In large commercial projects it is common for contractors to present owners with a schedule for the work to be performed using the so-called “critical path method,” or CPM. A CPM schedule identifies in logical sequence the tasks which must be performed in order to complete the project, assigning an estimated duration for each one. A task on the critical path is “critical” whenever a delay in its performance will delay the project’s ultimate completion. Thus, if unforeseeable causes or an owner’s conduct delays the performance of a critical path item, an extension of time, if not damages for delay, may be in order.
But not all scheduled tasks are “critical” in this sense. Many can be performed at any time within a given period without affecting completion of the entire project – i.e., the time slot calendared for performing the task is larger than the amount of time it will actually take to perform it. CPM schedules quantify this leeway by assigning these tasks early start/late start dates or early finish/late finish dates (it doesn’t matter which, since the result is the same either way). “The time difference between the early start and late start or the early finish and late finish of each activity is ‘float,’ that is, the time that the start of the activity can be delayed without affecting the critical path and timely completion of the project.” 5 Bruner & O’Connor Construction Law § 15:8. In other words, the float “represents the amount of scheduling discretion or flexibility that may be available for that activity before its total project duration will be adversely affected.” Id.
Of course, if the project is to get finished on time every task has to be completed by the specified project completion date. An activity with zero float is necessarily on the critical path, i.e., any delay to completion of that activity will delay completion of the project. Once a non-critical activity’s float is gone, bingo – it has just become a critical path item! And this raises an interesting question: how to handle contractor claims for time extensions or delay damages when, through no fault of the contractor, a non-critical path activity is delayed such that all of its float is destroyed.
The answer depends on whether the contractor or the owner “owns the float.” If float is available to absorb the impact of an unavoidable or owner-caused delay to a non-critical path item, owners argue that the contractor does not need an extension of time and has not suffered delay damages, while contractors argue that the float was their cushion which could have been used to speed up ultimate completion, and the delay deprived them of that earlier completion opportunity. Once all of the float associated with the task is consumed and it ends up on the critical path, further delay is certainly grounds for extension (and perhaps damages). If the owner owns the float, time extension (or owner liability) is only for the length of delay in excess of the float days. If the contractor owns the float, time extension (or owner liability) may be for the entire length of the delay.
But here's the rub: Even if the float is owned by the contractor, any loss of float that does not affect the critical path could entitle it to extra time or money only “if the contractor establishes that it could realistically complete the project early,” Weaver-Bailey Contractors, Inc. v. United States, 24 Cl. Ct. 576, 578 (1991). Without that proof, loss of contractor-owned float that does not impact the critical path is legally irrelevant. That should give some comfort to owners. Nevertheless, I am seeing with increasing frequency contract provisions dictating that the owner owns the float, or that the float is consumable by whichever party first needs it – colloquially, that the project owns the float.
Since it is the owner who usually drafts commercial construction contracts, such clauses are driven by the perception (which I happen to share, although I can point to no court case explicitly so holding) that if the contract is silent, the contractor owns the float.
But not all scheduled tasks are “critical” in this sense. Many can be performed at any time within a given period without affecting completion of the entire project – i.e., the time slot calendared for performing the task is larger than the amount of time it will actually take to perform it. CPM schedules quantify this leeway by assigning these tasks early start/late start dates or early finish/late finish dates (it doesn’t matter which, since the result is the same either way). “The time difference between the early start and late start or the early finish and late finish of each activity is ‘float,’ that is, the time that the start of the activity can be delayed without affecting the critical path and timely completion of the project.” 5 Bruner & O’Connor Construction Law § 15:8. In other words, the float “represents the amount of scheduling discretion or flexibility that may be available for that activity before its total project duration will be adversely affected.” Id.
Of course, if the project is to get finished on time every task has to be completed by the specified project completion date. An activity with zero float is necessarily on the critical path, i.e., any delay to completion of that activity will delay completion of the project. Once a non-critical activity’s float is gone, bingo – it has just become a critical path item! And this raises an interesting question: how to handle contractor claims for time extensions or delay damages when, through no fault of the contractor, a non-critical path activity is delayed such that all of its float is destroyed.
The answer depends on whether the contractor or the owner “owns the float.” If float is available to absorb the impact of an unavoidable or owner-caused delay to a non-critical path item, owners argue that the contractor does not need an extension of time and has not suffered delay damages, while contractors argue that the float was their cushion which could have been used to speed up ultimate completion, and the delay deprived them of that earlier completion opportunity. Once all of the float associated with the task is consumed and it ends up on the critical path, further delay is certainly grounds for extension (and perhaps damages). If the owner owns the float, time extension (or owner liability) is only for the length of delay in excess of the float days. If the contractor owns the float, time extension (or owner liability) may be for the entire length of the delay.
But here's the rub: Even if the float is owned by the contractor, any loss of float that does not affect the critical path could entitle it to extra time or money only “if the contractor establishes that it could realistically complete the project early,” Weaver-Bailey Contractors, Inc. v. United States, 24 Cl. Ct. 576, 578 (1991). Without that proof, loss of contractor-owned float that does not impact the critical path is legally irrelevant. That should give some comfort to owners. Nevertheless, I am seeing with increasing frequency contract provisions dictating that the owner owns the float, or that the float is consumable by whichever party first needs it – colloquially, that the project owns the float.
Since it is the owner who usually drafts commercial construction contracts, such clauses are driven by the perception (which I happen to share, although I can point to no court case explicitly so holding) that if the contract is silent, the contractor owns the float.
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