Delay Analysis in Construction Contracts: Assessing Claims and Legal Implications

Abstract

The purpose of this paper is to present a guided approach for the selection and application of an appropriate delay analysis method for construction projects considering different legal and contractual perspectives. The authors collected information on sampled projects as case studies that were completed in the last 15 years where the authors had direct or indirect involvement. Project participants were then interviewed and asked to provide information that was then used to build a comprehensive data set with parameters for project size, location, type, contract conditions, duration, delivery method, delay analysis method, and awarded time. A total of ten (10) causes of delay were identified in a thorough review of twenty-one (21) projects. Climate conditions, lack of coordination, conflicts between stakeholders, poor communication, inadequate planning, material shortages, payment delays, workforce and equipment shortages, stakeholder interference, and poor site management were identified as the most common causes of delay globally. Some projects had a combination of causes, leading to a more severe overall impact. The findings of the study is that the use of advanced delay analysis methods such as time impact analysis (TIA) and window analysis have a higher chance of enabling contractors to prove time entitlement particularly when used under FIDIC contracts, with less entitlement likely to be awarded under Anglo-Saxon contracts. This study identifies a common set of parameters to govern the selection of an appropriate delay analysis method and provides construction project managers with a practical tool to determine how much time and resources to invest in any particular method. It discusses how delay analysis affects the rights of the parties, delay damages, prolongation costs, bonuses, acceleration costs, reimbursement for fluctuation of prices or exceptional circumstances. The study also identifies the consequences of the method’s selection, the contractual and legal concerns that can be raised against it, and how such concerns can have an impact on decisions/awards. The most important gaps that can be monitored and proposals that can be recommended in this regard are presented. The use of artificial intelligence (AI) for purposes of delay analysis is evaluated and recommendations are proposed to utilize this technology to manage, sort, and filter project documents related to time extension claims. The question of which method to use in delay analysis poses challenges to all construction practitioners today, especially those who do not have the necessary skills and legal background in construction claims and dispute management. This study provides guidance to construction practitioners to select a delay analysis method that yield results able to withstand scrutiny based on a given set of parameters. The study is based on a pool of data selected from real contentious projects where delays have been recorded. The data were used to establish trends so that construction professionals can confidently use an appropriate delay analysis method based on project parameters. The graphical model in this study can be the cornerstone of an AI algorithm that blends legal framework and project parameters to select and apply a delay analysis method, which is another subject area covered in this study.