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Ownership of float

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Greg Stacey
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Please clarify for me the meaning and result of owning float.
In certain cases the builder or the client say they own the float, but what does that mean?

What is the consequence of owning float?
In the case of the builder owning the float, does this mean it allows him to claim delays on an activity that has float (i.e. does owning the float mean the builder can claim extensions for non-critical delays?)

If it means that, does that not mean that every non-critical (float) delay will be subject to an eot, even if the builder is not actually delayed on site? If it means that, is that fair to the client?

I understand that any delay that is critical extends the date of project completion. But how can a builder claim delay for an activity that has float (at least until it becomes critical)?

I understand float, how it is calculated etc., but I want to understand the meaning of ‘owing the float’ from the builder and client perspective.

Thanks

Greg

Replies

Dennis Hanks
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Daniel;

We agree. Sometimes the contract says differently, but the project owns the float. Also, just as the critical path is fluid, so is float. The current schedule governs.
Daniel Limson
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Dennis,

We all know as planners that there are so many factors involve in construction that will likely affect or delay the project completion and will necessitate a request for EOT.

You are right Dennis, if it takes 5 days to fabricate the counter top and the kitchen is in the critical path then it will affect the end date and will certainly require an EOT. However, I think we are deviating from the topic debate "ownership of float"

The common and accepted practice nowadays is that any change not affecting the critical path and/or completion date will not require an EOT, which means that the project itself owns the float, however, taking it from a Contractor’s perspective and from a resources point of view, any additional work from the original scope would mean additional time and money, the contractor in order to make money has to plan and utilise their resources to the optimum, they never planned for their resources to float around when there is a slack, they will utilise their resources to the maximum or they are off the job site. So I would argue that from the contractor’s perspective they should own the float. When a contractor plans for a job in terms of resources there is no such thing as float.

Something to ponder.

Cheers,
Daniel
Dennis Hanks
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Daniel;

Really? Had the owner decided to go with the new counter top, he would have extended the critical path by 5 days. The contractor, assuming no work around, would be entitled to an additional 5 days plus mob and fixed costs. Owner supplied equiptment, permits, access, etc. can all be the basis for a request for time (EOT). Labor alone, is not the only determinate of EOT.

Involuntarily re-allocating resources can incur losses in productivity and morale, it is not without some cost.

And the question remains, who owns the float?
Daniel Limson
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Dennis,

Change orders needs to be carefully studied and see whether they are labour related or relating to change of materials only. Change of materials may increase or decrease cost but seldoms impact the labour hours to do the work, however, it may change depending on the difficulty of installing the new material.

Your example above pertains to change of materials only and therefore does not affect the labour hours to complete the work and therefore does not require an EOT.

Remember on a real job site, if you have floats on some activities, your resources does not go on standby they perform other tasks or new activities.

Cheers,
Daniel
Dennis Hanks
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Daniel;

A 10% increase in project scope would certainly necessitate a change order - 15% may result in a new contract.

But lets say the critical path is through the kitchen. Also, the walkways/driveway have not yet started and have 5 days free and 15 days total float. The owner wants a differenct counter top and special pavers for the walkway. Both require and additional 5 days to fab and deliver. Who owns what? Where is the request for EOT? Is there any delay if the owner decides not to go with the new counter top? Remember different resource pools (subcontractors).
Daniel Limson
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Dennis,

For the sake of a healthy debate I will take side on the contractor and I say that they should own the float. You know why?

Think of it this way, for example, You were contracted to do a job for say a house for 2 months and you estimated that you need 100,000 manhours to complete the job. During construction the client wanted some additional features say an extension of his kitchen and after a careful assessment of the changes, you estimated that you need addional 10,000 manhours to do the additional work. If you think of it in terms of resources you do not have a float because the job is worth 100,000 labour hours and any additional work will mean additional manhours and therefore it is either you increase your resources or ask for an EOT. Got it!

Cheers mate,
Daniel
Dennis Hanks
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Daniel;

I disagree with your statement; "If the contractor owns the float then all activities becomes critical and any additional work would automatically translates to EOT."

An extension of time may/would only result if the delay affected total float. Any free float lost incurs no cost to the project/oontractor, hence no extension. All activities are not critical, regardless of ownership.

I tend to agree with the final statement, but oftimes the contract will address ownership/partnership. EOT has to be requested and justified, it is not automatic.
Daniel Limson
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Honesty and transparency is always the best policy. I believe and I think that this is true in any undertaking.

Going back to "Ownership of Float", If the contractor owns the float then all activities becomes critical and any additional work would automatically translates to EOT.

A properly plan and logically link project will naturally have floats that is not induced by any illogical means. Therefore the project owns the float and whoever uses it first is logically the owner. It is on a first come first serve basis.

Cheers,
Daniel
Dennis Hanks
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Richard

Interesting, two sets of books. Doesn’t that make progress reporting difficult? As you claim progress payments, it becomes apparent that you are making accelerated progress. Not altogether fair to the client, if they are attempting to forecast cash flow.

Target milestons are a different matter, but then so is dissembling to the client. CYA is one thing, and deceit another. What does the client say when they find out? If the project is long enough, don’t they usually?.

Not sure that it is not done over here, but it is not common practice, at least not on projects that I have worked.
Dennis Hanks
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Nieman

Too bad time zones prohibit an online discussion of this topic.

Just as the estimate is a best guess as to the cost of the project - has a P of .5, the schedule is a best guess as to the time and sequencing it will take. With the estimate, it may or may not have any contingency depending on whether or not the owner or contractor requires a ’comfort factor’ eg. cost plus or lump sum.

Schedule durations may or may not have any cushion depending upon the contract completion date and associated damages. Usually this end date is given and the schedule and any associated acceleration costs (crew sizing, expediting, extra shifts, etc.) required to meet the date are added to the estimate. Any schedule contingency will be addressed by a early finish date. Productivity demands that realistic durations be applied throughout the schedule.

The schedule may reflect uncertainty (risk management), but this is not contingency. Float is a scheduling concept. The contractor will apply whatever resources he has to the project as efficiently and expeditiously as possible (theoretically).

Again, this could have made for an interesting real time discussion.
Richard Spedding
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Dennis

IMHO there is contingency and there is float. Contingency is time that is applied to take account of the risks the client requires the contractor to allow for in the schedule. Float is what is left after contingency has been applied to a programme / schedule. This is spare time within the schedule on non-critical activities which can be used by whichever party first requires it. Too many client organisations are of the opinion that the contingency within the schedule is also float, which it most definitely is not.

The rest is confusion.;-)
Dennis Hanks
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These are new terms for me - contigency float, hidden float, and clear float. Are these accepted terms? I wonder.

First contingency, in a cost setting, is for unknown unknowns. It generally comes out of the blue, which is why it disappears over time, or should.

Known unknowns are usually referred to as ’allowances’. You know you have exposure, but unable to quantify at this point.

IMHO "hidden float" belongs to the owner of the schedule (usually the contractor), it is his assessment of how long the activity may take. His lack of certitude does not transfer ownership. He and the other contracting party (ies) have accepted his assessment. "Clear float" is usually dealt with in the contract, if not, then it belongs to the owner of the schedule. Unclear as to what "Contingency float" is, so no opinion.
Armando Moriles
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Nieman,

I believe in the following five Float Suppression Techniques:

1. Preferential Sequencing;
2. Lag Logic Restraints;
3. Extended Activity Duration;
4. Imposing Constraint Dates Other than as Required;
5. Resource Leveling to Artificially Adjust Acitivity Durations to Consume Float and Influence the Critical Path.

I’m not really sure what technique you use to protect your programme against the critical path.Or would you even agree to the items above which I believe you may not. But, I believe that as a planner dealing in the world of Critical Path Method, you must have a technique. Once you declare your true critical path without a certain degree of reservation and giving everybody an opportunity to make a mistake with handful of zero free and total float, there is always a good chance that they will commit that mistake with an result of LD’s.


Regards,

Arman
Rav B
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To summarise,

Contingency on an activty is for - For KNOWN UNKNOWN RISKS

Clear float on an activity is for - FOR KNOWN KNOWNS

Hidden Float on activities is for - UNKNOWN UNKNOWN RISK

Contingency reserves can be allocated for contingency on an activity (Can be used by PM), whereas Management reserves can be allocated for hidden float and only management is authorised to consume this float.

:-)

Rav
Richard Spedding
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James

Not strictly true. Many contractors input a lot of their contingency as what you have called hidden float on activities. This would be the difference between the maximum output per hour or day and the average (for example on any one good day one might bore and concrete 12 number 600mm diameter piles 25 metres long in a 10 hour shift with 1 CFA piling rig. However to make allowances for normal inefficiencies on site, weather and plant breakdowns etc that are the contractor’s responsibility you would actually programme to achieve 7 or 8 piles per day average over a period) Normally over a ten week period you would not have a 6 week activity and a 4 week contingency bar, just a 10 week bar, split into areas to achieve the requirements of the SCL protocol. As such this is NOT float, I would argue, it is contingency.

Determining what is float and what is contingency in this case is perhaps the most difficult part of the client team’s tasks ;)

I prefer not to show any contingency, for, as you say, a declared contingency becomes a bargaining chip in pre and post contract negotiations, rather than a period of time that WILL be needed at some time during an activity or project.
James Barnes
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Neiman, so we can say that there are 3 types of "float"

Contingency on an activty - claimed at the planning stage by one patry or another and clearly stated in the plan. Belongs to the claimant
Hidden Float on activities - Overstatement of activity duration which is similar to a contingency but not clearly stated, and thus arguably unclaimed. could be argued to belong to the activity and thus to the executor of that activity, although I would imagine an event delaying the activity start by less than the float in the activity duration would be argued over. Most float is here.
Clear float between activities - Up for grabs

Thus actual extra work issued should only eat Clear Float, although I know from experience that clients consider float on activities to be up for grabs aswell. Lesson is to clearly state your contingencies I suppose, although this can then become a pretender barganing chip.

Most programme float that I have seen would fall into the second catagory...
Richard Spedding
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Armando

You obviously have a typical clients view of the contractor’s planner as a subversive terrorist.

In fact he is the one that actually knows how to put the project together in real time. Very rarely does he/she have the time to suppress a preferred critical path and send it somewhere else - chance would be a fine thing!

Generally too busy trying to take on board the late issue of design details and other client information and making sense of them.

However obviously the client team have the right and responsibility to check the programme and comment on it. I find that what the client team generally don’t like is the programming of the inefficiencies within the contractor’s organisation such as the length of time between receipt of information and procurement / acting upon it. However IMHO they should have to recognise it as fact, since they have bought the cheapest price, generally they have bought the least efficient organisation.

Whether you can prohibit it is a matter of interest - under what clauses of most major contracts have you the right to do this? My belief is that the programme is subject to comment, not outright rejection.

Keep on planning, but forget the paranoia ;)
Armando Moriles
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Hi Nieman,

I would say that the contractor in its preparation of its baseline programme may technically suppress its preferred critical path by arranging it through activities that are susceptible to client caused delays such as owner supplied items which James asked about. The client however have the right to question such arrangement and may prohibit it during the process of accepting the programme.


Regards,

Someone
Richard Spedding
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James - I agree that it is fascinating.

What I was trying to say - inexactly - was that I believe that an increase in the amount of work should lead to another activity identifying the additional extent of the work - that way you can achieve a true ’cause and effect’ programme. The additional activity may use up float, but the original programme would stay as is.

In terms of ownership, I was hoping to provoke your response - from someone anyway! Indeed the project WILL pay the consequences of negative float, usually in the argument and discord it provokes, leading to delays in making the correct decisions and thus an unsatisfactory outcome.

Obviously the existence of negative float must be the responsibility of one of the parties to the contract. The possible solutions range from granting an EoT with costs to allocating additional resources to changing the logic etc. If the responsibility is obvious, then the decision can be made quickly and with the best cance of success. If there are conflicting reasons for the delay then the decision can be protracted, and the chances of achieving a positive outcome lessened.

Keep on trucking ;)
James Barnes
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Armando

we all know that the contractor owns all the negative float, no matter how caused. Sometimes the client can have some +’ve float and still the contractor can retain ownership of -’ve float. Often on the same activity ;)

Neiman,

I found your explanation very enlightening except for the following;

you said, "I do not think that the client can increase the amount of work on an activity and call it use of float."

then, "If it can be proved that this (exta) work can be executed within the time allotted for the contract then no EoT is due."

Surely these are contradictory? If the client issues additional work on an activity and has float on it then he either issues EOT (retaining the float on the activity) or not (claiming the float for himself). I do like the idea that the float cannot be used by the client to fill with extra work though, it seems fair. I also like the idea that each party should nominate theri required contingency on their activities, as they are both buying the risk involved with delivering those activities late enough to delay the project.

Also, surely one party or the other must own the -’ve float. It requires accelleration to ameliorate or causes costs consequential to late finish. The project itself cannot pay these consequences, one of teh contracting parties must. Of course philisophically you could turn this around and say that, should positive float turn into early completion and thus additional income (due to earlier renting of space etc) this should be allocated also (like we ever finish early :P )

Another Q; say a contractor schedules an activity (for example, lifting a client provided signpost into place) but the client provides the sign later than stated on the agreed plan but within the overall float of the programme (so completion still happens on time) Who pays for the standing time of the crane, assuming no notice has been given to the contractor that the sign will be supplied later than agreed?

This stuff is fascinating :D
Richard Spedding
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Of course the project owns the negative float - this means that either the programme is incorrect in terms of what has been input, or the project is late, it is still owned by the project.

Whose ’fault’ it is and what must be done about it will depend upon the particular circumstances of the project you are working on. At the moment I am working on a project where in monetary terms it is not worth spending significant sums of money to finish up to two weeks late - whether that is the correct political decision may be a different calculation.
Armando Moriles
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Nieman,

I would like to ask this question. If after updating the programme evedintly generates a negative float. Who own’s the negative float? Is it still the project?



Many thanks,

Arman

Richard Spedding
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Surely the client doesn’t own the float, it is the project that owns the float.

The contractor draws up the programme and it is in his interests to make sure that as much of the original float in a programme is turned into contingency against unforeseen delays for which he is responsible. This is not float. Whether it is shown as contingency on the contract programme, or rolled up within the activities, is a matter of debate and may be required under the contract conditions.

My understanding of current contract law is that the float may be taken by whichever party to the contract uses it first.

I do not think that the client can increase the amount of work on an activity and call it use of float. Increasing the amount of work is the subject of an instruction, whether merely by issue of a drawing or otherwise. If it can be proved that this work can be executed within the time allotted for the contract then no EoT is due.

In my opinion float is generally used up when an organisation does NOT do something, i.e. is in delay in making a decision or issuing an instruction or presenting a sample or other similar omission.
Muhammad Jawad Sh...
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Please take care about Float. Its a two way sword as it can kill you as well as save you.
For example float gives you the chance to suspend activity for some time if you want to shift resources to a critical activity that has been delayed.
At the same time, float is owned by Client that means that the work on that activity can be increased by Client in order to use the float available using the same resources.
Its all matter of experience and understanding the mind set of Client and Consultant.
Take Care
Muhammad Jawad
Greg Stacey
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Thankyou to you all for the replies. It has been helpful and given me new ideas and plenty to think about.

Kind regards,

Greg
Clive Randall
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Have aread of this it may help

www.eotprotocol.com
Charleston-Joseph...
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Hi Gary,

A lot of bullshitting happens in the ownership of floats. And this is one reason as you said a lot of degenrative arguments happens at project site.

Projects are unique.

In some projects I encountered, it is the contract department that causing unnecessary incovenience. Interuptions of non-critical activities with lots of floats will involve notifications of claims for extension of time. Eventually, smart ass know a lot of this kind of rubbish will come from contract department.

In some instances, 5,000 notification of claims for extension of time with associated cost may evolve only 10 serious events that need careful study and evaluation.

That the reality regarding the confussion of Ownership of Floats.

So in reality, ownership of floats is a physcological warfare that only the brightess mind couple with sweet talking individual will win during on-going construction project.

But the whole world will change the moment the project ends. The ownership of floats will now depends on the forensic claims analyst or someone engage in claims for extension of time and associated cost.

My advice to fully appreciat your query is to get lots of experience in claims, how this is process and you will find your answer.

Cheers,

Jopseh
Ramesh Kavassery
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Hi All,

I agree with Paul that floats have to be minimised by the
contractor and buffers have to be built in to durations.
And after all, the estimates of durations are the babies
of the Contractor only. As long as the Contractor has
provided a schedule to complete the project in the stated
Contractual Project Period and also has reasonably suitable
logic to the overall geographical/technical sequencing, the
Client/Consultant should have no problem in accepting the
schedule. Minor petty details cant be visualised at the
beginning anyway for massive projects.

I also agree with Raviraj that all major duration estimates
have to be internally agreed with the Project’s CMs & PM.
In fact, the agreement should be extended to include the
individual discipline managers, main area/section managers,
etc. It is best for a Planner to go by the methodologies &
thoughts of the personnel who will be directly executing the
jobs rather than putting some estimates out of his or her
mind so that there will be no conflict at later stages.
And with such an approach, what I have experienced is that
such personnel would always give duration & contingency
estimates much higher than what a Planner may estimate based
on quantities and other stated facts and figures. This shows
that reserves for a lot of unseen or unstated events have
to be built in, especially for massive projects. This
eventually results in floats not being available to the
extent that a Planner may normally arrive at, at the beginning.

Happy Planning folks....

Ramesh
Rav B
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Hi,

There is no point in creating unrealistic schedules by keeping more reserves / contingencies into all of the activities.

As somebody has said previously in PP,

Float is --> Unallocated Time
Contingency is --> Allocated Time

Always make sure that time allocated by you for all major works are agreed by CM/PM, so that they can well support u, during approval stages.

In the initial stages of the project, it is always difficult to have precise activity durations. Duration estimates are progressively elaborated. As the engineering works of the project evolves, more detailed and precise data is available and hence, you can accurately estimate the durations.

Expert Judgement, guided by historical information shud b used wherever possible. If such expertise is not available, the duration estimates are more uncertain and and risky. So, always make sure durations allocated by you are agreed in principally by your CM/PM.

Neway, check this link.

www.eotprotocol.com

Just need to sign up (1 min) and down this section of SCL.

Cheers,

Raviraj
Greg Stacey
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Thanks Paul,

I believe your scenario is right, and the builder would be entitled to the 5 days extension of time. The problem I now have is how that float of 20 days is agreed, at what time is it agreed, and how is the now critical 5 days agreed.
Is the 20 days from the ‘contract’ programme, or the statused contract programme? In statusing the contract programme, is the builder able to change any logic or durations?

I don’t agree that you should increase durations to reduce float. I have always believed you should plan and schedule what you think is the correct duration and logic. When I have tried to be too clever it has nearly always backfired on me. Clients representatives have said the long durations were unrealistic and rejected claims based on those durations. Things then just degenerated into an argument that wasted a lot of time.

Greg
Paul Leivers
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In theory if the contractor holds all the float, say 20 days then if the consultant uses 5 days leaving only 15 days left , then if the contractor uses more than 15 days upto a maximum of 20 days then you could recover 5 days prelims, no Lad’s etc. However in the court of law it is substantiating your costs ascociated with delays including loss of float.If you haven’t suffered any loss then you can’t charge anyone.
The builder uses the float when things don’t go to plan and trys to control it by not using it.
Key thing for a contractor to do for their contract programme is make the bars long and overlap, with the start date as early as possible and the end as late as possible with sufficient logic to minimise the amount of float. This means any delays by the client on for example information release will impact the programme but you have sufficient time to complete programmed tasks.
Greg Stacey
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Thanks for replying, I appreciate it.

My query is - If the contract says the builder owns the float, what does that really mean? What are the implications to the client or his consultants?

If as Trevor says, the client uses the buffer (float), how can the builder be fairly compensated if float is still remaining?
In the query I suggest, float is not available to the client as it is contractually owned by the builder. How is that ownership controlled or used by the builder, and if used by the client or others/consutlatns, how are they ‘charged’ for its use.

Thanks,
Greg
Trevor Rabey
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Float is a buffer against risk. Using up the float reduces the buffer and exposes the project to both the likelihood and the consequences of risk. If the client uses the buffer the contractor should be compensated for the risk.
Perhaps like this:
A ship sails from place to place. The distance off shore is like the float. It gives you some time to think and room to move if the unexpected happens. If the client, safe on the land, calls up the captain and tells him to sail closer to the rocks, can he say that the order has no effect just because the ship is still afloat and has water under the keel?
David Andreotti
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Gary;

It’s difficult to justify an extension of time or additional GC’s on an item that has float - at least that’s what the owner will tell you. theoretically, the job can’t be impacted by a float item. Float is owned by whoever uses it first.
David Brown
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Hi Gary,

In answering your thread. It will depend on what type of contract you are working under.

However, its normally determined that nobody owns float. Float belongs to the project. This in broad terms means that float belongs to whoevere uses it first.

Any activity that has float no delay can be claimed until it becomes critical, but if this was due to a change in scope additional cost would be applied for, for additional labour, plant and materials etc to carryout these tasks.

EOT (Extension of Time) only applies to the end date over the overall project not individual tasks.

Hope this helps as a start.

David