Updating schedules and preparing cost reports ranks near the bottom of contractors’ lists of eagerly awaited tasks. Both, however, are essential for contractor success.
When contractors experience delays, whether by non performing subcontractors, force majeure, or uncoordinated and incomplete project design, the contractor’s legal obligation to prove entitlement for an extension of time requires proving by a preponderance of the evidence; liability, causation and damages. Without a contemporaneously updated schedule, this may be impossible to do.
Not any schedule update will suffice. Courts recognize Time Impact Analyses (TIA) performed using the Critical Path Method (CPM) as the optimum proof of delay, with the single most important factor in determining the acceptability being contemporaneous updating reflecting the actual progress of the work. As one court held: “It is essential that…any time extensions due to the contractor be incorporated into progress [schedules] concurrently with the performance of the changes…”
It’s easy to get it right. The good news is there’s nothing special about a time impact analysis and many contractors perform them without even realizing it. It is nothing more than a schedule update performed immediately before and immediately after the delay. Chances are the Contract Documents require regular schedule updates anyway, and by simply doing what you’ve already promised to do, you’ve complied.
The slippery slope. Often, the very reason you should have updated your schedule is the reason you didn’t do it. Uncoordinated and incomplete drawings can create numerous RFI’s which often cause time and cost impacts to the contractor. It is not uncommon for subcontractors to submit RFI’s while they are performing the work the RFI relates to, and when they don’t have the information they need, the work is delayed. While the subcontractor is experiencing delay to its work, the contractor’s personnel are swamped with managing RFI’s and their cost impacts, and the contractor may not recognize the project was delayed because he put off that schedule update to manage RFI’s and their cost changes.
But I’m swamped! While putting off schedule updates because staffing was too thin might be a project manager’s excuse to his boss, the law offers little sympathy. Nearly all Contract Documents require contractors to provide regular schedule updates and failure to provide them is a breach of contract the contractor can be held accountable for. Not only does the failure to update the project schedule create serious obstacles to a contractors obligation to fulfill its burden of proof, it creates damages liability as well.
But if you prefer, a merciless attack awaits you. With no contemporaneously updated schedule, a contractor must fabricate an as built schedule from its records to fulfill its legal obligation to prove delay causation. While an as built schedule can be built if the project superintendent kept good records, if he didn’t, it is likely the contractor cannot fulfill its legal obligation to prove delay causation. Furthermore, because as built schedules are prepared for the sole purpose of litigation, they are viewed with skepticism and will be mercilessly attacked for accuracy to discredit them.
It’s no coincidence that projects whose schedules are contemporaneously updated are finished on time; regular updates allow contractors to timely identify delays to proactively resolve them, and they provide contractors the means to request timely grants of additional time when merited.
Lawyer repellent. An apple a day keeps the doctor away; timely updates keep the lawyers at bay.