Chapter 27 - § 27.2 • TYPES AND SOURCES OF DELAY

• Jurisdiction: Colorado

§ 27.2 • TYPES AND SOURCES OF DELAY

Four types of delays are generally encountered on a construction project: (1) non-excusable delays; (2) excusable, non-compensable delays; (3) compensable delays; and (4) concurrent delays. Delays may arise from various sources. Types of delays may overlap, and several different types of delays may combine to cause a delay. Some delays are so inherent in the construction process that construction contracts have standard clauses that anticipate them and deal with their consequences. For example, most construction contracts give the owner the right to make changes in the construction through the changes clause. The construction industry recognizes that the owner's changes may impact the schedule and accommodates this by allowing a change order to also change the schedule for performance. The changed conditions clause, or differing site conditions clause, also permits a change in the construction schedule when unanticipated site conditions are encountered by the contractor during construction. Once a delay has occurred on a project, the owner may direct the contractor, or the contractor may direct the subcontractors, to nonetheless meet the established completion date. When this occurs, the contractor or subcontractors, or both, may be forced to accelerate their work on the project.

§ 27.2.1-Excusable Delays

The contract between the parties generally dictates whether a delay is excusable. Excusable delays are generally those delays that are caused by events beyond the control of the contractor or subcontractor, and in some cases, the owner. Excusable delays may be compensable or non-compensable. Examples of excusable delays include those caused by acts of God, unusually severe weather, fire, floods, and labor disputes. Construction contracts typically provide that these types of excusable delays are not normally compensable. When an excusable, non-compensable delay is encountered on a project, the typical contractual remedy is an adjustment in the schedule or extension of time for completion.

§ 27.2.2-Non-excusable Delays

Non-excusable delays are delays caused by the contractor or subcontractors that are within the contractor's or subcontractors' control, or that could have been anticipated by the contractor or subcontractor. Such delays include delays caused by improper scheduling, anticipated weather conditions, inadequate labor forces, and correction of defective work. If the contract includes a liquidated damages clause, then the owner may be entitled to recover liquidated damages if the project is not completed on time and the delay in completion was non-excusable. In the absence of a liquidated damages clause, non-excusable delays may entitle the owner to recover its actual damages incurred as a result of the delay and may bar the contractor from recovering its damages from the extended construction schedule. Finally, a non-excusable delay may be considered a material breach of the contract and can form the basis for termination of the contract by the owner for either cause or convenience.

§ 27.2.3-Compensable Delays

Compensable delays are delays encountered on the project for which the innocent party is entitled to damages and/or an extension of time. If the owner has caused the delay, or the owner has assumed the risk of the delay by contract, then the contractor may be entitled to recover compensation for the delay in addition to the extension of time. The owner may assume the risk of the delay through the changes and differing site conditions clauses, which are discussed below. The contract may also address compensation for an owner-caused delay directly. The following is an example of a typical clause addressing this issue:

If the Contractor is delayed at any time in the commencement or progress of the Work by (1) an act or neglect of the Owner or Architect, of an employee of either, or of a Separate Contractor; (2) by changes ordered in the Work; (3) by labor disputes, fire, unusual delay in

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