How to Avoid or Manage Project Delays

The financial ramifications of a delayed project can be considerable for owners and contractors alike. For each, time - as the often cited cliché provides - is money.

By Burt P. Natkins, Esq.

Whether large or small, construction projects are fraught with many unique and varied risks. Construction-related risks may range from financial risks to personal injury risks. Indeed, no project participant is ever completely insulated from these risks and their potentially devastating consequences. A full understanding of the nature of these risks and the means to adequately manage them should be an overriding objective of all the construction project participants.

Project delay, for example, is a stark, if inescapable, reality common to the construction industry. Unnecessarily long and disruptive delays can literally turn an otherwise profitable project into a financially ruinous undertaking. Avoiding delays, or limiting their duration and managing their unwanted effect, is therefore often critical in ensuring a project's ultimate success.

A full appreciation of the nature and scope of time-related risks is, unfortunately, of little value if it is not used to establish a commonsense, workable program to manage those risks. The mere existence of such a program, however, does not alone suffice. To be truly effective, the loss avoidance and loss protection initiatives of the program must be strictly and timely implemented and followed. Otherwise, claims may be waived and contractual rights may be forever lost.

Some key program measures for avoiding, limiting or managing project delays should include:

• Review of the entire contract (including all attachments and the general and supplementary conditions) before its execution, with particular focus on the notice of claim, request for time extension, submittal review, and other similar provisions. A checklist of the key provisions requiring any action or communication during the performance of the contract should be created, with copies provided to all involved in the administration of the contract.
  
• Review of the design documents once completed for the purpose of identifying any obvious design deficiencies or plan inconsistencies. Any problems identified should be resolved before the underlying work needs to be performed or otherwise becomes critical to the project schedule.
  
• Agreement by all of the project participants on the forms to be used in connection with the routine project transactions, including submittals, RFIs, change orders, applications for payment, lien waivers, and daily reports. Such agreement will minimize the risk of the exchange of incomplete or confusing information during the project, thereby avoiding delay or otherwise exacerbating any ongoing delay.
  
• Full understanding of the dispute resolution and claim procedures, including their protocols, and a discussion of that understanding with the other project participants at the outset of the project. If the parties' understanding of the protocols is inconsistent with the contract language, then the contract should be amended. Also, if such procedures are later required, the contract requirements must be strictly followed.
  
• Creation of a standardized project filing system and record retention policy. Such measures will inevitably improve the day-to-day project administration and will enhance the success of any later initiated claim procedure or dispute resolution if needed.
  
• Use of the "agreed upon" project documents effectively. The content of the documents should be of sufficient detail to ensure their effectiveness in any later initiated dispute resolution or claim procedure. For example, if a project should be delayed, the appropriate documents should at the time of the delay identify the delay, its cause, and its impacts.
  
• Timely submission or issuance, logging, and tracking of all RFIs and responses, submittals and responses, change order requests, quotes, etc.
  
• Reducing to writing all orally issued field directives and orders.
  
• Updating of the project schedule during the course of the project to document as-built conditions, including any changes in schedule logic or construction sequences.
  
• Many project time-related risks share the same characteristic - they can be substantially mitigated or otherwise avoided if they are identified and addressed in a timely manner. Accurate and effective communications among project participants are critical to ensuring such mitigation or avoidance. Indeed, the very dangers of failing to communicate timely and effectively may be the very root of many project delays. A project participant should therefore develop and implement its risk management program with that notion in mind.

Burt Natkins is an attorney with the law firm of Zetlin & De Chiara LLP in New York, N.Y.