Shattering the Myth of Bilateral Time Extensions
The Case for Neutral, Third-Party Schedulers
When requesting a time extension, most construction contracts require the preparation of a time-impact analysis (TIA), in which unanticipated or changed work is inserted into the schedule to demonstrate what impact the change will have on the schedule.
In theory, the TIA sounds like a simple and elegant approach to resolve delays and determine equitable time extensions. However, in practice, an approved time extension based upon a TIA is uncommonly rare. As the Rabbi Glickman character from "Seinfeld" would say, the approved TIA is something of a myth, like the Yeti, or his North American cousin, the Sasquatch. After more than 20 years in the construction industry, I have yet to be involved in a project where a TIA or its sibling, the so-called impacted As-Planned Analysis, followed contractual or published guidelines and resulted in a time extension without acrimony or litigation.
The starting point for most time-extension disputes is responsibility for the delay, which is a debate as old as the construction industry itself (see "Roman Coliseum Plagued by Delays, Plague," ENR, June V, LXXIX). In the rare instances when the parties do agree on entitlement, an array of contractual hurdles must be cleared before most owners will even consider granting a time extension, regardless of the delay-analysis methodology used.
My company, PKR Consulting, recently worked on a project in which the owner's representative seemed to take perverse pleasure in avoiding time extensions due to an assortment of perceived technicalities. During litigation, we discovered internal emails joking about how "friends don't let friends" grant time extensions. Assuming a contractor succeeds in navigating the contract's procedural labyrinth or circumnavigating an overzealous owner's rep, the TIA looms large as the final challenge in the Golden Fleece-like quest for a time extension.
Experienced Schedulers Missing
TIAs are often unsuccessful for reasons too numerous to enumerate here. However, foremost among those reasons, many contractors do not employ experienced schedulers. As a result, schedules and TIAs are so seriously flawed that they cannot be used to evaluate delay. On some projects, I have wondered if the contractor could spell "TIA," let alone prepare one. Most contracts specify that TIAs must use the accepted schedule in place at the time when the delay arose. Since some projects never have an accepted baseline—let alone an accepted schedule update—the parties may not have a starting point for such an analysis. More troubling, an unscrupulous owner can use improperly rejected schedule updates as a pretense for rejecting TIAs.
Assuming an accepted, contemporaneous schedule does exist, the activities that get inserted into the schedule become the next sticking point. Known as a "fragnet," or "fragment of a network," the activities representing the change must have reasonably estimated durations with sound logic ties to existing activities. Getting the parties to agree on fragnet activities and logic is often a TIA's undoing.
TIAs are most useful for demonstrating future impacts so that project participants can decide the best course of action. However, most contracts require TIAs for all time-extension requests, regardless of when the delay may have occurred. Because the revised plan predicted by a TIA rarely replicates what actually occurred, many owners use the benefit of 20-20 hindsight and any discrepancies as a basis for rejection.
So, what can owners and contractors do to make TIAs work? While a neutral third-party project scheduler would resolve many of the problems identified above, based on the adoption rate of this concept since I proposed it in ENR (7/23/12), I will have long since retired before neutral schedulers are commonplace.
Nevertheless, there are steps the industry can take to improve the TIA process. Contractors could better train personnel so that scheduling is performed with more competence. We must enforce contract provisions that require an experienced scheduler to be on-site. On most major projects in the industry, the owner has retained a representative with scheduling expertise. Why not require the owner to prepare a TIA within the same time constraints as the contractor? In doing so, the parties would at least have a starting point to discuss the technical merits of each party's TIA. If such changes were implemented, TIAs might result in more equitable time extensions and fewer futile exercises chasing a myth.
Kurt Rossetti, P.E., CCP, is the founder of PKR Consulting, Inc., a construction management and litigation consulting firm in San Francisco. He can be reached at email@example.com.