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⏰ Delay Claims

Delays happen on almost every project. Recovering your costs depends on proper documentation and understanding your contractual rights.

Key Principle

Document delays in real-time. Trying to reconstruct a delay claim after the fact rarely succeeds.

Types of Delays​

Excusable vs. Non-Excusable​

Excusable delays - Not your fault

  • Owner-caused delays
  • Design errors
  • Unforeseen conditions
  • Weather (if beyond normal)
  • Force majeure

Non-excusable delays - Your fault

  • Poor planning
  • Insufficient manpower
  • Equipment breakdowns
  • Subcontractor failures

Compensable vs. Non-Compensable​

Compensable - You get time AND money

  • Owner-directed changes
  • Design issues
  • Owner-caused suspension
  • Differing site conditions

Non-compensable - You get time only (maybe)

  • Weather delays
  • Force majeure
  • Delays by other contractors (often)

Concurrent Delays​

When multiple delays happen at the same time:

  • One excusable, one not
  • Both parties contributed
  • Complex to analyze
  • Usually = time only, no damages

Contract Provisions to Know​

No Damages for Delay Clauses​

Common language:

"Contractor shall not be entitled to any damages for delay, regardless of cause."

What it means:

  • You may get time extension
  • But no additional compensation
  • Very owner-favorable

Exceptions often carved out:

  • Active interference
  • Bad faith
  • Abandonment
  • Gross negligence

Notice Requirements​

Typical requirement:

"Contractor must provide written notice of delay within 5 days of becoming aware."

Critical: Miss the notice deadline, lose your claim.

Time Extension Procedures​

Know your contract:

  • How to request extension
  • What documentation needed
  • Who approves
  • Timeline for decision

Documenting Delays​

Real-Time Documentation​

Daily reports should note:

  • Weather conditions
  • Work accomplished
  • Work delayed and why
  • Instructions received
  • Lack of access/information
  • Equipment issues
  • Manpower levels

Critical to document:

  • Date delay began
  • Cause of delay
  • Impact to schedule
  • Verbal instructions (follow up in writing)
  • Photos of conditions

Contemporaneous Records​

Credible documentation:

  • Created at the time
  • By people with knowledge
  • In normal course of business
  • Consistent format

Less credible:

  • Created after the fact
  • Reconstructed from memory
  • Inconsistent with other records
  • Only when dispute arose

What to Capture​

For each delay event:

  1. Date identified
  2. Cause (specific and detailed)
  3. Responsibility (owner, designer, other)
  4. Activities affected
  5. Duration of impact
  6. Costs incurred
  7. Notice sent (date and method)
  8. Response received

Calculating Delay Damages​

Extended General Conditions​

Costs that continue for longer duration:

  • Site supervision
  • Field office
  • Temporary facilities
  • Equipment rental
  • Insurance
  • Utilities

Calculate:

Monthly General Conditions: $25,000
Delay Period: 3 months
Extended GC Claim: $75,000

Labor Inefficiency​

Delays can cause:

  • Stacking of trades
  • Out-of-sequence work
  • Multiple mobilizations
  • Learning curve loss

Methods to calculate:

  • Measured mile (compare productive vs. impacted)
  • Industry studies
  • Total cost (last resort)

Material Escalation​

If delay pushes work into period of price increases:

  • Steel price increase
  • Fuel cost increase
  • Lumber price increase

Document: Original quote date vs. actual purchase date

Equipment Costs​

  • Owned equipment: Calculate daily/monthly rate
  • Rented equipment: Actual rental cost
  • Standby costs (if equipment sitting idle)

Home Office Overhead​

Eichleay Formula (federal contracts):

Daily Rate = (Contract Billings / Total Billings) × 
             (Total Overhead / Days of Contract)

Overhead Claim = Daily Rate × Days of Delay

Presenting a Delay Claim​

Claim Contents​

  1. Executive Summary

    • Amount claimed
    • Brief description
    • Contract basis

  2. Facts

    • Project background
    • Chronology of delays
    • Cause identification

  3. Contract Analysis

    • Relevant provisions
    • Notice compliance
    • Entitlement basis

  4. Schedule Analysis

    • Critical path impact
    • As-planned vs. as-built
    • Delay responsibility

  5. Damages Calculation

    • Detailed cost breakdown
    • Supporting documentation
    • Summary

  6. Supporting Documents

    • Notices sent
    • Correspondence
    • Daily reports
    • Photos
    • Cost backup

Schedule Analysis Methods​

As-Planned vs. As-Built

  • Compare original to actual schedule
  • Identify where delays occurred
  • Simple but doesn't show causation

Impacted As-Planned

  • Insert delay events into baseline
  • Show theoretical impact
  • Forward-looking

Collapsed As-Built

  • Start with as-built schedule
  • Remove delay events
  • "But for" analysis

Windows Analysis

  • Analyze schedule in time periods
  • Most accurate for complex delays
  • More expensive to prepare

Common Mistakes​

1. Missing Notice Requirements​

Problem: Claim waived due to late notice Solution: Know deadlines, send notice immediately

2. Poor Documentation​

Problem: Can't prove delay occurred Solution: Document daily, in real-time

3. No Schedule Analysis​

Problem: Can't show critical path impact Solution: Maintain updated schedule, analyze delays

4. Ignoring Concurrent Delays​

Problem: Claiming damages when you also delayed Solution: Honestly assess concurrent delays

5. Inflated Claims​

Problem: Lose credibility Solution: Claim only what you can prove

Defending Against Delay Claims​

If You Receive a Claim​

  1. Review notice compliance - Was it timely?
  2. Analyze causation - Did claimed events cause delay?
  3. Check critical path - Was work on critical path?
  4. Identify concurrency - Were there concurrent delays?
  5. Review documentation - Does evidence support claim?
  6. Calculate damages - Are costs reasonable and proven?

Common Defenses​

  • Late or no notice
  • Delay not on critical path
  • Concurrent delay
  • No proof of causation
  • Damages not documented
  • "No damages for delay" clause