelines. The delay bars mentioned above should include re-work delays and consequential
delays.

Should the updated contract programme show a contract duration longer than that stipulated in the
tender documents, resources on the critical path should be adjusted to shorten their durations.
Unused weather contingencies will create weather float which is for exclusive use for weather
delays. Here both the client and the contractor could agree on something else if such float becomes
available.

For the improved method to be successful, the client should not have the power to change the
wording of the weather clause(s) of the chosen contract form. The contractor may not qualify his
tender with his own weather “conditions”. The wording of the weather related contract clauses
should thus be revised and drafted in line with the input data guidelines and the improved method,
reducing weather related claims. However it must be said that this could impede on the contractual
freedom enjoyed by contract parties.

7 CONCLUSION

Construction contracts make provision for contractors to claim for an extension of time for
abnormal weather conditions. Yet no financial compensation is granted for cost due to such delays.
The financial risk thus rests with the contractor. Most standard contract documents require
contractors to produce a programme of the works. The programme is an important tool for
contractors to monitor the progress and plan for known and unknown events thereby reducing his
overall risk.

In order to make sufficient allowance in contract programmes for weather related delays, accurate
input data is required. The method of incorporating this input data into the programme is also
crucial for a risk conscious approach to weather delays and the control thereof.

Many techniques exist in which the input data is calculated. Yet all these often produce
unsatisfactory results. To add to the problem, clients can change the standard wording of contract
clauses and contractors are at liberty to manipulate the programme and qualify tenders. Giving
guidelines on input data to contractors, as part of the tender documents, would ensure uniformity in
tender programmes. Due to the complicated nature of weather events, the accuracy desired from
programmes resulting in better management of weather are difficult to achieve. The use of historic
data could be a good approach to schedule for unknown events. This needs to be combined with a
consideration of the unique characteristics of a particular contract, which in return requires a highly
technical and time consuming analysis of projects.

The preferred method for planning building work in the Cape Peninsula is the bar chart created
from a network analysis. A characteristic of this programming method is the determination of the
critical path of the project. It is important to note that the critical path will continuously changed
during project execution and all activities must therefore be treated as critical when making
provision for weather delays in contract programmes. Incorporating the calculated input data into
contract programmes is similar to applying delay analysis methods at tender stage. Although many
techniques exist, the best results are obtained from techniques based on the linked bar chart where
delays are represented by bars (activities) with durations.

A guideline for dealing with the allowance for weather delays should be developed. Such improved
method should be promoted throughout the industry in order to become an industry norm. An
improved method should consider all activities of a project. A clear allocation of expected and
allowed delays should be made. The allocation of these allowances, by means of additional activity
related delay bars, will make programmes more transparent. An improved method would thus
reduce risks on projects, improve project monitoring and control, reduce conflict and disputes due
to claims regarding weather delays on building construction projects, and promote planning
certainty amongst all contractual parties.
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