DELAY AND TIME EXTENSION ANALYSIS: CONTRACT REQUIREMENTS Vv. THE REAL WORLD SESSION 313 17TH ANNUAL CONSTRUCTION SUPERCONFERENCE PRESENTED BY: EVANS M. BARBA, PE. NAVIGANT CONSULTING, INC. AND JUDAH LIFSCHITZ, ESQUIRE SHAPIRO, LIFSCHITZ AND SCHRAM, PC. Copyright 2002 by Evans M. Barba, Navigant Consulting Inc. AIL Rights Reserved17" Annual Construction Superconference December 12-13, 2002 ‘The Sheraton Place Hotel San Francisco Session 313 Delay And Time Extension Analysis: Contract Requirements v. The Real World This session will focus on a crucial schedule delay analysis methodology issue; namely, the challenges, difficulties and issues associated with Contract Provisions that require the use of fragnets and schedule updates to analyze delay during the course of the work on a project, or in an after-the-fact "claim situation," versus the utilization of "As-Planned" to "As-Built” critical path delay analysis techniques in evaluating delay. Whether you're involved in asserting or defending against a delay claim during the course of the work on a project or afterwards, the selection of the method of analysis you use can "make or break" your position. Today, many construction contracts contain critical path scheduling requirements that mandate certain specified procedures for evaluating time impact due to changes or delays in the work; procedures which require you to utilize fragnets and "...the schedule update in effect at the time the change is issued or the delay incurred," or clauses which require that a "current schedule update" be utilized for evaluating time impact. The application of such procedures in the real world, however, presents significant challenges to the parties to a contract — especially when, as is so often the case, the schedule updates were not or could not be maintained in the manner contemplated by the contract. While contracts may stipulate critical path scheduling requirements and procedures to be utilized in establishing entitlement to an extension of the contract time, in many (if not most) instances the parties to the contract fail to adhere to such requirements. As a result, the schedule updates prepared during the course of work are fundamentally nothing more than a "payment vehicle" for purposes of generating monthly progress payments, while the fundamental "utility" of the schedule updates as a management tool, for purposes of forecasting the contractor's planned sequence of work to project completion becomes increasingly obfuscated by ongoing changes and delays that are not timely — if ever ~ resolved by the parties. In such situations the updates are inherently compromised, placing the parties in the position of having to utilize an alternative, more accurate, means of analysis in order to evaluate the effects of changes and delays in the work, So what do you do??? Enter: "As-Planned v. As-Built" critical path delay analysis techniques, This session will include a discussion of time impact analysis techniques and their delay analysis “utility” both during and after construction of a given project, and will also address "what constitutes an accurate and complete schedule update" for purposes of enabling updates to be i Copyright 2002 by Evans M, Barba, Navigant Consulting AU RightsReservedutilized for their intended purpose, Various cases and decisions, which provide seemingly contradictory guidance with respect to the utilization of "Contract Provisions" versus "As- Planned to As-Built" schedule delay analysis methodologies will be discussed. Key concerns and objectives from both the attorney's and the consultant's analytic standpoints will also be reviewed and the speakers will present recommendations for your consideration of factors to be considered in determining the appropriate method for performing a schedule delay analysis in a given situation, ii Copyrigh 2002 by Evans M. Barba, Navigara Consulting (AU Rights ReservedPresentation Outline Introduction Delay and Time Extension Analysis Methodology * Use Schedule Updates? * Use As-Planned vs. As-Built Analysis? = Prospective and Retrospective Analysis The “As-Built” Critical Path = What it is + Why it’s important Schedule Updates * The Good, the Bad; and the Ugly Time Impact Analysis Provisions = “Intent” vs. Real World “Utility” Project Schedule Revision Clauses * Can they hurt you? Significant Case Decisions Recommendations if (Copyrigh 2002 by Evans M. Barba, Neigont Consulting AU Rights ReservedTable of Contents To facilitate the discussion and presentation of the subject topic, the presenters have enclosed a series of “Discussion Papers” which contain information relevant to the subject matter. These Papers, which follow, are: Page No. 1 Discussion Paper No. 1 - CPM Fundamentals. Discussion Paper No. 2 — Change Orders: Pricing and Evaluation Discussion Paper No. 3 — Prospective vs. Retrospective Delay Analysis: An Overview. Discussion Paper No. 4 — Sample Time Impact Analysis Schedule Provision: Discussion Paper No. 5 ~ Sample Project Schedule Revision Provisions. Discussion Paper No. 6 ~ Relevant Case Law.. Addendum ~ Biographies of Speakers. Evans M. Barba Judah Lifschitz Copyright 2002 by Evans M, Borbo, Navigant Consulting All RightsReservedDiscussion Paper No. 1 CPM Fundamentals Development In 1957, the U.S. Engineering Department of E.1. duPont de Nemours, Ine., along with Remmington Rand, undertook a study which culminated in the development of a new system for developing and coordinating information relative to the planning and scheduling of an engineering project. Their goal was to attempt to optimize time and money. The net result of this study was the development of the technique that has become known as the Critical Path Method (CPM). CPM can be basically described as a graphic presentation of a planned sequence of activities which illustrate the inter-relationships and inter-dependencies that exist between the elements which comprise a project. ‘The development of a project schedule using the critical path method includes two phases (or steps) — the planning phase and the scheduling phase. The planning phase involves breaking a project down into its component parts and developing a listing of all activities anticipated to be performed and arranging those activities in their logical sequence with respect to execution. This step is best accomplished by having the scheduler meet with the project team personnel in order to review the project contract documents and procedures to be utilized by the parties to the contract in administering the construction, Based upon this review (and discussion with project personnel), the project can be broken down into discrete work areas, or sub- project categories. These categories or tasks can similarly be broken down into sub-tasks to provide a greater level of detail, and activity listing can then be accomplished. Page (Copyright 2002 by Evans M, Borba, Nevigan Consling AI RightsReserved‘The activities so identified are then used to construct the logic diagram or “arrow diagram.” [Note: CPM schedules can be prepared utilizing either the “arrow” (activity on arrow) or “precedence” (activity on node) method of scheduling. For purposes of this, discussion, reference will be made to utilizing the arrow diagramming method] When one constructs a bar chart schedule, the functions of planning and scheduling have to be considered together because of the time-scale characteristics of the chart. In developing a CPM logic diagram, however, these functions are treated separately. It is said “first plan and then schedule,” which represents a radical departure from bar chart schedule preparation thinking, In effect, we first consider the work as a series of items assembled strictly on the basis of logic of assembly. No consideration need be given to time when planning. A wall, for example, cannot be built until the foundation is installed. Time has nothing to do with the sequence. You cannot plaster masonry walls until the masonry walls are erected. Here again, time has nothing to do with the logical sequence of the work. This point is emphasized because it is one of the single most important aspects of CPM schedule planning and development. Once activity listing is complete, the logic diagram is constructed, There are three basic considerations which must be employed in order to assemble a logic (or network) diagram. CPM planning is an interrogation-type technique wherein one is asked the following questions with respect to each of the activities set forth on the activity listing: 1. What other activity(s) must be completed before this activity can start? 2. What other activity(s) can be going on while this activity is underway? 3. What activity(s) cannot start until after this activity is completed or at least underway? Page 2 Copyright 2002 by Evens M, Barba, Nevigont Consulting “Al Rights Reserved‘As a result of answering these questions, the logic diagram, which illustrates the interrelationships and interdependencies between the activities required to complete the project, is established ‘The development of the logic diagram marks the completion of the planning phase. ‘The next phase, the scheduling phase, involves determining a time duration for each of the activities (except dummies) set forth in the logic diagram and thereafter computing the event times for each of the activities in the network. The assignment of durations of time for the various activities is obviously a key element of schedule development and must be carefully undertaken by a contractor. Activity durations are a function of numerous factors including, among others, the quantity of work to be performed relative to a given activity, the size and make-up of the crew(s) to be utilized by the contractor in performing the work, the productivity anticipated to be realized by the contractor in performing its work, the time of year and geographic location of the work in question, etc. Once the schedule logic and activity durations are established, the critical path may then be determined. In this regard, the basic computations in CPM to determine a time schedule consist of simple addition and subtraction. These computations are known as the forward pass and backward pass. These two computations establish the time boundaries for each activity within the network (these “time boundaries” are referred to as an acti ‘boundaries are set can a schedule be established. ity's early start, early finish, late start and late finish). Only after these time Page 3 Copyright 2002 by Evans M. Barba, Navigant Consulting Ma Rigs ReservedQ The Forward Pass Starting at “time zero” a forward pass through the network is made wherein an activity’s duration is added to its starting time to determine its completion. This process is continued sequentially through the entire network. When this pass is completed, all early start and early finish times are established. When there are multiple predecessors, the predecessor with the largest finish time is the one selected to establish the starting time of the follower. Only numbers are used at this point and the numerical assignment of days is referred to as “project time.” Since zero is assumed to be the beginning of the first day, the tail of the first arrow in the network is at zero. The duration of the first activity is then added to its early start of zero to produce its early finish. If only one activity follows the initial activity, then the early start of the second activity is equal to the early finish of the first arrow. This process of adding the activity duration to its early start time (to ‘compute its early finish time) and the comparison of this time (at merge events) to determine the early start time of the follower is repeated through the balance of the network. The result of the calculation is the early start and completion time for all activities within the network, as well as the establishment of the total project, duration. Q The Backward Pass ‘The backward pass reversed the above process, starting from the final event of the network using the calculated total project duration as the starting point. This calculation is made to determine the late start and late completion time for each activity. Starting at the last activity in the network, the late finish time of the final activity is set equal to its early finish time. The final activity’s duration is Page 4 Copyright 2002 by Evans M, Barb, Nevgant Consting “Il RightsReservedthen subtracted from its late finish time to determine its late start time. This same process is repeated from the back end of the network to the front (or beginning) of the network. By making a forward pass and a backward pass through the network, early start and late start time, early finish and late finish time, and the critical path are established. Each can be defined as follows: © Early Start Time — the highest lapsed time cumulative count of all the pass of activities converging at an event on a forward pass © Early Finish Time — the early start time plus the duration of that activity © Late Finish Time — the lowest lapsed time cumulative count of all the pass activities converging at an event on a backward pass © Late Start Time — the late finish less the duration of that activity © Critical Path — a group of necessarily related schedule activities which together create the longest duration through the schedule to project completion (necessarily related by construction logic or resource allocation). Critical Path, In the above sample network, there is a continuous path of activities and events wherein the early start time is equal to the late start time. This is one further check on your arithmetic. There must be at least one path through the network where the early start time equals the late start time. ‘This is the so-called “Critical Path” (as indicated by the striped line). It is the longest path through the network and it is the path which determines the project duration. All activities which are not on the critical path are said to have “float.” Page 5 Copyright 2002 by Brant M Barbe, Naigant Coating Ma highs Reserved‘Types of Float By completing the forward and backward passes, event times are established which define the time limits within which an activity must start if the project duration is to be realized. These limits, or boundaries, are the early start and late finish of an activity. ‘The difference between the maximum time available within which to perform an activity and the duration of an activity is known as total float. It is important to recognize that float exists by virtue of the contractor's planned approach to the performance of its work. It is as a result of the contractor’s activity definition and breakdown, logic development (including the establishment of the interrelationships and interdependencies that exist between the various activities) and duration development, that activity event times are established. In essence, float is contingency time associated with a path or chain of activities, and represents the amount of time by which the early finish date of an activity may be delayed without impacting upon the critical path and thereby delaying overall completion of a project. In the first instance, float represents a resource to the contractor in that it provides some degree of flexibility in terms of resolving problems and assigning resources. There are several types of float which are recognized: total float, free float, independent float and interfering float. The differences between these types of float is the manner in which they affect other activities in the network. A definition of each of these terms is as follows: Total Float: the time by which an activity may be delayed or lengthened without impacting the project completion date, 0 Free Float: the time by which an activity may be lengthened or delayed without impacting upon the early start date of any following activity in the chain. © Independent Float: the time by which an activity may be lengthened or delayed without impacting upon the early start date of any following activity in the chain nor affecting the latest start time of any preceding activity in the chain. Page 6 Copyright 2002 by Evans M, Barba, Nevigant Consulting All RightsReservedFloat; the time that, if used, would decrease the float available to follow- ies in the chain; thus, the difference between total float and free float. Total float is the most commonly used and recognized type of schedule float. Free float, independent float and interfering float are rarely used in practice. O Procedures for Monitoring and Updating Need for Monitoring. A contractor may have developed the best possible schedule with input on activity content, sequencing, duration and manning estimates provided by all project participants. But unless the project’s performance is measured against this schedule, you will not truly know where “the project is,” or “where it is going.” To this end, it becomes necessary to track actual progress against planned progress. This can best be accomplished through. status reporting by all participants, by those who best know the real status of each project element and the problems being encountered. Monitoring allows project participants to exercise greater control over a project. It enables the Contractor to utilize its men and equipment in the best possible manner, and most importantly, permits/enables project participants to act, to avoid or reduce potential conflicts and problems as opposed to the typical “finger pointing” so often found at the end of many construction projects. How to Monitor: Monitoring of the work on a project entails systematically tracking and recording daily work progress, by schedule activity, throughout the performance of the work on a given job. Such information is invaluable in terms of facilitating the accurate, periodic updating of the project schedule, and likewise facilitates the development of Time Impact Analyses and the development of a project As-Built Schedule. Page 7 Copyright 2002 by Evans M. Barba, Neigent Consuing AI Rights Reserved‘Need for Updating: The dynamic nature of a construction project causes change from the unexpected as well as the expected. Some of the primary factors which influence such changes include added or deleted work, delays, strikes, weather problems, changes in sequence, unanticipated subsurface conditions and acceleration in the work, among others. To be a viable tool, the project schedule must reflect these changes in the work and the effect of same on the contract end date on a current basis. Updating involves the periodic review of the project schedule and progress to provide a complete and accurate report of actual versus planned progress. It also serves as a basis for allowing the parties to schedule their remaining work in order to achieve the overall schedule objectives. Preparing for Updates: Scheduling specifications or projects typically indicate the frequency with which the project schedule is to be updated. Typically, monthly updates are sufficient; however, project circumstances may dictate a longer or shorter duration between updates. The scheduling specification should also indicate the parties responsible for organizing, preparing material, and the party responsible for physically updating the network diagram and the computer printout. All involved parties then participate in a joint meeting to review the progress information, changes that must be incorporated into the work, and delays during the time from the last update. This information must be validated and incorporated into the schedule updating process. The pertinent information to be gathered and analyzed during each update period includes the following: * Commencement and completion dates for all activities commenced and/or completed during the update report period; Page 8 Copyright 2002 by Evans M. Berb, Nevigant Consulting “AI Rights Reserved* Current progress of activities which commenced in prior update periods, indicating actual completion dates or, if still in progress, the remaining time duration; * The determination of what activities need to be resequenced, added, deleted or modified to clarify or reflect a change in plan or operation which to maintain requires schedule detail for proper monitoring and controlling; and = Fragnets that have been incorporated into the network diagram to reflect delays and/or changes. Page 9 Copyright 2002 by Evans M. Barba, Navigant Consulting “al Right ResrvedDiscussion Paper No. 2 Change Orders: Pricing and Evaluation This discussion paper deals with the central question of the proper technique(s) to be used in re-pricing work affected by change orders. In addition, it will discuss the specific types of costs which are properly chargeable to such re-pricing. ‘The “Changes” clause contained in the United States Goverment Standard Form 23A, which is utilized in all formally advertised construction projects, requires an “equitable adjustment” in the contract amount and performance time. However, this clause does not provide any additional guidance with respect to defining the meaning of “equitable adjustment.” As a result, the meaning of the “equitable adjustment” has been refined through a long course of litigation in the Courts and Boards of Contract Appeals. Although all of the questions have not yet been answered, much can be leamed by examination and analysis of these decisions. In Bruce Construction Corp. v. U.S., 163 Ct. Cl. 97, 324 F2d 516 (1963), 5 G.C. 1554, the Court of Claims said that the basic purpose of an equitable adjustment is “to keep the contractor whole when the Government modifies a contract.” This statement has been widely quoted as stating the basic theory of equitable adjustment. However, it should be recognized that the theory is two-fold in that it is geared to maintaining the “contractor's position,” as well as to preserving the owner's pricing position in the part of the work that is not affected by the change. The author of a law review article most aptly described the theory of equitable adjustment as the “leave them where you found them” theory [Duncan, Equitable Adjustments on Fixed Price Contracts, 22 Fed. B. J. 307 (1962)]. This statement was derived in the case of Montag-Halverston-Cascade-Austin, Eng. C&A 1075 (1958) which Page 10 Copyright 2002 by Evans M. Barb, Navigant Consulting ‘AI Rights Reservednoted that the purpose of the equitable adjustment: is to leave the parties in the same position cost-wise and profit-wise as they would have occupied had there been no change, preserving them each as nearly as possible the advantages and disadvantages of their bargain. ‘The pricing of change orders can best be understood if broken into three component parts: a, The calculation of costs attributable to work added to the contract. b. The calculation of costs attributable to work deducted by change order form the contract. ¢. The application of overhead and profit to additive and deductive changes. Each of these elements will be discussed in the following section of this chapter. 1 Added Work Work added to the contract by change order is usually priced at the reasonable cost of performance to the contractor. In situations where the price of the change order is negotiated prior to the performance of the work, the rule consistently followed by Appeals Boards recognizes that estimated costs are properly useable, provided that they constitute the most accurate cost information available at the time of the pricing. In instances where, for one reason or another, the work is accomplished prior to negotiating a price, the actual costs incurred are available and are presumed reasonable. Bruce Construction Corp. v. U.S., 163 Ct. Cl. 97, 101 324 F.2d 516, 518 (1963), 5 G.C. 9554; Canon Construction Corp., ASBCA No. 15208, 71-1 BCA 8780. Page 11 Conright 2002 by Evans M, Barbs, Navigant Consulng AU Right Reserved‘There are two ways of determining the reasonableness of a cost: Using the first method, one determines the cost based on allowability, ie., interest expenses, advertising costs, etc. The second method looks at the reasonableness of the costs with respect to the method(s) utilized by the contractor in performing the work. Actual costs need not be equivalent to those which could have been incurred by the most efficient contractor in order for those costs to be deemed reasonable. Methods which are efficient and economical within the framework of the contractor’s procedures will be accepted. In order to refute the methods of operation the owner must identify very specific procedural deficiencies in order to show that the contractor’s costs are unreasonable. In dealing with changes that add work to contracts, contractors often request monies for “impact” costs resulting from a change. In this situation, the contractor should identify the nature of the alleged “impact costs” and the time frame in which they were incurred. A failure to advise the owner of the claimed costs at the time of acceptance of a lump sum payment for the performance of specific changed work may prevent the contractor from recovering additional costs. Tri-Messine Construction Co., Inc., GSBCA No. 5165, 82-1 BCA 15, 735. Therefore, the contractor’s failure to specifically reserve the right to claim additional costs in an initial contract modification may act as a waiver of its right to later assert a claim, However, in some cases the contractor may be awarded additional expenses even when he failed to explicitly reserve the right to claim additional costs. 2. Deleted Work When a change order deletes work from the contract that has not yet been performed, and there is no other separate payment stipulated in the contract (such as a Page 12 Copyright 2002 by Evans M. Barba, Navigant Consulting “ll igh Reserved‘unit price), the owner is entitled to a downward adjustment in price equal to the cost the contractor would have incurred had the work not been deleted. Thus, the cost information utilized in measuring the deletion is the cost information current at the time the change was ordered, The amount of the adjustment should not be based on the contractor's original estimate of the work. Note, in this situation, actual costs are not at issue since the work in question has not been performed. Therefore, the parties must deal with estimating the amount that would have been incurred had performance been required, ‘Where the contractor may have incurred a loss from performing the deleted work, because of his own inefficiencies or because his original work estimate was low, the would-have-cost rule will force him to bear the loss which he would have experienced if the work was not deleted. Conversely, if the contractor is able to demonstrate that he would have been able to:perform the work for less than the amount of his original estimate, the would-have-cost rule will permit him to retain the excess amount in pricing the change. ‘The central issue in pricing deleted work is the reasonableness of the estimated cost. In this regard, there are various sources of information to which the owner can look in order to evaluate the reasonableness of the amount of the deletion offered by the contractor. These include: ‘The contractor's original estimate and experience in performing similar work. ‘The owner’s estimate and prior experience in performing similar work. Bids of other contractors. ‘Subcontractor quotations. ‘Vendor quotations. Time and motion studies of similar type work. en ‘Various manuals and estimating services. Page 13 Conyrght 2002 by Evans M. Bare, Nevgant Consuing “al ighs Resened‘When the owner deletes work from the contract that is a separately priced item (ic., a unit price), it has been held that the measure of the deletion is the stated price. If the contractor had been in a position to make a high profit on the given item, he would be deprived of that profit. On the other hand, if the contractor stood to lose money on a given item, the deletion would relieve him of that loss. This rule can have a significant impact on contractors who intentionally unbalance their bids; these contractors run the risk of having underpriced items substantially increased in quantity, while overpriced items may be deleted or reduced in quantity. 3. Substitutions A contract change which involves substitutions generally requires computing the difference between the reasonable costs of performing the added and deleted work. Globe Const. Co., ASBCA No. 21069, 78-2 BCA $13,337. In addition, the cost of undoing previously performed work is usually credited to the amount owed the contractor. If labor and material costs have changed substantially in the period between bidding and the time of the change, pricing of the substituted work should be based on the cost of performance at the time the change order was made. In addition, when a contract change is issued that substitutes one piece of equipment (or material) for another, the re-pricing should take into account whether the proposed substitute equipment or material was originally priced under another item in the contract. 4. Overhead and Profit Contractors are entitled to an adjustment in overhead and profit as part of an equitable adjustment which increases the cost of contract performance. Conversely, it Page 14 Conpright 2002 by Evans M. Baro, NavgontConsling “Al RightsReservedseems that the owner should reduce the overhead and profit figures in changes which decrease the costs of the contract, However, this latter issue is not free from controversy, and requires detailed analysis in order to arrive at a clear perception of the applicable rules. (a) Overhead The standard accounting practice is to adjust indirect costs as a percentage rate of direct costs which reflect the contractor's experience over a period of time; itis, therefore, expected that any direct costs in an equitable adjustment will bear their standard amount of overhead. This practice has been applied whether direct costs have increased or decreased. ‘With “small” changes, this practice provides a convenient method for the calculation of an equitable adjustment, since it does not require a complete analysis of the contractor’s overhead accounts. Typically, the rate(s) utilized in these computations are (a) the rate provided for in the contract; or (b) the contractor's historical or standard overhead rate on original contract work already completed. However, when a change or changes have a drastic impact on the contractor, or significantly alter the contract work, the indirect cost impact is far different from the amount that would be applied by the use of a current (or standard) overhead rate. In this instance, the parties should negotiate a specific rate that is reflective of the actual cost impact of the change. This can be accomplished by re-analyzing the contractor's overhead accounts or by pulling certain cost elements out of overhead and treating them as direct costs. In Kenmore Garment Co., ASBCA No. 14142, 71-1 BCA 98768, the Board held that the overhead rate to be applied in computing an equitable adjustment for changed Page 15 Copyright 2002 by Evans M. Barba, Novigant Consling AU Righs Reservedwork should be based on historical costs for performing other than changed work for an appropriate time period. ‘The Board refused to allow the overhead rate to be calculated based on changed work costs. In the Board’s opinion, overhead cost should not vary “as one claim is allowed, another disallowed, and one increased, while another is decreased.” ‘A contractor may be denied compensation because of failure to demonstrate that overhead rates were increased. Lucarelli & Co., ASBCA No. 8768, 65-1 BCA 44655. In any event, the purpose of using such a procedure is to arrive at an overhead rate that is fair, and reflective of the actual cost of the change. ‘There is a good deal of flexibility in this area if the contractor can present sufficient facts to show that extreme alterations in overhead have occurred as a result of a change. This flexibility is, however, generally limited to those situations where a contractor is working on a firm, fixed-price contract, When dealing with cost reimbursement or incentive contracts, the only fair way to add or deduct overhead is at the historical rate which the contractor has incurred. (®) Profit Profit on the costs incurred in the performance of changed work is a normal part of any equitable adjustment. However, there is some controversy over whether it is proper to reduce the contractor's profit in a “deduct” situation; as well as over how to determine the amount of profit that should be added as part of an “additive” change. Determining the amount of profit to be added or deleted is a difficult problem when no provisions have been included in the contract for its handling, Page 16 (Copyright 2002 by Evans M, Barba, Nevgant Consuling AU Rights ReservedIf no provisions are contained in the contract, a standard rate (usually 5% -10%) can be applied to small changes, or the parties can use the profit rate used on the original contract in order to keep negotiations simple. In Keco Industries, Inc,, ASBCA No. 15184, 72-2 BCA 49576, one issue which was resolved by the Board was the amount of profit a contractor is entitled to as a result of changes in the fixed-price air conditioner supply contract. The Government argued that the contractor was not entitled to any profit because his original bid was allegedly based on not making a profit. The Board did not accept the argument that the contractor bid on the job with no profit. The Board further stated that even if the contractor had bid on the job without a profit, it would not follow that work required by the changes which increased the contractor's costs should therefore be performed without a profit. The Board held that the contractor is entitled to a reasonable profit for the work occasioned by the change. In situations involving more substantial changes, the rule is that the parties should negotiate a percentage of profit that reflects the impact of the change. If the change involves work that is more difficult than that originally specified, the percentage should be higher; conversely, if the work is less difficult than that originally specified, the rate should be lower than the original contract rate. Cimmaron Construction Co., ENGBCA No. 2862, 69-2 BCA 48003. Additional factors which should be considered in arriving at a reasonable rate of profit to be applied in a given change situation include: the complexity of the work; the risk assumed by the contractor; the amount of capital employed in the changed work; and the contractor's historical rate of profit in performing similar work. Page 17 Copyright 2002 by Evans M, Barbs, Navigon Consuling Al Rigs Reserved5. Subcontract Changes The pricing of changes which affect the work of subcontractors and sub- subcontractors is difficult. It should be noted that making changes to work being done primarily by subs and sub-subcontractors also raises the issue of how far down a change can/should be traced through the contract chain; recognizing that at some point the change ceases to remain within the general scope of the contract. ‘The principle to be followed in pricing subcontractor changes, is that changes should be traced down through the subcontract tiers to the extent information is available. (itis noted that in order for this trading to occur, the prime contractor should make sure that the subcontracts contain a “Changes” clause.) When the available information used to analyze the adjustment becomes vague and unclear, the matter should be settled by negotiation. 6. Time Considerations Most contracts provide time limitation provisions. These provisions specify the time limit in which a contractor must advise the owner of his intention to assert a claim for additional costs due to changed work. Most often these “time limitation provisions,” which are commonly referred to as notice provisions, are found in “Changes” clauses; “Differing Conditions” type clauses; “Suspension of Work” clauses; “Delay” clauses; ete. Most standard form contracts utilized in the United States contain specific time limitation provisions, Under government contracts the contractor has 30 days within which to furnish notice for formal changes; and a “reasonable time” period is indicated for constructive changes. However, any costs incurred by the contractor more than 20 days prior to notification of a constructive claim are not recoverable. Therefore, if the contractor desires to recover all costs related to a specific constructive change, he must Page 18 —_ Copyright 2002 by Evans M. Barb, NavigantConsing Al Rights Reseredadvise the owner/engineer of the costs within 20 days. (In order to be considered, the notice may never be later than the date of final payment under the contract, unless the owner “should have known” that a claim for additional compensation was pending at the time of payment.) Most jurisdictions will allow a claim if it is deemed that the owner, in fact, had actual or imputed knowledge of the change, and, consequently, anticipated a claim (or the possibility of a claim, Thus, American courts have utilized the theory of “constructive notice” in order to avoid denial of a valid claim (where entitlement is clearly evident) on the basis of merely not having complied with a technical requirement of the contract. However, the burden of proof is on the contractor to show that the owner was, in fact, aware of the change in question. Detailed cost data and analysis supporting a request for a time extension should be sent as soon as they are calculated and determined. Specific Limitations on Recovery Contracts contain specific limitations on the amount of compensation a contractor can recover in certain instances. For example, the “suspension of work” clause forbids recovery of profit in computing and adjusting the contract price; and other provisions limit the period of time for which increased costs may be allowed. In reviewing any request for adjustment in contract price, the owner should make certain that the pricing is consistent with the requirements contained in the contract provisions under which the contractor is claiming. With respect to pricing change orders, the computation of the price will depend upon the specific requirements set forth in the contract. Page 19 Copyright 2002 by Bvens M. Barba, Navigant Consulting All Rights ReservedWith respect to pricing change orders, the computation of the price will depend upon the specific requirements set forth in the contract. The allowable methods of pricing may vary from one jurisdiction to another, and from one job to another, depending upon the particular circumstances surrounding the change order. “Impact of change orders” is one last matter that warrants discussion. A change order on a fixed price contract almost always affects costs and time considerations, two parameters which are inextricably tied together. In recent years, the construction industry has come to recognize two components of a change order — “Direct effects” and “indirect effects.” The latter term is commonly referred to as impact or ripple effect, on the unchanged work. The direct effects of a change order are time and cost considerations, which are directly attributable to, and capable of being isolated from, the project as a whole. These “effects” are easily estimated utilizing contract prices and standard estimating procedures on the premise that the change is to be priced as if the work were being performed in a vacuum, The “direct effects” include direct labor, direct material costs, direct equipment costs, overhead, taxes, insurance and bond costs, profit, and any other agreed to costs which are incident to processing the change. ‘These costs should be considered for the most efficient method and should be estimated as if the work were to be performed completely isolated from the rest of the project. ‘The indirect (or impact) effects of the change relate to the current position of the contractor relative to incorporating a given change order into the project schedule. The problem in this regard involves the incorporation of the work into the “unchanged portion” of the work schedule such that an examination of the “total” effect the change has on the schedule, at a particular point in time, can be made. A “change order schedule Page 20 Copyright 2002 by Evens M. Barba Nevigant Contulng “A Rights Reseredanalysis” will enable the parties to ascertain whether or not project performance time is affected. Changes in project performance time (either increased or decreased) could affect the indirect costs of overhead; taxes; insurance; bonding; and cash flow. In addition, an altered sequence of construction may be required to incorporate the changed work Changing the sequence of as-planned activities can affect contractor costs with respect to: loss of efficiency, idle (standby) time, etc. Changing the project schedule can create additional work for the contractor in terms of temporary heating requirements; storage of materials, working in harsher weather conditions, etc. One should recognize that the impact costs associated with changed work can be, and are most often, more extensive and expensive than the “direct cost” of performing the changed work. In construction today, parties often negotiate and execute change orders to only include the “direct costs” involved in performing the work — leaving the question of impact costs somewhat “in the air.” In this instance, contractors typically “reserve their rights” to later recover impact costs at such time as these costs become determinable. Lakeside Bridge & Steel Co. v. Mountain State Construction Co., 446 F.Supp. 1163 (ED.Wis. 1978). ‘When the contractor presents a claim for impact costs due to previously executed change orders, an owner may allege that if a change order is accepted without protest, then it should be considered a final mutual agreement (an “accord and satisfaction”) as to the equitable adjustment and time extension stated, and is thus a “release” of the owner from any further liability to the contractor. The owner may further allege that an intention to reserve any times for a future claim must be fully and clearly expressed. Page 21 Copyright 2002 by Evans M. Barba, Neigont Consuling “A RightsReservedGenerally, acceptance of a written change order binds both parties and operates as a final mutual agreement (the final “accord and satisfaction” mentioned above) and a bar to any further claim by the contractor. For this reason, a contractor will often refuse to execute a contract modification when he believes it is not feasible to calculate and include the full costs resulting from the modification until a later date. There is no absolute requirement that a contractor affirmatively reserve his claim, Roberts Construction Co., GSBCA No. 5724, 81-1 BCA 15,104, However, to avoid the possibility of waiver of the right to claim additional costs, the intention to preserve a claim should be expressed, U.S. Optics Corp., ASBCA No. 18972, 75-2 BCA 11,603; Chantilly Construction Corporation, ASBCA No, 24138, 81-1 BCA 414,863. ‘An accord and satisfaction covers only those claims which are or should be genuine issues in dispute at the time the change order is issued. Stated differently, a change order does not constitute an accord and satisfaction when it is clear that it was not intended to encompass the problems experienced by the Contractor after preparation of the change order. Requirements and rules of interpretation for a valid accord and satisfaction have been set forth in various decisions. There can be no accord and satisfaction without the change order being equivalent to a new contract additional to the contract at the heart of the dispute claim. The essentials of a contract must be present: appropriate subject matter, competent parties, a meeting of the minds, and support of the agreement by sufficient consideration. See S. Leo Harmonay, Inc. v. Binks Manufacturing Co., 597 F.Supp. 1014 (SDNY. 1984). Regarding the owner allegation that a change order accepted without protest should be a final mutual agreement; the burden is on the owner to establish the “release” and also to show the applicability of the release to the subject matter in dispute. Brubaker Page 22 Conright 2002 by Evans M. Barb, Navigat Consaling “Al Rights Reservedv. United States, 342 F.2d 655 (7th Cir. 1965); Chantilly Construction Corporation, supra, While a claim for impact costs can survive change orders under some circumstances, they must be proven to have arisen out of the changes, Pittman Construction Company, GSBCA Nos. 4897, 4923, 81-1 BCA 14,849, and the change orders must not have been in final settlement of claims for all costs arising from and related to the changes. It may be found that a change order did not constitute an accord and satisfaction when it was clear that it was never intended to encompass the problems experienced by the contractor after the preparation of the change order. For example, in Blake Construction Company, Inc., GSBCA No. 4742, 80-2 BCA 414,756, a change order intended to compensate a contractor for additional work did not encompass impact costs he incurred as a result of extended performance necessitated by extraordinary changes. ‘Therefore, there was not an accord and satisfaction except to his direct costs. Although the change order authorized an equitable adjustment, it made no mention of impact costs and did not operate to bar the contractor’s claim for impact costs. Thus, the change order did not constitute an accord and satisfaction, and did not discharge the present impact cost claim. Also, see Mann Construction Company. Inc., supra. ‘When the contractor presents a claim for impact costs due to previously executed contract modifications, the Government may allege that an intention to reserve any items for a fature claim must be fully and clearly expressed. Although there is not an absolute requirement that a contractor affirmatively reserve his claim, it is incumbent upon the contractor to expressly reserve his rights to avoid a waiver. ‘The contractor should also be careful of the language of his reservation. If the contractor reserves his right for a claim of extension of time only, he will be precluded Page 23 Copyright 2002 by Evons M. Barba, Nevigant Consuing A Rghs Reservedfrom seeking monetary recovery. Najjar Industries, Inc. v. City of New York, 445 N.Y.S. 2d 302 (1982). If the contractor first protests but then unconditionally accepts a change order, he also abandons his right to claim for indirect costs. J.J. Fritch General Contractor, Inc., ASBCA No. 5253, 1962 BCA 43298; B.W. Horn Company, ASBCA No. 11517, 67-2 BCA 6583. 8 Time Impact Analysis Refer to Discussion Paper Nos. 3 and 4, Page 24 Copyright 2002 by Evans M. Barb, Navgent Consung “AI Rights ReservedDiscussion Paper No. 3 Prospective vs. Retrospective Delay Analysis: An Overview 1, The As-Planned Schedule: The Starting Point A contractor's as-planned (baseline) schedule typically represents the contractor's plan for performing the contract work as-bid. The project’s duration and the contractor’s/sub-contractor’s planned sequences, means and methods with respect to performing the work form the basis upon which the as-planned schedule is developed. In developing a planned schedule a contractor uses its experience and expertise to “ink” ond interrelate construction activities in a manner which forms a sequence of construction. This “necessarily related” sequence of construction activities is typically based on either physical constraints (relationships) or resource allocation (equipment/manpower) restraints which limit when work on various activities can be performed. Ultimately, only a limited number of schedule activities dictate project completion. This “limited number” or group of activities which controV/dictate project completion forms a trackable path from beginning to end of the project. This path is known as the critical path, which is a sequence of necessarily related activities through which develops the longest duration to project completion. Activities which are not on the critical path have — relative to the critical path — float, which is the time available for completion of an activity before it “tums critical” and impacts the completion date of the project. Typically, project float is for the use of either the Contractor or the Owner and delays to project completion occur only when all of the float for an impacted non-critical activity has been consumed. Page 25 Copyright 2002 by Evens M, Barba, Novant Consulting AU Rights ReservedIn essence, a change, problem, etc. which results in “extending” the time of performance of any scheduled activity can only result in a delay to project completion if that activity is, in the first instance, on the project’s critical path, or if the “extended” time of performance of an initially non-critical activity exceeds the float available to it at the time. Delay to a project’s completion date and resultant damages can be evaluated “prospectively” or “retrospectively” during construction, or retrospectively after work on a project is completed. 2. Prospectively During Construction: Using Updates and the “Projected” Critical Path To Completion “Changes” are a part of reality on nearly every major lump sum construction contract undertaken in the world today. ‘The impact of these changes on a contractor’s bid price and schedule is directly related to the timing and scope of the change. In some cases the specific scope of work related to changes to the original contract work are known in advance of the changed work being performed, and in such cases forward pricing/schedule time impact calculations can be prepared. Under a forward pricing schedule impact scenario, the contractor and owner “estimate,” or “predict,” the impact of the change on the contractor’s work with respect to cost and time, and reach an agreement prospectively. In this regard, the contractor's request for additional time and compensation is typically based on an analysis of the current (updated) schedule with respect to the “forecasted impact” a given change is anticipated to have on the project's “projected/as-planned” critical path to project completion. To the extent the owner and contractor reach agreement regarding such an analysis, the analysis typically translates into a revised required contract completion date (if it can be demonstrated that the change impacted the original contract completion date). Page 26 Copyright 2002 by Evans M. Barbe Nvigant Consing Mall Rights ReservedIn practice, however, relatively few contract changes involving contract time extensions are resolved prospectively due primarily to notice and timing of the changes and the negotiation process. In cases where prospective analyses are not performed and/or mutually agreed to, “retrospective” analyses must be performed. 3. Retrospectively During Construction: Using Update Data and the “Actual/As- Built” Critical Path to Completion Consistent with the submission of a monthly pay application, contractors are typically required to “status” and “update” the project schedule at the end of each month using the actual events which occurred during the prior month. Project Schedule updates are typically required on major construction projects. Monthly schedule updates are relatively straightforward to prepare. A complete monthly schedule update should identify actual/as-built start and finish dates for completed activities, partially complete activities (start date, % complete and remaining duration), remaining (as-planned) activities, and logic changes. Fragnets related to changes and delays in the work should also be submitted, A properly updated schedule will reveal the actual/as-built critical path and the impact of changes made during the prior month on the contract completion date. A complete schedule update embodies the impact of changes to the as-built critical path, which will cause the as- planned completion date to be extended. The identification of the as-built critical path and the calculation of actual time impacts are typically recognized by contractors as being the most equitable method of calculating project delays. This type of analysis is akin to performing changed work on a time and material basis when actual incurred costs are identifiable and recovered. The accumulation of complete monthly updated schedules and delay analyses becomes the overall project as-built schedule, which identifies the as-built critical path and embodies a Page 27 Copyright 2002 by Evans M. Barbe, Neigent Consuling AAI Rights Reserveddelay analysis based on those changes, problems, etc. which actually impacted the project’s completion date. 4. After_Construction Is Completed: Utilizing the “As-Built Critical Path” to Completion In situations where, for whatever reason(s), a contractor has not prepared complete monthly schedule updates (as discussed above) during the performance of its work on a project, constructing an as-built schedule which is compiled from project daily records and information is the proper method to determine the project’s actual/as built critical path. Using detailed, day-by-day as-built information and actual logic relationships as the basis for a delay analysis avoids the problems associated with incomplete schedule updates and “summary” activity pitfalls inherent in scheduling software packages. Detailed as-built data correlates to the contractor’s as-planned activities and identifies non-work periods, in contrast to summary level scheduling data. The identification of non-work periods in conjunction with the identification of actual logic changes in the work facilitates the identification of the as-built critical path, and subsequently facilitates the analysis of weather, stop work orders, non-work periods, changes, responses to questions (RFI’s), or any other “administrative-type” actions which may have caused an impact to the work. Retrospective as-built critical path delay analysis is a compilation of exactly that which should have been provided for through proper monthly updating of the project schedule. Retrospective/after construction analyses utilize the contractor’s originally envisioned activity relationships and actual work sequences/logic to identify the as-built critical path in the same manner as if properly prepared, complete updates were employed. In situations where complete monthly schedule updates are not prepared during construction, the use of retrospective analysis (after construction) is the only means available to identify the actual/as-built critical path and accurately evaluate delays. Page 28 Copyright 202 by vans M, Barb, NevigantConsling “Al highs ReservedOnce the as-built critical path has been established and project delays calculated, a determination of who is responsible for such delays is made. Typically, the Contract Documents in conjunction with an analysis of project documentation such as correspondence, RFI logs, Extra Work Reports, Cost Proposals, Stop Work Orders and Contract Modifications provide information regarding the calculation of delays and the basis of liability, therefore. In this regard it is noted that a contractor's failure to maintain accurate records related to the performance and impact of changes typically requires an interpretation of available project records in order to quantify impact related to alleged delay. 5. “Non-Critical Activity Delays” In its ultimate form, a schedule delay analysis focuses only on the as-built critical path, while recognizing that there are many non-critical activities which may have been affected by changes in the work. By definition, and in actuality, however, none of these “non-critical” activity changes caused the project completion date to be extended, although some may have caused specific non-critical activity durations to be increased. ‘An increase in a non-critical activity duration will not create “project delay” or result in “extended overhead costs,” but may result in additional direct costs related to labor inefficiency. Such costs are oftentimes addressed in contract change proposals. If a contractor seeks to recover “activity impact costs” outside of a contract change proposal, detailed records establishing those costs and definitizing liability are required. Contractors who do not establish or present any type of cause and effect/oss of productivity analysis with respect to disruption type claims should not be entitled to recover damages for same. Such analyses and damages calculations must be presented by the contractor in order to substantiate the contractor's claim position and enable the owner to assess the extent to which contractor bid errors, inefficiencies or other contractor problems may have contributed to the contractor’s claimed loss of productivity. Page 29 Copyright 2002 by Evans M. Barbe, Nevigant Consuting “Al RightsReservedIt is common industry practice in preparing and analyzing delay claims (retrospectively) to deal with “critical delay” only. It is of import to note that a project can only “lose time” or “gain time” along the actual critical path to completion of work on the project. Thus, only those modifications, problems, ete. which affect activities of work on the actual critical path to completion warrant evaluation in the context of determining the amount of delay to the project attributable to a given modification, problem or delay. In the context of performing a retrospective schedule delay analysis, modifications, problems, etc. which impact “non-critical” work activities do not need to be evaluated. The reason these items do not need to be evaluated is that regardless of the effect a given modification or problem might have in terms of extending the time of performance of a non-critical element of work, such an extended period of performance (on the non-critical activity) could not have any effect whatsoever in terms of critically delaying the overall completion of the project. With respect to “non-critical path” schedule impacts, an evaluation of said impacts — from a “schedule” standpoint — is only meaningful in the context of performing a disruption/loss-of-productivity analysis, which is separate and distinct from the performance of a delay analysis. Such an analysis has nothing whatsoever to do with the determination of overall delay in the work and the apportionment of responsibility between the parties for same. The analysis of “non-critical path delays” is only ‘meaningful in the context of a disruption/loss-of-productivity analysis in which a given party will endeavor to determine the cost of labor and equipment disruption related to those elements of work allegedly affected by modifications, problems and delays for which that party is not responsible. Page 30 Copyright 2002 by Evans M. Barba, Nevigent Conuling AI Rights ReservedDiscussion Paper No. 4 Sample Time Impact Analysis Provisions Sample Clauses Set forth below are examples of CPM time impact analysis provisions from several recent public and government contracts, As an initial matter, it should be noted that the Federal Acquisition Regulations (FAR) § 52.236-15, “Schedules for Construction Contracts,” is quite general and provides as follows: (a) The Contractor shall, within five days after the work commences on the contract or another period of time determined by the Contracting Officer, prepare and submit to the contracting Officer for approval three copies of a practicable schedule showing the order in which the Contractor proposes to perform the work, and the dates on which the Contractor contemplates starting and completing the several salient features of the work (including acquiring materials, plant, and equipment). The schedule shail be in the form of a progress chart of suitable scale to indicate appropriately the percentage of work scheduled for completion by any given date during the period. If the Contractor fails to ‘submit a schedule within the time prescribed, the Contracting Officer may withhold approval of progress payments until the Contractor submits the required schedule, (®) The Contractor shall enter the actual progress on the chart as directed by the Contracting Officer, and upon doing so shall immediately deliver three copies of the annotated schedule to the Contracting Officer. If, in the opinion of the Contracting Officer, the Contractor falls behind the approved schedule, the Contractor shall take steps necessary 10 improve its progress, including those that may be required by the Contracting Officer, without additional cost to the Government. In this circumstance, the Contracting Officer may require the contractor to increase the number of shifis, overtime operations, days of work, and/or the amount of construction plant, and to submit for approval any supplementary schedule or schedules in chart form as the Contracting Officer deems necessary to demonstrate how the approved rate of progress will be regained, Page 31 Copyright 2002 by Evans M. Barbs, NavigantConsulng AM Rights Reserved() Failure of the Contractor to comply with the requirements of the Contracting Officer under this clause shall be grounds for a determination by the Contracting Officer that the Contractor is not prosecuting the work with sufficient diligence to ensure completion within the time specified in the contract. Upon making this determination, the Contracting Officer may terminate the Contractor's right to proceed with the work, or any separable part of it, in accordance with the default terms of this contract. Additional clauses which will be discussed during the course of the presentation include the following: Federal Bureau of Prisons Provision @ Time Impact Analysis for Change Modifications, Delays, and Contractor Requests: 1. When change modifications are indicated, delays are experienced, or the Contractor desires to revise the Project Schedule, the Contractor shall submit to the Contracting Officer a written Time Impact Analysis illustrating the influence of each modification, delay, or Contractor request on the contract time. The preparation of Time Impact Analyses is considered part of the construction process and will be performed at no additional cost to the Government, Each Time Impact Analysis shall include a Fragmentary Network (Network analysis) demonstrating how the Contractor proposes to incorporate the modification, delay or Contractor request into the Project Schedule. The Time Impact Analysis shall demonstrate the time impact based on the date the modification is given to the Contractor or the date the delay occurred; the status of construction at that point in time; and the event time computation of all affected activities. The event times used in the Time Impact Analysis shall be those included in the latest project Schedule Update or as adjusted by ‘mutual agreement. 2. Activity delays shall not automatically mean that an extension of the Contract time is warranted or due the Contractor. It is possible that a modification or delay will not affect existing critical activities or cause non-critical activities 10 become critical. A modification or delay may result in only absorbing a part of the available total float that may exist within an activity chain of the Network, thereby not causing any effect on the Contract time. Page 32 Cogright 2002 by Evans M, Barb, Nevigant Consting “a igh ReservedFloat is not for the exclusive use or benefit of either the Government or the Contractor. Extension of the Contract time will be granted only to the extent the equitable time adjustments to the activity or activities affected by the modification or delay, exceeds the total float of an activity; and ‘forces the activity onto the critical path; and extends the contract time set forth in Contract Clause 52.212-3, “Commencement, Prosecution and Completion of the Work,” and Contract Clause 52.212-5 “Liquidated Damages.” Four (4) copies of each Time Impact Analysis shall be submitted as follows: a. Along with the proposal for any requested change. b. Within seven (7) calendar days after receipt of a written ‘modification under Contract Clause 52.243.4, “Changes,” paragraph (a). c. Within seven (7) calendar days after the furnishing of a written notice by the Contracting Officer as set forth under Contract Clause 52.243-4, paragraph (b). 4. Within seven (7) calendar days from the beginning of a delay from unforeseeable causes as set forth in Contract Clause 42,249.10, “Default,” paragraph (b-2), provided the Contractor complies with Contract Clause 52.249-10, paragraph (b-2). Jn cases where the Contractor does not submit a Time Impact Analysis within the time stated above in paragraph 14, it is mutually agreed that the particular modification, delay or Contractor request does not require an extension of the contract time. Approval or rejection of each Time Impact Analysis by the Contracting Officer shall be made after receipt of each Time Impact Analysis, unless subsequent meetings and negotiations are necessary. Upon approval, a copy of the Time Impact Analysis signed by the Contracting Officer shall be returned to the Contractor, and incorporated into the Project Schedule «at the next monthly Schedule Update. Time Impact Analysis related to an extension of the Contract time and/or change modification work shall be incorporated into and attached to the applicable change modification(s). Page 33 CCopyrigh 2002 by Evans M. Barb, Navigan Consuling (AM Rights ReservedU.S. Bureau of Reclamation Clause H.10 Oo Time impact evaluation. () Time impact evaluation shall be used by the Contracting Officer in determining if a time extension or reduction to the contract milestone dates is justified, The Contractor shall provide a time impact evaluation 10 the Contracting Officer for any contract change, e.g., a change order, proposed modification, or value engineering proposal. The Contractor shall also provide a time impact evaluation to the Contracting Officer for any delay to support its request or claim for an equitable adjustment to the contract. (2) A time impact evaluation is applicable whether the Contractor's current scheduled milestone dates are the same as, earlier, or later than those required under the contract. Changes, additions, or deletions to activities; activity durations; or activity time frames shall not ‘automatically mean that an extension or reduction of contract time is warranted or due the Contractor. Time extensions for performance shall be considered only to the extent that the Contractor's current scheduled milestone dates exceed the contract milestone dates. Float is not for the exclusive use by or benefit of either the Government or the Contractor. (3) Time impact evaluations shall be performed using the data available in the current detailed logic diagram(s) and schedule, The summary logic diagram and 120 calendar-day fragnets shall not be utilized for time impact evaluations. () Each time impact evaluation shall include a fragnet(s) which demonstrates where the Contractor proposes to incorporate the change or delay in the current detailed logic diagram(s). The fragnet(s) shall show (A) the current activity logic relationship for all activities directly affected by the change or delay and (B) the proposed activity logic relationships due to the change or delay highlighting the added, changed, and deleted activities. For all activities directly affected by the change or delay, the current and proposed (A) activity description; (B) type and quantities of major pieces of equipment, principle manpower, pacing material; (C) duration; and (D) earnings shall be shown on the fragnet(s). A narrative shall be provided containing the rationale used in developing the proposed logic relationships and activity data. Page 34 Copyright 2002 by Evan M, Barb, Navigant Consulting “All igh Reserved(ii) Each time impact evaluation shall include a table comparing the results of two mathematical analyses; one using the current activity logic and data, and one using the proposed activity logic and data. The comparison shall include all contract milestones and all activities whose periods of performance have shifted as a result of any change which affects production and/or manufacture schedules, material orders, construction seasons, and labor and/or equipment utilization. The mathematical analyses shall be based on the status of work and the available float at the time the Contracting Officer directs or proposes a change to the work, the Contractor submits a value engineering proposal, or when a delay occurs. (4) Following the Contractor's receipt of an executed contract modification, the activity date and logic relationships stipulated in the modification shall be incorporated into the current detailed logic diagram(s) and schedule during the next scheduled progress update. Washington Metropolitan Area Transit Authority Appendix F 4. Float time is not time for the exclusive use or benefit of either the ‘Authority or the Contractor. Extensions of time for Contract performance as specified in the General Provisions will be granted only to the extent that equitable time adjustments to the affected activity or activities exceed the total float time along the affected paths of the approved computer printout report in effect at the instant of one of the following: a. NIP with a change. b. Order of suspension or possession. c. Detection of a subsequently acknowledged differing site condition or excusable delay. After all Contract activities are complete; the Contractor shall submit an ‘as-built computer printout report and a time-scaled as-built graphic arrow diagram, The documents shall reflect all project as-built critical paths. The diagram shall be prepared in accordance with the requirements for Contract record drawings in the General Requirements and in Paragraph 3.b. above, except the following: Page 35 Copyright 2002 by Evans M. Barbe, Navigant Consulting “AU Rights Reserveda. All Contract activities, including all added activities, shall be shown, b, Activity durations shall be the actual number of separate workdays during which work was performed on the activity. Total man-days for an activity shall be the actual number of man- days that were required to complete the activity 4d. The I-node shall be plotted on the date the activity actually started and the J-node shall be plotted on the date the activity actually finished. Contract milestone completions shall be plotted on the dates of the Substantial Completion Reports. Legal status: The currently approved Network Analysis System documents shall be used by the contractor for planning, organizing and directing his work, for reporting progress, for requesting payment and for determining delay(s) in achieving milestone dates specified under the COMMENCEMENT, PROSECUTION AND COMPLETION OF WORK Article. The milestone dates shall be adjusted only upon modifications to the Contract. The Contractor acknowledges and agrees that actual slippage of activities shall not be the basis for time extension to this Contract unless such slipped activities are on the critical path of the currently approved computer print-out reports or cause one or more new critical paths, and result in a delay in achieving any milestone date specified under the COMMENCEMENT, PROSECUTION AND COMPLETION OF WORK Article or in achieving the Contract completion date, Further, although the foregoing is a necessary condition for a time extension, it is not a sufficient condition. Additional Sample Provision 1.7 TIME IMPACT ANALYSIS FOR CONTRACT MODIFICATIONS, CHANGES OR DELAYS A Requirements: When contract modifications or changes are initiated, or delays are experienced, the Contractor shall submit to the Engineer a written Time Impact Analysis illustrating the influence of each modification, change, delay, or Contractor request on the Contract Time. The Time Impact Analysis shall demonstrate the time impact based upon the date that the modification or change is issued to the Contractor or the date that the delay occurred; the status of construction at that point in Page 36 Copyright 2002 by Evans M. Barba, Navigant Consulting “All RightsReservedtime; and the event time computation of all affected activities. The event times used in the Time Impact Analysis shall be those in effect according to the latest update of the Project Schedule at the time the modification, change or delay begins or as adjusted by mutual agreement. Time Extensions: Activity delays shall not automatically mean that an extension of the Contract Time is warranted or due the Contractor. It is possible that a modification, change or delay will not affect existing critical activities or cause non-critical activities to become critical, A modification, change or delay may result in only absorbing a part of the available total float that may exist within an activity chain of the Project Schedule, thereby not causing any effect on the Contract Time. Time extensions shall be granted in accordance with the Contract Clauses of this Contract. Float ownership is defined in Paragraph 1.5.4.1] Procedure: J. Each Time Impact Analysis shall be submitted as follows: a. Within thirty (30) calendar days after receipt of a written order designated or indicated to be a change in accordance with Section 104.3 of the Contract General Special Provisions. b. Within thirty (30) calendar days after the furnishing of written notice by the Contractor. ¢. Within thirty (30) calendar days from the beginning of a delay from unforeseeable conditions provided the Contract complies with the requirements of the contract documents regarding this condition. 2. In cases where the Contractor does not submit a written request for extension of time and a Time Impact Analysis within the time stated above in Paragraph 1.8.C.1, it is mutually agreed that the particular modification, change, delay or Contractor request does not require an extension of the Contract Time. 3. Acceptance or rejection of each Time Impact Analysis by the Engineer shall be made within ten (10) calendar days afier receipt of each Time Impact Analysis unless subsequent meetings and negotiations are necessary. Upon acceptance, the Time Impact Analysis shall be incorporated into the Project Schedule in accordance with the requirements of Section 1.7, Project Schedule Revisions. Page 37 Copyighe 2002 by Evans M Barba, Navigant Consuling “AI Right Reserved4, Time Impact Analysis related 10 an extension of the Contract Time and/or modification work shall be incorporated into and attached to the applicable Contract Modification. 5. No revision to any contract milestones or contractually mandated schedule provision will be permitted without written authorization from the Engineer. Additional Sample Provision 1.10 TIME IMPACT ANALYSIS FOR TIME EXTENSIONS FOR CHANGES AND DELAYS A When Changes in the Work are ordered or requested by the Owner or requested by the Contractor pursuant to General Conditions, Article 40, CHANGES IN THE WORK, for which the Contractor contends it is entitled to an extension of the Contract Time, the Contractor shall submit to the Owner a written schedule analysis illustrating the influence of the Change upon Contract Time. Each such Time Impact Analysis shall include a network analysis demonstrating how the Contractor proposes to incorporate the performance of the changed Work into the Project Schedule. Each such Time Impact Analysis shall demonstrate the expected time impact of the performance of the changed Work as of the date upon which the change was ordered or otherwise initiated, reflect the status of the Work at that point in time, and provide the duration computations for all affected activities. The activity durations used in the Time Impact Analysis shall be those reflected in the latest Project Schedule Update, unless such are otherwise adjusted by mutual agreement. Each Time Impact Analysis related to a Change shall be submitted as follows: 1. For a Change Order, as a part of the Contractor's proposal for the Work contemplated by the proposed Change Order. 2. Fora Unilateral Change Order or Work Order, within seven (2) days after the date of written Notice by the Owner to proceed with the Changed Work. When delays to the Work are experienced which the Contractor believes entitle it to an extension of the Contract Time, the Contractor shall comply with all submittal and notice requirements of General Conditions, Article 91, DELAYS AND EXTENSIONS OF TIME, and shall submit to the Owner, within twenty (20) days after the delay has ceased, a written Time Impact Analysis illustrating the influence of the delay upon Contract Time. Page 38 Copyright 200 by Evans M. Bare, NevigantConsing “All RightsReservedIf the asserted cause of delay is weather, the Time Impact Analysis shall be submitted within seven (7) days after submission of the Notice of Claim as provided in General Conditions, Article 91, DELAYS AND EXTENSIONS OF TIME. Each such Time Impact Analysis for any asserted delay shall include a network analysis indicating how the Contractor proposes to incorporate the delay into the Project Schedule. Each such Time Impact Analysis shall demonstrate the actual time impact of delay as of both the date upon which the delay commenced and the date upon which the delay terminated, reflect the scope and results of all measures which the Contractor took to mitigate the effect and impact of the delay, reflect the status of the Work at both the commencement and cessation of the delay an provide the duration computations for all affected activities. The activity durations used in the Time Impact Analysis shall be those reflected by the latest Project Schedule Update, unless such are otherwise adjusted by mutual agreement. Extension of the Contract Time will be granted only in accordance with the requirements of General Conditions, Article 91, DELAYS AND EXTENSIONS OF TIME. Failure to file a Time Impact Analysis as required by this Section shall constitute an absolute waiver of any claim for an extension of time. Approval or rejection of each Time Impact Analysis by the Owner shall be made in accordance with the requirements General Conditions, Article 91, DELAYS AND EXTENSIONS OF TIME. Upon its approval, a copy of the Time Impact Analysis, signed by the Owner, shall be returned to the Contractor, and be incorporated into the Project Schedule at the next monthly Project Schedule Update. Page 39 (Copyright 2002 by Evans M, Barb, Navigant Consuling All Rights ReservedDiscussion Paper No. 5 Sample Project Schedule Revision Provisions Set forth below are examples of project schedule revision provisions from recent public contracts. Sample Provision 1 18 PROJECT SCHEDULE REVISIONS A. B. Required Revisions: 1. Updating of the Project Schedule to reflect actual progress performed as of the data date shall not be considered a revision of the Project Schedule. 2. If, as a result of the monthly Schedule Update, it appears the Project Schedule no longer represents the actual prosecution and progress 0 the work, the Engineer will request, and the Contractor shall submit, a revision to the Project Schedule. 3. The Contractor may also request reasonable revisions to the Project Schedule in the event the Contractor's planning for the work is revised. If the Contractor desires to make changes in the Project Schedule to reflect revisions in its method of operating and scheduling of the work, the Contractor shall notify the Engineer in writing, stating the reason for the proposed revision. Accepted revisions of the Project Schedule will be performed separately from the monthly Schedule Update. Procedure 1. If revision to the Project Schedule is contemplated, the Contractor or Engineer shall so advise the other in writing, describing the revision and setting forth the reasons thereof. 2, All reasonable requests by the Contractor for revisions will be accepted by the Engineer. Page 40 Conright 2002 by Evens M Baro, Navigan Consling AU RightsReserved3. Engineer-requested revisions to the Project Schedule will be presented in writing to the Contractor, who shall respond in writing with seven (7) calendar days, either agreeing with the Engineer's proposed revision or setting forth justification as to why it should not be accomplished. If the Contractor's justification for not accomplishing the revision is reasonable, such revision will not be incorporated in to the Project Schedule. If the Contractor's justification is not accepted, the Engineer directed revisions shall be incorporated into the Project Schedule. However, the Contractor may appeal the Engineer's determination to the Division Engineer, Construction, whose decisions shall be final and binding in accordance with Sec. 105.11 of the Contract General Special Provisions. The Contractor's failure to respond in writing within seven (7) calendar days will be deemed to be an acceptance of the Engineer directed revisions and such revisions vill be incorporated by the Contractor into the Project Schedule. Sample Provision 2 1.9 PROJECT SCHEDULE REVISIONS A If, as a result of the monthly Project Schedule Update, it is the opinion of the owner that the Project Schedule no longer represents the actual planned prosecution and the actual progress of the Work, the Owner will request that the Contractor revise the Project Schedule to reflect its current planning. The Contractor shall submit to the Owner in writing, a schedule analysis illustrating the influence, if any, of the proposed schedule revision on Contract Time, Each such schedule analysis shall be submitted to the satisfaction of the Owner prior to the next Project ‘Schedule Update, Compliance with such submittal requirements shall be a condition precedent to any obligation of the Owner to consider any Application for Payment, The Contractor may also request reasonable revisions 10 the Project ‘Schedule in the event that its planning for the Work is revised. If the Contractor desires to make changes in the Schedule to reflect revisions in its planned methods of operating and scheduling of the Work, the Contractor shall notify the Owner in writing, stating the reason for the proposed revisions and submit therewith to the Owner a schedule analysis illustrating the influence, if any, of the proposed schedule revision on Contract Time, Each such schedule analysis shall demonstrate how the Contractor would propose to incorporate the proposed schedule revision into the Project Schedule, The schedule analysis shall demonstrate time Page 41 Copyright 2002 by Evans M. Barbe, Neigant Consling (AI Rights Reservedimpact of the proposed schedule revision as of the date upon which the revision is proposed to be initiated, reflecting the project status of the Work at that point in time, and provide the event time computations of all affected activities if the proposed revisions were to be accepted by the Owner. Accepted revisions will be incorporated into the Project Schedule at the next monthly Project Schedule Update Meeting. Ifa revision to the Project Schedule is contemplated, the Contractor or Owner shall so advise the other in writing at least seven (7) days prior 10 the next Project Schedule data date, describing the proposed revision and specifically setting forth the reason(s) for each revision. Owner initiated revisions to the Project Schedule will not be incorporated into the Project Schedule without written Notice to the Contractor, who shall respond in writing within seven (7) days, either agreeing with the Owner's proposed revision or setting forth justification as to why it should not be made. If the Contractor's justification for not making the revision is accepted, such revision will not be incorporated into the Project Schedule. The Contractor's failure to respond in writing within seven (7) days will be deemed to be an acceptance of the Owner initiated revision and such revisions will be incorporated in to the Project Schedule in the next Project Schedule Update, Requests for revisions of activity manpower, activity costs or the redistribution of activity costs shall be made in accordance with the requirements of this Section, Page 42 Copyright 2002 by Evans Me Barba, Nevigant Consulkng All Rights ReservedDiscussion Paper No. 6 Relevant Recent Case Law Cogefar - Impresit U,S.A., Inc., DOTCAB No. 2721, 97-2 BCA (CCH) §29, 188 (1997) In Cogefar, the Board was presented with an appeal by the general contractor on a federal detention center construction project which presented numerous and complex issues as to delay. ‘The project had become so delayed that the owner, the Federal Bureau of Prisons, had terminated the contractor for default, Both parties presented CPM-based arguments which were supported by the testimony of scheduling experts. The scheduling experts relied upon different CPM methodologies and reached diametrically opposite conclusions. The Board, after expressing some skepticism as to CPM analysis, found ‘more persuasive the testimony of the scheduling expert whose analysis the Board believed to be based more upon “actual events” affecting work on the as-built critical path. ‘The contract required the general contractor, Cogefar, to employ CPM analysis in both planning the schedule and reporting the progress of the work to the owner. A preliminary network was to be delivered to the owner at the outset of the job followed soon thereafter by a computer generated detailed network. The contract also required that, ‘once work began, there be a monthly update of the schedule based upon a monthly meeting of the contractor and the Contracting Officer. The Contract also made provision for revision of the schedule including, most importantly, that: If, as a result of the monthly Schedule Update, it appears the project schedule no longer represents the actual prosecution and the progress of the Work, Page 43 Copyright 2002 by Evans M. Barb, Nevigont Consulting “AU Rights Reservedthe Contracting Officer will request, and the Contractor shall submit, a revision to the Project Schedule. Thus, the contract recognized that the progress of the work might be affected by changes or other occurrences to the point that the planned schedule would have to be revised. The contract also provided that, in the event of changes, delays or contractor requests for additional time, the contractor submit a CPM fragmentary network (fragnet) as part of a time impact analysis showing how the schedule would be affected, ‘The project experienced many difficulties which, the parties agreed, caused many substantial delays. ‘The contractor submitted a proposed revised schedule (apparently at the owner’s request) but, because of alleged deficiencies in the proposed revised schedule, it was not accepted by the owner. The contractor proceeded to use the revised schedule to carry out the work but the owner used the earlier schedule to track the progress of the work. ‘The parties were at odds also with respect to the time impact analyses submitted by the contractor with respect to various changes and delays. The contractor failed to submit the contractually provided-for fragnets with the time impact analyses and so those analyses were rejected by the owner. The contractor’s position at trial was that, due to the number of delays, it was impossible to provide fragnets with the time impact analyses. In any event, the parties had no agreement as to the effect upon the schedule of the various changes and delays. With the lack of an agreed-upon schedule, and the lack of any agreement as to time impact analyses, the delay issues were contested at trial by the parties’ respective scheduling experts. The Board summarized their respective methodologies thus: Page 44 Copyright 2002 by Evans M. Barba, Nevigont Consulting Al Rights ReservedCogefar’s scheduling consultant, [the Contractor's Consultant], was recognized by the Board as an expert on scheduling, construction project management, evaluations of time extensions, and the use of CPM scheduling techniques in construction contracts and projects. [The Contractor’s Consultant]’s analysis was based on a comparison of the as-built schedule to the planned schedule for the project. The methodology employed by [the Contractor’s Consultant] involved a review of the job on a day-by-day basis using the as-built information as to when an activity started and stopped. In reaching his conclusions, [the Contractor's Consultant] and his associates reviewed two videotapes of the entire work in the building by the masonry contractor, performed twenty interviews of Cogefar employees, reviewed eleven depositions, and reviewed the documents obtained in iscovery as well as daily, monthly, and field reports, costs reports, payroll records, and submittal logs. He also reviewed pour cards, execution reports, and diaries to evaluate how the job progressed, [The Contractor’s Consultant] and his associates reconstructed the project from its inception in February 1992 until termination in October 1993, He reviewed the amount of labor and equipment dedicated to the project along with the various activities performed by Cogefar to determine the actual critical path of the project. Afier determining the as-built critical path of the project, [the Contractor's Consultant] compared Cogefar’s actual construction to how the job was planned at the outset of performance to determine whether the problems during performance impacted the completion date. When [the Contractor's Consultant] determined that there was a delay during performance, he was able to determine the length of the delay and see how and where it occurred. [the Contractor's Page 45 Coppright 2002 by rans M, Barbe, NevgantConulng “AU RightsReservedConsultant] did this by looking at an activity on the as-built critical path and comparing the date the activity was actually performed with the date that it was planned to start and finish, [The Contractor's Consultant] also presented the as-planned schedules for the contract work as submitted in Cogefar’s original schedule of February 19, 1992. This schedule was compared with the actual work on the job in a series of fifty-six charts to arrive at [the Contractor’s Consultant]’s conclusions. Respondent’s CPM expert, [the Government’s Consultant], was recognized by the Board as an expert in scheduling analysis and other areas including delay analysis and the review of planned schedules. {the Government’s Consultant] employed @ contemporaneous time frame analysis to evaluate the dclay on this job. Under this method the delay is evaluated using the materials available at the time of the delaying event. The delay in any given month is evaluated based on that month’s updated schedule. The analysis is based on looking back in a window, which is defined by two successive schedule updates, and then looking at the critical path and who caused any delays. [The Governments Consultant] divided the work into seventeen windows. [the Governments Consultant] evaluated the critical path at the beginning and end of each window and determined whether there was any delay, including weather delay, during the period of the window being reviewed. Each window compared the completion date of two successive schedule updates and assessed responsibility for any delay found from one to the next. The critical path used was that shown on Cogefar’s schedule updates. [the Government’s Consultant] then Page 46 Copyright 2002 by Evans M. Barb, Nevgant Cons “A Rights Reservedperformed an analysis in each window determining whether Cogefar or the FBOP was responsible for the delays. On cross examination, [the Government’s Consultant] admitted that the logic of the September schedule reflected something entirely different from what was actually built....[the Government’s Consultant] further admitted that, while Cogefar changed the logic in its December 21, 1992 schedule, he did not use this change since the FBOP had rejected that schedule. [The Government’s Consultant] stated that if this, logic was faulty or changed, the critical path would be different than in his analysis. [The Contractor's Consultant] testified that [the Government’s Consultant] derived the incorrect critical path as a result of using the outdated logic. ‘The Board then expressed substantial skepticism as to the objectivity of the contending scheduling experts and the limits of the utility of CPM analysis: The parties presented extensive testimony by experts who evaluated the dclay that occurred on this project. Not surprisingly, Cogefar’s expert attributed the total delay on the project to the FBOP, while the FBOP’s expert assessed all clay not already compensated by time extensions, against Cogefar. For example, [the Government’s Consultant], for the FBOP, found that the project was delayed a total of 301 days and that the time extensions of 120 days granted by the FBOP were precisely correct, since Cogefar had caused exactly 181 days of delay. Similarly, [the Contractor's Consultant], for Cogefar, opined that the project was delayed a total of 353 days and that not a single day of delay was Cogefar’s responsibility. Yet, these experts of impeccable credentials attempt to convince the Board that their methods of delay analysis are scientific and precise. Given this evidence, we question the precision and value of CPM analysis. We find that there is some merit to each side’s position. For example, it is clear to us that Page 47 Copyrigh 2002 by Evans M. Barb, Navigant Consuling AI Rights Reserveddelays and numerous disruptions to the masonry work, which was an integral part of this building, must have impacted the completion date. However, the evidence is clear that these events were not responsible for the massive amount of delay attributed to them by Cogefar. Our analysis takes into account the experts? contrary opinions, but we give most weight to the other evidence in the record, and draw the logical conclusions flowing therefrom. The Board ultimately concluded that the testimony of the contractor’s expert was more persuasive because it was based upon “actual events” and because the testimony of the owner’s expert was not based upon “the actual logic of the job.” While we find both the expert analyses heavily slanted towards the position of the party that employed that expert, we find the analysis of {the Contractor’s Consultant] for Cogefar to be a more reliable indication of the delay caused to the project as a result of the various events that occurred. [the Contractor's Consultant]’s more thorough review looked at the actual events to plot the critical path. [the Government’s Consultant], relying on Cogefar’s schedule updates, which had not been changed to reflect the actual logic on the job, would seem to yield a less precise result...the Government's Consultant] failed to use a current CPM schedule to evaluate the delay on the project, This is mandatory to achieve an accurate assessment of whether an item of delay affects the overall completion of the project. Based in part upon the above-discussed considerations, the Board granted much of the extra time sought by the contractor. The Cogefar decision is a strong illustration of the need to base schedule delay analyses on real world historical events as they occurred in the course of the work and to establish the as-built critical path to completion, rather than to rely on incomplete, inaccurate updates. Page 48 Copyright 2002 by Evans M. Barb, Navgant Consulting AM RightsReservedFortec Construetors v. United States, 8 Ct. Cl. 498 (1985) In Fortee, the court rejected the government's use of a CPM for evaluation of a contractor's claims for extensions of time, despite a contractual provision for such use of the CPM because the CPM had been updated only once and did not reflect the actual course of work. As a result, the court held that the contractor was entitled to a lengthy extension of time and recovery of amounts withheld by the government as liquidated damages. ‘The Fortec contract included a requirement that the contractor prepare “a network diagram, showing the order and interdependence of activities and the sequence in which the work was to be accomplished as planned by the contractor, and a mathematical analysis of the network diagram, including a tabulation of each activity.” The contractor prepared a CPM to meet this contractual requirement. The project was subjected to numerous change orders, weather delays, and other delays. There was particular controversy as to whether various extra work that the contractor had been directed to perform had delayed the completion of the project. The contract provided that the CPM would be used to evaluate impacts on the contractor's work in determining the allowance of time extensions. Consequently, the government argued that the extra work performed by the contractor did not justify any time extensions because the CPM diagram did not show that any of the items of additional work were on. the critical path. ‘The court noted that the CPM had been updated only a single time. The contract allowed the contractor to update the CPM only upon receipt from the government of modifications adding additional work and then only with the government’s concurrence as to the time to be added. The government did not even consider several of the Page 49 Conpright 2002 by vans M,Barb,Nevigant Constng Mail Righs Reservedcontractor’s requests for extensions of time until after the completion of all the work. Thus, the CPM was not updated during the course of construction. The court noted that, because the CPM was not updated during the course of construction, it “did not depict the actual critical path.” The court pointed out that delay as to a non-critical item may make that item critical so that the critical path can change and, in fact, can change frequently. The court found that the various delays in the project had caused the critical path to change from that depicted in the CPM diagram. ‘The court concluded, “it is impossible to determine from the CPM diagram whether a particular activity was critical or non-critical”. The conclusion that one could not tell from the non-updated CPM diagram whether an activity was critical or non-critical destroyed the government’s argument that none of the items of extra work appeared on the critical path in the CPM diagram. The court stated: Itis difficult, if not impossible, for this Court to comprehend how the corps could have used the CPM to evaluate Fortec’s time extension claims without modifying the CPM to reflect the additional work Forte was directed to perform — the valve pit, the ftame and grate, the hangar doors, and the roof ventilator. ‘These items were all major components of the hangar project. If the corps made such modifications to the CPM, this Court cannot understand why the Corps did not issue a formal modification (logic revision), which Fortec would have then been required to include and use in its CPM analysis, see The Government’s reliance upon the CPM in denying Fortec’s claims is clearly misplaced. While this Court recognizes that Fortec Page 50 Copyright 2002 by Evans M. Barbe, Novigant Consuing Ml ighs Reservedadmittedly failed to justify its claimed relief by reference to the CPM, the Court cannot overlook the fact that neither party appears to have used the CPM in evaluating contract performance. Since Fortec’s CPM was revised only once during performance, and then without regard to the effect of prior delay claims on the project not acknowledged by the Corps, its use afier the fact as a gauge for measuring time extensions plainly is improper. Accordingly, Fortec is entitled to recover the amounts already discussed and allowed herein. The result of the government's reliance upon the non-updated CPM was that the contractor recovered amounts withheld by the government as liquidated damages. Coffey Construction Co., Inc., VABCA Nos. 3361, 3432, 3473, 93-2 BCA (CCH) 25,788 (1993) In Coffey the contractor made claims for additional compensation and for remission of liquidated damages. The work had been subjected to several lengthy delays. The government acknowledged that the delays had occurred, but denied that any of them affected activities which were on the critical path. The contractor, in contrast, alleged that all of the delays affected activities which were on the critical path. ‘As per a contract requirement, the contractor had a CPM prepared at the outset of the project. ‘The contract also required that, in order to be granted additional contract time, the contractor must demonstrate delay or change to activities on the critical path. ‘The contractor submitted a request for an extension of time based upon the occurrence of various delays. The government’s Contracting Officer rejected the request for extension based upon his determination that the critical path ran through activities which were not affected by the delays. Page 51 Conrieht 2002 by Evans M. Barb, Nevigant Consulting “AI RightsReservedThe contractor, at trial, supported its allegations of critical delay with the testimony of its CPM scheduling expert: As part of its claim presentation, and at the hearing, Appellant's CPM analyst presented a significant amount of computer data and charts derived therefrom by which he sought to determine the number of days of delay attributable to specific government actions. Essentially, the various computer runs consisted of the original Day 1 Schedule, or a re-phrased or revised Day 1 schedule, taken at various “data dates” and incorporating different combinations of activities, such as the asphalt delay, Building 2 demolition delay, delays related to various RFI’s, and so forth, The runs are not complete as they include some but not all events affecting the overall project and actual progress to-date. Nor did the runs prepared for Appellant's claim represent actual on-the-job updates, ‘month-by-month, reflecting progress to-date. None of the runs represented an “as-built” schedule, Coffey’s expert, Mr. Meyer, indicated that they had not put together an as-built CPM or chart because in his opinion it was “an impossibility..there is not enough wall space in the room to put it up...It would take pages and pages of documentation, if you are taking everything that is considered into a job... have yet to see anybody do it.” The Board noted that the CPM had been updated only a single time and that: “Thus, the schedule did not reflect the actual prosecution and progress of the project for the first seven or eight months, ‘The schedule was used for payment purposes but not for monitoring or coordinating the project.” Because of these shortcomings of the CPM, the Board found the contractor’s attempted reliance upon the CPM misplaced: [W]e now examine the reasons why this project was completed 241 days late and to whom the delay should be attributed. Our task would be easier if we were aided by the existence of reliable CPM analyses that evolved during the Page 52 Copyright 2002 by Evan M, Barb, Navgent Consulting “Al fights Retevedcourse of the project. However, this was not done in the instant case. The Appellant's CPM consultant did provide, as part of the claim presentation, CPM analyses which sought to demonstrate the effects of specific delays on the project. However, we are not confident in such piecemeal, after-the-fact approach. We have considerable doubts regarding the completeness and nature of the underlying assumptions, and the relationships considered in setting up the computer runs. Appellant's counsel argues that this Board has held that the parties must “live or dic” with the analysis of applicable CPM runs. Santa Fe, Inc., VABC No. 2168, 87-3 BCA P20,104. However, as government counsel correctly points outs, what the board actually said was “in the absence of compelling evidence of actual errors in the CPM’s, we will let the parties ‘live or die’ by the CPM applicable to the relevant time frames.” In this case, we have little faith in any schedule beyond that which the Contractor originally submitted and the VA approved, the original Day 1 Schedule. Since that schedule was not used as a planning tool and was not maintained throughout the performance of the work, there do not exist mutually approved CPM’s applicable to any relevant time frames. Nor did the Appellant present revised schedules which reflected all significant actual events that occurred during the course of the project. We are not persuaded that the schedule analyses presented by Appellant are compelling as to periods of delay, the causes thereof, or determinations of those activities through which the critical path meandered. This view is consistent with the position taken by the United States Claims Court (previously the Court of Claims and now the Court of Federal Claims) in Fortec Constructors v. United States, 8 Cl.Ct. 490 (1985), aff'd, 804 F.2d 141 (Fed.Cir, 1986). There the Court briefly explained the CPM method of analysis and stated that “if the CPM is to be used to evaluate delay on Page 53 Congreht 202 by Evans M, Barbe Nvigant Consig “AU Rights Reservedthe project, it must be kept current and must reflect delays as they occur.” Fortec at 505. ‘The Board decided to rely upon a comparison of the original (“Day 1") CPM with the actual periods of performance as shown in certain bar charts presented by the parties. The ultimate result was that the Board could not fix responsibility for critical delay solely on one or the other of the parties and held the delays to be concurrently caused. Liguidated damages were remitted but compensation to the contractor was denied. Blinderman Construction Co., Inc. v. United States, 39 Fed. Ct. 529 (1997), aff'd mem., 1998 U.S. App. LEXIS 30274 (Fed. Cir. Nov. 9, 1987) In Blindermen, the court denied the contractor’s claims for extended overhead, which claims were based upon various delays in the construction, due to deficiencies in the contractor's contractually-required CPM. The court stressed that, not only did the CPM fail to comply with the contract’s requirements of updates, but it was non-probative as a result of such lack of updates. The contract was explicit in requiring the contractor to, not only prepare a CPM, but to update it as well: Following the Navy’s review and approval of the proposed CPM network diagrams and mathematical analysis, the contract required that plaintiff use the approved CPM work schedule “for planning, organizing, and directing the work, reporting progress, and requesting payment for work accomplished.” JX AA § 01013, at P 2.2.3. Plaintiff was thereafter obligated to notify the Navy of any changes in methods of operating and scheduling, and to revise the CPM network diagram and mathematical analysis at no cost to the Navy if the contracting officer determined that said changes were of a major nature. Moreover, plaintiff was required to “submit at monthly intervals a report of the actual construction Page 54 (Conright 2002 by Evans M. Barb, NavigantConsling AU Rights Reservedprogress by updating the mathematical analysis.” Id. at P 2.2.4. Finally, the contract provided that whenever a change in the work became necessary, plaintiff was required to submit revisions to the network diagram of all activities affected by the change. ‘The contractor submitted CPM diagrams at trial in support of its contentions that various delays had affected activities on the critical path. The court found these CPM diagrams to give no support to the contractor’s position: At the outset, the court observes that the CPM network diagram received into evidence is utterly useless. Plaintifi's network diagram at bar indicates that it is comprised of four pages, yet plaintiff inexplicably offered only the first page, showing the earliest stages of the project, into evidence. Plainly the court cannot trace a critical path on plaintiff's network diagram without having the last three~ quarters of said path in view. Moreover, plaintiff's hand drawn CPM network diagram, originally prepared on February 19, 1990, indicates that it was revised on five later occasions — June 4, 1990, July 2, 1990, August 6, 1990, January 8, 1991, and February 11, 1991. Yet there is no way of telling, either textually or visually, which lines, symbols, numbers, or letters were added or deleted at the dates in question, for the purported revisions are visually indiscernible and are ‘unaccompanied by explanatory text. Finally, plaintiff's own Mr. Pieroni testified that the CPM network diagram was not supposed to show the critical path and, further, stated that there is no way to derive the critical path from the CPM network diagram. Needless to say, this startling testimony raises serious concerns about plaintiffs’ overall approach to CPM project scheduling, since the contract unequivocally provides that the network diagram “shall show the order and interdependence of activities and the sequence in which the work is to be accomplished as planned by the Contractor.” IX AA §01013, at P 2.2.1. Page 55 Copyright 2002 by Evans M. Barba, Navigant Consuing All Rights ReservedFinding plaintiff's CPM network diagram unhelpful, we tum to plaintiff's CPM mathematical analyses and find them gravely flawed as well. One deficiency is plaintiff's failure to update its CPM schedules in accordance with the requirements of the contract, which states in no uncertain terms “when changes in the work are necessary, the contractor will submit revisions to the [CPM] network of all activities affected by the change.” Id. at P 2.3. In fact, the relevant section of the contract is positively replete with provisions requiring updates, both periodic and as a result of changes in the work, to plaintiff's CPM schedules. Said contractual provisions acknowledge the principle that accurate, informed assessments of the effect of delays upon critical path activities are possible only if up-to-date CPM schedules are faithfully maintained throughout the course of construction. “Otherwise, the critical path produced by the computer will not reflect the current status of the work performed or the actual progress being attained.” Continental Consol. Corp., ENG BCA Nos. 2743, 2766, 67-2 (CCH) P 6624, at 30,715 (1967), quoted with approval in Fortec Constructors, 8Cl. Ct. at 506. Emphasi ing this point, Ms. Sandy Ginalski, the Navy's project manager and the person responsible for evaluating and approving plaintiff's CPM submissions on the EMIC project, testified that if the CPM documentation is inadequate, the critical path cannot be known and, consequently, there is no way to determine whether an overall project delay has truly occurred. Obviously, then, “if the CPM is to be used to evaluate delay on the project, it must be kept current and must reflect delays as they occur.” Fortec Constructors, 8 Cl. Ct. at 505. In the present case, plaintiff presented no evidence tending to establish that, its CPM mathematical analyses were updated in a timely manner following the delays alleged in Counts XV and XVI. Mr. Baudhuin and Ms. Ginalski both gave uncontroverted testimony that, throughout the duration of the EMIC project, BCC never provided timely updates of its CPM submissions. Page 56 Copyright 2002 by Evans M. Barbe, Navigant Consulting "All Rights Reserved‘The court ruled that, because the CPM had not been updated, it proved nothing of consequence. PCL Construction Services, Inc. v. United States, 53 Fed. Cl. 479 (2002) In a very recent decision issued in August 2002, the United States Court of Federal Claims discussed several important delay issues. PCL Construction Services, Inc. (“PCL”) was the general contractor on the construction a visitor’s center and parking facility at the Hoover Dam. In April 1994, approximately two and one-half years after the government issued a notice to proceed to PCL and eleven months afier the scheduled completion date for the visitor's center, PCL submitted an uncertified Request for Equitable Adjustment (“REA”), claiming entitlement to an additional $23 million and to a schedule extension of 363 days because of delays and disruptions arising from alleged defective contract drawings and specifications, differing site conditions, time required for the resolution of Requests for Information, and time impacts due to contract changes. The government requested that PCL participate in a fact-finding session regarding the preparation of an as-built schedule in order to agree upon responsibility for critical delays to the project; PCL interpreted this request as a denial of its REA in its entirety. PCL filed suit alleging, inter alia, breach of contract in the amount of $31 million, At approximately the same time, the government informed PCL that it was retaining money being held by the government to protect its interest in accrued liquidated damages, outstanding required submittals, and credits due the govemment. PCL requested the release of the retainage; the government denied that request and a month later, the contracting officer issued her final decision denying the breach of contract claim in its entirety. PCL submitted a certified claim in the amount of $1.3 million for the retained monies, stating that it had performed the contract and was entitled to the retained sums. PCL also stated that it would perform no additional work, as it believed that the work requested was outside the scope of its original contract and that the govemment’s Page 57 Coppright 2002 by vans M. Barb, NavgontConsating Mt igh Reronedwithholding of the retainage was contrary to the contract. The contracting officer denied PCL’s claim for retainage in its entirety, took exception to PCL’s statement that its contract work was complete, interpreted PCL’s refusal to perform further work as an “express and unequivocal repudiation” of PCL’s remaining contractual obligations, and informed PCL that failure to respond within ten days would result in the government's demand upon PCL’s sureties to complete the remaining work. Six weeks later, the government terminated PCL’s contract for default. After PCL was terminated for default, the contracting officer notified PCL of the assessment of liquidated damages in the amount of almost $1.3 million. However, the liquidated damages letter did not assign responsibility for delay and stated that if the government found at a later date that PCL was entitled to excusable delays, the liquidated damages assessment would be accordingly offset. On addressing the liquidated damages issues first, the PCL Court recognized that, “... where delays are caused by both parties to the contract the court will not attempt to apportion them, but will simply hold that the provisions of the contract with reference to liquidated damages will be annulled.” Id, at 485, quoting Acme Process Equipment v. United States, 171 Ct. Cl. 324, 347 F.2d 509 (1965), rev'd on other grnds, 385 U.S. 138 (1966), reh'g den'd, 385 US. 1032 (1967)(the “Rule Against Apportionment”). However, the PCL Court recognized that the Rule Against Apportionment had been subject to much criticism in the courts and the boards, and noted that more and more, “ liquidated damage provisions have obtained firm judicial and legislative support . . . As long as the owner’s own delay is not incurred in bad faith, it is not unjust to allow proportional fault to govern recovery.” Id. at 485-86. The PCL Court cited precedent for allowing liquidated damages, even though the government had delayed performance, 50 long as there “. . . is in the proof a clear apportionment of the delay and the expense attributable to each party.” Id. at 487, quoting Sauer Inc. v. Danzig, 224 F.2d 1340 (Fed. Cir. 2000)(the “Clear Apportionment Rule”). Afler recognizing the apparent tension Page 58 Copyright 2002 by Evans Me Barbo, Nvigant Consulting AU Rights Reservedbetween the Rule Against Apportionment and the Clear Apportionment Rule, and otherwise suggesting that the schism would be reached and resolved by Federal Circuit sitting en banc, the Court determined that under either rule, the government was not entitled to recover its liquidated damages. In examining the evidence, the PCL Court found that the government caused some of the delay on the project. While the Court found that PCL’s own delays and difficulties in its excavation operations contributed to the delay, the Court noted that the government’s own experts, witnesses, and post-trial briefs conceded that the government had caused hindered and delayed contract performance. Moreover, the Court stated: Although the court has found that the government did not delay the construction of the project to the extent plaintiff claims, and, therefore, did not breach the contract, based upon the evidence adduced at trial, itis clear that the government did contribute to the delay ... Under the rule against apportionment, as described in Acme Process Equipment, the court, therefore, should not attempt to apportion damages in this situation. Instead, the government's actions result in the annulment of the liquidated damages provision of the contract. Even if the court were to forego the rule against apportionment, however, in favor of the clear apportionment rule, as described in Sauer, the court also would reject defendant's claim for liquidated damages because, based... it is impossible to apportion damages in this case due to the nature of the plaintiff's claims and the evidence submitted, or not submitted by the parties. . . [O]ne established way to document delay is through the use of Critical Path Method (CPM) schedules and an analysis of the effects, if any, of government-caused events upon the critical path of the project. However, in order to properly demonstrate delay in the project, the CPM schedule must be kept current 10 reflect any delays as they occur. The required nexus between the government delay and a contractor's failure to complete performance at some unspecified earlier date cannot be shown merely by hypothetical, after-the-fact projection. Part of one’s understanding that an activity belongs on the critical path of a project is also an understanding of how that activity affects the other activities. A ‘general statement that disruption or impact occurred absent any showing through use of updated CPM schedules, logs or credible and specific data or testimony, will not suffice to meet the plaintiff's burden. Id, at 489 (citations omitted). Page 59 Copyright 2002 by Evans M. Barba, Navigant Consulting Ma Riphs ReservedThe PCL Court found that since neither party had submitted sufficient credible evidence relating to how the changes and delays affected other activities on the project, ‘the court was unable to clearly apportion the delays as required under Sauer’s Clear Apportionment Rule. Id. at 489-90. Wilner v. United States, 23 Cl. Ct. 241 (1991) ‘A 1991 decision of the United States Claims Court involved a contractor, Wilner Construction Co., Inc., that had entered into a contract for the construction of over $880 thousand in structures, site improvements, and gasoline islands at Camp Pendleton, California, Under the original contract, Wilner was to complete construction by August 14, 1986. However, the building was not usable until March 10, 1987, Wilner sought an equitable adjustment for delays arising in connection with project construction arising from defective plans and specifications, untimely responses to the contractor’s requests for clarifications, and untimely inspection. The Wilner Court started its analysis by recognizing that a“. . . contractor typically may not recover if the government-caused delay is concurrent with additional delay not caused by the Government, such as weather or contractor delay.” Id, at 245. In order to avoid this result, the Court pointed to the Clear Apportionment Rule, i.c., that “where both parties contribute to the delay neither can recover damage(s], unless there is in the proof a clear apportionment of the delay and expense attributable to each party.” Id, “A contractor may recover for concurrent, but apportioned, delay if it can prove the expenses assumed by each party.” 1d, at 254, citing Klingensmith, Inc. v. United States 731 F.2d 805 (Fed. Cir. 1984). In Wilner, the contractor failed to produce a schedule analysis to establish the requisite apportionment. The Court noted the significance of such an analysis to the imposition of delay damages: Page 60 Copyright 2002 by Evans M. Barb, Navigant Consulting AU Right ReservedPlaintiff's position, as stated by counsel in closing argument, is that the critical path was always in the building. Plaintiff, however, failed to diagram these delay episodes or otherwise to depict the precise route of the path. Plaintiff thoroughly described each item of delay, but did not present evidence concerning an overall view of the critical path that he sponsored. Undoubtedly, plaintiff does have a position regarding the proper course of the critical path. Unfortunately, he failed 10 supply a critical path analysis, and the court is not obligated to attempt to construct one for him. Due to the absence of plaintiff's view of the critical path, the court cannot assign weight to any concept of the critical path as propounded by plaintiff. Id. at 256, ‘The Court also noted that by contrast, the government had produced a credible critical path analysis. Defendant's view of the critical path, expressed through the testimony of [The Government's Consultant], is comprehensive and detailed... id. The Court also noted that “[iJhe existence of concurrent delay in both the t 257, citing building and site work does not preclude recovery by contractor.” Klingensmith Inc. v. United States, 731 F.2d 805, 809 (Fed Cir. 1984). “This Court .. . does not believe that the... [Government] can validly assert that the contractor is precluded from entitlement to an extension of time for one change merely because. . . [the contractor] is concurrently being delayed on other changes for which . . . [the Government] is also responsible and is also denying extensions of time.” Id. citing Fortec Constructors v. United States, 8. Cl. Ct. 490, 502 (1985). Harrison Western Corp. And Franki-Denys, Inc. (JV), ENG BCA Nos. 5556, 5576, 93- 1 BCA §25-382 (August 31, 1992) Page 61 (Copyright 2002 by Evans M. Barb, Nevgant Conlin “AM Rights ReservedIn a 1992 decision of the Army Corps of Engineers Board of Contract Appeals, Harrison Western Corp. and Franki-Denys, Inc. (IV) (the Contractor”) brought a series of claims for differing site conditions, resulting extra work, and delay and impact costs associated with its construction of a Washington, DC area subway system. The Contractor sought an equitable adjustment totaling over $2.6 million as a result of delays to its planned early completion date of the $25.5 million contract, The project consisted of the construction of two vertical shafis and two tunnels on both sides and under the Anacostia River in Washington, wherein a dual rail line would be laid for subway trains. ‘The contract contained several interim milestones as well as an overall duration of 1100 calendar days. The contract also contained most significantly for purposes of this case an appendix with several clauses relating to the use and effect of the project's CPM. 4. Float time is not time for the exclusive use or benefit of either [WMATA] or [the Contractor]. Extensions of time for contract performance as specified in the General Provisions will be granted only to the extent that equitable time adjustments to the affected activity or activities exceed the total float time along the affected paths of the approved... report in effect at the instant of... (©) Detection of a subsequently acknowledged differing site condition or excusable delay. tee 6. Legal status: The currently approved [CPM] documents shall be used by [the Contractor] for planning, organizing and directing his work, for reporting progress, for requesting payment and for determining delays in achieving milestone dates specified ... [The Contractor] agrees that actual slippage of activities shall not be the basis for time extensions to this Contract unless such slipped activities are on the critical path of the currently approved ‘computer printout reports or cause one or more new critical paths, and result in a delay in achieving any milestone date... or ... the Contract completion date. Further, although the foregoing is a necessary condition for a time extension, it is not a sufficient condition. Page 62 CCosright 2002 by Evans M Barb, NvigantConsling AI Rights ReservedPursuant to the contract, the Contractor submitted for the review to the government (“WMATA”) a series of time-related, cost loaded CPM’s. After much back and forth, typically centering on the adequacy of durations and manpower loading for the tunneling activities, the parties reached conditional agreement on increasingly detailed CPM's. The final, most detailed CPM showed an early completion by the Contractor by 237 calendar days. As part of WMATA’s conditional approval, it reserved its rights to require the Contractor to revise the tunneling rates to actual rates if planned rates were not achieved after the first right weeks of tunneling, WMATA stated that the CPM’s rates were unreasonable because they lacked contingencies inherent in tunneling work. During performance, the Contractor encountered unanticipated asbestos which it claimed to be a differing site condition. WMATA did not agree it was a DSC, but did agree it was a change. The parties disputed whether the delays associated with the change effected overall contract completion, but otherwise settled their differences by change order. The Contracting Officer denied the Contractor's delay claim relating to the asbestos, except for an additional amount for field overhead costs, after conducting an analysis based on a partial as-built schedule current as of the date of the delay. He concluded that since there was time between the Contractor's planned carly completion and the contractually-mandated completion date, there was still float and thus no delay. ‘Also during performance, the Contractor encountered unanticipated underground concrete obstructions, which again led to a disagreement between the Contractor and WMATA as to impact. WMATA denied the Contractor’s time-related claim based on a partial as-built schedule current as of the date of the delay as well as later as-built information showing actual tunneling, durations which exceeded planned durations. The Board characterized this latter basis as a finding that the Contractor's claim was not in compliance with 44 of Appendix H. The Board also emphasized the Contracting Officer’s statement that the Contractor’s CPM could not be used prospectively without agreement regarding the reasonableness of the activities’ durations, particularly the tunneling durations. Page 63 Copyright 2002 by Brant M Barbe, NovgantConsatng “all igs Retro‘The Contractor appealed and during trial, the experts described differing approached to their delay analyses. The Contractor’s expert performed an analysis using a partial as-built schedule updated as of the time of the delay. He did not consider later as-built information. His analysis projected delays on activities and on the overall project on a day-by-day basis, as viewed fiom the dates of the asbestos removal and the concrete obstructions removal. By contrast, WMATA's expert also considered later as-built information in computing delays, if available, WMATA concluded that although interim milestones were impacted by the two changes, the overall contract completion date was not delayed. WMATA’s expert also took the position that the time between the planned early finish date and the contractually-mandated completion date was float. In reaching its decision, the Board emphasized those provisions of Appendix H that the CPM requirements therein be met and that the alleged slippage results in a delay in achieving actual events. Moreover, the Board emphasized that the use of the CPM for “determining delays” was not exclusive, and that additional evidence, including evidence of actual events, was “fundamental”. In countering the Contractor’s claim that “delays must be analyzed at the time of their ‘occurrence or risk rendering the project’s scheduling system meaningless,” the Board stated that in fact, precedent required that “changes in the work and time extensions must be incorporated promptly in the progress analysis, or the critical path chart will not accurately reflect current project status. . . what [the Contractor] ignores, is that the successive CPM documents must reflect actual events to be useful.” Even within the terms of Appellant's argument, the insertion of allegedly excusable delays in a CPM contemporaneously with the delay event proves nothing that is critical 10 this case. An extension of the critical path, by itself, says nothing regarding the assignment of responsibility for delay of the final project completion date, if any. This is because it says nothing about how the parties arrived at the point in time at which the excusable delays were inserted. More importantly, it says nothing regarding succeeding events including subsequent delays. Appellant's case is similar to saying that a snapshot will suffice where videotapes or movies are required. In the present case, it is apparent Page 64 Copyright 2002 by Evans M, Barba, Neigan Consuling “Al Sighs Reservedthat the excusable delays to the north shaft claimed by Appellant in this appeal were a small part of larger delays to the shaft work and the causes for this larger delay have not been proven by the party with that burden, the Appellant. Page 65 Copyright 2002 by Evens M, Berb, Novigant Consuling AU Right ReservedADDENDUM Biographies of Speakers Evans M. Barba, P.E. Managing Director ‘Navigant Consulting, Inc. Judah Lifschitz, Esquire Shapiro, Lifschitz and Schram AdEVANS M. BARBA. EDUCATION: EXPERIENCE: B.E., Civil Engineering, The Cooper Union MS., Civil Engineering, Polytechnic Institute of New York Mr. Barba is a Managing Director with Navigant Consulting. Mr. Barba specializes in construction and government contract disputes on domestic and intemational projects. Mr. Barba has over 28 years of experience in engineering design, construction administration, construction program management, critical path method scheduling, and disputes and claims resolution. He has directed hundreds of program management and claims assignments on a variety of construction projects, as well as complex development and acquisition programs, including aerospace and marine contracts. Mr. Barba has not only developed the strategy for accomplishing these assignments, but has served as an integral member of the teams assigned to implementing them, He has also served as a lead negotiator in resolving problems and settling claims, and as an Expert in testifying as to claims analyses performed, and has been qualified as an expert witness in arbitration and at litigation, including, among others, before the Armed Services Board of Contract Appeals (ASBCA), the Department of Transportation Board of Contract Appeals (DOTBCA), and the U.S. Court of Federal Claims. Previously as the Founder, Chairman and Chief Executive Officer of Barba- Arkhon Intemational Inc., Mr. Barba has been widely recognized for his expertise in the fields of claims and schedule delay analysis. Claims analyses he has performed include a wide range of construction, marine and aerospace projects, A highly regarded speaker, Mr. Barba lectures internationally on such topics as "CPM Scheduling in Mitigating and Analyzing Claims," "Delay & Disruption Claims" and "Construction Planning and Management." ‘The latter course, which was regularly presented in Singapore and Hong Kong, focused on CPM scheduling utilization, FIDIC contracts and specific problems associated with intemational construction projects. In addition to his many years as a public speaker, Mr. Barba has presented courses to numerous private and public corporations, state and local governments, and quasi-public organizations, speaking in-house to their contracts, legal and construction divisions. Previously as a Vice President with an intemational consulting firm, Mr. Barba directed the analysis, preparation, defense and resolution of numerous construction claims, as well as the development of claims management procedures designed to insure that changes and claims on ongoing projects were properly documented, priced and processed, Peterson! BarringtonEvans M. Barba Page 2 Earlier in his engineering career, Mr. Barba was involved in the design, preparation of contract documents, and construction administration of numerous municipal water and wastewater treatment facilities, as well as industrial waste treatment plants and other environmental projects. Mr. Barba was also employed as a Soils Laboratory and Resident Field Engineer. In this regard he participated in and performed a full range of soils classification and laboratory testing procedures, and provided Field Resident Engineer services relative to soils (split spoon) sampling/drilling operations. PROFESSIONAL REGISTRATIONS: Registered Professional Engineer, New York Registered Professional Engineer, New Jersey Registered Professional Engineer, Connecticut Registered Professional Engineer, Michigan Registered Professional Engineer, Pennsylvania Professional Planner, New JerseyJUDAH LIFSCHITZ ee EDUCATION: EXPERIENCE: B.A., magna cum laude, 1974, Yeshiva College Co-President of SLS whose practice emphasis is in trial preparation and in the Government and Construction Contracts area. He is a member of the District of Columbia and Maryland Bars and is admitted to practice before various federal courts, including the United States Claims Court, the United States Court of Appeals for the Federal Circuit and the United States Supreme Court, He is a graduate of the George Washington University National Law Center. Mr. Lifschitz teaches Construction Law at the ‘Washington College of Law of American University. Mr. Lifschitz has been involved regularly in representing clients on a wide array of construction and government procurement issues, from bid protests through claims preparation, pricing, negotiation and trial. Mr. Lifschitz. has particular experience in construction contract matters and in environmental issues involving the construction industry. He also represents clients in fraud investigations and represents clients in many different industries, including aerospace, electronics, manufacturing and shipbuilding, both before civilian and military agencies and Boards of Contract Appeals. Mr. Lifschitz has published and lectured frequently on construction and government contracts topics. He is co-author of "Delay and Disruption in International Construction," Construction Briefings, No. 2001-8, "Copyright of Construction Plans and Structures," Construction Briefings No. 99-12, "Contract Licensing Laws", 1993 Wiley Construction_Law Update, "Construction Trust Fund Statutes and the Misappropriation of Contract Funds/Edition II", Constructi riefings No. 92-10, "Handling Environmental Incidents at the Jobsite," Construction Briefings, No. 91-10, "Misappropriation of Contract Funds," Construction Briefings, No. 90-10, "Tort Liability in Construction Contracting," oma Briefings, No. 86- 9, "Bid Rigging,” Construction Briefings, No 85-9, "Little Miler Acts," Construction Briefing, No. 84-8, and Mechanic" "Liens," Construction Briefings, No. 82-5, Federal Publications, Inc. Mr. Lifschitz serves on the editorial board and is a regular contributor to CBR, He has authored Revision Notes for the "Bid Rigging" and "Delay and Disruption in International Construction" briefing articles. He is also a Member and on the Editorial Advisory Board of The Construction Contractor, Federal Publications, Inc. Mr. Lifschitz is Contributing Editor and Associate Revisions Notes Editor of The Construction Briefings Collection, Federal Publications, Inc. and published Risky Business: The Extraordinary Products Liability Exposure of the Government Contractor, ABA Public Contract Section Annual Meeting Program, July 8., 1985. Mr. Lifschitz lectures on a variety of contract topics, including "Pricing of Claims," "Delays and Disruptions," "Environmental Problems on the Jobsite" and "Bid Rigging" for Federal Publications, Inc., "Cost Overruns in Government Contracts" for Touche Ross and "Proving Claims Under the FIDIC conditions of Contract" for Hawksmere ple in Europe. He has also lectured on government and construction contract subjects for DRI (Defense Research Institute),Judah Lifschitz Page 2 Professorial Lecturer, Construction Law, American University, The Georgetown University Continuing Legal Education Program in its Practical Contract Law Series, for Engineering News Record, the Defense Research Institute and the Construction Superconference. Mr. Lifschitz has also written two books, "Heaven Sent — Stories of Faith and Effort," Targum/Feldhiem, 1997, and "Stories for Shauli,” Targum/Feldhiem, 1999. PROFESSIONAL AFFILIATIONS: American Bar Associ: Industry Forum ion (Public Contracts Section and Construction District of Columbia Bar Association Prince George's County, Maryland Bar Association Peles Barrington