This post is the ninth in a series of discussions regarding various aspects of time management as it relates to the risk of delay. More specifically, we have titled the series MANAGING RISK OF DELAY, since we focus heavily on the managerial aspects of program / project management. This post addresses planning for and implementing recognition and notice as a managerial tool.
The challenge associated with managing time is common to virtually all projects. This challenge is true for most project management situations. It is intensified in the case of larger and more complex projects as well as fast-track (an ambiguous term) and high technology (similarly, an ambiguous characterization) projects.
In order to professionally manage time (and, therefore, risk of delay) the manager must have a time baseline [typically a Critical Path Method schedule and a Performance Measurement Baseline – please see earlier posts on these topics] and a method to recognize variations from the baseline.
Further, the managerial team must have an effective process to provide timely and compliant notice of the variance to the time baseline.
Most major Engineer Procure Construct [EPC], Lump Sum Turnkey [LSTK] and Construction contracts contain requirements or provisions for Notice. Simplistically, notice is the act of informing another party to the contract that an important event has (has not) occurred. These events tend to be related to negative consequences.
As a project/construction/contracts/business manager and similar, it is imperative that you define your project execution approach as it relates to recognition and notice. The project execution planning, including staffing plan and related execution strategy, must reflect the realities of many factors. Rationalize the project team’s accountability and responsibilities to their skill sets and the intended relationship with other parties. Keep in mind that these same considerations relate to many project interfaces (owner/developer/employer to prime contractor; prime contractor to subcontractor; and others).
In this discussion, I will use two key references:
- Delay and Disruption in Construction Contracts, Keith Pickavance
- Construction Delay Claims, Bramble and Callahan
Bramble introduces the subject as follows (focus is on delay):
“Notice to the appropriate contract representative that an excusable delay has occurred is important. From the owner’s perspective it is extremely important because the owner may have no knowledge of the events that affect the contractor’s performance. Even if the owner has knowledge of the events, it may be ignorant of their effect on the contractor’s performance. Notice will allow the owner an opportunity to remedy the problem, mitigate the damages, or plan for the consequences. Further, the owner may take steps to document the validity of the claim and the effect on the contractor. [Bramble p2-28]”
Pickavance addresses the rationale as follows (focus is on delay):
“5.12 Without notice, D [developer, owner, or similar] may have no knowledge of the event which has affected or is likely to affect C’s [contractor’s] performance. Even if D has knowledge of the circumstances giving rise to an entitlement to an extension of time, without C’s advice, it may be ignorant of its impact on C’s progress. One of the principal effects of a notice of delay to progress or disruption can be expected to be that both the CA [contract administrator] and D may give some thought as to how instructions could be given so as to reduce the effects of the event of which complaint is made. [Pickavance p140]”
Many contracts require that notice be given within a specified period (e.g. 10 days, 21 days). With such a defined (and arguably short) time period, several points are important. Perhaps the most important is the commencement or start date of the notice period. Several possibilities exist.
One start concept is the date that an event occurs. This ambitious and (potentially) problematic concept, coupled with a short notice period (say 10 days) can be extremely difficult to completely unrealistic in the context of project execution.
Pickavance addresses THE COMMENCEMENT OF THE PERIOD OF NOTICE in paragraphs 5.49-5.51. In this regard (and always the case), the parties need to obtain the specifics from their contract language.
Another arrangement could be that the period starts at the time of recognition. This more relaxed approach allows the party that is obliged to provide notice time to recognize the event or possibly see the results. Some call this recognition.
Using recognition as a concept, the party must consider when they can recognize or should recognize the event or its impact/results. As you can see, the matter becomes increasingly complicated.
Recognition can be straightforward or may contain several issues or challenges. The following list of general examples is arrayed in order of degree of difficulty [easier first]:
- “Owner-initiated change/variance”
- “Delay with clear documentation”
- “Acceleration – directed with agreement”
- “Delay without obvious indications”
- “Acceleration – constructive”
- “Disruption with a discrete event”
- “Disruption without a discrete event.”
What is the lesson here?
All parties need to have in place proper and legitimate mechanisms for detecting events and/or results (sometimes called impacts). These plans and procedures should be addressed in the Project Execution Plan [PEP], Risk Management Plan (often within PEP), or project / job procedures. It is not constructive to have an implementation procedure that calls for writing letters (or other documents) on an intensive basis. Letter writing factories tend to aggravate and not resolve an issue. Sound managerial judgment is needed.
When M&M undertakes an assignment involving program/project development, planning and/or management, we integrate both critical path time management and earned value management practices and procedures into project execution.
Good luck and let us all attempt to approach the issue of Time-Management strategy with all the factors in an integrated manner (critical path progress, bulk progress or EVM, and productivity) relative to other related aspects of program and project execution planning.
It is important to note that McLaughlin and McLaughlin [M&M] is not a law firm and is not intending to provide legal advice. M&M is a consulting firm providing (among other services) non-legal expertise in dispute resolution and litigation support. The Resource Center is for the convenience of blog visitors and M&M does not offer this for commercial purposes. For further information on M&M services, please see www.McLaughlinandMcLaughlin.com.