Concurrent Delay Intro.: What Does a Concurrent Delay Argument Look Like and Why Is It Made?
Both contractors and owners often argue for the existence of a concurrent delay to negate the granting of a time extension or payment of delay damages. Concurrent delays are discussed ever more frequently due to the increased cost of construction. It is essential to understand the concept of concurrent delay when evaluating delays on a construction project. Concurrency is relevant, not just to the identification of critical delays, but, more importantly, to the assignment of the party responsible for the critical project delays. This is due to the fact that the assignment of critical project delay responsibility directly determines whether a time extension should or should not be granted to a contractor and whether one of the parties may owe the other delay-related damages.
An owner may cite the existence of a contractor-caused concurrent delay as a reason for issuing a time extension without additional compensation or even as the reason for not issuing a time extension at all. For example, assume the owner issued a change order adding new scope to a project. If that added work delayed the project’s critical path and the project’s completion date, then the contractor is typically entitled to a time extension equal to the delay caused by the additional work, as well as corresponding delay damages. To avoid granting the contractor a time extension or paying the contractor its resultant delay damages, an owner may argue that the contractor also delayed the project and, as a result, the contractor is not entitled to a time extension or recovery of its delay damages. In this example, the owner would assert that the contractor’s concurrent delay offset or negated its responsibility to grant the contractor a time extension or pay the contractor for its delay damages.
Conversely, a contractor may cite the existence of an owner-caused concurrent delay as a reason why the owner should not assess liquidated damages for a critical project delay that was its responsibility. For example, assume a contractor’s slow progress was responsible for delaying the project’s critical path and the project’s completion date. To avoid the assessment of liquidated damages for the critical project delays that were its responsibility, the contractor would argue that the owner also delayed the project and, thus, the owner should not assess liquidated damages.
Unfortunately, few contract specifications include a definition of “concurrent delay.” Nor do they define how concurrent delays affect a contractor’s entitlement to additional compensation for its delay damages or how they may affect its responsibility for liquidated damages. To complicate matters further, there is a lack of consistency within the industry concerning the concept of concurrent delay.
Please look for the next posting on concurrent delay in which we’ll tackle the question of: “How is concurrent delay defined?”
For more on this or any other topic, please call me at 215-814-6400 or email me at mark.nagata@traunerconsulting.com.
