Presentation on theme: "By: John Livengood, PSP, CFCC"— Presentation transcript:
1By: John Livengood, PSP, CFCC CDR-842: Multi-Primes andMultiple Critical PathsIf you view the Master Template, you will see several slides pre-formatted. Please pick the slide from the template.By: John Livengood, PSP, CFCC
2John Livengood, Esq., AIA, PSP, CFCC Degree:B.Arch, Syracuse UniversityJ.D., Catholic UniversityYears of Experience:37 years of experienceProfessional Field:Expert WitnessConstruction ClaimsSchedule Delay AnalysisProductivity AnalysisConstruction Cost AnalysisSomething you do not know about me:My favorite music is produced by Female Pop Artists
3Why Multi-Prime Contracting? CharacteristicsOwner contracts directly with several prime contractors to provide the full scope of services.Between 3 and 20 prime contractors on a particular job.Each prime contractor goes through the entire procurement system of reviewing technical drawings, submitting a bid, having the bid evaluated, and issuance of a contract.The owner has more management of the bidding process.The owner may not have the necessary staff or expertise to manage this greater workload.Often hires an Agency Construction Manager (CMa) to provide coordination and management for the owner.Designer may have had to package the technical documents in a manner that supports/enables multi-prime bidding.
4Why Multi-Prime Contracting? Five ReasonsState statutes require it for certain types or values of construction.The owner may have specific contractors it wishes to work with.The owner may use the system in anticipation of costs savings by using specialized contractors and eliminating overhead.The project may be a fast-track project where it is important to have work advance on portions designed even if the total scope and cost is unknown.The owner may wish to minimize potential prime-subcontractor problems.
5Why Multi-Prime Contracting? Private UsePrivate use of multi-prime contracting lies primarily in large EPC (Engineer Procure Construct) contracts.The EPC contractor administers and coordinates the numerous major equipment supplies as well as the more incidental construction contractors.
6Why States use Multi-Prime Contracting? State LawMulti-prime contracting is almost exclusively a creature of state legislatures. Very few owners who are not mandated to use multi-prime contracts by law, do so.Reasons given:Speeds the payment process.Eliminates the risks of non-paying general contractors.It is claimed to be less expensive:Lower Risk -- eliminating potential bid-shopping;Lower Risk -- prompt payment and reducing risk of non-payment.Savings associated with the reduction of general contractor overhead and profit.
7Why States Use Multi-Prime Contracting? Cost SavingsStudies support the conclusion that multi-prime construction is less costly.1970s through 20075-10% less costlySavings due to elimination of double OH.Studies ignore increased Owner Management Cost.
8Owners’ Responsibilites in Multi-Prime Contracts Implied DutyOwners have an implied duty to coordinate and schedule the work of the prime contractors.General contractor has the duty to coordinate in a typical prime contractor – subcontractor agreement.Owners have limited ability to delegate the coordination obligation.This is true even in the case where one of the primes is a so-called “general contractor.” This responsibility of the owner can only be delegated where there is a very specific delegation.
9Owners’ Responsibilites in Multi-Prime Contracts Coordination DutyLong established.Site access.Prompt decision.Scheduling management.Non-interference.Prompt time extensions.Resolve time-related disputes.Failure of this coordination could result in delay damages against the owner.
10 Owners’ Responsibilites in Multi-Prime Contracts Avoidance of Coordination DutyDelegation to prime contractors.Owner agents (CMa).Contract Clauses:No-damages-for-delay clauses.Anti-concurrency.Primes required to coordinate amongst themselves.
11Disputes and Multi-Prime Contracting What does a Prime Contractor Say?I was delayed by other prime contractors failing to perform a timely manner.The owner or its agent (CMa) had coordination and schedule responsibility.My coordination responsibility was limited to near-term coordination/schedule.I had no control over the entire schedule.I had little input into its development and updating.
12Disputes and Multi-Prime Contracting What does an Owner Say?I hired a CMa to manage the project.The CMa was responsible for all coordination and schedule control.Whatever schedule and coordination responsibilities remained were delegated to the contractors.Whatever disputes exist must be settled among the prime contractors first.
13Disputes and Multi-Prime Contracting What does a Construction Manager Say?The owner made me do it.The owner directed it.The owner agreed to it.The owner approved all the major decisions.The prime contractors were required to coordinate/schedule amongst themselves.My only obligation was to push paper between the parties - facilitate the coordination and scheduling between the contractors and the owner.Whatever disputes exist must be settled among the prime contractors first.
14Disputes and Multi-Prime Contracting Multi-party disputesThe owner generally resolves each disputes w/o the other parties.Inconsistent decisions possible.Arbitration Clauses may prohibit multi-party proceedingsThe CMa will not be helpful.The owner has limited knowledge because of the role of the CMa.Each contractor will make its case against the owner only without regard to the other prime that might be involved.Contract may require primes to resolve disputes among themselves before pursuing the owner.
15Disputes and Multi-Prime Contracting What issues does a Schedule Delay Analyst face? The project is likely to be large and inherently complex;There are multiple parties, which will necessitate detailed review and investigation of multiple sets of documents;The schedule development and conceptualization is likely to be defective;The schedule updates are less likely to be accurate since the CMa’s power over the prime contractors for data requests is weak;There will be a project critical path, but most of the delays experienced by the prime contractors will exist off of that project critical path;Each prime contractor will have its own critical path, which will only occasionally be coincidental with the project critical path; andEach of the multi-primes is likely to have their own schedule.
16Disputes and Multi-Prime Contracting Multi-Prime Critical Path
17Disputes and Multi-Prime Contracting Project Critical PathNormal forensic schedule delay process may actually be counterproductive.Identification of the project critical path disguises the real delays that are at issue.The real delays are particular to each of the multi-prime contractors.
18Disputes and Multi-Prime Contracting Project Critical PathBoth Planned critical path and the As-built critical path will likely fall on several major prime contractors during the course of the project.Each prime contractor often argues that it was on the project critical path for only a short time and any delays that occurred during that time were minimal.Sometimes the prime contractors jointly hire a scheduling consultant.
19Disputes and Multi-Prime Contracting MEP Critical Path
20Disputes and Multi-Prime Contracting MEP Critical Path
21Disputes and Multi-Prime Contracting MEP Critical Path
22Disputes and Multi-Prime Contracting Baseline and Update IssuesBaseline Schedules are usually developed by the CMa using input from each of the prime contractors:The schedule is released for review by the primes.Comments and corrections are incorporated.CMa often lacks the authority.The iterative process may take longer.The schedules are prone to gaps.Monthly Schedule Updates:Collection of progress data.Chaotic amalgamation creates defects.Primes often maintain completely separate schedules.Radically different sequences.
23Identifying Multiple Critical Paths MethodologyDependent on availability of data.Seldom is there a series of carefully maintained logical schedules.Selected methodology must be able to accommodate these defects.RP29R-03 MIP 3.3 or 3.4 is preferred – Contemporaneous Period Analysis.RP29R-03 MIP 3.7 (Time Impact Analysis) may require so much remedial work on the underlying schedule as to make its use inadvisable.
24Identifying Multiple Critical Paths Contemporary Period AnalysisEssentially, the CPA methodology compares the planned sequence on a period-by-period basis at the outset of the period with the actual performance at the end of the period, with delays measured in each individual period along the as-built critical path for that period, as follows:
26Identifying Multiple Critical Paths CPA – Step One:Identify the schedule activities for a single multi-prime in the “first” schedule.In many CPM schedules contractor codes are used as an identifier.
27Identifying Multiple Critical Paths CPA – Step Two:Identify the schedule activities for a single multi-prime in the second schedule.This can be a true challenge, particularly in the beginning of a project, as schedules are often refined repeatedly during the first months.Each multi-prime contractor modifies its proposed performance in light of other prime contractor’s work.
28Identifying Multiple Critical Paths CPA – Step Three:Match the activities.In theory this mapping should be easy – but seldom is.If the project undergoes a major re-baselining process due to a major event or as a result of a series of events, such mapping can be extremely complicated.Consult with project personnel.
29Identifying Multiple Critical Paths CPA – Step Four:Compare the ProgressCompare the DurationCompare FloatCompare the Logic (MIP 3.4)There will likely not be a continuous series of activities that form the as-built critical path because many of these activities will be associated with other prime contractors.
30Identifying Multiple Critical Paths CPA – Step Five:Process is partly mathematical because it identifies the activities with the least float at any given moment.Process is partly expert judgment on the reasonableness of the identified sequence.The critical path identified will likely NOT be a continuous set of activities. This information, coupled with a careful review of the actual events on the project based on the daily reports and the analyst's experience, will enable a detailed identification of that month’s as-built critical path as well as when the critical path shifted from one activity to another.
31Identifying Multiple Critical Paths CPA – Step Five (cont.):It is important that the number of days identified for delay during a period actually match the change in the month being studied. It is also likely that the overall CPM changes WILL NOT MATCH the calculation for a particular month since schedule updates usually contain modifications to future activity durations or logic that changes the overall project’s projected end date.
32Identifying Multiple Critical Paths CPA – Step Six:Delay CausationPrime Contractor being evaluatedOther Prime ContractorsIdentify excusable, compensable and non-compensable time. Delays that are associated with other prime contractors or owners are likely all to be portrayed as compensable to the multi-prime being analyzed.
33Identifying Multiple Critical Paths CPA – Step Seven:Repeat process for all prime contractors being evaluated.Perform all analyses for a single time period, then move to next time period.Based on experience, it is better to analyze the performance of all the prime contractors during a particular period because it allows an evaluation of the causes and responsibilities for delay each month amongst the prime contractors before moving to the next month.
34Practical Tips Too much work Entire project needs to be analyzed, even for one multi-prime.Importance of contract remedies (no-damages-for-delay).Weather and Force Majeure.Multi-prime delay analysis is more difficult than on single prime contractor projects. Analysis often occurs during a period of negotiation:The Owner often has little dataThe Contractor has little dataThe CMa is often unhelpful
35CONCLUSIONMulti-prime contracting is less popular today than it has been in the past.State exceptions to the general requirement for the use of multi-prime.More prime contractors successfully negotiating or litigating delay claims.Modern forensic schedule analysis has the tools to provide effective analysis.Convincing the prime contractors, and their experts that their delay will be measured on their own critical path, rather than the project critical path can be a significant challenge.