The dynamics of float, logic, resource allocation, and delay timing in forensic schedule analysis and construction delay claims

The Dynamics of Float, Logic, Resource Allocation, and Delay Timing in
Forensic Schedule Analysis and Construction Delay Claims
By
Long Duy Nguyen

KY SU (Ho Chi Minh City University of Technology, Vietnam) 1999
M.ENG. (Asian Institute of Technology, Thailand) 2003
M.S. (University of California, Berkeley) 2005

A dissertation submitted in partial satisfaction of the
requirements for the degree of
Doctor of Philosophy
in
Engineering-Civil and Environmental Engineering
in the
Graduate Division
of the
University of California, Berkeley

Committee in charge:
Professor C. William Ibbs, Chair
Professor Glenn Ballard
Professor Frederick Collignon
Professor Arpad Horvath

Fall 2007


The dissertation of Long Duy Nguyen is approved:

Chair __________________________________________ Date _________________

__________________________________________ Date _________________

__________________________________________ Date _________________

__________________________________________ Date _________________

University of California, Berkeley
Fall 2007


The Dynamics of Float, Logic, Resource Allocation, and Delay Timing in
Forensic Schedule Analysis and Construction Delay Claims

Copyright 2007

by

Long Duy Nguyen


Abstract
The Dynamics of Float, Logic, Resource Allocation, and Delay Timing in
Forensic Schedule Analysis and Construction Delay Claims
By
Long Duy Nguyen
Doctor of Philosophy in Engineering-Civil and Environmental Engineering
University of California, Berkeley
Professor C. William Ibbs, Chair

Delay claims in construction projects present various tough and controversial issues.
How to prove the three elements, namely entitlement, causation, and quantum in the
“triad of proof” is an onerous task. The analyses of schedule delays and their associated
damages especially concern claims analysts, project parties, courts, Boards of Contract
Appeals, and so forth. On the one hand, the industry has employed various forensic
schedule analysis techniques to support delay claims. Paradoxically, schedule-related
factors such as float, logic, and resource allocation are frequently ignored even though
they can affect project completion time and delay responsibility, too. On the other hand,
the current “one-size-fits-all” methods for calculating financial consequences undermine
the relative importance of delayed activities and the fluctuating nature of overhead levels.
The effects of the context of a delay in terms of the timing of the delay and degree of
suspension should be therefore paid attention in quantifying delay damages.
Accordingly, this research develops novel techniques for analyzing causation and
calculating damages in construction delay claims. They address the dynamics of float,
1


logic, resource allocation and the delay context in forensic schedule analysis and delay
claims. Several published and hypothesized case studies are used to illustrate their
applications.
Among other things, this research proposes: (1) an enhanced window analysis
technique considering resource allocation; (2) an activity-specific overhead allocation
process (ASAP) for quantifying field-overhead damages; (3) FLORA as a novel forensic
schedule analysis technique that can capture the dynamics of float, logic, and resource
allocation; and (4) a framework which integrates FLORA and ASAP for analyzing
schedule delays and their field overhead damages in a real-time and interactive manner.
Through the applications, comparisons, and evaluations in case studies, these
developments really overcome various limitations of the available techniques and
practices currently used in forensic scheduling and delay claims.
This research recommends that the schedule-related factors should be captured in

forensic schedule analysis.

In addition, the quantification of delay damages should

emphasize the context of a delay. This also enables equitable apportionments when
concurrent delays occur. ASAP and FLORA developed in this research are able to tackle
these issues.

__________________________________________
Professor C. William Ibbs
Dissertation Committee Chair

2


To my Mom and Dad
guyen Thi goc Lan and guyen Van Quy

Kính Tặng Ba Mẹ
guyễn Văn Quy và guyễn Thị gọc Lan

i


Table of Content
Table of Content ................................................................................................................. ii
List of Figures .................................................................................................................... ix
List of Tables ..................................................................................................................... xi
Acknowledgements ........................................................................................................... xii
Abbreviations ................................................................................................................... xiv

Symbols............................................................................................................................ xvi
Chapter 1 ............................................................................................................................. 1
Introduction ......................................................................................................................... 1
1.1 Background ............................................................................................................... 1
1.2 The Need for Research.............................................................................................. 2
1.3 Problem Statement .................................................................................................... 6
1.4 Research Objectives .................................................................................................. 7
1.5 Scope of Work .......................................................................................................... 8
1.6 The Structure of the Dissertation .............................................................................. 9
Chapter 2 ........................................................................................................................... 11
Literature Review.............................................................................................................. 11
2.1 Scheduling Practices in Delay Claims .................................................................... 11
2.1.1 Types of Schedules .......................................................................................... 12
2.1.2 The Use of the Critical Path Method ............................................................... 13
2.2. Roles of Project Change in Delays and Disruptions .............................................. 14
2.2.1 The Concept of Project Change ....................................................................... 14
ii


2.2.2 The Extent of Project Change .......................................................................... 15
2.3 Delay, Disruption, Acceleration, and Delay Concurrency ..................................... 16
2.3.1 Delay, Disruption, and Acceleration ................................................................ 16
2.3.1.1 Delays ....................................................................................................... 16
2.3.1.2 Delay versus Disruption............................................................................ 17
2.3.1.3 Delay versus Acceleration ........................................................................ 19
2.3.2 Causes and Costs of Delays ............................................................................. 22
2.3.3 The Types of Delays ........................................................................................ 23
2.3.4 Concurrent Delays ........................................................................................... 25
2.3.4.1 The Concept of Concurrent Delays........................................................... 26
2.3.4.2 Conditions for Occurrence of Concurrency .............................................. 27

2.3.4.3 Apportionment of Concurrent Delays ....................................................... 28
2.4 Float and Criticality in Project Schedules ............................................................... 32
2.4.1 Float ................................................................................................................. 32
2.4.2 Float versus Criticality ..................................................................................... 33
2.4.3 Float Ownership ............................................................................................... 34
2.4.4 Alternatives to Float Distribution and Management ........................................ 35
2.5 Process of Forensic Schedule Analysis................................................................... 37
2.6 Forensic Schedule Analysis Techniques ................................................................. 39
2.6.1 Global Impact Method ..................................................................................... 41
2.6.2 As-Planned vs. As-Built Method ..................................................................... 41
2.6.3 Impacted As-Planned Method.......................................................................... 42
2.6.4 Collapsed As-Built Method ............................................................................. 43
iii


2.6.5 Schedule Window Analysis ............................................................................. 44
2.6.6 Time Impact Analysis ...................................................................................... 45
2.6.7 Other Schedule Analysis Techniques .............................................................. 46
2.6.8 Criticism of Available Schedule Analysis Techniques .................................... 48
2.7 Delay Damages and Commonly Applied Methodologies ...................................... 49
2.7.1 Overview of Delay Damages ........................................................................... 49
2.7.2 Owner’s Delay Damages ................................................................................. 50
2.7.3 Contractor’s Delay Damages ........................................................................... 51
2.7.3.1 Types of Recoverable Damages................................................................ 51
2.7.3.2 Equitable Adjustments .............................................................................. 52
2.7.3.3 Field Overhead Damages .......................................................................... 52
2.7.3.4 Extended HOOH versus Unabsorbed HOOH ........................................... 54
2.7.3.5 Methodologies for Calculating HOOH Damages ..................................... 55
2.8 Summary of the Literature Review ......................................................................... 62
Chapter 3 ........................................................................................................................... 63

Research Methodology ..................................................................................................... 63
3.1 Research Framework .............................................................................................. 63
3.2 Bases, Tools, and Techniques ................................................................................. 66
3.2.1 Current Forensic Schedule Analysis Techniques ............................................ 66
3.2.2 CPM, Linked Bar Charts, and Resource-Constrained Scheduling .................. 67
3.2.3 Scheduling Software Packages ........................................................................ 67
3.2.4 Project Overhead Allocation ............................................................................ 67
3.2.5 Research Evaluation......................................................................................... 70
iv


3.3 Data Sources ........................................................................................................... 71
Chapter 4 ........................................................................................................................... 72
Impacts of Resource Allocation on Forensic Schedule Analysis ..................................... 72
4.1 Introduction ............................................................................................................. 72
4.2 Motivating Case ...................................................................................................... 73
4.3 Window Analysis under the Effect of Resource Allocation ................................... 75
4.4 Case Study .............................................................................................................. 78
4.4.1 Case Overview ................................................................................................. 78
4.4.2 Analysis of Delays ........................................................................................... 79
4.5 Discussion ............................................................................................................... 84
4.5.1 Possible Extended Effect of Delays ................................................................. 84
4.5.2 Positive/Negative Effect of Resource Allocation on Delay Responsibility..... 85
4.5.3 Legal Acceptability .......................................................................................... 85
4.5.4 Implications of Applying the Enhanced Window Analysis ............................. 86
Chapter 5 ........................................................................................................................... 89
Delay Damages and Schedule Window Analysis ............................................................. 89
5.1 Introduction ............................................................................................................. 89
5.1.1 Delay Context versus Delay Responsibility .................................................... 90
5.1.2 Field Overhead Damages ................................................................................. 94

5.2 An Integrated Approach .......................................................................................... 95
5.3 Hypothetical Case Study ......................................................................................... 98
5.4 Discussion ............................................................................................................. 104
5.4.1 Estimated FOH versus Actual FOH ............................................................... 104
v


5.4.2 Degree of Suspension .................................................................................... 104
5.4.3 Apportionment for Concurrent Delays .......................................................... 105
5.4.4 Float Ownership ............................................................................................. 106
5.4.5 Statistical Implications ................................................................................... 107
5.4.6 Difficulties in Using the Proposed Method ................................................... 108
5.5 Summary ............................................................................................................... 109
Chapter 6 ......................................................................................................................... 111
Novel Forensic Schedule Analysis Technique ............................................................... 111
6.1 Introduction ........................................................................................................... 111
6.2 Issues in Forensic Schedule Analysis ................................................................... 113
6.2.1 Float and Float Ownership ............................................................................. 113
6.2.2 Hard Logic vs. Soft Logic .............................................................................. 117
6.2.3 Resource Allocation ....................................................................................... 118
6.2.4 The Dynamics of Float, Logic, and Resource Allocation .............................. 119
6.3 Novel Forensic Schedule Analysis Technique ..................................................... 120
6.4 Case Study ............................................................................................................ 124
6.4.1 Day 2: One-Day Contractor-Caused Delay on Activity A ........................... 125
6.4.2 Day 4: One-Day Owner-Caused Delay on Activity B .................................. 127
6.4.3 Day 5: One-Day Concurrent Delays, Contractor- and Owner-Caused, on
Activities B and C ................................................................................................... 128
6.4.4 Day 6: One-Day Concurrent Delays, Owner- and Contractor-Caused, on
Activities C and D................................................................................................... 130
6.4.5 Days 7 and 8: Two-Day Third Party-Caused Delay on Activity D .............. 131

vi


6.4.6 Days 10 and 11: Two-Day Owner-Caused Delays on Activities E and G ... 132
6.5 Discussion ............................................................................................................. 134
6.6 Summary ............................................................................................................... 137
Chapter 7 ......................................................................................................................... 139
Integrated Framework of Schedule and Damage Analyses ............................................ 139
7.1 Introduction ........................................................................................................... 139
7.2 Framework Description ........................................................................................ 140
7.3 Case Study ............................................................................................................ 142
7.3.1. Applications of the New Framework to a Case Study .................................. 142
7.3.2 Discussion ...................................................................................................... 145
7.4 Summary ............................................................................................................... 145
Chapter 8 ......................................................................................................................... 146
Conclusions and Recommendations ............................................................................... 146
8.1 Conclusions and Contributions ............................................................................. 146
8.1.1 The Effect of Resource Allocation on Forensic Schedule Analysis .............. 146
8.1.2 The Enhanced Schedule Window Analysis Technique ................................. 147
8.1.3 ASAP as a New Approach for Quantifying Field Overhead Damages ......... 147
8.1.4 FLORA as a Novel Forensic Schedule Analysis Technique ......................... 148
8.1.5 New Integrated Framework for Analyzing Schedule Delays and Damages.. 149
8.2 Recommendations ................................................................................................. 150
8.2.1 Schedule Analysis Considering Resource Allocation.................................... 150
8.2.2 Schedule Analysis Capturing the Dynamics of Float, Logic, and Resource
Allocation ................................................................................................................ 150
vii


8.2.3 The Context of a Delay Addressed in Calculating Delay Damages .............. 151

8.2.4 Apportionment for Concurrent Delays .......................................................... 151
8.2.5 Applications of ASAP and FLORA in the Industry ...................................... 152
8.3 Limitations and Future Research .......................................................................... 152
References ....................................................................................................................... 155

viii


List of Figures

Figure 1.1 Extended “triad of proof” in delay claims ......................................................... 6
Figure 2.1 Delay versus acceleration ................................................................................ 20
Figure 2.2 Delays: responsibility, liability and recoverability .......................................... 24
Figure 2.3 Delay concurrency scenarios ........................................................................... 27
Figure 2.4 Generic methodology for analyzing delay claims ........................................... 38
Figure 2.5 Mapping of forensic schedule analysis techniques ......................................... 40
Figure 2.6 As-planned vs. as-built method ....................................................................... 42
Figure 2.7 Contractor’s cost breakdown structure ............................................................ 52
Figure 2.8 Application areas of percentage markup versus Eichleay formula ................. 61
Figure 3.1 Research framework ........................................................................................ 64
Figure 3.2 Types of effort and overhead costs .................................................................. 69
Figure 3.3 Contactor’s overhead costs .............................................................................. 70
Figure 4.1. Schedules of the motivating example ............................................................. 74
Figure 4.2. As-planned resource-constrained schedule .................................................... 79
Figure 4.3. Hypothesized as-built schedule ...................................................................... 80
Figure 4.4. Traditional window analysis: window #1....................................................... 81
Figure 4.5. Enhanced window analysis: window #1......................................................... 82
Figure 4.6. Traditional window analysis: window #2....................................................... 83
Figure 5.1. The context of delays versus delay responsibility .......................................... 92
Figure 5.2. As-planned schedule ....................................................................................... 99

ix


Figure 5.3. As-built schedule .......................................................................................... 100
Figure 5.4. Time plot for time-related field overhead versus week ................................ 103
Figure 5.5. Histogram of per-week time-related field overhead ..................................... 108
Figure 6.1. The dynamics of float, logic, and resource allocation .................................. 115
Figure 6.2. FLORA process flowchart for “real-time” analysis ..................................... 123
Figure 6.3. As-planned schedule ..................................................................................... 124
Figure 6.4. Analyses for the contractor-caused delay on activity A at day 2 ................. 126
Figure 6.5. Analysis for the owner-caused delay on activity B at day 4 ........................ 128
Figure 6.6. Analysis for concurrent delays on B and C at day 5 .................................... 129
Figure 6.7. Analysis for concurrent delays on C and D at day 6 .................................... 130
Figure 6.8. Analysis for the third party-caused delay on D at days 7 and 8 ................... 131
Figure 6.9. Analyses for the owner-caused delays on E and G at days 10 and 11 ......... 132
Figure 7.1. Integrated framework for schedule and damages analyses .......................... 141

x


List of Tables

Table 2.1 Divergent and inconsistent perspectives on concurrent delays ........................ 29
Table 2.2 Comparative results of schedule analysis methods........................................... 48
Table 2.3 Formulas for calculating home office overhead ............................................... 56
Table 2.4 Allowed markup for home office overhead ...................................................... 59
Table 3.1 Criteria for evaluating forensic schedule analysis techniques .......................... 70
Table 4.1. Step-by-step schedule window analysis .......................................................... 76
Table 4.2. Schedule analysis summary ............................................................................. 84
Table 5.1. ASAP’s steps for quantifying field overhead damages ................................... 97

Table 5.2. Project cost estimate (in dollars) ...................................................................... 99
Table 5.3. Distributed activity-specific field overhead (in dollars) ................................ 102
Table 5.4. Field overhead delay damages (in dollars) .................................................... 103
Table 6.1. FLORA’s rules for time impact analysis ....................................................... 121
Table 6.2. Delay events and their secondary effects ....................................................... 125
Table 6.3. Summary of forensic schedule analysis ......................................................... 134
Table 7.1. Activity-specific allocation of field overhead (in dollars) ............................. 143
Table 7.2. Field overhead delay damages (in dollars) under different methods ............. 144

xi


Acknowledgements

I would like to thank many people for helping me during my graduate study and doctoral
research at Cal. I would particularly like to thank my research advisor, Professor William
Ibbs, for his invaluable guidance. He has advised me to research practical and interesting
areas. He also took a lead in securing my graduate assistantship in the last few years. I
am truly appreciative for the constructive comments of the other dissertation committee
members, Professors Glenn Ballard, Frederick Collignon, and Arpad Horvath. I would
also like to thank Professors Sara Beckman and Iris Tommelein for their exceptional
critiques and suggestions before and during my qualifying exam.
I extend many thanks to my sponsor, officers, friends, and colleagues. I owe a
special note of gratitude to VEF for financially supporting me in the first two years in the
United States. I would like to express appreciation to E&PM students at Cal for our
valuable discussion and interaction. Among them, I especially thank Kofi Inkabi, Martin
Chandrawinata, Sebastien Humbert, Tai-Lin Huang, Ying-Yi Chih, and Zofia
Rybkowski. I am very grateful for the generous support of the CEE Department staff,
especially Ms. Shelley Okimoto. I would also like to thank my Vietnamese seniors and
friends in Berkeley and the United States I have had opportunities to chat, play, and share

with my personal and professional hobbies, feelings, failures, and successes.
I would like to express my thanks to my former professors, teachers, and friends,
especially Professor Stephen Ogunlana, Do Thi Xuan Lan, Luu Truong Van, and Nguyen
Thi Dung. They continually stimulate my self-confidence even when I left them. I
xii


would like to thank Dung for her lovely patience and sharing for many ups and downs of
our love over the past seven years. Though I do not have her anymore, I hope she is
always happy.
Finally, I would like to thank my family. I am especially grateful to my parents
for their eternal sacrifice. I always miss and love you, Mom. Even you no longer live in
this world to see your son growing up, I wish you and Anh Quyen are happy in the
heaven. We never forget your smiles, Anh Quyen. Special thanks to Anh Quang for his
endless support to our home and family. I wish you all have happy and wonderful lives.

xiii


Abbreviations

AACEI

: The Association for the Advancement of Cost Engineering

ASAP

: Activity-specific overhead allocation process

ASBCA

: The Armed Services Board of Contract Appeals

BCA

: Board of Contract Appeals

CDM

: Continuous delay measurement

CPAT

: Contemporaneous period analysis technique

CPM

: Critical path method

C/SCSC

: Cost/Schedule Control Systems Criteria

DDV

: Daily delay values

DOD

: The U.S Department of Defense

DOT

: The Departments of Transportation

EBCA

: The Department of Energy Board of Contract Appeals

EFC

: Early finish cost

ENG BCA

: The Army Corps of Engineers Board of Contract Appeals

EVA

: Earned Value Analysis

EVMS

: The earned value management system

FLORA

: A new forensic schedule analysis technique

FOH

: Field office overhead

FS

: Finish-Start

G&A

: General and administrative expense
xiv


GSBCA

: The General Services Board of Contract Appeals

HOOH

: Home office overhead

IDT

: Isolated delay type

JLARC

: The Joint Legislative Audit and Review Commission

LFC

: Late finish cost

LOE

: Level of effort

NCHRP

: National Cooperative Highway Research Program

P3

: Primavera Project Planner

SS

: Start-Start

TIA

: Time impact analysis

TRB

: Transportation Research Board

VABCA

: The Veterans Affairs Board of Contract Appeals

xv


Symbols

ATF

: Allowable total float

Ba

: Total billings for actual contract period

Bc

: Contract billings

Be

: Contract billings for extended period

Bo

: Total billings for original contract period

CD

: Cost driver value for the whole contract

CDi

: Cost driver value for activity i

Di

: Duration of activity i

Da

: Actual days of contract performance

De

: Days of owner-caused delay

Do

: Original days of contract performance

DDj

: The delay day(s) for the jth analysis

DP

: Delay period identified by a window analysis

(DP)Wj

: Delay period of window Wj

∆TF

: Difference in total float that an activity has after and before the
occurrence of the corresponding event and analysis

FOH

: Field overhead

FOHn

: Non-time-related field overhead

FOHni

: Non-time-related field overhead for activity i

FOHt

: Time-related field overhead
xvi


FOHti

: Time-related field overhead for activity i

FOHC

: Total compensable field overhead damages

(FOHC)Wj

: Compensable field overhead damages in window Wj

HOOH

: Home office overhead

i

: ith activity or activity i

iD

: Critically delayed activity i

iDo

: Owner-caused critically delayed activity i

La

: Total labor costs: actual period

Ld

: Labor costs: delay period

Ma

: Actual HOOH: entire period (%)

Me

: Actual HOOH: delay period (%)

Mn

: Normal HOOH (%)

Mp

: Planned HOOH and profits at time of bid

OH

: Overhead

Oa

: Total overhead during actual contract period

Oc

: Overhead allocable to contract

Oo

: Total overhead during original contract period

PDD

: The number of days that the party delays on the affected activity path

Rd

: Daily overhead allocable to contract

RDD

: The number of delayed days that a party is held responsible

TDD

: The total delayed days of the entire project

TF

: Total float

TFC

: Contractor’s total float
xvii


TFO

: Owner’s total float

uFOHni

: Non-time-related field overhead for activity i per time unit

uFOHti

: Time-related field overhead for activity i per time unit

uFOHtiD

: Time-related field overhead for critically delayed activity i per time unit

uFOHtiDo

: Time-related field overhead for owner-caused critically delayed activity i
per time unit

Vo

: Original contract value

Wj

: jth window period or window j

xviii

Chapter 1
Introduction

“Time is of the essence.1”

1.1 Background
Project schedules are invariably dynamic and uncertain.

Various controllable and

uncontrollable factors can adversely affect the project schedule and cause delays. These
delays undoubtedly create negative impacts on project performance. They are also the
major cause of construction claims2 (Hester et al., 1991; Abdul-Rahman et al., 2006).
Together with the money associated with increased costs and expenses for delays on a
project, delay claims are possibly the most problematic type of construction dispute case
to handle (Hughes, 2003a). As a result, forensic schedule analysis3 or the identification
and analysis of delays become essential (Finke, 1999). They are however onerous tasks.
Contractors are prone to view most delays as the responsibility of the owner while
owners frequently attempt to tag delays as contractor-caused, third party-caused or
concurrent (Zack, 2001).

Consequently, delays may lead to some form of dispute

resolution alternatives, from negotiation to litigation, which may be expensive and a

1

A proverbial expression
Claims in this context are defined as the seeking of consideration or change, or both, by one of the parties

to a contract based upon an implied or expressed contract provision (Diekmann and Nelson, 1985).
3
“Forensic scheduling analysis refers to the study and investigation of events using CPM or other
recognized schedule calculation methods for potential use in a legal proceeding” (AACEI, 2007).
2

1


crapshoot. There is a recent increase in both the number and size of construction claims
(Schone, 1985; Pinnell, 1998).

In addition to evaluating and apportioning responsibility for schedule delays, the
quantification of the damages caused by delays is also an extremely challenging job.
Most professionals agree that measuring and demonstrating evidence on the damages are
the most arduous part of many delay claims and construction cases (Overcash and Harris,
2005). All parties more consider the cost of delay and impact, are more sophisticated in
their scheduling techniques and tools, have tighter budgets that cannot afford delay or
impact, and are more contentious (Pinnell, 1992). As such, more appropriate approaches
for the analysis and determination of schedule delays and associated financial
consequences are imperative in today’s “claims-oriented” construction business.

1.2 The eed for Research
The fact that the construction industry is unable to properly address scheduling and delay
problems has led to a “chronically sick building industry” (Sweet and Schneier, 2004). In
addition, “most public and private construction contract disputes touch on the issue of
delay” (Calkins, 2006). Responding to such a challenge, practitioners and researchers
have created and employed many schedule analysis techniques.

The level of

acceptability of each technique depends on its credibility and the court or board ruling the
corresponding delay claims.

However, schedule-related issues such as float, float

ownership, soft logic, and resource allocation can cause delays yet their effects are
typically neglected in those techniques. For instance although a number of studies have
2