American Bar Association
The Construction Lawyer – January 1992
By Steven Pinnell
The objectives of a construction project are normally defined in terms of time, cost, and scope — scope being the quantity and quality of the finished product. All are interrelated, such that failure to achieve one objective (e.g., late completion) often results in problems with others (such as costs or reduced quality). All are dependent upon the resources (people) available to accomplish the work and the management and leadership skills of those directing them.
Schedules are a basic element of any project. An understanding of scheduling concepts, and familiarity with techniques of analyzing and explaining construction scheduling problems and their cost impact can be helpful in any type of schedule dispute.
This article provides an overview of current construction scheduling practices and critical path scheduling techniques. It then describes how to analyze a scheduling claim, with specific recommendations on selecting experts and dealing with inadequate data. The next two sections cover preparation and presentation of exhibits, and defense techniques. The final section is a summary. The article also describes a relatively new scheduling technique, “timescale arrow diagramming,” that is more powerful and easier to understand than conventional techniques. It makes an ideal exhibit for scheduling disputes. And it can be used to create an as-built schedule of large, complex projects when the available historical data is inadequate for conventional methods of analysis.
The goal is to explain scheduling concepts and techniques for the litigator and how to manage an expert or the client’s staff in preparing and presenting a scheduling claim. It is as applicable to mediation and negotiation as it is to litigation and arbitration.
Construction Scheduling Practice and Problems
Contract Scheduling Requirements and Enforcement
In construction, as in most industries, “time is of the essence” and a completion date is normally part of the contract. Most contracts do, and all should, require the contractor to submit a schedule of progress and to periodically update it. This helps ensure the project will be completed on time and serves as the basis for resolving any time-related disputes. More specific contract requirements and insistence on compliance are needed, however, to avoid many of the problems currently being experienced. This will also provide better information for conflict resolution or litigation. Attorneys should urge their owner clients to periodically perform a legal and technical review of their standard contract clauses and contract administration procedures.
A Trend Towards More Scheduling Disputes
Historically, the majority of scheduling claims have been by general contractors against the owners of publicly bid projects. However, most construction work is done by subcontractors, 80 percent being common in building construction. Although mediation, partnering and other alternative dispute resolution procedures are tending to reduce construction litigation, the trend is for more scheduling disputes and more disputes between the general contractor and the subcontractors, sub-subcontractors, or material suppliers. This trend is also evident on privately owned, negotiated contracts. All parties are more aware of the cost of delay and impact, are more sophisticated in their scheduling techniques, have tighter budgets that don’t allow for delay or impact, and are more contentious.
How To Avoid Scheduling Problems
The construction industry is rife with poor practices that lead to delays and cost disputes. Owners want to reduce construction time but the designers don’t really know how much time to allow for construction. General contractors seldom prepare a detailed schedule when bidding a project. Subcontractors commit to a fixed price without knowing the time that will be allotted for their work, let alone the working conditions, such as conflicts with other crafts, congestion, or winter weather that can materially affect their cost. Often schedules are prepared without input or commitment from the subcontractors. Or the subcontractor agrees without understanding the schedule or having a comprehensive grasp of the total crew requirements for all of their contracts. And some subcontractors bid more work than they can staff.
During construction, mistakes are found in the plans, unexpected site conditions are encountered, or changes ate made by the owner that delay or impact the work. Failure to promptly order anyone of several thousand different material items can also cause delay. Earlier tasks don’t proceed as quickly as planned, and the work gets pushed into winter weather. Schedules are disrupted and commitments on other projects supersede. Rain and cold cause working conditions to deteriorate; then, in an attempt to finish on time, crew sizes are increased past an efficient level. Prices escalate, efficiency plunges, costs spiral out of control, and you have a schedule-related construction dispute.
At this point, you discover that the original schedule either wasn’t prepared or is incomplete, inaccurate, and has insufficient detail. It may be a bar chart instead of a critical path schedule. Often the owner never approved it. Updates, if prepared, may be sporadic instead of monthly, and usually include only the percent complete as of the report date. If provided, actual start and completion dates are often inaccurate, and no note is made of intermittent progress, insufficient staffing, or the reason for delays.
Most contractors are aware of the above problems, but often need firm guidance from their legal counsel before acting. The recommended course of action is to document good claims management procedures and to train their field personnel in the procedures and basic legal issues.’ This should be a joint effort by legal counsel working with client staff or an experienced construction consultant.
The most common scheduling technique is the bar chart (also called a Gantt Chart after its developer). Bar charts are easy to prepare and understand, but often lack sufficient detail. More seriously, they fail to show the relationship between tasks (which determines the impact of a delay), and they do not show the critical path (which tells whether a delay to a task will delay completion of the entire project). Nevertheless, they are a good tool for project planning and control, and for demonstrative evidence.
Critical Path Scheduling Methods
Critical path scheduling is a more recent method, having been developed in the late 1950s and normally accomplished with computers. It consists of two steps:
• Planning, which identifies each task required to complete the project, the duration of each task, and the relationship between tasks. The technique for planning and the result of this effort is the network diagram. It can be generated on a computer or on paper.
• Scheduling, which computes the early start and finish dates of each task based on the project start date. It also computes the late start and finish dates of each task, which are the latest dates the task can start and finish without delaying project completion. The difference between the early start and the late start (or the early finish and the late finish) is the float. Tasks with zero float cannot be delayed without delaying the project, and are said to be “critical”-they are on the critical path. Scheduling is normally done by computer. It can, however, be done manually or graphically on paper.
The two primary methods of critical path scheduling are called CPM (critical path method) and PERT, the latter now seldom used except for the term “PERT Chart” to designate the network diagram. The CPM method itself has two types of diagrams for planning the project:
• Arrow Diagrams represent each task as an arrow, with the arrows linked to show relationships between tasks. Arrow diagrams often have numbers in circles at the beginning and end of each activity which identify the activity. The beginning number of each activity is called the “i-node” and the ending number is the “j-node.” The diagram is then called an i-j diagram.
• Precedence Diagrams (often called activity-on-node) has the tasks enclosed in boxes with lines between the boxes to show relationships. Each activity is identified by a number. The boxes may also list other information, such as the early start date and duration. The CPM method also has two methods of scheduling (computing start and finish dates and the float):
• i-j Scheduling uses the i-j numbers to identify relationships- activities with the same i-node number as another activity’s j-node numbers are successors to that activity.
• Precedence Scheduling lists the priors (or successors) of each activity to identify relationships. It also allows overlap (lead) and delay (lag) between the end of one activity and the start of its successor. In addition to the standard finish-to-start relationship between tasks, it allows start-to-finish and finish-to-finish relationships. It is more powerful and easier than i-j scheduling, and will eventually supplant that technique.
Critical path scheduling is a complex subject requiring training and years of experience to master. The essential elements, however, can be explained to a judge or jury in a fraction of an hour by the right expert. This can be crucial to their understanding and to your success.
Timescale Arrow Diagrams
In the early 1970s, this writer developed a method of critical path scheduling called “timescale arrow diagramming.” It combines the timescale of the bar chart with the relationships of a network diagram (Figure I). An arrow diagram is used, because the arrows can be timescaled. The i-j nodes are deleted because computerization is not required and if computerized, the precedence scheduling method is preferred over i-j scheduling. The arrow diagram works well with precedence scheduling.
The result is a flexible, powerful, interactive tool for scheduling and control. It allows the scheduler to “see” the entire project on a single drawing, while simultaneously adding or changing tasks and considering resource constraints, work conflicts, overcrowding, weather impacts, etc. Although somewhat more difficult and time consuming to initially prepare than a conventional non-timescale network diagram, it is a far better product. It doesn’t have to be computerized to determine dates and the critical path, nor be revised in order to level resource demand, resolve work conflicts, reduce overcrowding, or avoid scheduling weather-sensitive work in the winter.
The end product is more usable than a conventional network diagram. Instead of reading two separate diagrams such as some scheduling programs offer (i.e., a bar chart and a non-timescale arrow or precedence diagram) plus a tabular list of dates, you have a single document that displays everything. It is easier to understand because you can glance at a network and identify the critical path (which can be highlighted with color or a heavier line). You can also see that a chain of non-critical activities has only a few days float or several weeks float instead of a specific number.
Although it can be prepared with a computer, the timescale arrow diagram need not be computerized, because you “graphically compute” the start and finish dates of each task and the float is graphically displayed as horizontal relationship lines. It is normally prepared on grid paper to aid in laying out the diagram. Other suggestions to aid in preparation of a timescale arrow diagram are described in various professional and trade journals.
Some computer scheduling programs can generate “connected bar charts” that have many of the features of a timescale arrow diagram. Few programs can condense a major project on a single sheet that is as readable and useful for exhibits as Figure I. This identifies the major project phases with large text adjacent to each subnetwork and with summary activities (hammocks) at the top of the drawing. The critical path is clearly identified by the heavier line and the float shows as horizontal dashed lines.
There is excessive reliance on computers for scheduling. Too many contractors believe all they need to schedule a project is to buy a project management (scheduling) program. They fail to understand important scheduling concepts or to provide adequate management input and control. The result is an inaccurate schedule, having insufficient detail, which isn’t really used to manage the project. Often, it merely fulfills the contract scheduling requirements and the superintendent plans the job on short-interval bar charts that bear little relationship to the approved schedule.
The courts also have a tendency to place too much credence on computer analysis because they sometimes fail to weigh the accuracy and completeness of the underlying data. Computer analysis is therefore mandatory in order to ensure the credibility of your analysis. Critical path scheduling computations involve simple addition and subtraction. There is nothing the computer does that a skilled individual cannot do better-except for processing the great quantities of data that must be searched, sorted, and summarized.
The “Art” of Scheduling
Often overlooked is the fact that schedules are but “estimates” of what can and will be done. They can vary widely in accuracy depending upon the skill and project knowledge of the individual preparing them, the complexity and determinability of the project, and the level of scheduling effort expended. More importantly, they are subject to the degree of commitment made by the individuals or groups that will accomplish each task and to the persistence and efforts by the individual assigned to manage the project.
A “good” schedule is one that can be accomplished with the resources available within the allotted time and at reasonable cost. There are numerous variations that would also suffice.
For information on legal issues, consult current case law as published or presented at construction law seminars. The article by Wickwire, Hurlbut, and Lerman, ”The Use of Critical Path Method Techniques in Contract Claims: Issues and Developments, 1974-1988″ is a good starting point.
Selecting An Expert Witness
Decisions on demonstrative evidence are very much secondary to your selection of experts. Not only does the quality of experts vary widely but also their approach and preferred type of exhibit will differ. An “old hand” with years of experience may be comfortable only with bar charts. Most construction claims consultants, however, use computerized scheduling techniques. The courts favor critical path methods in determining the impact of delays or acceleration. In fact, it is very difficult to “prove” schedule impact without a critical path schedule. If using bar charts for demonstrative evidence, a computerized critical path schedule should be prepared to validate the bar chart.
Experts in schedule disputes must be experts in the industry. Don’t use a theorist or a computer consultant to analyze construction, although computer skills are almost mandatory. The expert must know construction methods, construction industry practice, the fundamentals of contract law and current case law related to construction, and even engineering/architectural design practices and standards. Experience as an arbitrator is helpful. The expert should have extensive field experience to better appreciate the impact of winter weather, overcrowding, constant change, acceleration, and other factors affecting morale and productivity.
The personality of the expert is also important. Some are good at research and painstaking analysis, but don’t come across very well under cross-examination. Others are very convincing as a witness and do well on broader issues, but are not well enough organized or efficient to turn loose on major investigations. Sometimes, a team approach using two individuals with complimentary skills and personalities works best. In any case, you need to establish a clear-cut scope of work, with budgets and schedules for each phase.
In some cases, the client has expertise in critical path scheduling and you will need an expert only for an independent verification of their work. Your client may know credible experts in construction methods and scheduling. If not, ask the Associated General Contractors, Associated Builders and Contractors, or other attorneys.
If your expert (or opposing party’s expert) has published any papers, read them. When selecting an expert you should verify their experience, including litigation or arbitration, and obtain references on past testimony and the results. If dispute resolution is possible, it is best if your expert is known and respected by the other party and has a reputation for fairness.
Data Collection and Review
Early Involvement of Your Expert
It is important for your expert to be involved in discovery and depositions. Not infrequently, important documents are missed or misinterpreted and pertinent areas of inquiry are left unexplored because of insufficient construction expertise at this phase.
You should not rely solely upon your client’s advice; it is this writer’s experience that nearly every construction claim as presented by a client misses major issues (such as concurrent delay) that vitally affect the dispute. In some cases, the initial thrust of the claim has been discarded and other issues of more important and greater cost impact substituted. Clients (either contractors, designers or owners) seldom have the breadth of experience in claims analysis and scheduling or the familiarity with construction law needed to identify all those items that are important. Their involvement in the project often makes them blind to their company’s shortcomings.
If construction is still underway, the expert can gather additional information, or even help mitigate damages. You should ensure that notice provisions and other legal issues have been addressed. Your expert can check recordkeeping and job management procedures. If scheduling is done by onsite personnel, an independent review is recommended. The expert’s fees for rescheduling required by a delay can be compensable as part of the change order.
For suggestions on retaining and managing experts, see Marted and Poretti’s article in The Construction Lawyer.
Organization of the Client’s Data for Review
When organizing data for expert review, have your client organize its files, put correspondence in chronological order, and otherwise make it easier to review all the documents and to ensure they are complete. Too frequently, individuals within the client’s organization fail to inform an expert of additional information that is available. Oral or written briefings and a written narrative of the dispute and tentative legal theories are also helpful in getting up to speed at a minimum cost.
The most critical documents to be identified for a scheduling claim are the original (as-planned) schedule and the periodic updates, as well as any draft schedules prepared but not submitted. These show the original plan and what actually happened. The final update often can be used as the as-built schedule.
Documents needed to supplement the schedules include correspondence, daily diaries, inspection reports, foremen’s and superintendent’s reports, submittal logs, photographs, weekly labor cost reports, certified payroll reports, timesheets (especially if annotated), test reports (which, for example, provide the dates of concrete pours), progress payment requests, submittal logs, shop drawings, and even delivery tickets. Other items include the contract documents (with all modifications), subcontracts and purchase orders, requests for information (RFIs), change order proposals and notice of claims, approved change orders, and minutes of meetings.
Discovery and Depositions
If all documents will not be copied, your expert should assist client staff and paralegals with discovery, in order to identify those few critical documents that are too obscure for a non-expert to recognize as important. For example, penciled notations by the reviewing architect/ engineer on the file copy of shop drawings may be crucial to proving or defending claims for slow review or unreasonable rejection of substitutions. The expert must be briefed and conduct an initial review before discovery, in order to know what might be important. The expert can also prepare suggestions for deposition questions. This may resolve issues not clearly documented or help determine their defense to anticipated legal strategies.
Site Visit and Interviews
If warranted, the expert should visit the job site (especially if work is still progressing) and interview job personnel. Failure to do so can result in a lesser grasp of the project and loss of credibility during cross-examination.
Analysis of the Data
Objectives, Legal Strategy and Work Plan
Before starting analysis, identify the objectives and tentative legal strategies. You should require an agreement on the scope of the expert’s investigation and analysis, the time required, and budget. For schedule-related claims, the objectives usually include finding and/or creating the following:
• As-Planned Schedule
• As-Built Schedule
• Comparison and Analysis of Differences
• Determination of Cause and Effect
• Would-Have-Been, But For … Schedule
• Comparison and Analysis of Differences
• Computation of Damages
A detailed work plan for the investigation, and all other aspects of the litigation, will help ensure accomplishing all objectives while maintaining the schedule and budget. The work plan should be in the form of a bar chart or network diagram and be “resource loaded” with the estimated expenses and effort by each individual. This will generate the budget and can be used to track and control the work.
Problems Often Encountered with the Data
Construction disputes often involve mountains of conflicting, fragmentary evidence. Memories may be vague, incorrect, or self-serving. Correspondence may be of limited value-beyond proof of notice, intent, and when the parties were aware of an event-due to the posturing of most parties in a dispute. It cannot be relied upon, even for the accuracy of stated dates. Original schedules are often incomplete, with insufficient detail, or simply incorrect. Schedule updates are often not prepared, and if existing usually contain only the percent complete of each task as of the update date.
Daily diaries may fail to include important information, or may not consistently record it. The accounting records seldom identify the extra costs of impacts, or fail to separate impacted work from non-impacted work, and the timesheets upon which they are based are often too numerous to review. Too frequently cost records fail to note the quantity of work accomplished each period so that separate productivity rates can be established for impacted versus unimpacted work. Photographs, if made, often lack dates and never include a clear explanation of what is happening. In short, it is very difficult to determine what actually happened, let alone the impact of those events and their costs.
Computerization of Historical Data
Laptop computers and improved software have changed data collection and analysis dramatically. One can abstract critical documents and index each record of the database to a source document, to multiple claims or other topics, to a date, and to an activity number on the as-planned schedule. This can be accomplished during the initial document review, if the expert assists in discovery. If available, electronically stored data can be imported to the database without retyping.
The computerized database can be sorted by topic and then in chronological order for review. This facilitates understanding each topic and the overall project, and ensures that no issues are overlooked. References to the source documents and proper organization of those documents (chronological by type) will permit more detailed review later and provide an “audit trail” if statement is challenged. If a written report is needed, the researcher’s database will provide the basis of that report, and the narrative portion of the report can include as many references as necessary to substantiate each event and its impact.
Issue Analysis and Working Papers
The expert will often be asked to analyze specific issues, such as possible concurrent delay by the contractor, industry practice, the expert’s interpretation of critical clauses in the specifications, etc. These analysis and factual investigations of key events are usually accomplished as discrete tasks. They define the issue, assemble and analyze the material available, identify items needing further effort and reach a conclusion with recommendations. As long as they can be preserved from discovery as attorney work products, issue analyses are best done in written form because they can be shared by all individuals of the dispute resolution/litigation team. This helps ensure that everyone is aware of and understands the key issues. Unlike a verbal briefing, they can be referred to later and refresh memories.
Working papers should be prepared on a word processor or a spreadsheet, so that information from the historical database and schedules can be readily incorporated. Easy transfer of data between various programs is essential for economical analysis.
Written reports are often needed to explain complex issues to the dispute resolution/litigation team, and in some cases may be provided to the opposing party and fact finder. They can present a chronology of the project, a narrative to accompany the schedules and establish entitlement, and the cost data and computations to prove damages. If issue analyses have been documented and are pertinent, they should be incorporated into the report. Reports should be prepared for counsel, instead of directly for the client, to limit the ability of the opposing side to obtain them during discovery.
Written reports, if requested, should be heavily referenced to source documents or noted as the opinion of an expert or a comment by an individual involved on the project. If available, the opposing party’s records should be referenced in preference to your client’s records, because they are less likely to be contested. There should be an “audit trail” from every conclusion back to detailed facts in the body of the report and from each fact to one or more source documents. References can be in square brackets; as an example [L-COE/GC 14Jun91] would be a letter from the Corps of Engineers to the General Contractor dated June 14, 1991 and [J] would be based on the judgment of the author and the preceding text. If the source documents are organized by type (i.e., letter telephone conversation, submittal, etc.) and sorted chronologically within each type, location of a referenced document is quite easy.
Issues not yet fully resolved, notes, and questions for reviewers in draft documents can be placed in different brackets ( ) to facilitate global editing after resolution.
“As-Planned” and “As-Built” Schedules
There should be a detailed and accurate as-planned schedule. If not, it will need to be reconstructed-based on whatever data is available. If the as-planned schedule is a bar chart, it can be converted into a timescale arrow diagram-either by drawing relationship lines between the bars or by computerizing and adding relationships. Obvious, minor errors can also be corrected.
Computerization of a hand-drawn “As-Planned” schedule is usually recommended, to aid in analysis and comparisons. Most claim consultants prefer a specific scheduling software program; if the as-planned schedule was generated with a different program, it is easy to generate an ASCII file (by sending reports to a disk file), which can be imported to the preferred program. The better scheduling programs can import several different data formats and all the major programs claim to comply with the Corps of Engineers’ NAS Data Exchange format (ER 1-1-11, March 15, 1990) for transfer of scheduling data between different programs.
The final schedule update constitutes an as-built schedule (except for the work remaining in the final work period). Unfortunately, updates are sometimes inaccurate, incomplete, or nonexistent. One should always validate the schedule updates, and expand the level of detail to aid in creating the “Would-have-Been, But For …” schedule.
Creating an As-Built Schedule If Incomplete Data
Sometimes the data provided is not adequate for a normal investigation and determination of the facts-at a reasonable cost and some certainty. Then you and your client need to decide whether to pursue a “total cost” approach, rely on an expert’s “judgment,” or commit the time and money to reconstruct the project with a “detailed as-built schedule.”
The total cost approach to construction claims is to present the actual cost of the work, subtract the estimated cost as bid, and ask for the difference as damages. Much has been written about this approach, and the difficulty of having it accepted in court. It is not generally recommended.
The standard alternative to a total cost approach is to put together the best analysis possible using conventional procedures based on the client’s allegations or an expert’s opinion. This requires expert judgment based on years of experience, and involves many assumptions and a lot of uncertainty. It is not difficult to prepare and is reasonably economical. In court, however, it often becomes a contest of whether your expert or the other side’s expert comes across as more credible. See “Conventional Methods of Delay and Impact Analysis,” infra.
An alternative to either an expert’s “judgment” or a total cost claim is an integrated, multi-document analysis that reconstructs the project on a day-by-day basis. This synthesizes numerous source documents (accounting records, timesheets, daily diaries, correspondence), each of which is incomplete for purposes of determining the events that happened and their consequence, into a coherent single document that describes what happened and why. This requires a format that can accept thousands of separate notes with references to individual source documents, brief narrative statements describing what happened and why, tabular information such as daily rainfall and crew sizes, graphical information such as a resource histogram or a percent complete curve, and some form of network diagram that displays the data in a readily understood manner.
The best format is a timescale arrow diagram, although a spreadsheet with notes can be used in simpler cases. Narrative reports or working papers are inadequate for organizing the data so that it can be understood.
Creation of a “Detailed As-Built” Schedule
A Detailed As-Built Timescale Arrow Diagram of a construction project starts with a large sheet of paper (up to 3 feet by 5 feet with a grid pattern to help in organization (Clearprint® paper is recommended). A calendar is placed across the top of the drawing with one or more grid squares for each day of work. The layout of the schedule is more like a modified bar chart rather than a network diagram.
Using the “As-Planned” schedule as a guide, each daily actual event from the source documents is recorded on the paper to form the “As-Built” schedule. Brief comments are made as needed. If necessary, individual one-day events forming a task are coded (e.g., the letter “p” above the line to signify a concrete pour and “r” for rebar as part of a “construct footing” activity) and referenced below the line with a code for the source document (e.g., “FDR” for foreman’s daily report). Crew sizes for each cost code or task can be printed across the bottom of the drawing in a matrix format to aid in identifying the start and finish of each task, periods of inactivity, and levels of effort. Each task on the detailed as-built timescale arrow diagram is built a day at a time until the start and finish dates are established for each, along with any periods of inactivity. Sequential tasks are then linked by arrows to show the flow of work. Judgment must be applied to fill in the blanks and to connect dependent tasks.
Creating a detailed as-built schedule can be very difficult. Activities are often intermittent, with varying (and often inadequate) crew size, which should be identified. The as-planned logic is often incorrect and grossly simplified as the actual relationships of tasks are very complex. Tasks often overlap and frequently are performed in a seemingly random order based on the manager’s preference or perceived efficiency.
The actual start and finish dates may be difficult to determine precisely. Should they, for example, include a subcontractor’s mobilization, material delivery and layout, or repair and rework; or should those be separate tasks?
The reliability of source documents cannot be assumed. Basic business records maintained by field personnel (foremen, superintendents, and inspectors), such as timecards and daily diaries, are generally more reliable than records maintained by jobsite managers or the home office. With experience, one can judge the veracity and accuracy of an individual’s records from cross-checks with other records, comments by the author, and even the “tone” of the text.
Inconsistencies and conflicts may create questions that cannot be fully resolved. On one project, the backside of a number of daily reports copied during discovery were stapled to the wrong front sheet, which took considerable time to identify and correct. Client-prepared data sometimes contains small errors that may preclude full reliance without some verification. Recording of facts must be without error in order to avoid inconsistencies during analysis or possible exclusion as an exhibit.
The result of the investigation is a very detailed document, often containing thousands of individual events with references. It becomes a secondary source document and can be referenced by a written report or in testimony. If challenged, each element can be traced to an original source document or to the expert’s judgment.
Even when the documentation is grossly inadequate, a detailed timescale arrow diagram can be useful, as a large number of small judgments are more reliable and more credible than a few gross assumptions by a hastily briefed expert.
The primary problems with this approach are the cost and time to prepare, plus the difficulty in finding someone with the experience and skills needed to perform the analysis.
Costs can be reduced by focusing on critical issues. For example, on a recent claim analysis, a detailed as-built was prepared only for the first 60 days, which was the most important period, and the as-built information from the monthly updates was used for the balance of the “As-Built” schedule.
Conversion to a “Condensed As-Built” Schedule
The next step is to condense the detailed as-built schedule into a more understandable form for computerization and further analysis. Depending upon the complexity and completeness of the detailed as-built diagram, this may require the use of clear acetate and colored pens to define the tasks and flow of work. The result is the condensed as-built schedule (timescaled) which can be plotted by a computer program (similar to Figure I).
The condensed as-built schedule defines the actual progress and flow of work, and will be compared to the as-planned schedule. It should, therefore, have the same activities and the same general layout on the network diagram, whenever possible. Normally, it has more activities than the as-planned schedule-for unanticipated tasks, added work, and impact activities. It may have intermittent progress of some tasks due to inclement weather, contract delays, or insufficient personnel. It should be annotated to highlight delays, acceleration, impact, and the events that caused them. It should also show the original completion date, the revised completion with approved changes, the actual substantial completion, and the final completion date. A narrative of all assumptions and judgments made with condensing the detailed as-built can be associated with each task.
Creation of the condensed as-built schedule can be quite difficult, especially in establishing the relationships between tasks. This often requires considerable experience and judgment, in addition to careful review of the as-planned schedule and the actual logic of the work. The physical effort, however, is relatively easy as you simply copy the computerized as-planned schedule and edit it for differences in duration, logic, and additional activities.
The Cost of Preparing a Detailed Schedule Analysis
Preparation of a detailed as-built schedule can be expensive, with the cost varying widely depending upon the quality of the available data and the size and complexity of the project. For example, the basic claim analysis to defend a transit agency from a fiercely contested $250,000 suit on a $900,000 public works project cost $5,000, and a detailed as-built schedule to confirm the initial conclusions cost about $10,000. Other analysis, preparation of exhibits and four days of testimony and cross-examination cost substantially more-but our client was awarded $130,000 for contractor delays and attorney’s fees. A smaller example is a project review, analysis of multiple disputes, preparation of an as-built schedule (not detailed), and a preliminary estimate of delay and impact costs on a $400,000 building remodel for purposes of negotiation. The cost was under $5,000. An expensive example is the detailed as-built schedule for a $20 million advanced wastewater treatment plant that cost nearly $50,000 due to grossly insufficient, conflicting records and a very complex project. Typically the cost for such a project would be $15,000 to $30,000 less if the records are good.
The cost of claim preparation or analysis must be proportional to the benefit expected. The additional cost of a detailed as-built schedule and a more thorough would-have-been schedule and damage computations must be balanced against the likelihood of a more favorable award. A compromise using the detailed as-built schedule for critical periods and more traditional analysis for the balance of the project may provide a satisfactory product at substantially less cost. In any case, you should require a reasonably detailed work plan from your experts and establish clearly defined budgets and schedules for each phase of their work.
The most effective means to reducing the cost of a claims analysis is to keep good records.
Fixed-price agreements are not recommended for claims analysis because the effort required is difficult to estimate in advance and may change as the analysis proceeds. Time and material agreements with a not-to-exceed budget for each phase (unless authorized) are recommended. Be prepared for changes as the analysis proceeds.
The “Would-Have-Been, But For …” Schedule
Determining what happened is only the first step. Next, the events that are due to actions or inactions of the other party or are otherwise reason for a time extension and/or compensation must be linked to their impacts and from there to a scenario of what would have happened absent the identified events. One method of doing this is to compare the as-built schedule to the as-planned schedule and determine why they are different. The events that are the responsibility of the other party can be identified and analyzed for their impact and whether the damages and resulting delays are compensable. Concurrent delay by the contractor, if any, must be addressed as it will preclude award of delay damages. Non-excusable delay by the contractor or better-than-expected progress should also be identified.
A bar chart is usually best for comparison of plan to actual and the scheduling program can quickly generate such charts (Figure 3). Relationships between tasks can be displayed with some software, although showing all relationships may make the drawing too confusing. Overlaying cumulative curves of work accomplished (and/or effort expended) and histograms of planned and actual resource use (labor and equipment) on the bar chart can be useful in analyzing the data, especially when the events causing the impact are plotted on the diagram. Tabular comparisons are also needed and some scheduling programs have special features for such analysis.
The as-planned and as-built schedules, supporting computations, and previously-generated database and issue analyses will be used to create the would-have-been schedule, and all should be documented with a narrative for each task. In some cases, schedule simulation and other computerized techniques beyond the scope of this paper will be used to qualify the delays and their cost impact.
The result is the “Would-Have-Been, But For …” schedule that identifies what would have happened absent the events that are the responsibility of the other party or that are non-compensable reasons for time extension. It should be in the same format (timescale arrow diagram), the same level of detail, and generally have the same activities as the “As-Planned” and “Condensed As-Built” schedules. This is where experts truly earn their fee. Again, the physical effort is fairly easy as either the computerized as-planned or the condensed as-built schedule is copied and edited.
Some experts start with the as-built schedule and subtract the claimed impact events to generate the would-have-been schedule. This writer generally prefers to build the would-have-been schedule a step at a time from the beginning. One must analyze what “would have” happened at the time a specific event occurred, based on the intent and knowledge of the jobsite management at the time, instead of what “could have been.” This is where correspondence can be very helpful, although the as-planned schedule is more important than any other document to establish intent.
Activities on the would-have-been schedule that would be accomplished under different conditions than the as-built must have their durations adjusted appropriately. This doesn’t mean just using the as-planned schedule durations, but may require a comparison of similar activities accomplished in unimpacted conditions. In some cases this may require a detailed analysis of the activity (the author once spent three weeks analyzing the critical piledriving activity on a large South American harbour project, which controlled the duration of the entire contract). The results, however, can be significant; on one recent project such an analysis determined that a twelve-day delay to a six-month project increased the cost by nearly 50 percent. This became understandable when the analysis revealed that those twelve days represented 42 percent of the available time to do the weather-sensitive earthwork before the winter rains began.
Comparison of the “As-Built” to the “Would-Have-Been, But For …” schedule will determine the allowable time extension and thus entitlement. The time extension may be partly compensable and partly non-compensable.
Other Analysis Methods and Issues
Other Techniques and Issues
Fragnets are portions of a network that are displayed separately for easier analysis and understanding. They are extremely useful for both analysis and exhibits.
Cumulative curves of percent complete or cash flow and histograms of planned and actual resource use are sometimes useful for analyzing impacts from delays, impact and acceleration. They can be easily generated for each version of the computerized schedule by cost-loading and resource-loading each task. In addition, a narrative should be written for all schedules (as-planned, as-built, and would-have-been) documenting the assumptions and expectations.
CAD drawings, or at least colored drawings or colored acetate overlays, can be helpful in identifying and analyzing what areas were impacted. Photographs and videos can also aid analysis. In addition to verifying statements in the other documents they can provide a great deal of additional information. For example, rock stockpile quantities can be computed by horizontal scaling from objects with known dimensions and the angle of repose for the specific material. A powerful, well-lit magnifying glass will help identify details.
When analyzing delays, it is important to identify mitigation efforts and the cost of acceleration to avoid further delays. These costs should be compensable.
The analysis should also investigate possible and alleged concurrence to ensure that contractor-caused delays were not concurrent with owner delays so as to prevent compensation for delay costs. In many cases, contractors will slack off on some near-critical activities in order to minimize costs, which can lead to allegations of concurrent delay.
There are other techniques available and issues applicable to specific projects; which are beyond the scope of this document. Your expert can identify which are relevant.
Conventional Methods of Delay and Impact Analysis
More conventional methods of schedule analysis are:
• Global Impact or “Total Delay” Approach. This is a simplistic and usually inaccurate method of showing delay, acceleration and impact-similar to the “Total Cost” approach of computing damages. It plots the as-planned and as-built schedule and sometimes the would-have-been schedule as either single bars or highly summarized bar charts, and alleges the differences to be the fault of the owner. No attempt is made to show possible contractor error or concurrent delay, or to show the logic of cause and effect on the overall project. At best, a list or descriptions of the alleged delays will be presented to substantiate the claim. It is a satisfactory method only when used to summarize the results of more detailed analysis.
• Net Impact Approach. This attempts to deal with concurrence by displaying only the net effect of claimed delay. It displays the as-planned and as-built schedules as either single bars or summary bar charts and shows the period of each alleged delay either separately or embedded in the as-built schedule. Often, the entire period of a change order from issuance to completion of the work is shown as a delay to the overall project. The total sum of all the delays is either considered irrelevant or alleged as proof of constructive acceleration in order to achieve the as-built completion date.
• One-Sided “But-For” Approach. This inserts into the as-planned schedule the admitted delays of the party preparing the document (usually a far smaller number than warranted) and alleges that all other delays are the fault of the other party. In addition to being a one-sided approach with seriously understated impacts from the admitted delays, it also makes no adjustment for circumstances and the schedule status at the time the event occurred. Nor does it provide an adequate connection between the alleged cause and its effect.
• Adjusted As-Built Approach. This often uses a critical path network of the as-built schedule and inserts alleged delays as distinct activities restraining the project. It is similar to the “Net Impact” approach, except that it alleges to use critical path analysis.
• Time Impact Analysis Approach. This describes an iterative process of multiple analyses, starting with the as-planned schedule which is adjusted each time an impacting event occurs. It is far superior to the methods described above, and is similar to this author’s approach as described in “The ‘Would-Have-Been, But For …’ Schedule,” supra.
Verification of the Analysis
The analysis should be verified by reviewing it (or at least discussing key points) with client personnel and subcontractors. It is difficult to defend a position when your client’s staff and subcontractors don’t agree with it.
You should also either get a signed agreement from the subcontractors that the claim fully represents their damages, or exclude subcontractor claims from your settlement.
Computation of Damages
All the work done to this point will lead to naught, unless you can now prove damages — a specific, reasonably accurate dollar amount. This may be the most difficult task facing the expert, and one that often relies on professional judgment as much as on quantification and analysis.
A full review of the methods and techniques for computing damages is beyond the scope of this document; they are amply described elsewhere.
Preparation and Presentation of Exhibits
Whereas the expert normally has considerable leeway in the claim analysis, within the defined scope and budget, the trial lawyer needs to exercise close control of exhibit preparation and has total control of the presentation.
The essential requirement in the presentation of schedule-related claims is that it be as simple and straightforward as possible. It is therefore best to limit the number of exhibits or to only briefly review the detailed exhibits and focus on the summaries, because too many exhibits can dilute the overall impact of the presentation.
We recommend that detailed information be presented only to the extent necessary to build a foundation, to establish credibility in the mind of the fact finder, and to intimidate the opposing side with the thoroughness of your preparation. The presentation should focus on summaries of the schedules and damages, with specific details only when warranted.
Summary of Exhibits
Exhibits for a construction scheduling dispute will normally include the following and be introduced in the same general order:
• Overview of the Claim and how it will be proven, so that the fact finder knows what to expect.
• As-Planned Schedule that identifies what the contractor expected to do when starting the project.
• As-Built Schedule that describes what actually happened.
• Comparison Schedule of the “As-Planned” to the “As-Built” schedule with an analysis of what caused the differences.
• “Would-Have-Been, But For …” Schedule that describes what would have happened absent the actions of the other party.
• Comparison Schedule of the “As-Built” to the “Would-Have-Been” schedule and analysis of the differences and who is responsible. It proves entitlement.
• “Fragnets” of critical portions of the schedule that focus on the activities impacted for each issue analyzed.
• Other Exhibits demonstrating specific issues. These may include percent-complete curves, resource histograms, pie charts and photographs.
• Cost Data to prove damages.
• Summary Chart or Table recapping the presentation and focusing attention on the key issues.
Network Diagram Exhibits
Original As-Planned Schedule and Updates
If an as-planned schedule and updates were submitted by the contractor to the owner or designer, they should normally be included as exhibits, in order to establish the validity of subsequent exhibits. It is helpful to have them blown up to be approximately the same size as the other schedule exhibits. Acetate overlays with colored relationship lines and other information can be used to explain job logic.
Modified and Redisplayed As-Planned Schedule
The original as-planned schedule often has some obvious errors. These can be corrected and the modified as-planned schedule can be displayed as a timescale arrow diagram. If the original as-planned schedule was a bar chart, relationships can be added. Conversion to a timescale arrow diagram makes it much easier to follow the logic and understand what was planned. To aid in understanding, the tasks should be grouped in subnetworks and labeled (as in Figure 1), and a summary as-planned schedule should be prepared for easy explanation of the initial plan when the project started. The presentation of the summary as-planned schedule can be made concurrently with presentation of the site/phasing plan described in “Site and Phasing Plans,”infra.
Detailed As-Built Schedule
If an accurate, as-built schedule was prepared during the course of the project, that document can be displayed as the as-built schedule. Frequently that has not been done and a detailed as-built schedule must be prepared, as described in “Creating an As-Built Schedule If Incomplete Data,” above (Figure 2).
The detailed as-built schedule is presented to validate the condensed as-built schedule. A clear acetate overlay with felt-tip pen coloring of the activities can be used to link the two together.
Condensed As-Built Schedule
This is the computerized version of what actually happened, which condenses the thousands of references on the detailed as-built to the same general level of detail as the as-planned schedule. It normally has more tasks than the as-planned schedule, with the same layout and activity descriptions where possible. If the exhibits are used for in-depth study by the fact finder, the condensed as-built schedule may become the key document for explaining what happened.
The presentation of the condensed as-built schedule must build from the detailed as-built schedule, in terms of what happened. It isn’t necessary to explain each task or even the overall chronology, but only to demonstrate the thoroughness of your analysis. The testimony can then focus on the summary as-built schedule, as it can be easily understood-which is essential to explaining what happened to the fact finder.
Summary As-Built Schedule
For easy comprehension by a fact finder, a higher level of summary (with at most thirty to forty tasks), with graphical highlighting of key events (milestones) and narrative text, will be needed. This diagram should have the same layout and the same scale as the condensed as-built schedule, and should use color to highlight and simplify the logic. It may also include superimposed resource histograms (Figure 2) and percent-complete curves. It can be presented in a modified timescale arrow diagram format, similar to a bar chart. Some scheduling programs can generate this type of chart automatically, through a “roll-up” feature.
You now have a complete, auditable trail from thousands of individual source document references to a clearly understandable exhibit that summarizes what happened and demonstrates the time impact on the project.
“Would-Have-Been, But For …” Schedules
There will often be two “Would-Have-Been” schedules- one with the same level of detail as the condensed as-built and one at a summary level. They should have the same general layout as the other schedules, and must be based on the as-planned schedule, as modified by the events chronicled by the as-built schedule. They cannot be just “could-have-been” schedules, but must represent the most likely course of action absent the claimed event(s).
Presentation of the “Would-Have-Been” schedule and its acceptance by the fact finder is crucial, as this is where you prove entitlement. All questions and doubts should be resolved at this time, before proceeding to damages.
After each of the schedules has been presented (as-planned, as-built, and would-have-been), they can be compared to show how the project changed and how it would have been absent the disputed events. Color is best to show the work and to differentiate between the two schedules being compared, but hatching can be used if necessary. Schedule comparisons are best done with bar charts (Figure 3).
Fragnet schedules are portions of a network diagram, showing only the pertinent portions for easier analysis and understanding. They should be extracted from the full network, blown up in size and displayed as separate exhibits explaining specific events and issues. Some software can do this automatically.
Cumulative (Percent Complete) Curves
Cumulative curves are frequently used to show progress (percent complete, cash flow, and earned value), and to compare planned with actual progress. An abrupt change in slope of the curve (e.g., a flatter slope, indicating slower progress) coinciding with an event (i.e., an alleged cause of delay) and a steepening when the issue is resolved, supports the contention that the event caused the change.
Cumulative curves can overlay a summary schedule to graphically illustrate the pace of construction. The as-built curve can be compared to the as-planned or would-have-been curves to illustrate the differences.
Rainfall is normally displayed with a histogram, which underemphasizes the impact of winter rains. An alternative is to use a cumulative curve, with the increased slope in winter clearly illustrating the onset of the rainy season. Starting with a base of zero in early summer will further emphasize the cumulative impact of winter rains after the limited rainfall of summer.
Histograms (Periodic Curves)
Histograms (periodic curves) are most frequently used to show planned and actual resource use (i.e., the number of workers). The planned staffing of a project with a steady increase of crew size followed by a constant crew size and then a slow decline to project completion can be compared to the impacted schedule with lower initial staffing during good weather, excessive peaks during inclement weather, and wildly fluctuating levels through to completion. This is especially effective if the start and finish of the impact are plotted on the diagram and correspond to reduced staffing and then excess staffing to make up for lost time.
Histograms (of resource use or rainfall) can be overlaid on a summary schedule and combined with a cumulative curve (of progress) to explain what happened.
Tabular Schedule Reports
Tabular data are needed to support the testimony and other exhibits and are used extensively in claim documents or written reports. It should seldom be used as demonstrative evidence except to lay a foundation, as it requires careful study and expert knowledge to understand. Presentation of specific dates or tabular data is best done in conjunction with graphics, as in Figure 3.
Other Types of Exhibits
Cost data are normally in tabular form and presented in a spreadsheet. Where possible, graphical representation of costs will aid in understanding. For example, variations in productivity rates (cost or labor hours per unit of output) can be plotted on a vertical scale as a line drawing for each reporting period. The learning curve effect of increased efficiency with experience will be apparent, as will abrupt changes at the beginning and end of the period of impact.
Photographs can be very helpful in providing an understanding of what happened on a project and in demonstrating impact conditions that result in extra costs. Photographs of mud, rain, snow, crowded conditions, etc. can generate a feeling for the problems experienced. They need to be organized either chronologically or grouped by claim or topic, with the date on each photograph and a description of what is happening and where it is.
For inclusion in a report or for individual review, 3″ X 5″ prints give adequate definition. Four can be pasted on 8 ½ ” X 11″ paper with a brief description for color copying at less than one dollar per page. Aerial photographs (which in some areas can be obtained for around $200 per flight if ordered monthly) and other items needing more definition can be printed at 8″ X 10″ and pasted onto 8 ½ ” X 11″ paper for inclusion in a report. For courtroom exhibits, larger blowups may be used. Photographs can be used to supplement a verbal description of conditions in order to give a better understanding of actual conditions. Selective presentation of photographs can give a distorted view of conditions. To correct the problem if used by the other party, you can show a more representative series of photographs or photos of work either progressing or not during the impacted period.
Video cameras are easy to use, small enough to carry around a jobsite, and economical. Many project owners and contractors are using videos to document problems or the general course of construction. If available, videos of the project can be extremely helpful. A few minutes of film illustrating impact and difficult working conditions can be extremely effective in convincing jurors of the general extent of damages (sometimes out of proportion to the actual impact). Careful editing and a clear narrative can focus attention on important elements. In some cases, “freezing” selected views or insertion of text and simulation of events can help the presentation. If only selected material is presented, all film must be made available to the opposing party in unedited form.
This condenses a full day’s progress into a few minutes to provide a quick review of daily progress. It also makes work patterns and inefficiencies obvious to non-experts, and can be analyzed by a time-and-motion study expert to determine productivity rates and impacts.
Pie charts can be used to display costs, resource use or other numerical information. They help focus attention on differences between cost elements and the relative distribution of costs, or resource use.
Site and Phasing Plans
A simplified plan of the overall project, with boldly lettered descriptions of each work area or where specific claims occurred, can be helpful in understanding the project and should be referred to frequently during testimony. Large bold text, hatching and half-tones, or color can be used to show project phasing. In some cases, colored acetate overlays can be used to show project phasing.
Detailed drawings are very helpful in explaining specifics .of the project, especially if color-coded for easier understanding. This can be done directly on copies of the drawing and blown up if needed, or on acetate overlays to show various conditions. More sophisticated analysis can use computer-generated CAD drawings to show impacts and areas affected by change.
Written reports can be helpful for review by a judge or arbitrators on large, complex cases. They must be clearly written and professionally produced. Review by an experienced technical editor is highly recommended.
Defense Against Scheduling Claims
Normally, the best defense against a scheduling claim is to attack the following issues:
• The logic and durations of the “as-planned” schedule, as they frequently are inaccurate, incomplete and of insufficient detail.
• The accuracy and completeness of the “as-built” schedule, which are often incorrect in details and have an insufficient level of detail to reflect the true job logic.
• The validity of the “would-have-been, but for” schedule and how the delays are allocated between the parties.
• Whether the computation of damages is adequately proven, given the normal level of detail and completeness of the job records.
• Whether the unimpacted work being compared to impacted work to determine cost differences is truly equivalent to the impacted work. The productivity of unimpacted work may actually be too low if it occurred on the “learning curve.”
• Other items to watch for in contractor claims include:
• Reams of computer printout with tremendous detail, no summary, and few graphics. The contractor may be trying to overwhelm the owner with complexity. Or, hidden features in the scheduling program, such as no credit for out-of-sequence progress, may be used to generate misleading results.
• Excessively simple analyses without supporting detail and linking of cause to specific effect.
• Complex computer scheduling analysis and simulation purporting to prove some theoretical approach.
If the owner has reviewed and approved or even received and not rejected the contractor’s schedule there is an assumption that it is correct and the burden of proof is shifted to the owner.
Although it is less expensive to attack the contractor’s presentation rather than to prepare an independent analysis, in some cases that may be necessary — especially when the claim is thought have some validity but is grossly inflated. If so, the process described in “Creating an As-Built Schedule If Incomplete Data,” supra, is as applicable to a defense of a schedule claim as it is to the plaintiff.