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Acceptable Delay

12 replies [Last post]
Thu, 2009-12-10 06:52
Taranath babu
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Joined: 26 Mar 2009
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Groups: Petro-Chem / Oil & Gas
Dear All,

Any body can tell me the Acceptable delay of a project
in percentage.
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Replies

Mon, 2009-12-14 15:58
#1
Samer Zawaydeh
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Posts: 1664
Groups: Civil Engineering, Regional Representatives
Dear Rafael,

I agree with you, the copy and paste system is used, but you have to remember that you have a system and that it should be reviewed and approved by competent and experienced engineers.

You have two and a half checks before the Conditions of Contract becomes final.
1. When the Consulting firm prepares the Conditions.
2. When the Owner approved the Conditions.
1/2 When the Contractor reviews the Contract Documents during the tendering stage and raises the questions to the Client and the Owner.

Because of the large size documents, things get to slip and you have mistakes and acceptance of bad clauses.

You have two situations:

1. You know the bad clauses and you accept them to take the work with the margin available to secure work for your company.

2. You reject them, because you know that they have a degree of uncertainity and high risk.

I know of so many cases that the Contractor thought that the Contract is identical to a previous standard Contract and did not read the Contract, only to find out that the new Contract has more clauses and less profit margins!

With kind regards,

Samer
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Mon, 2009-12-14 06:05
#2
Rafael Davila
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Groups: Spider Project Team
Samer

"not to enter these types of situations" seems very easy for you.

Here it means ruling out government jobs as 90% of government jobs do have such clauses. If you are a road contractor or a marine contractor means getting out of business. Because government does over 35% of construction business you would rule out over 35% of the market. In these though days you would rule 70% of the market as most of private sectos do include these clauses, easy "copy and paste".

From:

http://www.census.gov/const/www/c30index.html

http://www.census.gov/const/C30/totsa.pdf

Construction Spending for October 2009
Construction at a Glance - in Millions of Dollars

Private $588,951 = 64.66%
Public $321,816 = 35.33%
Total $910,767

Here is different is not like in your location where government contracting is negligible. Big fish (government) eats small fish here (contractors).

Best regards,
Rafael
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Sun, 2009-12-13 21:51
#3
Samer Zawaydeh
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Groups: Civil Engineering, Regional Representatives
Dear Rafael,

You are correct in your statement. If the Conditions of Contract was not prepared well and custom made according to the project requirements, then you tend to have problems.

It is the responsiblity of the Contractor to read all the conditions well and to sign it only after negotiating it well and ensure that it is balanced. If it is not logical, then then Contractor should cancel the paragraphs that they do not approve.

In these types of Contract we do tend to negotiate all these clauses at the pre-acceptance stage. If we are cornered, we evaluate the situation per project and act accordingly. When you have enough people thinking on the job and they are confident that they can complete the Engineering and Construction, it gets easier.

If it is a new type of project and you have a lot of ambiguity, unless the profit margin is high, we advice not to enter these types of situations.

With kind regards,

Samer
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Sun, 2009-12-13 21:36
#4
Rafael Davila
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Samer,

It is on many specs, is what Architects that know nothing of CPM schedules throw at the specs book, see the following typical of federal government jobs.

http://rapidshare.com/files/255088743/CPM_Specs.pdf

Early Completion

From the extracted paragraph you can see in this particular specification early finish plan is not forbidden but it means you provide float to the owner for free by using time of your own buffer. It makes more sense to disguise plan for early finish, to lie to the owner and everyone else, not because you wish but because you have no other option.

Here is not like a General Contractor will convince Owners and Architects to change the specs, is not that easy.

Ironically they refer to float and require you to resource load the schedule and to use Primavera, but no American software including Primavera gives you true float under resource leveling.

Maybe you could use soft relationships to avoid using resource leveling function and get correct float but it is many times forbidden, is considered a kind of float suppression technique.

Best regards,
Rafael
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Sun, 2009-12-13 21:16
#5
Samer Zawaydeh
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Joined: 3 Aug 2008
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Dear Rafael,

It always depends on the project. But I can assure you that I do work with many clients and I do recommend to have a float of at least 5%-10% for time.

But for critical projects, I can also assure you that we work 24 hours with huge workforce and we do complete a floor of 300m2 (about 3000ft2) within 4 days.

The client are free to use our advice. But from experience, time overrun will occur if the float is not built in the program. You can’t do anything about this type of clients. You always have a super guy who knows everything and wants it to be completed without float and of course it will not happen if it is not planned well.

With kind regards,

Samer
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Sun, 2009-12-13 16:44
#6
Rafael Davila
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Samer,

Quote from your post - "Without contingency we do not accept the program."

Here is the contrary, Owners do not allow you to show contingency in your planning, and probably 100% of contractors do agree with you. Believe me it is frustrating our specifiers don’t get it.

Based on our type of jobs and experience I would plan with a 15% contingency for scheduling time by targeting for early completion in the hope we finish on time.

Because we are not so bad at cost estimating due to low inflation rate, we hit close to the cost estimate but project duration is another issue.

Best regards,
Rafael
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Sun, 2009-12-13 16:06
#7
Samer Zawaydeh
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Groups: Civil Engineering, Regional Representatives
Dear Taranath,

The percentage that you mentioned is what we use when we prepare programs of works. Without contingency we do not accept the program. The Party submitting the Program of Works must show that they have taken into account float for the "unknown".

If you are using FIDIC, then you can refer to clause (8/4) Extension of Time for Completion:

1. Changes.
2. Any reason that can explain the time extension.
3. Extreme Weather.
4. Shortage of Labor.
5. Owner Delays.

Hope that the information was useful.

With kind regards,

Samer
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Sun, 2009-12-13 06:58
#8
Rafael Davila
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Taranath,

Looks like your company is having good results with this as a metrics to raise the flag before it is too late then seems ok to me. Not all jobs have the same urgency though, and as Mike said it costs money.

For our type of jobs, Building Construction, if you are that close to the bull’s-eye either the schedule is too relaxed or you are too good, we are farther most of the time.

Best regards,
Rafael
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Sun, 2009-12-13 06:42
#9
Mike Testro
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Hi Taranath

Another word for "catching up" is acceleration which costs money.

If you company has enough money that it doesn’t mind wasting a bit then fine - otherwise manage the construction time properly and avoid all delays that will cost you money.

Best regards

Mike Testro


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Sun, 2009-12-13 00:51
#10
Taranath babu
User offline. Last seen 14 years 19 weeks ago. Offline
Joined: 26 Mar 2009
Posts: 4
Groups: Petro-Chem / Oil & Gas
Dear Mr.Rafael & Mike

Thanks fo your Mail but normally if a project is delayed
can always possible to catch up, for example projects in Petrochemical company i consider a delay of 5% to 10 % anything above this is alarming ,what is your opinion.

Regards
Taranath
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Thu, 2009-12-10 08:56
#11
Rafael Davila
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Groups: Spider Project Team
Taranath,

Although Acceptable Delay is not a legal concept per se such as Excusable and Non-excusable Delays it is a metrics you can use for your own.

You might set a % for Excusable delays and another for Non-excusable Delays to use as a flag above which you would start to ask questions or require a justification report.

At home in government contracting a 15% overrun in cost and or duration due to a combination of both plus all other changes requires approval from the board of directors of the agency before a cange order can be issued by the agency, the approval by a designated official is no longer enough.

Best regards,
Rafael
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Thu, 2009-12-10 07:16
#12
Mike Testro
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Joined: 14 Dec 2005
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Groups: Building Information Modelling, Content Moderators, GPCCAR Editors
Hi Taranth

There is no such thing as an "Acceptable Delay" and the idea of having an acceptable percentage is in applicable.

All delay will have some degree of an impact on the project.

Delays that use up float may be tolerated provided it does not affect the critical path.

Best regards

Mike Testro

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