It's important for owners and general contractors (“GC”) to understand how delay, cost overruns and deficiencies can impact the bottom line. The ideal construction project would be completed on time, on budget, and without any deficiencies. This post addresses delay and what remedies owners or GCs may have when delay claims arise because of matters beyond their control.
In today's large construction projects, cost certainty is something owners and GCs want. This can be addressed through a fixed price contract or, alternatively, cost-plus with a maximum upset price. In either circumstance, the owner or GC seeks to protect itself from delay claims, hence the provisions in the contract.
Most standard-form construction contracts, such as the CCDC, have specific and detailed provisions relating to delay. Generally speaking, a trade or subcontractor, or in some circumstances a GC, will need to give notice of delay at or around the time it is encountered. Many standard-form contracts attempt to prohibit claims where the appropriate notice was not given. While this may seem harsh to those making delay claims, the overall scheme of a large construction project provides a rationale for why such claims may ultimately be denied. In the end, the terms of the contract will govern whether compensation is available.
5 Ways to Avoid Delay
- Finalize the master project schedule during pre-construction.
- During construction, monitor the 3-week lookahead schedules for any delineations from the master project schedule.
- If any delineations from the master project schedule are found, engage with the GC or trade directly to determine the cause and explore solutions.
- Visit the site regularly to monitor progress.
- Familiarize yourself with the specific and detailed provisions relating to delay in your contract.
Ultimately, the success of delay claims will be determined by the terms of the contract. Most standard-form contracts contain specific notice provisions when a delay claim is encountered – often in the range of 5-7 days – so that the owner or GC can try to mitigate additional costs at the earliest stage. From an owner's perspective, these notice provisions can mean the difference between a small fix and a large delay claim. As the saying goes, an ounce of prevention is worth a pound of cure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
