IMPORTANCE OF SCHEDULE
DELAY ANALYSIS ON
CONSTRUCTION PROJECTS – A
Construction industry has been a busy industry in the 20th century.
Vast multitudes of projects have sprung up, especially since the Second
World War. With the growth rate going up constantly, a fierce competition
has been set up among the builders. A construction project is typically a
series of activities that have a specific objective to be completed within
certain specifications and the start/ end dates are well defined. The
construction projects are usually capital intensive with a lot of debt and
interest components and everybody wants to earn profit on the investment, as
soon as possible. This has prompted the surge of fast track projects worldwide.
Construction project schedules are typically a compressed one on
fast track projects. To keep up with the competitive pressures, it becomes
quite essential for companies to control projects, using all tools for tracking
and monitoring. In addition with low profit margins and involvement of many
parties at a time, these projects have inherent risk of schedule slippages and
subsequent monetary losses. Therefore it is very important that the potential
delays are looked into well ahead of time and mitigated implementing suitable
workarounds. Even then the schedule may slip and it is of utmost importance to
keep a tab on delays arising out of various reasons, especially those from the
other parties i. e. the owner, fellow contractor or the subcontractor, right
from the design phase through the commissioning of the project. The documents
form the basis for delay claim analysis at a later date so as to save one party
from the losses made on account of the failure of the other.
The purpose of this paper is to discuss practically all aspects
related to delay analysis on a construction project, followed by a case study.
Though the paper details practically every aspect related with the delay
analysis, focus will be on the Lump Sum Contract from the viewpoint of a
contractor, as it carries the maximum risk for a contractor.
As it is the contract document which details the policies in case of
delay claims, the following section will discuss various types of contracts and
factors for deciding the type of contract before formally accepting it.
2. CONTRACT TYPES AND DELAY IMPACTS
A Contract is a legal agreement
between the owner and the contractor for successful completion of the project
and it details comprehensive guidelines including that for delay and disruption
of work for various reasons. The Owner specifies and pays for the work
whereas the Contractor executes the job for getting profits. The parties
involved should Read The Full Contract before formally entering it.
Various types of contracts
are prevalent in the construction industry depending on the priorities of the
owner and mutual agreement between the owner and the contractor. The most
popular types of contract being used in construction industry are detailed
Lump Sum/ Fixed Price Contract
In Lump Sum Contract, the
contractor agrees to perform the specified work for a fixed price. If the owner
needs some extra work to be done, a variation in contract is to be finalized
with mutual agreement, which may affect either schedule or cost or both. It is
the sole responsibility of the contractor to complete the job and remain on
budget. The price has to be the minimum possible to remain competitive while
bidding as well as it should not be impractical to run into losses. Since the
optimum balance is sought while bidding the amount, this type of contract is
normally used where traditional method of construction is being used and there
are minimum chances of significant deviations. In this contract, the contractor
owns total risk but has the maximum incentive also for early completion. For
owner, the advantage is competitive bidding.
It is very important for
the contractor to continuously monitor schedule & cost progressively and
keep the budget on track. Delays can eat away the profit margin of the
contractor and/ or cause slapping of liquidated damages from the owner, per
conditions of the contract.
Cost Plus Fee Contract
The Cost Plus Fee
Contract normally provide for the contractor to do the work, get reimbursed
for the material & labor cost of the job and a fee for profit on top of the
reimbursement. This fee is usually a percentage of the final cost of the
project or a fixed fee. This method provides little risk for the contractor but
small profit as well. Here the owner takes the maximum risk and is exposed to
the cost overruns due to poor performance of the contractor. This contract is
used where time and quality are of prime importance. A variation to this
contract is Guaranteed Maximum Contract where the maximum amount is
capped, if the contractor delays inordinately and cost overruns are too high.
Unit Price Contract
The Unit Price Contract
allows the contractor to get estimated quantities of defined items of work
and in turn get paid for each unit executed. Total payment is based on the
units of work actually done and measured in the field. This type of contract is
normally used for relatively small scope of jobs and when definitive estimates
can be prepared to calculate the quantities for a fair degree of accuracy. In
this contract the risk is equally shared between the owner and the contractor.
In brief, the following
factors mostly affect the types of contract to be executed:
¯Extent of the work scope definition
¯Accommodation of fast tracking to complete the job
¯Allocation of risk level between the owner and contractor
¯Expertise of the contractor/ owner in the subject field
¯General market conditions
It is clear that the
allocation of risk level is an important factor for finalizing the type of the
contract executed. As detailed above, schedule slippage risk is an underlying
factor for practically all construction contracts. Therefore it becomes
imperative now to discuss fundamentals of schedule control, which helps track
the progress on projects and take corrective actions from time to time.
3. FUNDAMENTALS OF SCHEDULE CONTROL
Delays can impact a project in numerous
ways. The one impact is common that they all cost money. Field and home office
overhead costs get escalated. Work that could have been performed in good
weather gets pushed out into bad weather. Continuous hindrances on a task can
greatly reduce labor productivity and lower morale of the workers. Material and
labor cost could escalate due to substantial delays.
Schedules are developed on a project to monitor and control effectively and
avoid delays. The hierarchy defines the schedule control system and is shown in
Figure 3.1 on the following page. The different level schedules are detailed
below, which are typically used for construction projects:
¯ Level I: This is Contract
Milestone Summary Schedule. Usually one page shows overview. This is used
mostly at the Director level of the companies to review the project.
¯ Level II: This is summary level
schedule from Level III schedule detailed below. Senior management at jobsite
as well as at home office uses this schedule to review the project.
¯ Level III: Level III schedule is
usually the controlling engine for all the schedules. This is an Integrated
Schedule for all the functions and used by department managers
¯ Level IV: Level IV schedule is
detailed work plan and lower level of details compared to Level III schedule.
This is typically used for regular progress review at site and is field
superintendent level schedule. This basic schedule supports all upper level
schedules. The project is controlled using this schedule and is used for delay
analyzes as well.
Among the various methods
that are available, the Critical Path Method (CPM) is the most
popular schedule analysis method, used for tracking the progress of
construction projects. Figure 3.2 on the following page depicts a simple CPM
network using Arrow Diagram Method. Project activities are shown by
arrows in the arrow diagram method, with a Node or Event at each
end. Activities take time and resources to be carried out and serve as
the building blocks of the network.
Activities are logically
interrelated in the network and each one of them is assigned a reasonable
duration. The durations must be estimated with reasonable certainty for this
method to be successful. For an activity to commence, all immediate preceding
activities must be completed. If an activity starts before its preceding
activities are completed, the activity must be subdivided to honor the logic of
Dummy activities are used
only to show relationships between activities and have no time duration. They
are used as restraints for the succeeding activities to start.
The network in Figure 3.2
shows sequence of activities for erection of an equipment. Activity Erection
can not start till base plate is installed on the foundation, equipment is
delivered and the crane is
arrived on the jobsite. Dotted line represents a dummy activity. It is a
restraint for the activity of erection to start.
After creation of a network and
assigning duration to each of the activities, start/ finish time is calculated
for individual activity as well as for the whole project. Four limiting times
are calculated for each activity on the project, as mentioned below:
¯ Early Start: This is the earliest possible date when an activity
can start, allowing for
the duration required for the
preceding activities to be completed.
Early Finish: This is the earliest possible date on
which an activity can be completed.
Late Start: Latest possible date, on which an
activity can start without delaying the
of the project.
Late Finish: Latest possible date on which the
activity can finish without delaying
the completion of the project.
Calculating the dates is a simple method
of addition and subtraction, as follows:
Forward Pass: This is the first step in a network to
calculate early start & early
finish dates for each activity. At
first, the early start is assigned to the first activity.
Early finish is equal to the early
start of the activity plus its duration. It is assumed
that the activities start as soon
as the immediate preceding activities get finished.
for other activities, early start is equal to the largest of the early finish
the immediate preceding activities. This forward calculation
process continues till
activity of the project is reached, which gives early dates for the individual
and the early finish date for the total project as well.
Backward Pass: This is the second step in a network
to calculate late start & late
dates. Here a finish date, either the early finish calculated by forward pass
is set equal to late finish date for the last activity in the network. Then
for the activity is equal to late finish minus its duration. Further, Late
activity is the smallest of the late start times of the succeeding activities.
that an activity finishes as soon as its all immediate successor relations are
This backward calculation process continues till the first activity of the
reached to calculate late dates for all activities.
The difference between the Late Finish
and the Early Finish or the Late Start and the
Early Start is called as Total
Float. Usually Total Float is termed as Float. The activities with
the least amount of float are considered as Critical. Ideally any delay
to these activities will delay the completion of the project, if no efforts are
taken to recover the delay. The Critical Path is defined as the longest
path, timewise, of the interrelated activities throughout the project. Since
this chain of activities takes the longest time to complete, it is critical to
completion of the project. For example, if one of the activities on critical
path is delayed by two days and no corrective actions applied to the schedule
or the critical activity, the project completion date will be delayed by those
two days. Delay involving activities not on critical path generally has no
impact on the eventual completion date of the project unless they become
critical due to the delay. However, they may impact resource allocation/
availability. The schedule can be loaded with resources/ costs to perform these
Free Float is defined as the amount
of time an activity can be delayed without delaying the early start of any
succeeding activity. This amount of time may be utilized for the activity to
delay without affecting the project completion. After that the activity may
become critical, subject to criticality of the immediate succeeding activities.
The schedule is updated regularly for
the progress at the jobsite and is revised for any major changes in the
construction sequence. It is of paramount importance to keep schedules updated
regularly and analyze critical paths on a frequent basis. For large projects it
is usually beneficial to analyze loss of total float every month. This gives
early warning signs to the troubled activity paths and arms the project to take
corrective actions. Once the schedule is updated regularly, the critical path
routinely shifts from one sequence of activities to another during the course
of a project. Thus this method is the most efficient to track the progress,
monitor and control the project.
To achieve timely
completion of a project, the plan should be carefully prepared and should be
bought of by all parties responsible for execution. All delivery lead times
should be sufficient to avoid delay. Design should be released in the sequence
of construction priorities at site. All permits from Government Authorities
should be planned and applied for in advance. Construction interfaces should
also be identified well ahead and requirement of resources should be planned
against availability of the same.
Project Controls Group is an integral part of
the construction project organization. A full project controls set up needs to
be functional at the design office as well as at the jobsite to monitor the
progress and take corrective actions. The group interacts with all other groups
at jobsite as well as at home office to get information on all aspects of the
project. The information is used to analyze and track the progress of the
project, identify potential delays and raise a warning flag. If at all delays
occur; schedule impacts are calculated, mitigations planned and they are well
documented with proper responsibilities for performing delay analyzes.
Even with all careful
planning for the project, as detailed above, delays may occur for various
reasons. The following section will discuss on various causes of delays to help
identify and analyze delays on a project.
4. CAUSES OF DELAY
responsibilities, the most common reasons for schedule delays are listed below:
Owner caused Delays
The responsibility lies on
owner for these delays, as enumerated below:
¯Suspensions/ Terminations from owner
¯Owner directed changes in scope, schedule sequence or work
¯Owner’s interface for access, permits, design and material
¯Interface on inspection and approval with the owner
Third Party caused Delays
Depending on the assigned
responsibilities per conditions of the contract, these may be accounted to the
owner or to the contractor. For example, if it is the owner’s responsibility to
obtain Government Approvals, delay will be owner caused. Various reasons
are listed below:
¯Jobsite contractor interfaces
¯Approvals from Government/ Regulatory authorities
¯Delay in getting data from vendors for equipment
¯Delayed delivery of material from suppliers
Circumstances caused Delays
Reasons are listed below, which can be
attributed to different parties, depending on the interpretations of the
conditions of the contract:
¯Unanticipated subsurface conditions (Differing Site
¯Force Majeure (Strike, Earthquake, Flood etc.)
¯Attitude of any one or both the parties
¯Rework of defects
¯Delays for providing adequate safety conditions at site
¯Manpower availability constraints – Qualitative/ Quantitative
¯Labor Productivity losses due to extreme physical conditions
(Severe heat/ cold etc.)
Delays usually cause loss
of money and time on the project. Depending on the parties responsible for the
delays and the impact on schedule, delays are classified into five categories.
Next section will discuss different types of delays and compensation applicable
in terms of time extension or money or both.
5. TYPES OF DELAY
This section discusses different
types of delays and respective compensation applicable but these are general
guidelines only. Actual compensation depends on the conditions of the contract
and the contract clauses must be comprehensively referred before proceeding
with any delay analysis based on the facts discussed below:
Excusable/ Compensable Delays
The owner’s actions or inactions cause
Excusable/ Compensable Delays. The contractor is entitled to time extension
as well as damage compensation for the extra cost associated with the delay.
Usually construction contracts have an implied obligation on part of the owner
not to unreasonably delay, interfere with or hinder the contractor’s
performance. Major factors that lead to the compensable delays are as follows:
The changes in the work
scope or changes in the work method, manner or sequence of performance may
require changes in the schedule or milestones. The change may have a direct
impact on the schedule and hence the contractor has to be compensated for the
delay resulting from the change and to be paid for the increased cost caused by
Differing Site Conditions
The most risky latent condition in construction projects is the
unknown sub-surface. The sub-surface or the latent physical conditions at the
site may differ materially from those shown in the contract or the contractor
may encounter unknown or unusual physical condition differing sharply from
those usually encountered.
From time to time during the course of
the work, it may be necessary or desirable by the owner to suspend all or part
of the work. To be compensable, the suspension should in no way be caused by
the wrongdoing or fault of the contractor.
Some examples of
compensable delays caused by the owner are:
¯ Failure to release
drawings necessary to maintain the contractor’s satisfactory performance
¯ Failure to release owner
supplied materials to the contractor in time
¯ Not releasing access to
the contractor to hold the work
¯ Interfering with the
contractor’s schedule and ordering to proceed under conditions
¯ Supplying incorrect
information, which misleads and disrupts the contractor in his
¯ Failure to provide timely
inspection of the contractor’s completed work
¯ Requiring the contractor
to use any particular method when the contract does not
¯ Failure to timely process
invoices, change orders or amendments and contractor
If the owner directs the
contractor to accelerate the work for the delay caused on owner’s part or due
to Excusable Delay, the cost of acceleration becomes compensable. Excusable
Delays are the delays caused by the Excusable Events that are out of
control of the parties concerned and unforeseeable.
Excusable/ Non-Compensable Delays
Excusable delays are neither the
contractor’s nor the owner’s fault. Both the parties share the risk and the
consequences when excusable events occur. Contractor is entitled to time
extension, including relief from any contractually imposed liquidated damages
for the period of delay, but not to damage compensation.
The general intent here is
to free the contractor from liability for the effect of a superior force that
can not be anticipated or controlled, usually referred to as Force Majeure.
This typically includes:
¯ Acts of God (Flood,
Earthquake, Cyclone etc.)
¯ Extreme severe weather
¯ Unusual delays in
The following criteria should be fixed to constitute excusable
delay, to avoid limiting the different events:
¯ Beyond the contractor’s
¯ Without contractor’ fault
¯ Events unforeseeable
Non-Excusable/ Non-Compensable Delays
The contractor causes Non-excusable/
Non-Compensable Delays and assumes the risk for these delays. The
contractor’s or its subcontractor’s actions or inactions cause these delays.
Such delays could have been foreseen and avoided by the contractor with due
care. The contractor is not entitled to any time extension or damages for this
delay. On the other hand the owner may be entitled to liquidated or any other
damages. However there is one gray area, which could turn out to be compensable
delay from a non-excusable delay. Usually it is implied responsibility of the
contractor and its subcontractors to foresee and plan for site interference
with other parties working at site. However an unreasonable delay, even in the
case of an event the contractor was advised to anticipate, can change a
non-excusable delay to a compensable delay. Examples are:
¯ Failure of owner to
competently coordinate the work of separate contractors
Concurrent delay can be described as a
situation when two or more delays occur at the same time during all or a
portion of the delay being considered. The concurrent delay is excusable or
compensable, this depends on the terms of the contract, cause of the delays,
timing and duration of the delays, parties responsible for the delays and the
availability of float.
In a particular scenario,
both the owner and the contractor are responsible for two separate delays,
which occur simultaneously and have equal duration, being on critical path. In
this situation, the net point is that the contractor has not been held up by
the delay caused by the owner. Therefore the contractor is not entitled to an
extension of time. In the same breath, the contractor may face liquidated
damages from the owner for delayed completion, even though the owner was not in
a position to allow the contractor to complete earlier. In this case, the
contractor will be entitled to time extension if he can prove that he could
have accelerated the work but delayed due to advance notice from the owner. But
the contractor will require delivering notice to that effect at an early
In cases where a
compensable delay and an excusable delay occur at the same time, the excusable
delay will negate the compensable delay.
In case of concurrent
delay, the most important action is to distinguish the impact of contractor delays
from the impact of owner delays. Rights of the parties are mostly determined by
delays on critical path. Hence the analysis should always be made whether the
contractor was in fact prepared to proceed according to the schedule but for
the owner caused delay or whether the contractor would have been delayed anyway
for reasons within its own scope of responsibility.
Delays that do not upset project
completion are Non-Critical. The delay may be large in duration but not
critical if they could run parallel to other activities without being on
critical path. But these delays may upset loading pattern for resources.
Non-critical delays may deserve monetary compensation for extra cost
involvement but there is no effect on completion date, unless they become
critical due to the delay caused. This analysis of criticality should be
performed for every delay occurrence on a project.
Delays usually create an
ugly situation and lots of allegations and counter allegations are there from
the parties involved. The following section discusses the various documents
required supporting a delay analysis.
REQUIRED FOR DELAY ANALYSIS
None of the parties will
easily accept the responsibility for the delay, unless there is valid document
in support of that. Supporting documents for delay analyzes are very important,
as the claim may be void in absence of proper support. Hence all documents and
records should be well preserved for the project.
A few documents are listed
below, which are of prime importance to perform and support the delay analysis:
¯ Approved Schedule: Approved schedule is a
very important document as it is used as the baseline for the delay analysis
and all distinct responsibility for the delay could be chalked out using this.
The schedule should be reliable, accurate, reasonable and agreed by the parties
concerned. Any mistake in schedule can cause the delay analysis to be rejected.
¯ Manpower and Equipment
Histograms: The histograms provide basis for comparison for planned versus actual
¯ Record of Design/ Material
Release: These records form the basis for delay on account of deliverables from
either of the parties.
¯ Progress Reports: All progress reports,
whether Daily/ Weekly/ Monthly, can tell
into minute details
about the working interfaces/ work put on hold etc. during that
¯ Correspondences: Correspondences are very
useful tool to find out the responsibilities at a later date and each of the
parties should write letters for any delay or interface from the counterpart.
¯ Change Orders: Change orders detail out
the scope of change and the analysis can be made for the delay/ cost
escalation, based on the work involved.
¯ Trend Logs: A regular log of trends
should be maintained to track all deviations, reasons for the deviations
and schedule & cost impacts.
¯ Quality Non Conformance
Reports: These could be used to detail out deficiency in
the quality of the work and the
party responsible for that.
¯ Photographs: Regular jobsite progress
photographs could tell the story in details with
the dates printed on them.
¯ Minutes of Meetings: Minutes of meetings
contain formal details of all the discussions, agreements and disagreements
during the meeting and hence very useful.
¯ As Built Schedule: This is of paramount
importance. This could tell all stories that
happened during the
life span of the project. It tells what event happened, when and
how did that affect
the job performance. Activities should be incorporated into the
schedule for each
individual cause of delay, logically tied with the impacted
After taking a look at the
documents required analyzing and supporting delays, the following section
discusses different methods to perform schedule delay analysis.
7. DELAY ANALYSIS METHODS
Schedule delay analysis is a complex
process mostly and varies with the situation. The analysis of delay becomes
more difficult when there are multiple causes of delay with interrelated
As discussed earlier, the
project schedule is the most widely used and the comprehensive tool for
schedule delay analysis. Since the schedule gets updated regularly, all
relevant details can be logged in to display them later.
scheduling programs that are available in the market today, allow the project
scheduler to keep track of:
¯ Actual start and actual
¯ Suspension period for a
particular activity, once activity started.
¯ Log records as the project
progresses. All historical information can be entered for future use. They can
be masked also for in-house reference and not to be visible in the prints.
¯ Activities can be coded as
delay activities with individual responsibility for all the parties concerned.
They can be filtered out later for analysis.
¯ Target bars can be shown
against the current/ actual bars to make a visual comparison of the progress.
Similarly a table can also be formed for the target dates and the current/
¯ Leaving aside the original
schedule, copies can be made and analysis can be done for various scenarios
arising out of the delay or change orders. The analysis can be seen quickly,
even for large projects and networks.
¯ Pictures can be inserted
in the layouts for effective visual display of some activities/ milestones.
Starting with the following page, this
paper discusses few prominently used delay analysis methods.
7.1 Total Time Approach
Total Time Approach is the basic method as shown in Figure 7.1. Here the comparison is
made for As Planned bar chart against As Built bar chart. The
difference calculated is the delay duration. The obvious difficulty with this
method is that it does not show the causes for the delay and thus who is
responsible. Also it does not show the effect of the delay. It is a subjective method
and difficult to analyze using this method.
7.2 Should-Have-Been Approach
Should-Have-Been condition is implied to the original plan, in this approach, for
the various reasons of lesser productivity (See figure 7.2). Then period of
acceleration is deducted and delay duration is arrived by comparison against
the original plan.
7.3 But-For Approach (Collapsed
In But-For Approach, all owner
caused delays are deleted from the as built schedule to analyze what would have
been But-For the owner caused delays as depicted in figure 7.3. Then the
difference between But-For Schedule and As Built Schedule tells
the scope of owner caused delay for time as well as for cost. This method does
not account for criticality/ non-criticality of the activities for the effect
of this realignment.
7.4 Time Impact Analysis
Time Impact Analysis was already discussed earlier in Section 3. Detailed schedules are
used and critical path analysis done in this method. It shows effects of each individual
delay and the actual progress. Difference can be visible between the two
schedules using approved schedule as target schedule. This is a proven and
successful method and widely used in the construction industry.
7.5 Window Analysis
Window Analysis is a pictorial presentation and information is taken mainly from
updated/ as built schedule with support from the various documents mentioned in
section 6. The basis for determination of delay analysis window is the best
judgement and the periods of delay. Figure 7.4 shows a sample format for window
analysis. Events are identified on the critical path, in the window. The
comparison is made for the planed against as built durations for the
activities. Here a better account can be taken for the concurrent delay and we
can superimpose the delays on a single bar clearly showing the effect of each
delay and responsible parties. This is a very accurate approach to analyze
complex delay situations and the best advantage is the effective visual
Since window analysis has the advantages
of clarity and effective visual presentation, this is widely used on
construction sites for the delay analysis. To explain this method in details, a
delay analysis case study will be discussed, for which window analysis method
was used. The author while working with a contractor as a planning engineer did
the analysis. In this case the contractor was delayed by two owner invoked
suspensions on the pre-commissioning activities of the contractor.
8. CASE STUDY
The subject of discussion is a delay
analysis, faced while constructing a Gas Based Combined Cycle Power
Project. The contractor was awarded Lump Sum Contract to design,
procure, build, commission and hand over the plant to the owner in a time span
of 27 months from the date of Notice To Proceed. Per the terms of the
contract, the contractor had to pay a Liquidated Damage of US$ 150,000
per day of delay. On the other hand, the contractor would have been eligible
for an Early Completion Bonus of US$ 80,000 per day, for completion
ahead of the Contractual Completion Date. For discussion in this paper,
the contractual completion date will be referred as the Guaranteed
Completion Date. For analysis, say, the Guaranteed Completion Date
was agreed as 07 Jun 2000.
The project comprised of the following:
Combustion Turbines & Generators (CTs & CTGs), named CT 2A/ 2B &
CTG 2A/ 2B.
Heat Recovery Steam Generators (HRSGs), named HRSG 2A/ 2B.
Steam Turbine & Generator (ST & STG).
An internal target was set by the contractor to complete the job in
25 months i. e. 60 days ahead of the guaranteed completion date, referred to as
Target Completion Date. On completion per target completion date, the
contractor would have been eligible for an early completion bonus of 60 days,
per conditions of the contract. A detailed schedule was prepared to achieve the
target completion date in consultation with all responsible parties associated
with the project. The schedule was delivered to the owner with the internal
target milestone dates and the owner agreed to support with all the
deliverables on their account to support the schedule to help the contractor
achieve the target.
The contractor started the work per schedule and the schedule was
continually reviewed on a weekly basis to status for progress. Supporting
critical path reviews were also carried out. The contractor used to send the
updated schedule regularly to the owner, to appraise of the latest developments
and to make aware of the expectations from the owner to support the schedule.
Construction of the project progressed well and after achieving all
milestones of construction, entered into pre-commissioning phase. During
construction phase, the schedule slipped against the target one for various reasons,
and that is out of the subject of this discussion.
Before proceeding further, it is imperative to discuss the sequence
of pre-commissioning activities falling on critical path, leading to handing
over of the project. The First Fire of the combustion turbines is
referred to as the milestone activity when the CTs are test run for the first
time with fuel on a project. This activity of First Fire triggers the
sequence of following activities, typically on a power project of the same
configuration as mentioned above:
¯ Synchronization: Testing of the CTs
at full speed and running on full capacity after synchronization of the CTGs
with the electricity distribution grid.
¯ Steam Blows: Steam is blown through
the HRSGs and associated piping using temporary pipes, to clean the system to a
¯ Restoration: Once steams blows are
completed, temporary pipes are all removed. All permanent pipes, fittings and
valves are installed and control system tubes are flushed to required
¯ Function Checks: All control systems
are checked in a comprehensive manner. On completion of this activity, the CTs
can be refired with fuel.
For ease of discussion here, the above set of activities is referred
to as Activities Leading to Refire of CTs. In this case, this set
of activities was totally under control of the contractor and was not affected
by any direction of the owner.
The Refire of CTs is another important milestone
activity which refers to the rerun of both the CTs with fuel, to perform further
testing & commissioning, leading to Handing- Over of the project.
Typical sequence of activities to follow after Refire of CTs listed
¯ Set Safety Valves on HRSGs: The
safety valves are first tested and set per operational specification.
¯ ST Roll: Steam Turbine is rolled for
the first time, feeding steam into the turbine. After this activity, various
checks are done on the turbine & generator and it is synchronized with the
electricity distribution grid.
¯ STG Loading: Steam Turbine &
Generator is loaded @ incremental load of 25%, 50% and 100%.
¯ Plant Tuning: Fine-tuning is done
for the plant to achieve maximum efficiency. After that the plant is shutdown
for removal of the screen from the valves, installed to check impurities going
into steam turbine. This shutdown period is also utilized for water wash of the
¯ Plant Operation/ Test & Hand-over: Finally the plant is continuously run and a battery of test needs
to be carried out in the presence of the parties involved, per specifications.
On satisfactory completion of the tests, the plant is handed over to the owner.
Coming back to the case, the contractor was in the process of
completing the Activities Leading to Refire of CTs when a suspension (Suspension#1)
was invoked by the owner on Refire of CTs. Shortly after that, the
second suspension (Suspension#2) was invoked when the contractor was
about to Refire the CTs. To analyze the delay due to the suspensions,
four schedule snapshots were taken:
17 Mar 00, Status prior to suspension#1 in place
06 Apr 00, Status after suspension#1 lifted
10 Apr 00, Status prior to suspension#2 in place
13 Apr 00, Status after suspension#2 lifted
The schedule on the project was developed using Primavera Project
Planner software. As a back up to window analysis, the activities falling on
the most critical path are shown in the figures 8.2, 8.3, 8.4 and 8.5 for
reference. Each one is a schedule, statused on different dates as mentioned
Identification number, description, duration, early start,
early finish and total float is shown for each activity on the schedules. Bar
area shows timescale on top and activity descriptions are marked on bars also
for clarity. Activity interrelationship lines are visible in the bar area.
Since the owner directed to put a hold on Refire of CTs during
suspensions, window of the delay analysis was selected from Refire
of CTs to Handing Over the Project to the Owner. There
is a focus on Activities Leading to Refire of CTs too, as the project
got delayed due to that activity. Figure 8.1 on page no. 34 depicts the window
analysis. Microsoft Excel software was used for the analysis as
different types of shapes could be used easily to make an effective pictorial
The window analysis shows summary of one
schedule snapshots on each bar, presented graphically. Each bar is divided into
two parts. One is Steam Blows to Refire of CTs and the other is Refire
of CTs to Handing Over. Flags are used to display refire and hand over.
Each bar shows successive slippages against timescale for the period ending,
mentioned on top.
The composite bar at the bottom of the window analysis identifies
delay types and responsibilities for the date marked on it. A table shows the
delays with accountability and total of the delays.
The float, stated in the discussion at all places, is against
the Guaranteed Completion Date of the project. As mentioned earlier,
this date was the key for calculation of early completion bonus or
liquidated damages. All the four schedule snapshots and the delay impacts are
analyzed below, one by one:
Status Prior to Suspension#1 in Place
On 17 Mar 00, Suspension#1 was slapped on the contractor as
the owner failed to get some statutory approvals from Government Authorities,
which was solely on their account.
First schedule snapshot was taken just prior to suspension#1 in
place, as shown in figure 8.2 on page no. 35. Refire of CTs was
scheduled for 27 Mar 00 on this date. With this forecast date for refiring of
the CTs, the date for Handing Over was forecast to take place on 24 May
00. There was a float of 14 days to achieve early completion bonus.
Status After Suspension#1 Lifted
The owner lifted Suspension#1 on 06 Apr 00 as
they got some interim approval from the Government Authorities. The
schedule status is shown in figure 8.3 on page no. 36.
In the mean time the contractor slipped by 4 days in completing the Activities
Leading to Refire of CTs and could be ready to Refire the CTs only
on 31 Mar 00.
The suspension#1 stayed for a total period of 20 days and even
though the contractor was ready to refire the CTs on 31 Mar 00, they could not
do that as the suspension#1 was still in place then. Hence the period of 20
days (17 Mar 00 to 05 Apr 00) could be divided into two parts:
Mar 00 to 30 Mar 00 (14 days) was a window of concurrent delay, as the
contractor could not be ready to refire the CTs.
May 00 to 05 Apr 00 (6 days) was a window of excusable/ compensable delay as
the contractor was ready to refire the CTs but could not do, per direction of
suspension#1 lifted, the refire of CTs was scheduled to be on 06 Apr 00 and the
date for handing over of the project slipped straight to 03 Jun 00. Float
reduced to 4 days from 14 days.
Status Prior to Suspension#2 in Place
Another schedule snapshot was taken just prior to suspension#2 in
place on 10 Apr 00, as shown in figure 8.4 on page no. 37. At that point of
time, the contractor was just ready to Refire the CTs. Delay for 4 days
on the contractor’s part is detailed below.
As the contractor got the Suspension#1 lifted and went ahead
to refire the CTs on 06 Apr 00, a snag got developed in the Combustion
Turbine Air Inlet Filter. Air Inlet Filter is an important component for
firing of a CT, as it filters the air before it comes to CT to get mixed up
with fuel for combustion. All efforts were made by the contractor at this late
stage to rectify the problems. This took 4 days on the critical path to correct
and was totally on account of the contractor and thus non-excusable delay. This
non-excusable delay caused to push the refire of CTs on 10 Apr 00 and the
handing over date to the same 07 Jun 00 as the guaranteed completion date. The
float reduced to zero.
The problem was fixed on air inlet filter and the contractor was about
to Refire the CTs. At this juncture, the owner invoked Suspension
#2. The suspension directed again to stop refire of CTs and it was again
for the owner’s failure to get through with the Government Authorities.
Status After Suspension#2 Lifted
On 13 Jun 00, the Suspension#2 was lifted by the owner and
the same day the CTs were refired. The schedule impact of suspension#2 is shown
in figure 8.5 on page no. 38. This delay of 3 days due to suspension#2 was
a compensable one. The delay caused the project handing over date to push out
of the guaranteed completion date of 07 Jun 00 and that went over to 10 Jun 00.
Thus the float was negative three days on the project.
On analyzing, it was found that the
contractor had lost ground for 14 days of concurrent delay. The contractor
issued the notice of delay to the owner in time, against the notice of
suspension#1 invoked by the owner, but failed to be ready to refire the CTs
early and hence no time extension claim was possible for the Concurrent
Delay of 14 days.
But-for the contractor’s delays, clear Compensable Delays
from the owner was on two occasions:
¯ Suspension#1: 31 Mar 00 to 05 Apr 00
¯ Suspension#2: 10 Apr 00 to 12 Apr 00
For compensable delays, the contractor was entitled for a total of 9
days of Time Extension against the Contractual Completion Date. In
addition to that the contractor was entitled for the Reimbursement of
Cost Overruns for this period. As the contractual completion date was
getting extended, there was no effect on the entitlement of the contractor’s
early completion bonus.