Managing time during construction

Page contents:

• The construction program
• Critical path programming
• Expediting the works
• Time provisions in standard contracts

The construction program

If the architect believes that the contractor is not proceeding with the works in a diligent and satisfactory manner, the architect should use best endeavours to encourage the contractor to improve performance. However, the architect must make sure that this is not done in such a way as to usurp the contractor's role by issuing specific instructions, thereby prejudicing the owner's interests and incurring extra costs.

Where the contractor's performance has fallen behind that indicated in the construction program prepared by the contractor, the architect should request an updated program showing how the work is to be expedited for completion on time. (Note that the architect can only demand the program if able to do so under the contract.)

The ABIC 2018 contracts require the contractor to provide the architect with a construction program within 10 working days after possession of the site, and to provide an updated program when the date of practical completion has been adjusted by five working days or more or such other period as agreed.

See Acumen note Program as a contract document.

Respond to delays

In some instances, falling behind program is a symptom of insolvency. Subcontractors who are not being paid are often loath to do any more work and the patience of unpaid suppliers soon wears thin. In other instances, the contractor may be over committed. If the contractor is insolvent, it might be necessary for the owner to seek legal advice and to terminate the contractor's employment for insolvency or for failure to perform. If termination is inappropriate, the contractor should be reminded that the job is to be completed on time or the owner will be entitled to liquidated damages. The facts can be stated (for example, 'It is a week until the date for practical completion and the footings have not been poured yet.') and the contractor can be asked to demonstrate how it is proposed to fulfil the contract.

See Acumen note Termination rights and insolvency events.

Keep the owner informed

As with most aspects of the project, it is crucial that the owner is kept informed of progress so that accumulated minor delays do not cause alarm.

• Invite the owner to attend or send a representative to site meetings to observe, but not necessarily to participate. The agenda should include a report from the contractor on progress and the likely date of completion. The owner can thus see the constructive role played by the architect in monitoring the progress of the work, in identifying work which is behind schedule, and in encouraging the contractor to reschedule work to regain lost time.
• For larger projects it may be necessary to consult a programming consultant to set a realistic provisional program, related to the date for practical completion. This provisional program could be issued to tenderers for their information only in tendering and may, at the contractor's discretion, form the basis for the construction program referred to above. Again, it should be made clear that whatever the source of the program may be, it does not form part of the contract.

Be proactive

Architects should consider the following in arranging the conditions of contract for a building project and in administering the contract:

• Determine a fair and reasonable contract time for the works. The time nominated should be realistic and appropriate for the job, its location, industrial conditions and so on. Alternatively, ask the tenderers to nominate the starting and finishing dates.
• Avoid specifying items with long lead times, unless care is taken to draw the contractor's attention to the need for early ordering. This may be particularly relevant with imported materials or equipment.
• Encourage tenderers to be realistic in the allowance made for 'disruptive weather conditions' in Schedule 1 of the ABIC 2018 contracts. Alternatively, agree on an allowance with the owner prior to tender in order to provide parity between tenders and control the allowance, and include this figure in the tender document.
• Require the preparation and submission by the contractor of a construction program in the form of a bar chart or similar, and that the program be accompanied by a cash-flow projection and a trade breakdown of the tender with both related to the program. Performance can then be monitored by testing progress against the building works progress, expenditure and trade progress. It is important that the program is a requirement of the contract and not part of the contract documents, in case an instruction that causes the contractor to diverge from the construction program permits the contractor to claim an otherwise unjustifiable time extension.
• Monitor the performance of the contract against the construction program where there is one, or against the expected rate of progress where there is not, and direct the contractor's attention to areas in which performance is falling behind.

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Critical path programming

Critical path programming or critical path scheduling is a technique for programming a building project by means of a network diagram. The critical path passes through the activities or sequence of activities that determine the length of the construction period. 

The critical path is the longest path through the network – it is the minimum time in which the network can be completed. The activities critical to progress that determine the critical path, are the activities that must be completed (or at least started) before subsequent activities can commence.

Progress is monitored by reviewing the progress of activities on the critical path and claims for delay are assessed against the critical path. Delay, beyond the contractor's control, to activities on the critical path would normally be agreed and the date for practical completion would be adjusted. Delays to activities not on the critical path may be agreed with or without an adjustment to the date for practical completion.

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Expediting the works

The role of the architect in monitoring the progress of the works on behalf of the client is an important one. For this reason, the architect should make the client aware of the procedures that will be adopted within the powers given to the architect by the terms of the building contract to encourage timely completion of the works. The architect should advise that delays are common, and that it is unlikely that the date for practical completion, as tendered, will be achieved. (Note that where the common sources of delay are heavily qualified by provisional allowances, as required by state and territory housing legislation, this advice may not be prudent; rather the architect should point out the potential impact of an unforeseen cause of delay.)

As the building contract is an agreement between the owner and the contractor, the architect cannot legitimately interfere with the contractor's programming and sequencing of the works unless the contract allows the owner to instruct this through its agent, the architect. Generally, it is the contractor's obligation to execute the works within the contract time or else be liable for payment to the owner of liquidated and ascertained damages.

Notwithstanding the various features of ABIC contracts which allow some flexibility for the owner to amend the construction program, the obligation to perform on time is the contractor's alone. An architect who believes that a contractor is falling behind must immediately seek to reconfirm the contractor's program, and inform the owner of the implications to the contract. In rare cases the only method of achieving practical completion at all may be to terminate the contract and seek an alternative contractor to complete the works.

Even when the contractor is performing, the architect should make a point of keeping the client well informed of progress. This type of communication reassures the client and establishes that the architect is fulfilling the obligations of the commission.

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Time provisions in standard contracts

Most standard-form building contracts include a date by which practical completion is to be reached and a mechanism for extending the date due to delays that occur that are beyond the contractor's control. These contracts usually also include provisions requiring the contractor to minimise the impact of delays on progress of the works.

Common to most building contracts is a requirement for the contractor to act in good faith throughout the project and to proactively and creatively manage the construction process in spite of the inevitable problems that occur.

For example, in the ABIC 2018 contracts the contractor must take all reasonable steps to minimise the impact of delay on the progress of the works .

The architect must not interfere with the contractor's responsibilities, including methods, sequencing and procedures of constructing the works. The architect is free to provide advice, but only if it is not given as a direction or instruction. Otherwise this could result in additional costs to the client and potential liability for the architect should it result in failure to achieve improved progress.

In order for the contractor to qualify for an extension of time, the contractor must establish that proper and reasonable steps have been taken both to preclude the occurrence of the cause of delay and to avoid or minimise the consequences of delay.

ABIC MW 2018 Contract (major works contract)

The program is not a contract document, but a significant feature of the ABIC MW 2018 contract allows the architect (on behalf of the owner) to instruct the contractor to provide the program within 10 business days of the request.

Owners may experience financial difficulty within the contract period and it may suit both parties for the progress of the works to be amended to suit a reduced expenditure stream. This will need to be done by way of variation. A party will issue a variation in accordance with the Variation clause that will reduce works/services from the scope of building works. Alternatively, should an owner wish to substantially accelerate the pace of the works for some reason, the contractor should be allowed an opportunity to price the additional labour required to do so. This will also need to occur by requesting a variation.

Another feature of the ABIC MW 2018 contract is the provision for the contractor to claim an adjustment to the construction program for delay. The contractor must prove that any delay affecting the progress of the works under the program is in excess of that allowed for. Importantly, the cause/reason for the delay will be independently assessed by the architect.

Australian Standards building contracts

Subclause 33.2 of AS 2124-1992 makes reference to a construction program to be furnished voluntarily by or as required by the superintendent, but it does not affect the parties' other rights and obligations concerning timely completion and ordering of the works. When a program has been provided the contractor is not to depart from it without reasonable cause.

Under subclause 33.1 of AS 2124-1992 the superintendent also has the power to direct at what time or in what order various stages should be undertaken. In some instances, it can be of great advantage to the owner to have a certain part of the works completed prior to overall completion. The contractor is entitled to be compensated for extra costs incurred.

See Acumen note Australian Standards contracts.

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