Delay and Claims Analysis: Method

Schedule Delay Methods, Concurrency, Eichleay and the Claim Timeline

What a delay claim has to show

A construction delay claim asks three questions in order: entitlement (did an event for which the other party is responsible delay the work?), causation (by how many days did it delay the completion, as distinct from delaying an activity that had float?) and quantum (what did those days cost?). The schedule analysis answers the first two from the as-planned network, the record of the delay events and the as-built durations; the damages section prices the days; the adjustment and timeline sections handle the index clause, the statutory interest and the notice periods that decide whether the claim is heard at all. The tool is a calculation of the arithmetic of each step from entered facts; the responsibility for each event, the as-built durations and the money figures are findings of fact the analyst enters.

The fragnet convention

Time is counted in working days from the project start, day 0; an activity scheduled from ES to EF occupies the days ES, ES + 1, …, EF − 1. The as-planned network is read in the Project Schedule tool's single-duration format with finish-to-start logic (relations with lags are refused, because a split activity cannot carry them). A delay event is described by the activity it affects, its length in days, the day it began and the party responsible. It is inserted as a fragnet: a delay activity of the stated length that cannot start before its start day (an imposed early start) and that must finish before the part of the affected activity not yet done on that day can resume. Where the start day falls inside the activity, the activity is split there, the work already done keeps its place and the remainder waits for the delay; where it falls before the activity's start the whole activity waits; where it falls in a gap between parts of an already split activity the next part waits; where it falls after the activity has finished in the schedule current at the time of insertion, the delay is applied at the finish and a note says so. The split uses the schedule as it stands when the event is inserted, so the events are taken in order of start day: an event that begins while an earlier delay of the other party is in progress holds a remainder that is already stopped, which is how concurrency shows up in the attribution.

The as-built durations entered are the days actually worked on an activity, excluding the delay events listed, which are inserted on top of them. This keeps the event table as the one record of the delays; an as-built duration that already contained a delay would count it twice.

Impacted as-planned

The events are inserted one after another into the as-planned schedule and the completion recomputed after each; the extension attributed to an event is the change of the completion at its insertion (the cumulative, chronological attribution). Because an event inserted later meets a schedule already pushed by the earlier ones, the attribution depends on the order. The page shows the sensitivity two ways: each event inserted alone into the clean baseline (its full potential effect, which can exceed its share in the cumulative result when the events overlap) and the events inserted in reverse order (latest first). The chronological result is the one carried forward, and the totals of the three columns need not agree: with overlapping events the reverse order models work continuing on days when, in fact, an earlier delay had stopped it. The method is prospective (it does not use the as-built progress) and is the simplest of the forensic methods; AACE International RP 29R-03 catalogues it among the modelled additive methods and the Society of Construction Law's protocol describes its limits (both cited for the names only).

Time-impact windows

The analysis period is divided into windows, one beginning at each event. At the window start the schedule is updated to the progress then achieved: every activity with an as-built duration entered and finished by that day takes it (an activity still in progress keeps its planned remaining work, since the tool does not take progress percentages). The change of the completion date from the update is the extension attributed to progress in that window, the contractor's own performance or the earlier events already in place; the change from inserting the window's event is the extension attributed to the event. A closing step applies the as-built durations of the activities that finish after the last event, so the final completion is the as-built schedule with every event in it. The page lists the critical path after each window's event, in the activities' own ids with the delay activities in brackets. Where the as-built durations are left blank the windows reduce to the impacted as-planned analysis.

Collapsed as-built

The as-built schedule is the baseline logic with the as-built working durations (planned where none was entered) and every event inserted. Removing one party's events and recomputing collapses the completion; the collapse is the delay that party's events caused in the as-built context, net of float and of overlap with the events left in. Removing all the excusable events (owner, neither, both) leaves the contractor's events alone: what remains above the plan is the contractor's responsibility. Removing every event leaves the as-built durations alone, and their difference from the plan is the contractor's own overrun (or under-run) of the activity durations, which no event recorded. The collapses do not add up to the total extension when events overlap, which is the point of showing them beside the prospective attributions.

Concurrency and entitlement

An extension day caused by the owner is excusable and compensable; a day caused by neither party (unusually severe weather, strikes, third parties) is excusable but not compensable; a day caused by the contractor is non-excusable and carries liquidated damages. A day on which both an owner delay and a contractor delay were driving the completion is concurrent: the contractor is entitled to the time (it was delayed by the owner) but not to its delay costs (it would have been delayed anyway), and the owner cannot assess liquidated damages for it. Two definitions are in use, and the page reports both:

• Literal: a day is concurrent when a critical owner delay and a critical contractor delay are both in progress on that calendar day. Critical means the event extended the completion when it was inserted (attributed extension greater than zero). The count is the number of such days.
• Functional: owner and contractor critical delays that start in the same analysis period (its length is entered, 30 days by default) are concurrent up to the lesser of the two parties' delay days in that period, whether or not they overlap day by day. The count is the sum over the periods.

The concurrent days are charged first against the owner's attributed days (compensable = owner days − concurrent days, floored at zero); any excess is charged against the contractor's (non-excusable = contractor days − the excess). The days of events marked "both" are concurrent by definition. The entitlement table lists, for each method and each test, the compensable, concurrent, excusable non-compensable and non-excusable days; their sum is the total extension, the time extension due is the sum of the first three, and the liquidated-damage days are the non-excusable days. The names of the two tests follow the SCL Protocol and AACE 29R-03, cited for the names only; the definitions implemented are the ones stated here.

Unusually severe weather

Under the Default clause, FAR 52.249-10(b)(1)(x), unusually severe weather is an excusable cause of delay. The Corps of Engineers' ER 415-1-15 makes the test arithmetic: the contract carries a schedule of the anticipated adverse-weather work days of each month (from NOAA records, Appendix A), the contractor records the actual adverse-weather delay days (a day counts when adverse weather prevents work on critical activities for half the scheduled day or more), and a month whose actual days exceed the anticipated ones has had unusually severe weather. The excess is the most that can be converted to calendar days of extension; the regulation's Appendix B paragraph 3d insists that the excess must also have delayed activities critical to completion, which the analyst establishes by entering the days as a "neither" event in the schedule analysis. The 10-day written notice of 52.249-10(b)(2) applies.

Liquidated damages

The clause at FAR 52.211-12 fixes an amount for each calendar day of delay after the time specified in the contract, as extended, until the work is completed or accepted; FAR 11.501 requires the rate to be a reasonable forecast of the Government's probable damage, not a penalty, and allows a maximum amount or period. The tool multiplies the entered rate by the non-excusable days. The timeline section also counts the calendar days between the contract completion date as extended and the actual completion, which is the period over which the clause runs before the excusable days are deducted.

Unabsorbed home-office overhead: the Eichleay formula

When the Government suspends or delays the work for an uncertain period and the contractor must stand by, ready to resume, the home office goes on costing what it did while the delayed contract generates no billings to absorb its share. The Armed Services Board of Contract Appeals in Eichleay Corp. (ASBCA No. 5183, 1960) approved a three-step allocation that the Federal Circuit has since made the exclusive method for this item (Wickham Contracting Co. v. Fischer, 12 F.3d 1574, 1994; Capital Electric Co. v. United States, 729 F.2d 743, 1984):

(1) allocable overhead = total fixed home-office overhead of the performance period × contract billings / total billings of the period;
(2) daily contract overhead = allocable overhead / actual days of performance;
(3) recovery = daily contract overhead × delay days.

The DCAA Contract Audit Manual (chapter 12, section 12-804) states the formula this way and adds the audit rules the tool follows: the overhead pool holds only fixed home-office costs (variable and job-site costs out, 12-804.3); the billings and the overhead cover the whole actual performance period, extension included (12-804.1); the delay days are the days by which the performance was extended beyond the completion date by the Government's delay, not the length of the suspension (12-804.4: a 20-day suspension after 50 of 70 days that extends the contract to 85 days gives 15 delay days, and zero if the contract still finishes on time, unless an intended early finish is proven). The manual's example (12-804.5: contract billings $598,400 of total billings $1,397,000 over two years, fixed overhead $110,000 a year, 730 days performed, 365 delay days) rounds the ratio to a whole percent and the daily rate to a whole dollar and arrives at $47,450; the tool prints the exact arithmetic ($47,118) and the manual's rounding beside it. Entitlement has prerequisites the formula does not test: a government-caused delay of uncertain duration not concurrent with the contractor's own, an extension of the performance (or a prevented early finish), and standby with no replacement work practicable (P.J. Dick Inc. v. Principi, 324 F.3d 1364, 2003; Nicon, Inc. v. United States, 331 F.3d 878, 2003, which also holds that the formula is not available before performance has begun). The manual's section 12-805.4 shows how replacement work earned during the delay reduces the recovery; the tool leaves that adjustment to the analyst.

The alternatives are named and computed from the entered values but carry the manual's warnings. A per-diem home-office rate from the contractor's own study is a modified formula the boards reject in place of Eichleay (12-805.2, Wickham). The total-cost method (actual cost less bid cost) requires proof that the delay costs cannot be determined directly, that the bid was realistic, that the actual costs were reasonable and that the Government caused the whole difference (12-807a); the modified total-cost method corrects the bid and removes the contractor's own costs but keeps most of the objections (12-807b). Extended field-office overhead is priced at the contractor's daily job-site rate for the compensable days, the per-diem method the manual expects for time-related changes when the contractor uses it consistently (12-802.4b, M. A. Mortenson).

Acceleration and loss of productivity

Acceleration, directed or constructive, is priced from the premium hours and rate, the added crew-days and an inefficiency percentage on the accelerated labour; the manual lists overtime on an extended basis among the causes of lost efficiency and asks that a factor be supported technically (12-808). The measured mile prices loss of productivity by comparing the productivity of an unimpacted period of the same work with the impacted period: with units per labour hour P_p and P_i, the hours per unit are their reciprocals, the lost hours are (1/P_i − 1/P_p) times the impacted quantity, and the cost prices them at the labour rate; the inefficiency is 1 − P_i/P_p. From a pasted daily record the tool takes the aggregate rate of each period (units over hours) and also fits a least-squares line of units against hours to each period as a check: the slope should be near the aggregate rate and the fit tight if the record is consistent, and a large intercept would mean a fixed daily effort that a comparison of rates does not separate. AACE International RP 25R-03 is the standard reference for the method and is cited for it; the arithmetic is the comparison of rates stated here.

Index-based price adjustment

An economic price adjustment based on a cost index scales the adjustable part of the price by the ratio of the current index to the base index; FAR 16.203-4(d) allows such a clause for long contracts with unstable labour or material costs but prescribes no standard wording, so each clause is agency-drafted. The tool applies the two limits of the standard labour-and-material clause, FAR 52.216-4, as entered percentages: no adjustment unless the net change reaches 3 percent of the contract price ((c)(3)), and aggregate increases limited to 10 percent of the original price ((c)(4), decreases not limited). The contract's own clause governs the index, the base date, the adjustable portion and the limits.

Contract Disputes Act interest

Interest on the amount found due on a claim runs from the date the contracting officer receives the claim until payment (41 U.S.C. 7109(a); FAR 52.233-1(h)), simple, at the rate the Secretary of the Treasury fixes for each successive six-month period from current commercial rates for five-year loans (7109(b)); the rates are published in the Federal Register each January and July and are entered, one per period. The tool sums amount × rate × days / 365 over the periods the span crosses, actual days.

Notice and the claim timeline

The periods the tool checks, each a stated fact of the clause or statute cited on the page: written notice of an excusable delay within 10 days of its beginning (FAR 52.249-10(b)(2), unless the contracting officer extends it); no recovery of costs incurred more than 20 days before the written notice of a constructive change or of a suspension not ordered in writing (52.243-4(d), 52.242-14(c)(1)); the adjustment asserted within 30 days of the change order or notice (52.243-4(e), a period agencies may vary); a suspension claim asserted as soon as practicable after the suspension ends and not later than final payment (52.242-14(c)(2)); the claim submitted within six years of its accrual (41 U.S.C. 7103(a)(4), FAR 33.206); certification for a claim over $100,000 (7103(b)); the contracting officer's decision within 60 days of a written request for a claim of $100,000 or less, or, for a larger certified claim, within 60 days either a decision or notice of the date by which one will issue (7103(f)), a decision not issued in time being deemed denied for the purpose of appeal (7103(f)(5)); appeal to the board of contract appeals within 90 days or an action in the Court of Federal Claims within 12 months of receiving the decision (7104, FAR 33.211(a)(4)(v)). A missed contractual notice period does not always bar the claim (the Government must usually show it was prejudiced), but it is the first question asked, and the statutory periods are jurisdictional.

Worked example on the page

The default schedule is an illustrative eight-activity building project of 80 working days (mobilize, excavation, foundations, steel, underground utilities, roofing, mechanical and electrical, finishes; critical path A-B-C-D-G-H). Three events: an owner delay of 8 days on the foundations from day 20 (a differing site condition), a contractor delay of 5 days on the same activity from day 24 and 4 days of unusually severe weather on the steel from day 50. The impacted as-planned analysis attributes 8, 1 and 4 days (the contractor's event began while the owner's had already stopped the work, so only its last day extended the completion): completion 93. The literal test finds 4 concurrent days (days 24 to 27), the functional test 5 (both events in the first 30-day period, the lesser of 8 and 5); the entitlement is 4 compensable, 4 concurrent, 4 excusable non-compensable and 1 non-excusable day under the literal test (3, 5, 4 and 1 under the functional one). With as-built working durations of 11, 15, 21, 10 and 20 days for B, C, D, F and G the windows analysis and the collapsed as-built both finish at 97, the owner's collapse being 4 days, the contractor's 1 and the as-built performance 4 days above the plan. The damages section carries the DCAA manual's Eichleay example with its 365 delay days ($47,450 as the manual rounds it, $47,118 exactly) beside illustrative field-overhead, total-cost, acceleration and measured-mile figures; the production record is a seeded synthetic set checked against numpy. Every number is reproduced by test_delay_claims_analysis.php against an independent Python implementation of the fragnet model on the default and three seeded random networks.

Limits of the tool

• Finish-to-start logic only, working days with no calendar; no resource or cost loading; no progress percentages (an activity in progress at a window start keeps its planned remaining work).
• The attribution follows the fragnet convention stated above; a different convention (delays modelled as added duration, or as start constraints only) gives different numbers for overlapping events, and the page prints the order sensitivity so the analyst sees how much is at stake.
• Responsibility, as-built durations, the money figures and the inefficiency factor are entered findings; the tool does not judge entitlement, standby, replacement work, prejudice from late notice or the reasonableness of a liquidated-damages rate.
• No pacing, no float ownership rules, no time-cost trade-off; the Treasury rates and the price index are entered.