In my previous article I explained the benefits of having a resource loaded programme and why it is crucial to do so. In this article / case study, I would like to demonstrate and explain how resource loading can assist in substantiating a standing time claim.
I would like to start with this statement, If you don’t have a resource loaded programme you are going to find it very difficult to substantiate a standing time claim and that is purely because the client / owner will always ask you to prove that the resources, you are claiming standing time for are in fact evident in the baseline / accepted programme.
Condition president to any claim may it be a standing time claim or a claim for delay because of others is as follows but not limited to;
Identify who is responsible for the event that is causing the delay to work progress.
Notify the Engineer / Client / Owner of the event, this is either by way of an early warning, if the event has not occurred but is imminent, or if it has occurred then by way of a compensation event notice
Determine if the delay can be mitigated in any way
Can the labourers be deployed on other work?
Can plant and equipment utilised in other areas?
This should be done with a level of caution because moving resources from one area / workface to another brings another dynamic into the equation and that is one of disruption, which is very difficult to prove in many instances. So, beware of just moving for the sake of moving.
Ensure contemporaneous records are updated
Take photos, where possible
Capture event in daily diary
Capture event in schedule
Ensure timesheets are available
Ensure that you consider the effect of the delay has on restarting the works and that it isn’t just an immediate start-up when in fact there is a sort of ramp-up time required to remobilise to the area.
This case study involves the installation of an underground pipeline. There are two contractors, one a civil contractor and the other a mechanical piping contractor. Figure 1 shows the planned scope of work. The rates for each resource, may it be labour or non-labour, are not in alignment with the actual rates of the respective resources and are purely for the purpose of demonstrating the calculation.
Figure 2 – 5 shows the resource loading for each activity in the programme. It should be noted that the resource loading has been done at crew level rather than individual level.
Figure 6 – 7 shows the makeup of the crews including the hourly and daily rates. The civil crew has a total daily rate of R11,900 per day, and the mechanical crew a daily rate of R13,660 per day.
Let us assume that all went according to plan and on the 20th of December the civil team came across an underground pipe that was not identified on the site survey report. As a result of this pipe the excavation works must be stopped. Figure 8 shows the progress of the work performed to date
As mentioned earlier, it is imperative that the client / owner gets notified as soon as practically possible, since this is what the contract normally calls for and what the contractor is obligated to do.
Figure 9 shows the fragnet of the events as they occurred from the event date.
Figure 10 shows the impact the delay event has / had on the remaining works. It is seen that the total delay amounted to 9 days of non-progress
Figure 11 shows the total cost of the delay should the contractor not be able to mitigate this delay. The total delay cost for the 9 days of standing time would be R230,040. If the resources are loaded into the baseline programme, or you have loaded by crew but have resource tables to detail the crew make-up, then it makes it clear when it comes to calculating and substantiating your claims.
In this case study the contractor was able to mitigate some of the impact by moving some of the resources elsewhere for the duration of the standing time. Figure 12 shows the cost that the contractor was able to save the client / owner.
Figure 13 shows the total cost less the mitigation cost, and Figure 14 – 15 shows the spread of these costs. The green highlighted cells indicate the mitigation.
Do you feel like you've bitten off more than you can chew in a claim situation?
From experience we know that the first port of call in demonstrating any entitlement to extend the time for completion is the schedule. It is common knowledge that it is always best to deal with schedule impacts as close to the event as possible, i.e. prospectively. Many times however this does not happen and it results in the parties seeking to reach conclusion some time after the event had ceased, even maybe after the contract had concluded, i.e. retrospectively.
Profactaplan is experienced in dealing with delay impacts, both prospectively and retrospectively. Our members have a track record of successfully winning and defending such entitlements.
Let us quote you on handling your claim.