Managing Risk Of Delay – Earned Value Management (Part 5)

This post is the fifth in a series of discussions regarding various aspects of time management.  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 some ideas regarding preparation and maintenance of time management related to overall bulk progress.  Some might refer to this as Earned Value Management.

The challenge associated with managing all (critical and non-critical path) work is common to virtually all Lump Sum Turn Key (LSTK), Engineer Procure Construct (EPC) and other similarly executed projects.  In addition to the normal issues associated with bulk progress, actions or inactions by the owner can add considerable complexity to this challenge.  Owner/Employer delays can be masked among the myriad of activities that are the responsibility of other (than the Owner/Employer) stakeholders.  Even when detected or disclosed, these variances to plan are often dismissed as simply consuming available float.  Hence, the Owner/Employer (or other stakeholder) may rationalize these variations as having no impact.  Of course, the reality is that these sorts of departures may (or may not) add risk or disruption to the project execution.  Further, they may delay forecasted completion.  The managerial challenge becomes detection, assessment and quantification (should it be appropriate to compensate the contractor for the impacts). [Read more…]

Contract Notice and Recognition (Part 4)

This is the fourth post in a series regarding Construction Contract Notice and Recognition.

This post addresses backcharges.  The subject does not have a broad applicability; but is very troublesome to subcontractors and vendors.  This discussion is focused on notice.

Simply, backcharges (or backcharge) is a term of art or a term of the trade to describe an assessment of money from one contract party to another.  Typically, this is done by a prime or general contractor to a subcontractor, supplier, vendor or other subordinate party.  Unfortunately, this is often done unilaterally and without explicit contractual coverage.  Further, the timing of these backcharges is not favorable to the recipient and can lead to pressure to engage in deal making or compromises in order to receive final payment. [Read more…]

Contract Notice and Recognition (Part 3)

This is the third post in a series regarding Construction Contract Notice and Recognition.

Initial questions regarding compliance with contract notice provisions can be answered in a straightforward manner.  Yes, of course it is best practice to comply with these important provisions.  This point is clearly stated in the following comments within LinkedIn Construction Law Group Discussion regarding notice.

Emily Monastiriotis • Cases like Education 4 Ayrshire Limited -v- South Ayrshire Council (which is subject to Scots law) illustrate the importance of issuing contractual notices particularly when such requirements are conditions precedent. As a lawyer my tendency is to think that clients ought to err on the side of caution and issue notices when any issue arises that may trigger any of the provisions of the contract. I accept and recognise that such notices may not be well received by the Employer but I think it is better to protect your rights rather than lose them because of a simple administrative failure to issue a requisite notice.

A Google search of notice of contract claims yielded some comments at HALBERSTADT CURLEY website.  The blogger states that there are three key components associated with contract claim notice: [Read more…]