Concurrent Delay and Pacing Delay in Construction Project

What is Concurrent Delay?

The term “concurrent delay” is commonly used to describe circumstances where owner-caused delays and contractor-caused delays occur at the same time.

In true concurrency, the owner and contractor delay events (the cause of delay) both occur at the same time and the delay caused by the delay events start and finish at the same time. True concurrency is unlikely to occur and this narrow definition is too limited for practical application. Conversely, Keating (Keating on Construction Contracts 10th ed, Sweet & Maxwell, 2016) considers delays as concurrent when:

  • each delay event, in the absence of any competing event, has caused delay;
  • each delay event is on the critical path; and
  • the delays caused by the owner and the contractor overlap.

Typical scenarios of concurrent delay and how to resolve them

In situations of concurrent delay, the Contracts between the parties must first be examined to determine whether they provide an answer to how the allocation of liability for any concurrent delay should be considered without sophisticated analysis.

The contract between the parties may provide no direct guidance as to the treatment of concurrent delay. Then the most common principle applied in the international construction industry which addressed below is utilized.

1. True Concurrency

Concurrent Delay in Construction Project-1

If the owner-caused and contractor-caused delays are concurrent and of equal duration, and if they equally affected the critical path to project completion, the contractor would not be entitled to compensable delay damages and the owner would not be entitled to its actual delay or liquidated damages.

The Contractor is still entitled to a full Extension of Time (5 days).

2. Partial Concurrency

Concurrent Delay in Construction Project-2

AACE International’s Recommended Practice No. 29R-03 for forensic schedule delay analysis states the following:

“…That is, the contractor is barred from recovering delay damages to the extent that concurrent contractor-caused delays offset owner-caused delays, and the owner is barred from recovery liquidated or actual delay damages to the extent that concurrent owner-caused delays offset contractor- caused delays.”

The Society of Construction Law Delay and Disruption Protocol states the following:

“If a contractor incurs additional costs that are caused by both owner delay and concurrent contractor delay, then the contractor should only recover compensation to the extent it is able to separately identify the additional costs that were only caused by the owner delay. If it would have incurred the additional costs in any event as a result of concurrent contractor- caused delays, the contractor will not be entitled to recover those additional costs unless provided otherwise in the contract.”

In this example, the Contractor’s compensable duration is 2 days. It can not receive 3 days of compensation for its own delay.

The Contractor is still entitled to a full Extension of Time (5 days).

In a complicated project, the Collapsed As-Built / As-Built But-For Delay Analysis method is deployed to quantify the Contractor’s entitlement to receive compensation. The method is addressed in the following article: How to perform Collapsed As-Built / As-Built But-For Schedule Delay Analysis in Primavera P6

3. Functional Concurrency

Concurrent Delay in Construction Project-3

Functional concurrency occurs when the separate network paths, on which the delays reside, concurrently impact the Project Completion date.

AACE International Recommended Practice No. 29R-03 Forensic Schedule Analysis (Section 4.2.D.1, p. 105.) affirms that the functional theory is “closely attuned to delay methodologies that use modeled CPM schedules as their basis and utilize some form of time period analysis. Since these analyses measure delay at the end of time periods [typically the status updates] it makes sense to measure concurrency under this methodology at the same points, rather than trying to develop a separate concurrency analysis. Accordingly, the functional application of concurrent delay theory does not necessarily require the delay events to occur at the same time. In addition, the functional theory allows that CPM schedules, even if properly maintained, are not perfect, and near critical delays may in fact be concurrent.

In this example, there would be no compensable delay for the Contractor and the Owner.

The Contractor is still entitled to a full Extension of Time (5 days).

Summary Table of Concurrent Delay Scenarios and Net Effect

The various permutations of concurrent delay are summarized by AACE International in Table below (Recommended Practice No. 29R-03 Figure 12- Net Effect Matrix-Concurrent Delay, p. 100.):

Concurrent Delay in Construction Project-4

What is Pacing Delay?

Pacing delay occurs when the delay in one activity occurs, and a conscious and contemporaneous decision is made by the contractor to pace progress in a second and independent activity. Thus, the contractor deliberately slowed down its work in an effort to “keep pace with the owner’s delay”. The thinking typically expressed by contractors is “Why should I hurry up and wait?” because the owner-caused delay was driving the project completion.

It is common for construction contracts to not address or define concurrent delays let alone “pacing.” Most construction contracts contain specific language such as, “time is of the essence” or “a contractor shall diligently perform the work” which requires a contractor to expedite the completion of the work. Consequently, most construction contracts do not inherently sanction a contractor to “pace” its work when delayed by an owner-caused impact to the critical path.

However, nearly all construction contracts include an implied warranty that requires the contracting parties not to delay, hinder, or interfere with the performance of the other party. A contractor is allowed to enjoy a least cost performance based on implied warranty. When an owner delays the critical path, the contractor is permitted to mitigate costs to the benefit of the contractor thereby providing a basis for “pacing.”

Pacing is typically presented in two scenarios.

1. Direct Pacing – This situation occurs when the duration of a successor schedule activity is extended due to a delay in a predecessor activity on which the progress of the successor activity is directly dependent. An example would be that the duration of wire pulling is delayed because conduit installation is taking longer than anticipated due to the lack of conduit materials on the site. This is pacing delay, not concurrent delay because the cause of one delay is the result of the other delay.

2. Indirect Pacing – In this situation, the paced activity has no dependency on the other activity. For example, a contractor deliberately slows down piping installation in one area of the project due to an owner-caused delay in another area of the project. The owner-caused delay creates float while the contactor’s decision to slow down piping installation consumes this float.

In its evaluation of potential concurrent delay vs. a pacing delay, the following generally accepted international construction industry guidelines apply, in order of importance, as follows:

1. A predecessor dependent parent delay must precede a pacing delay;
2. The contractor needs to demonstrate that it could resume progress at an un-paced rate; and
3. The contractor needs to provide evidence that a conscious and deliberate decision was made at the time to pace the work as a result of the other delay.

If no documentation is made available to justify a pacing delay, then consistent with the AACE International recommended practice, concurrent delays by the contractor should not be regarded as pacing delays, and instead are delays for which the contractor is responsible.

References:

Analysis of Concurrent Delay on Construction Claims – Richard J. Long

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