From Theory to Practice: The Art of Project Delay Management
Over the past two decades, I have had the opportunity to work in few industries, primarily on the client side. One prevalent issue that transcends technology, country, and industry is the occurrence of project delays. These delays often give rise to disputes among project parties and, in some instances, result in legal proceedings.
From a theoretical standpoint, it may appear simple to differentiate between various types of delays, such as those caused by contractors, clients, acts of God, or concurrent delays. Some delays may warrant an extension of time, while others may entitle the contractor to reimbursement based on the associated risks outlined in the contract. Clients often seek to safeguard their interests by incorporating liquidated damage clauses. However, in reality, the situation is far more complex. Issues such as inadequate documentation, outdated or irregularly updated programmes, and contract ambiguity can lead to conflicts between both parties.
NEC contracts have made an effort to address this problem by emphasizing the significance of accepted programme, regular programme updates, early warning and compensation events mechanisms. The aim is to foster a cooperative culture that focuses on the project's outcome and mitigates any issues or delays at the earliest stage possible. However, identifying risks and potential delays early on is not without its challenges. Assessing the amount of extension of time or prolongation cost in advance is not easily discernible and often depends on the risk appetite of the parties involved, leading to differing assessments between the client and contractor. Additionally, conflicts regarding assessments can impact the progress of the remaining work and strain the relationship between the two parties.
In some other types of contracts, the assessment of claims and counterclaims is frequently postponed until later stages. While this approach allows for a more accurate assessment of the event after it has occurred, it may result in missed opportunities to mitigate the impact. Moreover, limited access to project teams and documentation during the assessment period, can further complicate the resolution process, could leading to costly and time-consuming dispute resolution.
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Some delay events are relatively straightforward to identify and assess, such as a delay in site access at the early stage of a project. However, the majority of delays are not as easily discernible, and there is no one-size-fits-all solution to address them. For instance, imagine a delay in issuing a VFC (Valid for Construction) document to the contractor from the client side, while the contractor is already behind schedule and the site location is experiencing severe weather conditions. Assessing and making decisions regarding such delays often require a combination of technical knowledge, experience, negotiation skills, an understanding of the importance of maintaining healthy stakeholder relationships, and consideration of the potential impact on the company's reputation and future opportunities.
Despite the challenges mentioned above, investing in certain areas can potentially help prevent or reduce the occurrence of disputes and delays. Furthermore, in the event that disputes or delays do occur, such investments can make it easier to assess and resolve them.
By focusing on these areas, project teams can better navigate the complexities of project delays, minimize disputes, and ultimately achieve successful project outcomes.