No one can deny that construction claims in the GCC in particular and globally in general are on the rise.
The decline of new project awards, projects at low profit margins, liquidated damages claims for late completion are rising in frequency and amount, and tough pressure on margins among other issues are compelling owners and contractors to become more contentious and adversarial thus resulting in growing volume of claims and disputes.
One of the key challenges in quantifying the damages of construction claims is the quantification of the delays associated with each claim. Those delays could result in financial damages as it relates to prolongation cost, idle resources, disruption, loss of efficiency, constructive acceleration among others. The project planner has the obligation to provide the project team responsible for the claims submission, review and negotiation with a robust and comprehensive quantification of the delay impact that claim events have caused to the project.
The Integrated Baseline Schedule
Every project has the contractual requirement for preparing and submitting a detailed integrated construction schedule that details all the activities needed to deliver the project with the approved milestone and completion dates. The project schedule needs to incorporate the Work Breakdown Structure (WBS) used to decompose the project’s scope into manageable control account or work packages. The project schedule is usually resource loaded with the manpower and other resources needed to execute each schedule activity. In most projects in the Middle East region, contractors are required to submit this schedule using Oracle Primavera P6.
To ensure that this submitted schedule is complete and correct, it is highly recommended that it is formally reviewed and analyzed before it is submitted for approval. Reviewing the schedule will ensure that the schedule is reasonable and complete while analyzing the schedule will ensure that the schedule represents a workable plan considering available managerial and production resources. Using PMWeb Project Management Information System (PMIS), a standard checklist template will be created to formalize the review and analysis process. A workflow will be added to this template to capture the comments made by the review team and ensure that they were incorporated in the schedule before submitting it for formal approval by the project owner or his/her authorized representative.
Aligning the Project Schedule with the Project Everyday Events and Communications
To be proactive in capturing and analyzing the impact of everyday project events and communications, the project schedule WBS levels and activities need to be part of the different project records used in documenting project events and communications. Those include submittals, transmittals, request for information, daily reports, change orders, progress invoices, meeting minutes, safety incidents, snag list among many others. Accordingly, a PMIS like PMWeb must not only allow importing the schedule WBS levels and activities but also associate those schedule records with the different records generated from PMWeb.
PMWeb default out of the box forms have pre-defined fields for the WBS and activity ID to allow associating the record with the relevant project schedule WBS level and activity. The same will be done to the other custom forms created in PMWeb to capture other project’s data that are not covered in the default forms. Of course, for each PMWeb record, the project team member can attach all supportive documents as well as link to other relevant PMWeb records and imported emails.
Capturing Actual Progress Details
Although it is very important to capture the actual progress details needed to update the schedule, nevertheless this becomes more critical and important when the purpose of this actual progress data is to support the delay analysis submission. In construction projects, the document that all parties agree on as being the only formal communication document to capture the actual project progress is the daily report. The daily report is used to capture the daily weather condition, work completed on site, resources used to perform the works among others.
In addition to the basic details like weather conditions, PMWeb default daily report module allows capturing the details of all work activities accomplished on the project for each particular day. The location breakdown structure provides a structured approach to identify all project locations so by just drag and drop that specific location, the project team member can report the actual progress achieved at that location. It allows quantifying the work done as well as associate it with the Cost Breakdown Structure (CBS) level which is part of the project budget, commitment, change order and progress invoice records in PMWeb. For each progress entry, pictures, videos and other documents can be uploaded and attached to that entry.
The PMWeb daily report also allows capturing the details of all resources, manpower, equipment and others that have worked on that day. For each resource entry, there will be quantification of the hours spent, from when to when, and whether those hours were overtime, weekend or regular working hours. Those resource hours can also be labelled as idle hours. For each entry, the resource hours will be associate with the Cost Breakdown Structure (CBS) they are associated with and the work done on that day as well as the project schedule activity that those resource hours are associated with.
Since it is possible that key project deliverables are completed at one of the project days, PMWeb daily report module allows creating a checklist that can be used to verify the completion of that deliverable. PMWeb allows creating a repository of all possible checklists to enable the project team member to simply drag and drop the checklist to be used.
One of the best practices used today on construction sites is to allow every site superintendent or site engineer to submit his/her own daily report for each WBS level he/she are accountable for. This not only will expedite the capturing of daily progress data but also will ensure accountability for the reported progress data for each WBS level or control account. Again, a workflow can be assigned for the daily report to formalize the submit, review and approve process or as an alternative choose to generate a transmittal to capture this submit, review and approve process.
Capturing the Delay Analysis Details
When there is the requirement to perform the delay analysis due to an event that could have an impact on the project’s schedule, the planning engineer needs to capture the particulars of this delay analysis to ensure that he/she has the complete particulars of this delay event. PMWeb custom form builder will be used to create the Delay Event Form which will be used to record the delay particulars including the details of its being Excusable or Non-Excusable, Concurrent or Non-Concurrent, Compensable or Non-Compensable and Critical or Non-Critical. It will also make reference to the contract agreement clauses that this delay event is associated with.
Identifying the Reason for the Delay
The Delay Event form will also allow to select from a predefined list for the reason of this delay which could be Acts of God, Acts of Government, Actual Acceleration, Adverse Weather, Bankruptcy, Cardinal Change, Commercial Impracticability/ Performance, Commercial Impracticability/ Supply, Constructive Acceleration, Constructive Change, Defective Specifications, Delay of Approvals, Delayed Issuance of Change Orders, Delayed Notice to Proceed, Destruction of Work, Destruction of Materials, Differing Site Conditions, Early Completion Prevented, Impossibility of Performance, Improper Inspection, Inadequate Supervision, Inadequate Utilities, Interference, Labor Shortage, Lack of Access, Lack of Information or Decision, Lack of Permits, Lack of Right of Way, Late Drawings, Late Defective Material, Payments Not Made, Scheduling Difficulties, Stacking of Trades, Strikes, Subcontractor Delay, Superior Knowledge/ Misrepresentation, Supplier Delay, Suspension of Work/Delay, War and Other Hostilities among others. Nevertheless, it is usually recommended to have another PMWeb form created to capture the details of those occurrences and link it to the relevant Delay Event Form.
Search and Locate Project Communications to Support Delay Analysis
Similar to all other PMWeb records, the planning engineer can attach all supportive documents to the Delay Event Form but n delay analysis, the planning engineer needs first to locate those records. Therefore, PMWeb allows the planning engineer to search for the records captured in PMWeb for the needed key words and store those selected documents in what is known as a Claim Issue. The planning engineer can do multiple record search and keep appending the Claim Issue with newly identified records. Only those that are relevant to the delay analysis will be then attached to Delay Event Form.
Reporting on Delay Analysis Status
The planning engineer needs to maintain a log of all submitted Extension of Time (EOT) requests along with their relevant details. The log will be based on the data captured in the Delay Event form as well as the Occurrence form which details the reason for the EOT. The dashboard has four visuals: EOT By Reason, Awarded Time Extension by Reason, Awarded Compensation by Reason and EOT By Status. In addition, the dashboard includes a table that details all EOT submissions made to date. The project team member can drilldown to the Delay Event form to get additional details on the Extension of Time analysis when needed.
Disputes arising from claims for time extension are on the rise. Planning engineers use different techniques to analyze the time impact of delays associated with claim events. All those techniques require having approved baseline and periodically updated project schedules. In addition, they require formal details of the different events associated with those delays to quantify the time and cost impact of those events. Daily report is a formal project communication that all construction projects must have. If daily reports are implemented correctly, they will provide true description of what has happened on the project for which all parties of the contract have agreed to when they were submitted. This data along with other project records and documents will enable the planning engineer to come with the EOT Submission that the project owner/consultant can review, analyze and approve or reject.