Harmony vs. Property Rights

One question is whether Hess' critique really represents the death rattle of an older, more-contentious world of construction. Instead of emphasizing the potential for cooperation afforded by mutually agreed upon CPM schedules, Hess' view considers float, which is time or days, as a kind of property. But some CPM experts think the notion of float ownership is absurd.

To an outsider, CPM's processes may seem opaque—forward passes, backward passes, lags, constraints. Even the definitions are puzzling

Float, for example, has been described as the period between the earliest possible start time for an activity not on the critical path and the latest time the activity can possibly finish, minus the actual number of days to do the work.

According to CPM expert and author Murray Woolf, terms such as "total float," "free float," "activity float" and "project float" are confusing because they carry different meanings.

 

HESS

The differences matter, especially when the definition of float is related to contract provisions. The 2007 recommended practices of the Association for the Advancement of Cost Engineers International defines "project float" as the period between the scheduled completion date and the contract's completion date.

Craig Hogan, senior vice president in the Austin, Texas office of construction manager Atkins, says the definition may put a contractor on the hook. "The contractor could submit an early completion schedule," he explains. "If this schedule is delayed, it may not be delayed beyond the overall contract time. [But] the contractor may be eligible for delay-claim payments, unless there is a contract clause providing the owner equal use of the project float."

So although shared resources is the most common contractual approach for float, contract terms vary.

"In our experience, almost every entity has a different approach to using float," says Frank Martin, chief executive of Martin-Harris Construction Co., Las Vegas. For example, Clark County, Nevada, says it owns the float, while the Clark County School District believes the contractor owns it, Martin says.

There is a tendency among owners, especially more sophisticated private-sector owners that produce their own CPM schedules, to want to own the float. "The reason being, if a delay doesn't eat up the float on a particular activity or group of activities, it doesn't delay the project, therefore no harm to the CM, in their eyes," says Kevin P. Bowen, president of Peter R. Brown Construction Inc., Clearwater, Fla.

Gaming and manipulating float totals is a common worry. Randy Nye, senior vice president and general counsel for Sundt Construction, Tempe, Ariz., says his company sees "contracts that prohibit the contractor from disguising the float by artificially extending durations of time for activities."

When contracts are silent on float, they may simply state that, "should the contractor fall behind schedule through no fault of others, he shall put together a recovery schedule indicating how an on-time completion will be achieved" and bear all the costs. Under other contracts, owners protect themselves by imposing either liquidated damages or consequential damage clauses.

The Origins of Shared Float

Hess, who mostly represents general contractors and large subs, portrays shared resources as a developing trend. The concept grew, in Hess' view, by the mid-1970s, when federal boards of contract appeals began adopting the shared-resource rule. The rule denies relief to contractors and favors the owners when the owner consumes all the available float, leaving the contractor no cushion later in the project, Hess writes.

"In other words, the shared-resource rule may allow a party's delays early in the project to be excused, while later delays generate liability after available float time has been consumed," Hess writes in the article.