JOHN DELANEY - FRICS, MSCSI, FCIArb ASSOCIATE DIRECTOR – HKA LONDON CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 Delay / disruption / acceleration – loss of productivity. A COMMERCIAL overview JOHN DELANEY - FRICS, MSCSI, FCIArb ASSOCIATE DIRECTOR – HKA LONDON

introduction Society of Construction Law Delay and Disruption Protocol CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 introduction Society of Construction Law Delay and Disruption Protocol Delay – work activities take longer than anticipated Implications – for Contractor and for Clients Disruption – disturbance – hindrance – interruption – lower productivity Consequences of delay and or disruption

Delay Vs. disruption Disruption is not Delay CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 Delay Vs. disruption Disruption is not Delay Disruption may cause Delay Disruption may be caused by Delay

Delay vs. disruption American Case of ‘Bell V’s USA’ CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 Delay vs. disruption American Case of ‘Bell V’s USA’ Delay Claim – captures time and cost of NOT BEING ABLE TO WORK Disruption Claim – captures the cost of WORKING INEFFICIENTLY

CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 acceleration “The application of additional resources or alternative construction sequences or methodologies seeking to achieve the planned scope of work in a shorter time than planned or execution of additional scope of work within the original planned duration” – SCL Protocol 2nd Edition Mitigation

Acceleration claim Non Productive Overtime Additional Resources CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 29 JUNE 2017 Acceleration claim Non Productive Overtime Additional Resources Loss of Productivity Increased Plant Costs Credits

delay claim Linked to a claim for an extension of time. CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 delay claim Linked to a claim for an extension of time. Not necessarily a loss of productivity claim. Typically based on the extended contract duration and the consequential time related costs that are incurred in that period

CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 disruption claim Objective is to demonstrate the loss of productivity and additional expense incurred as a result of events for which the Employer is responsible. A disturbance, hindrance, or interruption to a Contractor’s normal working methods, resulting in loss of productivity.

Loss of productivity Variations Dilution of Supervision Trade Stacking CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 Loss of productivity Staffing levels – Beware the Saturation Point Variations Dilution of Supervision Trade Stacking Acceleration Learning Curve Logistics and Site Restrictions Defective works Partial possessions Staff Morale Adverse Weather Errors and Omissions

Loss of productivity claim – 3 golden rules CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 Loss of productivity claim – 3 golden rules 1. LIABILITY 2. CAUSATION The ship that sunk. Cause A – the storm? Cause B – the torpedo? 3. LOSS AND EXPENSE SUFFERED

Disruption analysis methods CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 Disruption analysis methods PRODUCTIVITY BASED Measured Mile Analysis Earned Value Analysis Programme Analysis Work or Trade Sampling Systems Dynamics Modelling Project Comparison Industry Studies

Disruption analysis methods CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 Disruption analysis methods COST BASED Estimated V Incurred Labour Estimated V Used Cost

The evaluation of a Loss of productivity claim CMG CONFERENCE – DUN LAOGHAIRE DUBLIN 6 SEPTEMBER 2017 The evaluation of a Loss of productivity claim 1. LIABILITY 2. CAUSATION 3. LOSS AND EXPENSE SUFFERED (i) Has the sum claimed been paid? (ii) Whether the sum claimed has been incurred in consequence of the failure(s) complained of? (iii) Whether the sum claimed and/or paid is reasonable in the circumstances?

Worked example: 3 Plumbers / 1 Apprentice & A Boiler

Worked example: paid for the additional hours only

Worked example: paid for the additional hours & Adjustment for unproductive working

Worked example: paid for the additional hours & productivity based adjustment

Construction: the least efficient industry “Productivity in the construction industry is notoriously low.. Since 1995 the global average value- added per hour has grown at around a quarter of the rate in manufacturing... Building trade is worth $10trn per year or 13% of world output.. Fragmented structure.. Highly cyclical..”

JOHN DELANEY Associate Director HKA johndelaney@hka.com 06 September 2017 Questions? JOHN DELANEY Associate Director HKA johndelaney@hka.com