How to Write a Construction Delay Claim

By Nick Mirisis on December 2, 2019
Tags: Data Collection

What is a Construction Delay Claim?

Like trains and planes, a construction project needs to run on time. When a schedule gets de-railed, it is important for contractors, general managers, and other professional builders to document the set-back with a construction delay claim. A builder may reduce his loss if he implements Critical Path Method (CPM) scheduling in his contract. This algorithm defines contingencies that occur during a building project and may grant the contractor an extension of time and avoid additional costs. By recording the situation with a construction delay claim, the contractor is protected from future contract disputes and possible litigation.

Best Construction Apps

Types of Construction Delay Claims

Once you’re in the middle of a set-back, you need to determine the cause and the estimated length of time a general contractor needs to correct the situation. Claims are also divided into three categories:

  • excusable or inexcusable
  • compensable or non-compensable
  • critical or non-critical

How to Determine if a Claim is Excusable or Inexcusable

Sometimes, setbacks occur that are unavoidable in the construction industry and are not the fault of the contractor. These excusable delay claims may include:

  • Weather and natural disasters, such as heavy rain, hurricanes, earthquakes or wildfires.
  • Errors in the design of the project.
  • Hindrance by a third party, such as a regulatory agency that discovers a rule violation. This could include a black-mold infestation or destruction of an endangered species’ habitat.
  • The owner changes the original design.
  • A dispute emerges regarding property ownership.
  • Bad faith is revealed, including knowledge of a fault line on the property.
  • Unforeseen hindrances e.g. during a remodel, you might uncover a rotted floor that needs to be removed and replaced.

Inexcusable delays, on the other hand, can be avoided with better planning by the contractor. These may include:

  • Poor quality construction that must be rebuilt.
  • Slow acquisition of necessary equipment, tools, or supplies.
  • Lack of supervision of workers resulting in unsafe working conditions and/or delayed labor productivity.

Key Points Regarding Compensable vs Non-compensable Costs

The excusable vs. inexcusable determination of a claim will impact compensation made to a contractor, subcontractor or owner. The debate opens with these questions:

  • Will there be extra costs?
  • Could the hold-up have been avoided?
  • Should someone be compensated?
  • Should the owner, contractor or subcontractor be compensated?
  • Will the slowdown affect the final completion date?

Inexcusable delays caused by the contractor will result in non-compensable expenses. An excusable delay will usually win the builder an extension of time for completion and he may re-coup compensable costs. His CPM scheduling in his contract may stipulate specific contingencies.

Some work stoppages aren’t as straightforward and fall into a grey area of compensable expenses. For example, some extreme weather events have indirect effects that are hard to foresee. Who would have predicted the national-wide lumber shortage following Hurricane Andrew?

When a Non-Critical Construction Delay Claim Becomes Critical

Compensation may often depend on the construction schedule’s final completion date stated in its CPM scheduling. The project’s critical path’s timeline identifies each construction stage, the length of time it will take to complete, and its dependence upon the work preceding it. For instance, a property lot must be cleared of trees before the start of excavation. If the tree cutters are behind schedule, this could ripple through the build’s timeline.

Smart professionals insert extra “float” time into every phase of their critical path to allow for contingencies. In one scenario, a builder might be slated to lay a foundation by August 1, but will schedule an additional 20 days of float time. Despite setbacks, if a contractor remains within the CPM’s allotted time, it is still considered an uncritical delay because it does not exceed the final completion date.

However, if one obstruction or a succession of delays has a cumulative impact on the final completion date, the client may face lost profit due to extra interest payments, higher insurance premiums, loss of rental income, and other streams of revenue. When a project enters this critical period, a contractor may owe compensable costs to the client.

How Electronic Options Can Expedite a Construction Delay Claim

Prompt filing of a construction delay claim is important throughout the build. It’s not a time to be slowed down by paperwork and difficult calculations. If a builder needs to notify his construction partners, including his client, bank, inspector or architect, timing is crucial. If this delay is not addressed in a timely matter, it could damage a builder’s reputation, sabotage your credit, or impact future work acquisition. A digital platform with an easy-to-use construction delay template can save a contractor precious time.

Don’t be intimated by electronic options. People often learn a new app on a mobile device over a coffee break or lunch hour. A template for a construction delay claim will include contact info and a description of the problem. The drag-and-drop feature of the affordable GoCanvas’ construction templates allows you to expound on the reason for the slow-down, outline options to correct the issue, and estimate additional time and cost. GoCanvas apps have the capacity to capture signatures, edit submissions, and dispatch data. They also have options to capture images and provide API service that puts full research tools at your fingertips. This documentation will ultimately help when making decisions regarding who is at fault, who can be compensated and when the status becomes critical.

Filing a Construction Delay Claim with GoCanvas Apps

GoCanvas had created a full collection of construction apps that are designed to expedite the challenging demands of a building project. Records of your construction progress can also help you plan future projects.

Delay Notice Construction Forms for Contractors

Excellent for documentation and reference, this app outlines potential solutions to get a project back on track.

Construction Project Notification of Delay

This straight-forward app summarizes any delay situation with relevant fields.

Memorandum of Delay Construction Forms for Contractors

With a focus on compliance, this app helps you report a delay in a project. Working with timelines, this app follows the effect on the scope of work.

GoCanvas designs easy-to-use apps for busy professionals. These apps work with you to digitalize your office and reduce your paper load. The Application Store also features apps that help you streamline and track Project Implementation, Inspections and Work