The term "concurrent delay" often arises when contractors submit claims for extensions of time. The recipient of the claim will point to another event, which does not qualify for an extension, that is also said to be causing a delay during the same period as the event in the contractor's claim. They will argue that this means the contractor is not entitled to the additional time and/or cost claimed.
Concurrent delay requires two or more events which simultaneously impact a project's "critical path" (i.e. either of which would delay the completion date), where one qualifies for an extension of time but the other does not.[1] Each event must actually impact the critical path. For example, if there is "float" in the programme such that one of the events, although late, would not delay the overall completion date, there is no concurrent delay.
The facts, therefore, matter. Often there will be numerous workstreams behind schedule. Whether this means there is concurrent delay (and not just coincidental/parallel delay) requires a careful investigation of the facts, sometimes with the help of an expert programmer.
Examples of concurrent delay
The following are some examples of scenarios where concurrent delay has been found:
- A contractor claims for delay due to inclement weather, but the contractor has a shortage of labour that day, such that it would not have been able to perform the works even if the weather had been fine.[2]
- A contractor claims for delay due to defects with the principal-provided structure preventing concrete capping from being installed, but the contractor was behind in completing roof covering works, which needed to be completed before capping could be installed in any case.[3]
Examples of coincidental (not concurrent) delay
If one of the events does not impact the critical path, there is no concurrency. For example:
- Design changes to the roof mean exterior works to enclose a multi-storey building (which works are on the critical path) are delayed. At the same time, the contractor is delayed in progressing interior linings on the ground floor due to procurement issues. There is sufficient float in the programme in relation to the interior works such that the procurement issues could be resolved and linings installed before the roof is completed, even if the roof works had not been delayed. No concurrent delay – the principal's risk event (design changes) is the only event impacting the critical path.
- A variation is instructed to the paint colour of a feature just days before the practical completion date, but the contractor is significantly delayed and has not yet built the feature to be painted. No concurrent delay – only the contractor's delay is impacting the critical path, and the paint change can be implemented without further delaying the works.[4]
What happens if there is concurrent delay?
What does the contract say?
If they wish, the contracting parties can decide what the consequence of concurrent delay is to be. The NZS 3910 standard form contract has no express clauses dealing with concurrent delay. We often see bespoke terms dealing with the consequences of concurrent delay. For example, some clauses provide that where there is concurrent delay no extension of time is awarded; others that time-related costs are not awarded during any period of concurrent delay.
If there is no contract term dealing with concurrent delay, then there are two main approaches that decision-makers in New Zealand (engineers to contract, adjudicators, arbitrators, and courts) might take:
- The conventional approach is to grant the contractor an extension of time (proportionate to the principal's risk event), but no time-related costs.[5] A possible exception to this is where the contractor can separate the time-related costs of the principal's risk and contractor's risk events – in which case it could claim only the extra time-related costs associated with the principal's risk event.[6]
- The alternative approach is to apportion the critical delay between the two events according to their 'causative potency' or dominance,[7] i.e. their relative causative importance and degree of responsibility for the delays. This may mean, in cases where both delays are equally dominant, that the contractor is awarded only half of the time claimed.
In our experience, option 1 is applied far more often in New Zealand. However, parties should be aware that option 2 is open to decision-makers (at least until the law in New Zealand is more settled). A key difference between the options is the applicability of liquidated damages. Option 1 removes the principal's ability to apply liquidated damages, but it remains open under option 2 for liquidated damages to be awarded in respect of the period of delay apportioned as being contractor's risk.