By HMC Lawyers LLP

Delays and disruptions are an inevitable part of the construction industry. When managed properly, they can be a forgotten bump in the road towards substantial completion. However, if they are not managed carefully, these issues can escalate into formal claims, disputes, and strained working relationships. Understanding how delay and disruption claims arises and how they should be managed under Alberta construction contracts is critical for contractors, subcontractors, and owners alike.

Delay vs. Disruption: What’s the Difference?

Although often discussed together, delay and disruption are distinct concepts with different contractual implications. Delay occurs when an event extends the overall project schedule or affects critical path activities. Depending on the contract and the cause, a delay may entitle a contractor to time extensions or additional compensation. However, it may also become the contractor’s responsibility depending on the contract language.

On the other hand, disruption refers to reduced productivity or inefficiencies but does not extend the project completion date. Common examples include out of sequence work, trade stacking, repeated remobilization, or excessive changes.

Common Sources of Delay and Disruption in Calgary

Certain issues consistently give rise to delay and disruption claims in the Calgary market:

• Permitting and Municipal Approvals: Delays in development permits, building permits, or inspections can significantly impact project schedules, especially when the project has a fast-tracked schedule. Disputes often arise where permitting timelines were assumed optimistically or responsibilities were unclear.
• Changes and Incomplete Design: Late design changes, incomplete drawings, or evolving owner requirements are among the most common causes of both delay and disruption.
• Weather Impacts: Unexpected and severe winter conditions, or heavy precipitation can affect site access and labour productivity. It is wise for your contracts to allow for normal seasonal delays, but unusually severe conditions may cause delays if they are not accounted for in the contract.
• Labour and Supply Chain Constraints: Labour shortages, material pricing volatility, and supply chain disruptions can force resequencing or acceleration, often leading to cost and productivity impacts.

Reviewing Your Contract: Delay Issues to Consider

Regardless of whether your project is using standard form CCDC agreements, or more informal contracts, all construction industry members should be familiar with what their contract says about delay and disruption. Things to look out for include notice requirements and rules surrounding change orders.

On notice, timely written notice is critical when managing delay/disruption claims. Many contracts require prompt notice of any delay to a specific address. Failure to comply with these requirements can undermine any entitlement you may have to damages for the delay.

It is also important to understand how your contract discusses change orders. There may be provisions on how change orders impact delay claims. Further, it is important to consider the cumulative impact of change orders. Treating each change in isolation, without addressing schedule or productivity impacts, can significantly increase the risk of delay claims on the project.

Proving Delay and Reducing Risk

Delay and disruption claims are evidence driven and successful claims require detailed records. Often, delay experts need to look at all documentation to determine the impact that certain activities have on delay. If you do not keep records, it becomes harder to determine how a delay impacted the project timeline. Similarly, keeping good records limits your risk for delay claims against you, as it will be easier to prove that the delay was not the fault of your business.

It is also important to keep open lines of communication with all parties on a project. This allows you to raise issues of possible delay impacts immediately and ensure all parties are informed. Keeping the parties working together can often be the best way to minimize delay claims. Early engagement and problem solving can preserve working relationships and prevent disputes from escalating.

Conclusion

Delay and disruption claims are a reality on construction projects, but this does not mean they need to become project ending disputes. In Calgary’s complex construction environment, success depends on understanding contractual obligations, maintaining strong project controls, and addressing issues as they arise.

This blog post highlights only a portion of the considerations for a contractor on delay claims. Emphasizing timely notice, thorough documentation, and collaborative resolution, can ensure project teams can manage delay and disruption effectively.
However, you may have further questions on delay issues with your project.. The construction law team at HMC Lawyers can help you with this.

If you need help in the early stages of resolution for a delay claim, assistance in determining the notice provisions in your contract, or simply want another opinion on the potential for a delay claim, you can contact HMC Lawyers to discuss your situation at 403-269-7220.