Construction Research Congress 2012 © ASCE 2012

Applying Delay Analysis Techniques to the World Bank Funded Projects Salwa FAWZY1 and Islam EL-ADAWAY 2 1

Contracts Manager: Egyptian Resort Company, 44 Aziz Abaza Street, Zamalek, Cairo, Egypt. E-mail: [email protected]. 2

Assistant Professor: Civil and Environmental Engineering, Mississippi State University, 501 Hardy Road, 235C Walker Hall, P.O Box 9546, Mississippi State, MS 39762. E-mail: [email protected].

ABSTRACT One of the main characteristics of construction projects in general is that they are subject to a wide range of risks causing delays beyond the planned completion dates. Due to the current unrest in the Middle East and North Africa, it is expected that the World Bank will fund many projects in the region to restore and build the affected and aged infrastructure systems. Under the current circumstances, these projects could be subject to delays. World Bank projects are managed through the Standard Bidding Documents for Procurement of Works (SBDW). The Conditions of Contract included in the SBDW (i.e. WB Contract) are based extensively on the Conditions of Contract for Construction published by the International Federation of Consulting Engineers (FIDIC). Since the WB Contract and the FIDIC have their own procedures that cover the submission of schedules (programmes, the term used in the WB Contract and the FIDIC), updating programmes and submission of claims for extension of time; some delay analysis techniques would fit to be applied to such contracts whereas other would not. Under these interrelated conditions, it is crucial for U.S contractors to utilize the appropriate delay analysis techniques that will enable them to study and assess the associated impact to the project schedules, and consequently submit well substantiated claims for extension of time. This paper uses a three-step methodology to present administration guidelines for appropriately applying the different delay analysis techniques to the World Bank funded projects. INTRODUCTION Delay is generally acknowledged as the most common, costly, complex and risky problem encountered in construction projects (Ahmed et al 2002). According to contractual frameworks, construction delays can be grouped in four broad categories: (1) non-excusable delays are ones that the contractor either causes or assumes their risks, and thus is not relieved of their consequences; (2) non-compensable excusable delays are caused by factors that are not foreseeable, beyond the contractor’s reasonable control, not attributable to the contractor’s fault or negligence, and thus while the Contractor will not receive compensation for the cost of delay, he will be entitled for an additional time to complete his work and is relieved from any contractually imposed liquidated damages for the period of delay (3) compensable excusable delays include suspensions and/or interruptions to all or part of the work caused by an act or failure to act by the owner resulting from non compliance and/or breach of an obligation, stated or implied, in the contract, and thus the contractor is

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entitled not only to an extension of time but also to an adjustment for any increase in costs caused by the delay; and (4) concurrent delays that occur when both owner and the contractor are responsible for the delay (Ahmed et al. 2002; Menesi 2007). GOAL AND OBJECTIVES This paper presents contract administration guidelines for appropriately applying the different delay analysis techniques to the World Bank funded projects. The objective is to promote efficient and effective management of claims for extension of time under the World Bank contracts, and consequently highperformance project outcomes. Ultimately, the World Bank will be more enabled and aligned to attain its mission and objectives because neither the Bank nor its associated stakeholders will suffer from lengthy problems during the course of their projects. BACKGROUND INFORMATION In early 2011, uprisings in Tunisia and Egypt led to the overthrow of their heads of state and sparked a wave of protests throughout other countries in the Middle East and North Africa. These moves, now commonly referred to as the "Arab Spring", will trigger the World Bank to fund major projects in the region in order to restore and improve the affected and aged infrastructure systems, respectively. The World Bank was created at the Bretton Woods Conference, USA, in 1944. It was established to carry out the reconstruction works in Europe after World War II. Later, its mission was changed to reduce poverty through funding various infrastructure projects in developing countriesIn May 2005, the World Bank prepared the Standard Bidding Documents for Procurement of Works (SBDW) in projects funded in whole or in part by the World Bank. The SBDW are based on the Master Bidding Documents for Procurement of Works and User’s Guide adopted by the Multilateral Development Banks (MDBs) and International Financing Institutions. The Conditions of Contract included in the SBDW are based extensively on the Conditions of Contract for Construction published by the FIDIC in 1999. In this paper, the General Conditions included in the SBDW are referred to as ‘WB Contract’. RESEARCH METHODOLOGY This research used a three-step interdependent research methodology where the authors: (1) conducted a comparative analysis of the different delay analysis techniques; (2) studied and presented the application of each technique to the WB Contract; and consequently (3) recommended contract administration guidelines for the use of the different techniques as appropriate under the WB Contract. DELAY ANALYSIS TECHNIQUES There are many techniques for delay analysis. Delay analysis is used to determine the cause(s) of the delay in order to ascertain whether an extension of time should be awarded. The analysis of delays in construction projects is difficult and complicated because of the large number of individual activities that have to be dealt with, even for a relatively simple project (Menesi 2007). The purpose of the delay analysis is to calculate the contribution of each party to the total project delay. Daily recording of progress-related data including start and finish times, work completed,

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resources used, idle times, work disruption periods, delivery of materials, and change orders, are of extreme important for effective and efficient delay analysis. This paper focuses on the following three most commonly used delay analysis techniques. Impacted As-Planned In this technique, the as-planned schedule is identified and used as a basis. The delays caused by either the contractor or the employer are identified and inserted into the as-planned schedule. The result would be the ‘as-planned impacted’ schedule with a new date for completion. The difference between the as-planned completion date and the new completion date is determined to be the impact of the inserted delays on the project duration (Magdy 2010 and Stumpf 2000). In such case, contractors who submit a claim for extension of time would insert only the employer responsible delays and the resultant impact on the project duration shall represent the extension of time entitlement, as a result of such delays. It could be used as a prospective technique, i.e. by identifying the likely impact of certain delay events on the project duration. It could also be used as a retrospective technique, i.e. by identifying the actual impact of some events upon completion, after the fact. Collapsed As-Built (or But-for Analysis) It is the reverse of the Impacted As-Planned analysis. In this technique, the asbuilt schedule is used as a basis. The analyst studies the as-built information and constructs an as-built schedule. The analyst then removes the activities representing the employer’s delays or shortens the actual durations of delayed activities. This is used by the contractors to demonstrate a schedule that could have achieved 'but for' the actions of the employer. The result would be the ‘collapsed as-built schedule’ with a new date for completion. The difference between the as-built completion date and the collapsed as-built completion date is determined to be the extension of time entitlement as a result of the employer responsible delays (Trauner et al. 2009; Menesi 2007). This is a retrospective technique. Windows/Snapshot/Time Slice/Contemporaneous Period Analysis In this technique, the total duration of the project is divided into a number of time periods or ‘windows’ or ‘snapshots’, usually monthly. The project is updated at the end of each window (usually represents the regular updates of the as-planned schedule). From each window, two things are determined; the critical path at that date and the extent of delay incurred to completion as at that date (Barry 2009). The delays are then analyzed within that window to determine the ones for which the contractor is responsible and the ones for which the employer is responsible. This is repeated for all windows. It could be used as a prospective or a retrospective technique. ADMINISTERING DELAYS UNDER WB AND FIDIC CONTRACTS Programme According to Sub-Clause 8.3 of the WB Contract and the FIDIC [Programme], the Contractor is required to submit to the Engineer within 28 days after receiving the notice under Sub-Clause 8.1 [Commencement of Works] a detailed programme (i.e. schedule). However, the Engineer is not empowered to give or withhold approval to the programme. The programme is submitted to the Engineer

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only for his consent, i.e. the Engineer shows that he has no objection to the Contractor's programme but assumes no responsibility for it (Bunni 2005). As a result, neither party can misuse the programme in order to achieve an unfair advantage over the other party. Since no approval is required, the Engineer cannot wrongfully withhold approval unless and until the programme includes a constraint which was not provided for in the Contract. Furthermore, if the Contractor submits an over-optimistic programme, there will be no approved programme to be used in the validation of a claim for extension of time. In such case, it would not be reasonable for obligations to be imposed on the Employer by reason of a document prepared after the Contract became effective and to which no consent was required to be given and no consent was given (Booen 2000). The above applies to both the WB Contract and the FIDIC. The same Sub-Clause requires the Contractor to notify the Employer of future events which may delay the execution of the Works. In addition, the Contractor is required to submit a revised programme whenever the previous programme is inconsistent with actual progress or with the Contractor's obligations under the Contract. On the other hand, if the Engineer notifies the Contractor that the programme fails to comply with actual progress and the Contractor's stated intentions, the Contractor is under the obligation to submit a revised programme to the Engineer. It should be noted that it is the actual time which is referred to as being affected, not the Time for Completion to which the Contractor is entitled, so the obligation of the Contractor to notify includes events other than those which entitle the Contractor to extension of time, i.e. it includes events for which the Contractor is responsible (Booen 2000). It should also be noted that, under Sub-Clause 4.21 [Progress Reports], the Contractor is required to include in his monthly progress reports a comparison of actual and planned progress, with details of any events or circumstances which may jeopardize the completion in accordance with the Contract, and the mitigation measures adopted to overcome delays. Studying Construction Delays The delay events which could possibly raise entitlement to extension of time, under the WB Contract are listed in Sub-Clause 8.4, as follows: “ a) a Variation (unless an adjustment to the Time for Completion has been agreed under Sub-Clause 13.3 [Variation Procedure]) or other substantial change in the quantity of an item of work included in the Contract, b) a cause of delay giving an entitlement to extension of time under a Sub-Clause of these Conditions, c) exceptionally adverse climatic conditions, d) Unforeseeable shortages in the availability of personnel or Goods caused by epidemic or governmental actions, or e) any delay, impediment or prevention caused by or attributable to the Employer, the Employer's Personnel, or the Employer's other contractors”. Sub-paragraph (b) in the above Sub-Clause states as one of the delay events “a cause of delay giving an entitlement to extension of time under a Sub-Clause of these Conditions”. Bunni (2005) lists the following sub-clauses as relating to extension of time in FIDIC, which are referred to in sub-paragraph (b). The authors contend that the same would apply to the WB Contract (Fawzy and El-adaway 2011):

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• • • • • • • • • • • • • •

sub-clause 1.9: delayed drawings or instructions; sub-clause 2.1: delay in giving access to or possession of the site; sub-clause 4.7: error in specified referenced points; sub-clause 4.12: adverse unforeseeable physical conditions; sub-clause 4.24: fossils; sub-clause 7.4: delayed testing caused by employer; sub-clause 8.5: delays caused by authorities; sub-clause 8.9: a suspension initiated by the employer; sub-clause 10.3: interference by employer in Tests on Completion; sub-clause 13: variations (dealt with in sub-clause 8.4 (a)); sub-clause 13.7: adjustments for changes in legislation; sub-clause 16.1: contractor's entitlement to suspend work; sub-clause 17.4: employer’s risks; sub-clause 19.4: Force Majeure The procedures for extension of time under the WB Contract are the same as those for additional payment; both are covered under Sub-Clause 20.1 [Contractor's Claims]. As for the procedures for extension of time for events having a continuing effect, the WB Contract builds them on the above procedures by adding the following to the same Sub-Clause 20.1. Figures 1 and 2 illustrate the associated procedures.

Figure 1: Extension of Time under the WB Contract and FIDIC

Figure 2: Extension of Time for Events having a Continuing Effect under the WB Contract and FIDIC

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DELAY ANALYSIS APPLIED TO WB AND FIDIC CONTRACTS Impacted As-Planned According to Sub-Clause 8.3 of the WB Contract and the FIDIC [Programme], the Contractor should submit to the Engineer within 28 days after receiving the notice to commence works a detailed programme. This programme represents the as-planned programme, which is used as a basis in the Impacted AsPlanned technique. As previously mentioned, in this paper, there is no sanction for a failure on the part of the Contractor to submit the programme within the timescales required by the Contract, yet this might yield the programme produced later on as asplanned programme questionable by the Engineer and may prejudice the Contractor's claim for extension of time. Also, according to the same Sub-Clause, the Contractor is required to notify the Employer of future events which may delay completion. The Contractor is required to submit a revised programme whenever the previous programme is inconsistent with actual progress or with the Contractor's obligations under the Contract. Using the Impacted As-Planned technique, the Contractor should insert the future events which may delay completion into the as-planned programme, yielding the ‘as-planned impacted’ programme. In such case, the Impacted AsPlanned technique is used as a prospective technique, i.e. by identifying the likely impact of certain delay events on the project duration. On the other hand, Sub-Clause 20.1 [Contractor's Claims] provides that if the Contractor considers that there is a delay event which entitles the Contractor to any extension of time, the Contractor shall notify the Engineer of such event not later than 28 days after the Contractor became aware, or should have become aware, of the event. Within 42 days after the Contractor became aware, or should have become aware, of the event the Contractor shall send to the Engineer a fully detailed claim with full supporting particulars of the basis of the claim and of the extension of time claimed. By applying this to the Impacted As-Planned technique, the delays caused by the Employer are inserted into the as-planned programme, generating the ‘asplanned impacted’ programme. The ‘as-planned impacted’ programme should be included in the supporting particulars submitted 42 days after the Contractor became aware, or should have become aware, of the delay event. It is worth noting that some analysts use the Impacted As-Planned technique retrospectively, i.e. by identifying the actual impact of some events upon completion, after the fact. As mentioned earlier in this paper, Sub-Clause 20.1 provides that if the Contractor fails to issue the notice of the claim within the said 28 days, the Contractor shall lose his entitlement to the claim for extension of time. Consequently, the Impacted As-Planned method cannot be used under the WB Contract and FIDIC retrospectively, if the Contractor fails to meet the duration set for the notification of the claim in the Contract. Nevertheless, if the Contractor meets the duration set for the notification but fails to submit the details and particulars of the claim for extension of time, including the Impacted As-Planned analysis and the ‘as-planned impacted’ programme, within the required timescale, any extension of time shall take account of the extent to which the failure has prejudiced proper investigation of the claim by the Engineer.

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The Impacted As-Planned technique should yield reliable results under the WB Contract and FIDIC if the delays occurred at the outset of the project and the analysis is performed before the timescales provided for in the contracts expire. Yet, if later on further delays occur and the Contractor attempted to insert the delays into the as-planned programme, the Engineer should only accept the inserted delays for which the timescales for the notification was met by the Contractor. If other delays not notified by the Contractor had occurred and hence were not included in the analysis, the programme would be one that does not take account of the relevant asbuilt information. Thus, the programme would not necessarily reflect the actual progress of the works and the technique would unlikely yield reliable results. Notwithstanding the above, still this technique lacks fairness and accuracy as the Contractor would be including only the Employer responsible delays. Furthermore, this technique does not assure that the delay to completion was a result of the inserted delay events and thus the causation factor which is the primary interest of judges and arbitrators is missing (Barry 2009). It is possible that the delay occurred as a result of an event that was not inserted or an event by the other party. Since the timing of the delay event is not considered, it is possible that at the time when the delay event had occurred, it was unlikely to impact the project duration, due to other events that occurred elsewhere (Barry 2009). Collapsed As-Built (or But-for Analysis) As mentioned before, this technique uses the as-built programme as a basis. The analyst studies the as-built information and constructs an as-built programme. The analyst then removes the activities representing the Employer’s delays or shortens the actual durations of delayed activities. If the Contractor failed to notify the Engineer of the delay events to be included in the as-built programme, within the timescale provided in Sub-Clause 20.1 [Contractor's Claims], the Contractor shall lose his entitlement to the claim for extension of time. In this case, the Collapsed AsBuilt technique cannot be used. It should be however noted that, if the Contractor meets the duration set for the notification but fails to submit the details and particulars of the claim for extension of time, including the Collapsed As-Built analysis and the ‘collapsed as-built’ programme, within the required timescale, any extension of time shall take account of the extent to which the failure has prejudiced proper investigation of the claim by the Engineer. If the Contractor succeeds to meet the timescales for the submission of the notification and the particulars, this technique would most likely yield reliable results. Thus, this technique is most successful when the delay events are incurred very close to the end of the project. If such timescales are met, the Collapsed As-Built technique would not be subjective, as the events inserted could be verified by the Engineer since they represent contemporaneous information as they are prepared at the time of the events which give rise to the claim. According to Sub-Clause 8.3 [Programme], the Contractor is required to notify the Employer of future events which may delay completion. The Contractor is required to submit a revised programme whenever the previous programme is inconsistent with actual progress or with the Contractor's obligations under the Contract. The Collapsed As-Built technique would not be used in such case, as it is a retrospective approach.

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Windows/Snapshot/Time Slice/Contemporaneous Period Analysis According to Sub-Clause 8.3 [Programme], the Contractor is required to notify the Employer of future events which may delay completion. The Contractor is required to submit a revised programme whenever the previous programme is inconsistent with actual progress or with the Contractor's obligations under the Contract. Using the Windows technique, the total duration of the project is divided into a number of time periods or ‘windows’. The Contractor can select the window established by each update to the programme. The Contractor should then insert the future events which may delay completion into the as-planned programme or the updated as-planned programme, as the case may be. The Contractor should then determine for the current window the critical path at that date, the extent of delay incurred and the party responsible for the delay. In such case, the Windows technique is used as a prospective technique, i.e. by identifying the likely impact of certain delay events on the project duration. Sub-Clause 4.21 [Progress Reports] requires the Contractor to include in his monthly progress reports a comparison of actual and planned progress, with details of events which may delay completion, and the measures adopted to mitigate delays. The Windows technique can be used in such case. The project is updated at the end of each window, which represents the regular updates of the as-planned schedule. Such update would be included in the progress report and shall represent the actual progress, and shall include details of events which may delay completion. The Windows technique could also be used to support a claim for extension of time in accordance with Sub-Clause 20.1 [Contractor's Claims]. In such case, if the Contractor contends that there is a delay event which entitles the Contractor to any extension of time, he should notify the Engineer of such event not later than 28 days after the Contractor became aware, or should have become aware, of the event. Within 42 days after the Contractor became aware, or should have become aware, of the event the Contractor shall send to the Engineer a fully detailed claim with full supporting particulars of the basis of the claim and of the extension of time claimed, including a Windows analysis representing the window of the delay and the impact on the project duration. However, it should be noted that if the Contractor failed to issue the notice of the claim within the said 28 days and the analyst attempted to use the Windows technique retrospectively, i.e. by identifying the actual impact of some events upon completion, after the fact, such analysis together with the claim for extension of time would not be accepted, since Sub-Clause 20.1 provides that meeting the timescale for the notification of the claim is a condition precedent for accepting the claim. Consequently, the Windows technique cannot be used under the WB Contract and FIDIC retrospectively, if the Contractor fails to meet the duration set for the notification of the claim in the Contract. On the other hand, and similar to all the other techniques if the Contractor meets the duration set for the notification but fails to submit the details and particulars of the claim for extension of time within the required timescale, any extension of time shall take account of the extent to which the failure has prejudiced proper investigation of the claim by the Engineer.

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If the Windows technique is applied as illustrated above either prospectively or retrospectively meeting the timescales required in the WB Contract and FIDIC, it should yield reliable results as it would take into account contemporaneous information, the timing of delay events since the analysis is prepared at the time of the events which give rise to the claim. In addition, the analysis should be fair as it includes the contractor responsible delays and takes into account concurrent delays. Furthermore, it takes into account the dynamic nature of the critical path, as it uses schedule updates whose logic may have changed from the previous updates as well as from the baseline (Tieder 2009). CONCLUSION The conditions of contract in the WB Contract and the FIDIC do not specify certain method to be used for delay analysis. In this paper, the authors applied the most famous delay analysis techniques to the WB and FIDIC Contracts. The authors believe that the Impacted As-Planned technique is likely to yield reliable results under the WB Contract and FIDIC if the delays occurred at the outset of the project and the analysis is performed within the timescales provided for in the contracts. The Impacted As-Planned method cannot be used under the WB Contract and FIDIC retrospectively, if the Contractor fails to meet the duration set for the notification of the claim in the Contract. Yet, this technique lacks fairness and accuracy as it ignores the effect of the concurrency of the events since the Contractor would be including only the Employer responsible delays. The authors also contend that the Collapsed As-Built technique would most likely yield reliable results when the delay events are incurred very close to the end of the project and the Contractor succeeds to meet the timescales for the submission of the notification and the particulars. If the Contractor failed to notify the Engineer of the delay events to be included in the as-built programme, within the timescale provided in Sub-Clause 20.1 [Contractor's Claims], the Contractor shall lose his entitlement to the claim for extension of time. Consequently, the Collapsed As-Built technique would be unsuccessful. Nevertheless, if the Contractor meets the timescale for the notification but fails to submit the details and particulars of the claim for extension of time within the required timescale, any extension of time shall take account of the extent to which the failure has prevented proper investigation of the claim by the Engineer. The Windows technique could be used successfully to update programmes in accordance with Sub-Clause 8.3 [Programme], to provide regular updates of the programme, which identify events which may delay completion, to be included in the progress reports submitted under Sub-Clause 4.21 [Progress Reports] and to support claims for extension of time submitted, either prospectively or retrospectively meeting the timescales required in accordance with Sub-Clause 20.1 [Contractor's Claims]. The authors thus recommend that the Windows technique is the one to be used for delay analysis under the WB Contract and FIDIC. If applied correctly, meeting the timescales required in the contracts, the Windows technique would fulfill all requirements under such contracts to update programmes, to support claims for extension of time and to identify the likely delays to completion. It, further, takes into account contemporaneous information and the timing of delay events. It includes the

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delays by all parties and thus takes into account concurrent delays. It includes any measures made by the Contractor to mitigate the delays. In addition, it takes into account the dynamic nature of the critical path. It should, however, be noted that if the as-planned programme was not detailed and include logic relationships, it is unlikely that the Windows technique shall give reliable results. REFERENCES Ahmed, Syed, Salman Azhar, Mauricio Castello, and Pragnya Kappagantula (2002), Construction Delays in Florida: An Empirical Study, State of Florida: Department of Community Affairs. Barry, David (2009), Beware the Dark Arts! Delay Analysis and the Problems with Reliance on Technology, Society of Construction Law. Booen, Peter L. (2000). The FIDIC Contracts Guide. Federation Internationale Des Ingineurs Conseile, Genève, Switzerland. Bunni, Nael G. (2005) The FIDIC Forms of Contract. Wiley-Blackwell, United Kingdorm. Champion, Ronan (2007), Variations, Time Limits and Unanticipated Consequences, Society of Construction Law. Conditions of Contract for Construction (1999), First Edition: FIDIC1999, Federation Internationale Des Ingineurs Conseile, Genève, Switzerland. Fawzy, Salwa and Islam El-adaway (2011), “Contract Administration Guidelines for U.S. Contractors Working Under World Bank Funded Projects”. Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, American Society of Civil Engineers, in press. Knowles, Roger (2005), 150 Contractual Problems and their Solutions. Blackwell Publishing Ltd, United Kingdorm Magdy, Mohamed (2010), Claims and CPM Delay Analysis, Orascom Construction Industries, Cairo, Egypt. Menesi, Wail (2007), Construction Delay Analysis under Multiple Baseline Updates. A thesis presented to the University of Waterloo in fulfillment of the thesis requirement for the degree of Master of Applied Science in Civil Engineering, Waterloo, Ontario, Canada. Stumpf, George R. (2000), “Schedule Delay Analysis”, Cost Engineering, Vol. 42/No. 7. Trauner Theodore, William A. Manginelli, J. Scott Lowe, Mark F. Nagata, Brian J. Furniss (2009), Construction Delays, Second Edition. Tieder, John (2009), “Methods of Delay Analysis and How They are Viewed by the United States Legal System”, Society of Construction Law, London, United Kingdom. Wallace, Duncan (1994). Hudson’s Building and Engineering Contracts. Sweet & Maxwell, London, Eleventh Edition.

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