How to prepare for delay analysis through better project controls

When we leverage Project Controls to better ready ourselves for delay analysis, you can think of it in two distinct ways:

Anticipation: agreeing the rules by which analysis will be conducted before a delay happens;

Preparation: the process of creating and maintaining project documentation in a state such that, when an impact occurs during execution, analysis can be established clearly and efficiently.

Anticipation of Delays: An Agreement to Agree

Best practice for anticipating delays is to establish a framework within which all parties to a contract can quickly and efficiently come to an agreement on how to conduct the analysis of a delay. Making sure this is done before the first delay occurs (i.e. before project kickoff) ensures that even though all parties have a vested interest in the outcome of the analysis, they will have agreed to abide by the rules for conducting the analysis.

Agreeing on these points early prevents the first delay from becoming the first dispute. This agreement will need to cover the major decision points around delay analysis including, but not limited to:

Defining the Starting Point for Analysis:

• Standard for the Project Baseline Schedule should be agreed including technical requirements (detail, logic, etc.) as well as the review and approval process for a schedule to be used as a project baseline.
• The procedure for revising the Schedule should be clear, including fixing the update frequency, cut-off dates, and required as-built data. This also includes defining whether approval of periodic schedule updates and revisions implies acceptance for use in delay analysis. If not, the requirements for use as a reference for delay analysis should be specifically spelled out.

Rules for Executing and Evaluating Delay Events:

• Parties should agree on which Delay Analysis Classification system (e.g. Using the AACE Taxonomy of Forensic Schedule Analysis (29R-03)) and delay analysis methodologies (e.g., TIA, As-Planned vs. As-Built, or Windows Analysis) should be used.
• The definition of all unclear terminology, such as “Compensable,” “Excusable,” and “Non-Excusable” delays. In addition, an Agreement on principles such as Float Ownership, Concurrency, Pacing as well as how parties should treat cases of concurrent or sequential delays, how EOT entitlement & compensation as well as the priority of access to float will be handled.
• The notification and approval process for delay events should be clearly defined
• Solidify expectations for the Contractor to integrate mitigation efforts on impacted schedules (and any effects this will have on entitlements).

Formalize Paths for mitigation, mediation and escalation

• Defined when recovery or acceleration schedules need to be submitted as well as protocols for developing acceleration, mitigation, and recovery schedules
• Parties should formalize agreement on the process for referring schedule disputes to a third party, such as an independent schedule review as well as the standards and references (AACE 29R-03, SCL, etc.) for use in expert analysis.

Additionally, thought should be given to how much needs to be left open to decide how to deal with a delay the moment it arises because of the specifics of that delay. With that said, the parties need to ensure that even if the specifics are not detailed, there is alignment on what is required of them in the event of a delay.

The cumulative effect of these anticipatory steps is that at the moment of the first delay, the analysis can be conducted immediately. This contemporaneous analysis is the core of all prudent delay analysis procedures. Agreement on facts and procedures allow delays to be handled factually and cordially instead of spiraling into messy disputes.

Preparing for Delays: Prudent Project Controls as a Defense

Once a project has kicked off, delays can come at any time, and from any source. Therefore, establishing prudent practices and properly documenting them will ensure that parties are on the best possible footing when a delay does occur. This is because, despite what provisions may be established in the contract, if a concrete connection between the impact and the delay cannot be established and backed up with project documentation, receiving any compensation or extension of time may not be certain.

With that in mind, the best practices for any projects are to incorporate all the following into their Project Controls execution strategy:

Change Management

• Ensure that there is a clear process to manage changes to the baseline used to register and classify all changes and assess their impact;
• Maintain a separate Baseline Change Log, Schedule Narrative and Cost Narrative
• Institute a robust
• Early warning system before potential delays
• Maintain Baseline integrity as a reliable reference for control.

Schedule

• Regularly update the project schedule through a formalized procedure of submission, review and acceptance (Formal acceptance should be well defined)

Costs

• Establish a Cost Breakdown Structure (CBS) that match how cost data is reported;
• Ensure that the cost estimate is allocated to the line items within the CBS;
• Establish ties between cost performance and schedule progress.

Scope

• Clearly link Scope, Cost and Schedule
• Ensure aligned understanding of scope definition(s)

While none of these steps individually seem revolutionary, however, together they form the basis of a strong proactive strategy against mounting legal challenges and the associated costs.

Conclusion

When teams integrate these protocols before work starts, delay analysis stops being a battleground and becomes a project management tool. By anticipating delays, we ensure agreement on the rules, then adequate preparation builds the necessary documentation. Delays are a given, by taking simple and time-tested steps to plan for the inevitable; we can leverage the power of Project Controls to make delay analysis faster, fairer, and far less adversarial.