Concurrent Delay in Construction Explained
Even though concurrent delays in construction projects are common, both owners and contractors alike would prefer to avoid them altogether.
Owners want to avoid being billed for overhead on uncompleted projects, and contractors don’t want to be responsible for liquidated damages.
Concurrent delays can be difficult to understand, let alone know how to use them in your favor. This article will clear things up by:
- Defining concurrent delays in construction
- Sorting out the issues for both owners and contractors; and
- Explaining how concurrent delay claims are filed
Contracts are one of the most important pieces of a construction project because they contain pertinent details for every aspect of the job. Without a comprehensive and detailed contract, all parties involved in the project are put at risk — and that risk can be costly.
Flexbase can help you create foolproof contracts, so you can avoid the pitfalls that can accompany concurrent delays.
Flexbase takes care of contract details like:
- AIA forms
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- Insurance documents
- And more
And if concurrent delays leave you strapped for working capital, Flexbase has you covered with:
- Our own Flexbase credit card
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What Is a Concurrent Delay in Construction?
This question doesn’t always have a straightforward answer.
The most basic understanding of a concurrent delay is when two or more individual delays happen during the same time period.
The delays do not need to occur at the same time, but the individual delays will have an impact on the project schedule and the completion of the project on their own. For example, if one of the delays is removed from consideration, the other delay must still affect the critical path.
Another way a concurrent delay in construction projects can take place is when a delay by the owner or contractor overlaps with an excusable delay like a force majeure event.
If you are a contractor or project owner, it’s important to understand concurrent delays.
The use of concurrent delays by owners is a way to avoid paying for change orders, extended overhead, and other such claims that affect the date of the project’s completion.
On the other hand, contractors use concurrent delays to avoid penalties from liquidated damages and to recoup costs accumulated because of delays.
Types of Concurrent Delays
Owners and contractors should understand the different types of concurrent delays in order to know how to appropriately file a claim for their specific situation.
Excusable delays are those that are allowed by contract documents. In this case, the affected party may make a claim for a time extension, compensation, or both.
Examples of excusable delays include those:
- Allowed under a force majeure clause.
- Caused by omissions or mistakes on the part of the owner.
A non-excusable delay is one in which the contractor is completely responsible for the delay in the project’s completion.
Some non-excusable delays may be for:
- Failure to secure permitting
- Submitting documents late
- Delayed mobilization
- Poor planning
Compensable delays are those that should allow for compensation or extension of the schedule. All excusable delays fall into this category because these delays are not caused by the contractor.
Non-compensable delays are usually those caused by the contractor. It is logical for these types of delays to be non-compensable. If a contractor makes a mistake on their own work, they shouldn’t be given an extension or extra funding.
True concurrent delays are rare.
True concurrency happens when the owner and contractor delays occur at the same time, and those delays share the same start and finish dates. In other words, the owner and contractor delays both have an impact on the same individual critical path.
Overlapping concurrencies are more common. These types of delays occur when each individual delay event causes the delay even without any type of competing event.
In this case:
- Each event is on the critical path; and
- The owner’s delay and the contractor’s delay overlap
For example, the owner and contractor delays may start at different times and overlap for a period of time. The concurrent delay would be considered the period of time when the delays overlap.
How Are Stakeholders Affected by Concurrent Delays in Construction Projects?
Both owners and contractors are affected by concurrent delays in construction and can have both favorable and unfavorable outcomes.
For this reason, it’s crucial that both parties:
- Strive to comply with the terms of the contract
- Take advantage of tools for precise scheduling; and
- Use comprehensive financial estimation tools
A concurrent delay can be an effective go-to but only if a good foundation is laid when creating the contract.
Concurrent Delays and Contractors
Contractors can rely on concurrent delay claims when being pressured to pay for liquidated damages.
It might look something like this:
- A project is delayed, and the owner believes it is the fault of the contractor.
- The owner believes the contractor should pay for liquidated damages.
- However, the contractor believes the owner is also responsible for a delay during the same time period.
- Claiming a concurrent delay, the contractor will refuse to pay the liquidated damages.
For this type of delay to work in the contractor’s favor, he should be very careful to keep a weekly updated construction schedule that can be compared to the contract schedule.
In addition, it would also be beneficial for contractors to:
- Make sure their employees are familiar with contract documents and change order procedures
- Have the owner’s final decisions and instructions in writing
- Meet timelines and submit notices in line with the contract details
In order to make sure a concurrent delay works in your favor, contractors should follow these guidelines:
- Follow the contract precisely and fully.
- Keep an updated construction schedule.
- Communicate delay notices to the owner promptly.
- Be aware of notice of claims as spelled out in the contract.
- Be familiar with any other contractual requirements for submitting requests.
- Request a formal response from the owner.
Concurrent Delays and Owners
When it comes to concurrent delays in construction, owners would do well to educate themselves regarding the language of the contract. Owners with an incomplete understanding of complex contract lingo may end up with unwanted expenses related to change orders and increased overhead.
Along these same lines, owners should also demand strict compliance to the terms of the contract to avoid implied mutual consent by remaining silent on certain compliance issues.
Just as the contractor should keep a carefully updated schedule, the owner should also document the contractor’s progress. Noting and documenting delays by contractors and subcontractors may be useful to prove concurrent delays and keep from paying for change orders and overhead expenses.
In order to be protected from concurrent delay claims, owners should be careful to do the following:
- Understand the contract language well.
- Make sure to include information about excusable events in the contract.
- Include explicit language in the contract regarding changes.
- Ensure team members have a clear understanding of timelines and know how to handle claims and notices from the contractor.
- Fully understand how a change order will impact the scope and time before issuing a change order.
Concurrent Delays in Construction Contracts: What Should Be Considered?
To avoid misunderstandings and legal procedures around concurrent delays, contracts should be written with very specific language regarding concurrent delays. Below we will take a look at definitional and procedural considerations.
Definitional considerations in construction contracts deal with how the term “concurrent delay” is defined as well as setting boundaries regarding time and monetary compensation.
Since it has already been established that the definition of “concurrent delay” can be hard to come by, it’s crucial to define that term specifically for each project in the contract.
AACE International Recommended Practice (RP) 10S-90 has published a technical reference entitled Cost Engineering Terminology. RP 10S-90, which many in the construction industry use when defining contractual terms.
Among the five options they offer for concurrent delay, contractors may consider this one: Two or more delays that take place or overlap during the same period, either of which occurring alone would have affected the ultimate completion date.
Without a clearly established definition and proof of what substantiates a concurrent delay, both the owner and the contractor will have little or no recourse when attempting to claim damages.
Procedural considerations in construction contracts focus on spelling out the procedures each party needs to follow when claiming or disclaiming a concurrent delay, including knowing what steps each party must take if a concurrent delay claim is successfully made.
Concurrent delay clauses in contracts should include some language as to the degree of time impact on the delay. If the owner-caused delay is of greater severity on the time impact than the contractor’s delay, then it makes sense that the contractor is compensated for delay damages proportionately. In order for the time impact to be correctly measured, a forensic schedule analysis will need to be performed.
Additionally, procedural considerations would also include information on how the delay cases are to be assessed and resolved.
This is most successfully accomplished with procedures that both parties would need to follow to prove or disprove a concurrent delay. The contract should also include the procedure to follow once a concurrent delay has been established.
Along with proper forensic schedule analysis techniques in place, having definitions and procedures agreed upon in the contract before signing can go a long way in minimizing disputes related to delays.
How Are Claims for Concurrent Delay Filed and Who Reviews Them?
Concurrent delay claims can be filed by either the owner or the contractor.
To submit a concurrent delay claim, the owner or contractor should follow the procedures laid out in the contract. Most likely this will mean a prompt notice of the delay followed by a claim outlining the details of the delay event along with the delay cost.
Concurrent delay claims are reviewed and settled in court.
Contracts are complex documents, and concurrent delay clauses further add to the complexity.
Even for the simplest projects, you want to know that every detail is covered in the contract. But how can you be sure that you haven’t omitted a key element?
With Flexbase’s automated and integrated systems, you can rest assured that every part of the contract is reviewed and completed before signing.
See how it all works when you schedule your Flexbase free demo.
