Navigating the Labyrinth: Concurrent Delay Under the SCL Protocol and FIDIC 2017

The construction industry, a realm of intricate planning and execution, frequently encounters the thorny issue of delays. While delays are commonplace, they become particularly challenging when they occur concurrently, involving both the employer and contractor.

This article delves into the complexities of concurrent delay, contrasting the perspectives offered by the Society of Construction Law (SCL) protocol with the updated provisions found in the FIDIC 2017 suite of contracts, particularly the Conditions of Contract for Construction.

The SCL Protocol: A Deep Dive into Concurrent Delay

The SCL Delay and Disruption Protocol, a widely referenced guide in the construction industry, provides a pragmatic framework for analyzing delay and disruption.

Notably, it addresses concurrent delay head-on, defining it as “two or more delay events [occurring] at the same time, where each is an effective cause of delay to the completion date.” This definition goes on to explain: “If two or more events are each an effective cause of delay to the Completion Date and they are not concurrent, then each would independently extend the completion date.

” In essence, the SCL Protocol views concurrent delays as those which would have, on their own, caused the project to be delayed, The SCL Protocol highlights that a project may encounter various types of delay:

• Excusable Delay: These delays are caused by events beyond the contractor’s control, such as acts of God, employer actions, or changes in law.
• Non-Excusable Delay: These delays are due to the contractor's own actions or inactions.
• Compensable Delay: These are delays for which the contractor is entitled to both an extension of time and compensation, for example employer change orders.
• Non-Compensable Delay: These delays do not entitle the Contractor to either an extension of time or compensation.
• Concurrent Delay: As defined earlier, those instances in which two or more effective causes of delay (excusable and/or non-excusable or compensable and/or non-compensable) occur during the same time.

The protocol emphasizes that the key to handling concurrent delay lies in identifying and analyzing the causes of delays, especially critical path delays. The protocol’s principle aim is to determine what actually caused the delays and when. It also stresses a need for a “critical path analysis” to find out what caused critical delays.

The protocol introduces the concept of the "dominant cause" approach, a popular approach in the US, which is based on examining which cause of delay is most effective. In practice, this would be the most significant delay, which, if it did not exist, would cause the least delay to the project. Under the traditional approach the most significant delay is seen to overwhelm the other concurrent delay. The problem with that approach, as the protocol is at pains to show, is that it tends towards an "all or nothing" solution.

The SCL Protocol seeks a more equitable solution to the problem of concurrent delay that does not leave one Party unfairly exposed. The concept of ‘apportionment of concurrent delays’ is introduced, whereby the overall period of delay is apportioned between the various causes, with the employer liable for compensable causes and the Contractor liable for non-excusable causes.

This is done through a detailed analysis of the causes and critical path delays to try and achieve a ‘fair’ result. In the absence of clear contractual provisions, the Protocol recommends an apportionment of concurrent delay to match the respective responsibilities of both the contractor and the employer. This approach, however, is not without its complications, requiring careful evaluation, quantification, and justification. The Protocol also recognises that a clear and specific contract clause is the preferred route to dealing with this issue.

Concurrent Delay in FIDIC 2017: A Different Perspective

The FIDIC 2017 suite of contracts, specifically the Conditions of Contract for Construction, provides a framework that approaches concurrent delay from a different angle. While the term "concurrent delay" itself is not explicitly defined, the FIDIC 2017 contracts set out a framework for determining the consequences of delays and for awarding an Extension of Time (EOT), The FIDIC framework is structured as follows:

• Sub-Clause 8.5 (Extension of Time for Completion): This clause outlines the specific grounds for a contractor to be entitled to an EOT, which include variations, employer's instructions, and certain exceptional events.
• Sub-Clause 8.8 (Delay Damages): This clause establishes the Employer's right to claim delay damages if the Contractor fails to complete the Works within the time of completion, including any agreed or determined extensions.
• Sub-Clause 20.2 (Claims for Payment and/or EOT) This outlines the rules and procedures for the Contractor to follow in lodging a Claim with the Engineer.
• Sub-Clause 3.7 (Agreement or Determination): The Engineer will be responsible for making an agreement or determining the cause, effect and value of any delay event, including a concurrent delay situation.

FIDIC 2017 does not directly adopt an approach of ‘apportionment of delay’ as is suggested in the SCL Protocol, instead it focuses on evaluating the impact on the critical path. The clauses focus on whether an Employer's event has caused a delay on the critical path. If it does, then the Contractor is due an EOT (and the payment of relevant compensation). The question of any concurrent delay (caused by the Contractor or by other events that are the Contractor’s liability or their risk) does not feature explicitly as it does in the SCL Protocol. If the Contractor has failed to mitigate the effect of an event that is their liability or at their risk, any delay that results would, of course, not give rise to an EOT.

The Conditions of Contract for Construction makes a statement, in Sub-Clause 8.5, that is aimed specifically at concurrent delays; “if a delay caused by a matter which is the Employer’s responsibility is concurrent with a delay caused by a matter which is the Contractor’s responsibility, then the Contractor’s entitlement to EOT shall be assessed in accordance with the rules and procedures stated in the Special Provisions (if not stated, as appropriate taking due regard of all relevant circumstances).”. The “appropriate taking due regard of all relevant circumstances” is important, as this statement makes it clear that a ‘cause and effect’ analysis is necessary for the Engineer.

Contrasting the SCL Protocol and FIDIC 2017: What Does it Mean For Practitioners?

The main point of difference between the SCL Protocol and the FIDIC 2017 contract is, that while the SCL Protocol, through the principle of apportionment, seeks to deal with concurrency by sharing the delays (and costs) between the Parties (where they have both caused delay), FIDIC 2017, while recognizing that concurrency is a factor that needs to be taken into consideration, has no specific mechanism built in for dealing with apportionment.

The two approaches represent two sides of a coin. In practice, it can be argued that they might achieve a very similar result, but where the approaches differ is in the route each method takes. A thorough critical path analysis, undertaken by the Engineer, as required by Sub-Clause 3.7 of FIDIC 2017, should lead to an outcome where both causes of delay, their impact and their respective responsibilities are correctly identified. The focus of FIDIC 2017 on the causal connection, rather than relying upon the potentially misleading concept of concurrency, should result in a fairer outcome for both Parties.

The approach under the SCL Protocol may be seen as seeking a “fair” outcome from an approach which says that delay is a divisible and separable entity and that responsibility for delay can, therefore, be apportioned, however, many consider that a delay either is or isn’t a cause of critical delay.

The FIDIC 2017 contract provides a more linear approach where a specific cause is identified and its actual effect, (or lack of it) on the critical path is evaluated. Under the FIDIC 2017 Contract it is not enough for the Contractor to show that an Employer responsible event has occurred, it must also be shown that it has impacted the critical path, that it actually caused a delay. By contrast, under the SCL Protocol the Contractor may still be due some compensation or an extension of time even though the Employer’s event did not actually cause a delay.

The SCL Protocol's emphasis on allocating responsibility for delays is a move towards fairness and away from the "all-or-nothing" outcome. FIDIC 2017, on the other hand, provides clear rules as to how to evaluate the impact of individual delays. Each approach has potential challenges, particularly in the more complex and intricate construction projects.

Practical Implications

• Clarity in Contracts: Both the SCL Protocol and FIDIC Contracts underline the importance of clear contractual provisions for managing delays. Parties should define key terms, such as ‘concurrent delay’ and how it should be assessed, and specify rules and procedures for analysis, mitigation, compensation, and extensions of time in the Special Provisions.
• Thorough Record Keeping: Both the SCL Protocol and FIDIC approach rely heavily on thorough and comprehensive contemporary records that accurately capture the sequence of events and their effects. Detailed progress reports, notices of delay, communications, and site records are essential for a robust delay analysis.
• Careful Analysis: Delay analysis must be comprehensive and systematic. This requires project managers and consultants with specialist knowledge of delay analysis and how the critical path is affected. Understanding the causal relationship between delays and their impacts on the programme is of paramount importance. This often involves using techniques such as critical path analysis, time impact analysis, and other established methodologies.
• Prompt Action: Under FIDIC, a Contractor must follow the procedures outlined in the General Conditions when submitting a claim for an extension of time. A notice of claim must be issued quickly after the delay event has occurred, and, similarly, a comprehensive claim with supporting information must be provided in a timely manner. Parties should take prompt action to mitigate delays as much as is practical, regardless of the causes or responsibilities.
• Engineer’s Determinations: Under FIDIC, it is essential that the Engineer is fully aware of the required processes in making his/her determinations. The assessment should, as it requires under Sub-Clause 3.7, be performed using all relevant information at the Engineer’s disposal and should also be fair, impartial and unbiased.

Conclusion

Concurrent delay represents a significant challenge in construction projects. While the SCL Protocol offers a detailed approach focused on apportionment of delays and responsibilities, the FIDIC 2017 framework sets out the framework for determining the correct value and timing of payment when delays arise.

By understanding the nuances of these two different perspectives, parties involved in construction projects can better prepare their contracts and adopt the relevant mechanisms for effective dispute management. Clarity, careful analysis, good record keeping, prompt action and an understanding of cause and effect are essential to ensure that both employer and contractor rights and obligations are considered appropriately when dealing with the complex issues that can occur as a consequence of concurrent delays.