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Contracts Capsules Episode 7 - Types of Construction Delays.

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Today’s topic is: Types of Construction Delays

A study was conducted by several international professional entities in the construction domain, operating across multiple regions—focused on understanding common contractual deficiencies and causes of conflicts. The study found that at least 70% of construction projects worldwide are not delivered on time, due to factors such as scope creep, unplanned changes, or lack of proper resource management. This occurs despite the use of today’s advanced technology, machinery, software applications, AI solutions, and modern planning and execution techniques.

Because this is such a significant percentage, most of complexed Construction Claims worldwide are simply Delay Claims. However, not all delays are equal, and that’s why today I want to discuss the different types of delays in construction to help you understand their criteria and impacts.

Instead of summarizing the types academically, I will explain them in a story-like approach, so you can recognize a Delay Event you might have when it occurs.

1. Non-Critical Delay:
When a delay occurs, check your program of work. Is the affected activity or delay occurring on the critical path?
If not, this is a Non-Critical Delay.
In this case please do not ignore the delay and try to control and mitigate, because non-critical delays can escalate and turn to critical delays, of course if not mitigated immediately.

2. Critical Delay:
If the affected activity is on the critical path, it is then a Critical Delay.
In this case, prompt action is required to avoid or mitigate its impact, as the resulting damages will affect the overall project period. The resulting damages can be further studied in the next steps.

3. Non-Excusable Delay, or Not-Justified:
Once the delay is classified as Critical or Non-Critical, you can determine if the delay is caused by the claimant.
If the answer is yes, it is Non-Excusable delay, and the claimant cannot claim time or cost damages under this event. Then, the claimant must mitigate the delay and bear any resulting damages and delays' impacts.

4. Excusable Delay, or Justified:
If the delay is not caused by or through the claimant, it is usually an Excusable delay, entitling the claimant to claim time-related damages.
The Cost damages require further analysis before deciding on its legitimacy.
Even in excusable delays, the claimant must make all reasonable efforts to reduce or mitigate the impact, of course as applicable.

5. Concurrent Delay:
It is one of the most debated types of delay in construction projects and often becomes a major source of conflicts and disputes among the parties. It occurs when both parties are delayed for different reasons during the same period, and each one has benefited from the other party’s delay.
Depending on timing and contract terms, this may result in Non-Compensable outcomes to the claimant if both parties’ delays started at the same time or the claimant’s delay started first. On the other hands, it may lead to Compensable scenario if the non-claimant party’s delay starts first.
Always review your contract and local practices to assess your specific scenario.

6. Non-Compensable Delay, or Non-Reimbursable Delay:
When the delay is excusable, we start to ask whether the delay is or is not Compensable.
In Non-Compensable situation; the claimant may recover time impact but not cost impact.
The causes leading to the non-compensable situation include partial responsibility by the claimant, failure to try mitigating the delay, or because of concurrency depends on my explained scenarios before.

7. Compensable Delay, or Reimbursable Delay:
It is classified as an excusable delay fully caused and generated by a non-claimant party.
It must be demonstrated that this type of delay has caused unavoidable additional costs to the claimant, commonly referred to as Prolongation Costs, since it prolongs the claimant’s performance commercially by extra time-related expenses.

To conclude what I said today:
The claimant must demonstrate sincere efforts to control the schedule, whether delays occur or not.
Claimable portions of excusable delays should reflect aspects beyond the contractor’s control, which cannot be mitigated by an experienced contractor, after taking all reasonable measures in good faith and with due diligence.

You may also visit our website: con c maze.com
And search for and download our world’s first mobile app, Con c maze, to access our construction-contracts consultancies for free if you have a specific query.

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Goodbye!