Float – adjustment of time

In other words, float is the additional time available before a non-critical activity becomes a critical activity in relation to the overall program of activities leading directly to the date by which practical completion is to occur. (A critical activity is one that if delayed will directly result in a delay to the date for practical completion or one that directly causes other delays that will in turn directly affect the date for practical completion.)

The question of whether the owner or the contractor should have the benefit of the float in a construction program is often the subject of debate between architects, owners and contractors. The answer will determine when an owner must accept delay to practical completion, and whether there will be costs to the owner over and above the contract sum when such delays occur.

The wording of the clauses in the contract dealing with adjustment of time is critical to the question of which party has the benefit of the float.

The development in the 1950s of the Critical Path Method (CPM) of programming, introduced for the first time a reliable method for the planning and control of major construction projects. CPM was also quickly recognised as an equally reliable means of measuring progress on such projects and for forecasting the likely impact of various events on completion. CPM rapidly became widely used as the tool to manage contract time administration, and to assist in establishing what does and does not constitute a delay resulting in a contractual adjustment of time.

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Types of float

The float in a construction program may be generated in three ways:

• It may arise as a result of the contractor unilaterally programming (for their own benefit) to complete the project earlier than the date set for practical completion by the contract. The difference in time between the programmed completion date and the contractual completion date is the 'contractor's float'.
• The 'project float' is the free time available in a particular chain of activities in the critical path program. A delay to that chain of activities which is equal to or less than the project float will not cause the programmed completion date of the total project to be delayed because it uses up the free time and will not affect the critical path of events that lead directly to the date for practical completion.
• 'Contractual float' may be built into the contract. For example, the ABIC suite of contracts makes provision for quantifying likely delays to the critical path prior to commencing construction. This contractual float is inserted into the program. By anticipating likely delays it allows for a more realistic date for practical completion so as to assist the owner's programming.

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Who has the benefit of the float?

The effect of granting of an extension of time for a delay of, say, five days to a non-critical chain of activities in which there is contractor’s float will be to preserve for the contractor the original level of contractor’s float available on that chain.

However, the effect of a time extension on a chain of activities with zero project float will be that this chain will now have a float of five days and all other chains of activity, critical and non-critical, will have their respective float increased by the same amount. The result would be that the contractor has gained a windfall of additional time to complete those other activities.

Extensions of time are therefore, under most forms of contract including ABIC, only to be granted when it can be demonstrated that the delay has or will affect critical activities, i.e., those on the critical path. In this way the owner has the benefit of project float in a critical path activity until it becomes zero, but the contractor has the benefit of contractor's float in other non-critical activities which are subject to extensions of time granted for delays to critical activities.

Both parties also have the benefit of the third type: contractual float. It is in effect a credit from the owner for agreed likely delays (such as inclement weather or any other project specific issue) for which the contractor has built in a financial allowance for all likely delays in the contract price, whether or not they actually occur. Such provisional delays are used up by actual delays without altering the date for practical completion until all credits are used. Subsequent delays in excess of the allowance are then treated as project delays with corresponding adjustments to the date for practical completion, but as the contractor is assumed to have made adequate financial allowance for all likely delays, subsequent delays are not awarded costs unless the contract specifically states that it is a delay attracting costs.

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Contract conditions

The provisions in the building contract usually determine who has the benefit of the float. Most standard form building contracts include wording such as:

If the works are delayed in a manner that will affect the contractor's ability to bring the works to practical completion by the date for practical completion then…

Wording of this type requires that, as a precondition to an extension of time being granted, the contractor must be able to demonstrate that the delay has affected critical construction activities. ABIC contracts provide for credits of provisional delays to be used up before extensions of time are granted. Once any project float in the chain of non-critical activities has been used, and all credits for the contractual float have been used, further delays outside the control of the contractor will result in delays justifying an adjustment of time.

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