Tag Archives: damages

Construction Delay Claims – Critical Path Method Scheduling

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Construction Delay Claims – Critical Path Method Scheduling

Critical Path Method (“CPM”) is the most readily accepted method of measuring construction project delays. This scheduling technique is used to plan and manage a construction project.  The CPM schedule calculates the completion time for a project with discrete start and finish times for the construction project’s work activities.

The CPM schedule represents the set or sequence of predecessor and successor work activities including earliest start dates, latest start dates and completion dates for each activity.  The start of a discrete construction activity on the critical path is dependent on its predecessor work activity being completed based on estimated time durations in the CPM schedule.  For example, excavation for a building foundation is quite often a predecessor work activity to its successor work activity of pouring the concrete foundation. 

In our example, pouring the concrete building foundation is the work activity dependent on its predecessor work activity (foundation excavation) being completed in a reasonable time duration set forth in the CPM schedule.  Timely completion of the concrete foundation is dependent on timely completion of the foundation excavation to avoid delay to these two discrete work activities and the construction project as a whole.  Delays along the critical path may require additional time to complete the project and/or require accelerating work activities to make up for lost time.  Increased costs are often the direct result of delays and acceleration to make up for delays. 

Many project owners insist that liquidated damages be assessed for failure to timely complete interim milestone(s) and failure to meet the overall completion date.  Most courts and arbitrators recognize the CPM schedule as a tool for measuring construction project delays and calculating liquidated damages as well as other time related damages.  It is important for everyone involved in construction including owners, general contractors and subcontractors to understand how CPM scheduling is used to plan and execute construction work in addition to using CPM scheduling in proving or defending delay claims.

If you are experiencing delays, increased costs and damages on your construction project, please contact Milo D. Miller Law Group, P.C. at (720) 306-7733 to assist in navigating the often complex arena of CPM Scheduling and delay claims.

The materials contained at this site have been prepared by Milo D. Miller Law Group, P.C. for informational purposes only.  This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship.

The Role of the Budget as a Tool to Prove Damages and Promote Improvement

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The Role of the Budget as a Tool to Prove Damages and Promote Improvement

Many commercial, public works and industrial construction projects involve competitive bids in which the successful bidder subsequently converts the work items or categories of work in the bid to a construction budget for the project.  On a complex construction project the budget may contain dozens of categories of work with hundreds of cost codes.

Budgetary overruns in cost codes or categories of work lead some construction managers to “dump costs” into cost code(s) that are otherwise under-budget.  This is problematic for a number of reasons including: 1) minimizing/degrading the integrity of the budget as a means to track the accuracy of the bid/estimate for the project; and 2) it can lead to potential problems in proving damages where the cost increases are due to causes other than bidding/estimating errors.

Construction costs should be properly allocated to the appropriate construction category and/or cost code in the budget.  This allows construction professionals to make adjustments where the estimate/bid did not include realistic projections on production, time and costs  (i.e. improve on future projects).  Conversely, proper construction cost tracking allows construction professionals to rely on past bids and budgets where accurate estimates proved profitable for the construction company (i.e., improve on future projects).

From a legal perspective, proper construction cost tracking is also essential to assist in calculating damages.  When construction managers “dump costs” into inappropriate cost codes it can make it very difficult to accurately track and determine damages for cost increases not caused by the contractor, and for which the contractor may be entitled to compensation. Additionally, when events arise, such as changed conditions, it is critical to create a new budget line item for the changed condition. Creating a new budget line item for the changed condition segregates the costs resulting from the change and allows for accurate cost tracking, defensible documentation, and clearer claims to entitlement.  It is also important to take steps to avoid the inclusion of cost increases independent of the changed condition due to the contractor’s own inefficiencies.   A budgetary overage may not mean the estimate/bid is unreliable or inaccurate.  Rather, it could mean that something arose that could not have been reasonably anticipated at the time of bid.

For more information on how proper construction budgets affect damages and project improvement, contact Milo D. Miller Law Group, P.C. at 720-306-7733.