COBRA AUBEA 2015

Sydney, Australia
8 10 July 2015

RICS COBRA AUBEA 2015

The Construction, Building and Real Estate Research Conference
of the Royal Institution of Chartered Surveyors
The Australasian Universities Building Educators Association
Conference

Held in Sydney, Australia in association with AUBEA, the University

of Technology Sydney and University of Western Sydney

8 -10 July 2015

RICS 2015

ISBN: 978-1-78321-071-8

Royal Institution of Chartered Surveyors

Parliament Square
London
SW1P 3AD
United Kingdom

www.rics.org/cobra

The papers in this proceeding are intended for knowledge sharing, stimulate debate, and
research findings only. This publication does not necessarily represent the views of RICS,
AUBEA, UTS or UWS.

APPORTIONING DELAY LIABILITY: WHICH CRITICAL PATH?

Nihal Ananda Perera1 and Monty Sutrisna2
1

School of Built Environment, University of Salford, Salford, M5 4WT, UK.

Department of Construction Management, School of Built Environment, Curtin University, Australia.

ABSTRACT
Since its advent, Critical Path Method (CPM) has assumed a primary role in construction
project management, particularly in planning and controlling to ensure timely completion. In
addition, it has increasingly been used in resolving construction delay claims, including
determining parties liability and resulting compensation. In its primary role, CPM enables
analysts to predict the project completion date taking into account the dynamic project
circumstances. However, its other role in delay claims is a more perplexed one. This is because
there have been two fundamentally different approaches for defining applicable critical path.
These approaches are led by two distinct theories: Total Float Value (or Zero Float school)
and Longest Path (or Lowest Float Value school). These theories could potentially generate
completely opposite outcomes for the same delay events. It is a sure recipe for disputes, if
either theory is followed arbitrarily particularly in the case of concurrent delays. Thus,
deciding the appropriate theory to be implemented in a particular circumstance is required to
minimise the potential for disputes. This discussion is presented in this paper with a hope to
promoting a broader dialogue on some considerations indispensable to choose the critical
path proper for apportioning liabilities. The ensuing discussion is largely relied on published
academic works on the subject and related case law.
Key Words: delays, apportioning liability, critical path.

INTRODUCTION
In both US and UK courts it is now a requirement that a delay must be shown to be
critical in order for awarding time or time-related damages. Here, CPM programming
is key to demonstrate those events and their impacts causing critical or non-critical
delays (Keane and Caletka, 2008). A delay analyst who uses CPM to undertake this
task would have to select between two primary criteria for defining the criticality of
the delays. These criteria are advocated by two fundamental theories, famously known
as the Longest Path (or Lowest Float Value school) and Total Float Value (or Zero
Float school). Accordingly, for determining the criticality of a delay, a delay analyst
would have to decide whether all activities in the CPM based construction programme
having total float less than or equal to zero are critical, or only those having the
maximum negative float are critical; while the former criterion belongs to the Total
Float Value theory, the latter represents the Longest Path theory. Depending on which
theory is relied on, the two criteria would possibly generate completely divergent
outcomes in the apportioning of liabilities and entitlement.
With the intention to promoting a broader dialogue and awareness on some
considerations indispensable for determining the critical path proper, the distinct
characteristics and mechanisms of these two theories are discussed here.

1
2

nihal.a.perera@gmail.com
monty.sutrisna@curtin.edu.au

Theories of Criticality
As noted above, the definition of criticality can be set to either all activities on the
Longest Path or alternatively, all activities with a negative float. These two definitions
underpin the two fundamental theories. Recommended Practice No. 29R-03 Forensic
Scheduling Analysis (AACE International, 2011) has explicitly identified the
fundamental differences between these theories. Understanding of these differences is
of vital importance for determining the critical path proper.
A negative float is formed in CPM through imposing a constraint. Once a schedule
is constrained to its completion date that alters one of the basic rules of CPM
scheduling (OBrian and Plotnick, 2005). In doing so the late finish of the last activity
(presuming it is tied to a contract completion date) becomes equal to the early finish
of that activity; accordingly, if that last activity is delayed beyond that late finish date,
the calculation of the Total Float will be a negative value. Thus, the network model
may display negative float values indicating how many days the schedule activity is
behind schedule or the contract completion date.
The general norm as to a CPM programmes critical path is that it is the Longest Path
of logically connected activities which, when the individual time durations of each
activity are added, equals the overall duration of the project (AACE International,
2011). However, at any given time there may also be multiple paths parallel to this
longest critical path (Wickwire et al., 2003). Albeit this Longest Path is perfectly
capable of predicting the project completion date at a given time, it will not readily
reveal the existence of delays in the other subordinate paths running parallel to the
Longest Path. The delays in these subordinate paths are critical to the prevailing
contract completion date but would have no impact on the predicted project
completion date which is set by the Longest Path.
Where two causes of delay are of different causative potency, according to the
Longest Path theory the longer delay is then regarded as the effective cause and the
shorter or the subordinate one as the ineffective. In other words, the minor cause is
treated as if it were not causative at all (Marrin, 2002). Under the Longest Path theory,
if an activity has a float with respect to the Longest Path in excess of a given delay, it
can absorb that delay, and therefore no time extension will be required relative to the
existing project completion date. In this instance, a residual float will be created by
the largest negative float of the Longest (critical) Path which can absorb the shorter
delays in the subordinate (critical) paths; thus, under the Longest Path theory the mere
fact that an activity has a negative float with regard to a contractual milestone will not
determine its criticality in so far as the project completion date is not affected.
Consequently, in spite of having their own negative floats any delays in the
subordinate paths are consigned to oblivion by the maximum negative float in the
Longest Path and hence assumed non-critical.
On the other hand, if the criticality is determined by Total Float Value theory all
activities that have negative float (i.e. one or more unit below zero total float) relative
to the existing contract completion date are considered critical (Jentzen et al., 1994;
Peters, 2003). Bramble and Callahan (2000, p.11-88) explained the Total Float Value
theory as In other words, in addition to the one critical path, any path with negative
float may qualify as critical under this approach and be available to offset a

claimed delay..In the absence of delay to the one critical path, all other paths with
negative float also would have caused delayed project completion.
It is obvious from the foregoing discussion that criticality in context cannot be
considered an absolute phenomenon but has only a relative meaning and value. Thus,
the criticality of an effect of delaying event is determined whether it is measured
against the (predicted) project completion date or from the point of (prevailing)
contract completion date.

Concurrent Delays and Determining Criticality

For determining the criticality of delays, the importance of concurrent delays is
relevant to one issue only. That is compensability. When all delays are critically
affecting the time for completion, a party who needs to defend a claim would find the
significance of a concurrent delay as it may permit him to offset the compensability
claimed by the other party (Bramble and Callahan, 2000). In other words, its use is for
the contracting parties trying to cancel out the compensability of one another.
However, thanks to the numerous definitions floating around this already complex
issue has been further complicated (Zack and Federico, 2011). Basically, the
controversy exists in whether a situation where two or more delaying events (one an
employer risk event and the other a contractor risk event) occur at the same time and
have effects felt at the same time or a situation where two or more such events arise at
different times and have effects felt at the same time should be considered for
concurrent delays (SCL Protocol, 2002).
This controversy on concurrent delays is inextricably linked with the approach for
defining the criticality of the delays (Peters, 2003). Here, the proponents of Longest
Path approach incline to recognize true concurrency or concurrency at the same time
as the ideal situation which gives rise to concurrent delays. For example, Wickwire et
al. (2003) who championed Longest Path approach for CPM delay analysis recognized
the concurrent delays as a situation in which two or more delaying events from each
party occurred at the same time during all or portion of the delay periods being
considered; for others, to be considered as concurrent delays, the delays need not
actually taking place at the same time (Ness, 2000) and concurrent delays may occur
either (i) when there are two or more independent delays during the same period, or
(ii) during any part of the project performance period, sequentially and not necessarily
at the same time (Bramble and Callahan, 2000; Tobin, 2007; SCL Protocol, 2002).
Particularly, the Figure 9 of the SCL Protocol illustrates this with sequentially
occurring delaying events on two independent paths (one being the longest and the
other subordinate) and acknowledges their resulting concurrent effects of unequal
potency in order for apportioning liabilities and offsetting. Notably, with the principle
illustrated in Figure 9 (see Figure 9 re-produced below), SCL Protocol has
unambiguously considered the effect of the subordinate path is also critical and
concurrent with the effect of the Longest Path. This is in contrast to the orthodox
Longest Path approach which considers the effect of a subordinate path as noncritical (hence non-concurrent), and only the path with activities having the
maximum negative float (i.e. the lowest float) is critical.
There appears no universally accepted legal position defining what should be
considered as the meaning of concurrency or concurrent delay (Moran, 2014). For
example, in the UK jurisdiction there are case authorities for both definitions. Thus, in

Malmaison3 it seems the judgment considered the concurrent causes occurring at the
same time only. The Malmaison test was followed by several other cases too. On
the other hand, the second definition above seems corroborating with the judgment in
The Royal Brompton Hospital4; there, the Judge Seymour considered an argument that
two delays happening at different times were concurrent delays. Occasionally a similar
position can be seen in the US jurisdiction as well. For example, in Raymond
Construction of Africa, Ltd.5 the court determined that three consecutive delays were
concurrent; similarly, in Williams Enterprises, Inc6. the federal court determined
consecutive delays as concurrent delays.
The foregoing calls for considering the issue of defining concurrency not so
dogmatically. Perhaps, unless expressed otherwise in a contract, it may be safer to
consider that both true concurrency (i.e. two or more delay events occur at the same
time) and concurrent effects (i.e. two or more delay events arise at different times
but the effects of them are felt at the same time) should have equal effectiveness as
considered by SCL Protocol core principles (ref. item 1.4, and Figure 9); it may not
only corroborate with the mainstream legal position to an extent, but also offer a more
equitable approach to agree on for defining the criticality of delays.
Which Critical Path?
AACE International (2011) and Livengood and Peters (2008) pointed out that as all
forensic delay methodologies provide for extensions of contract time on the critical
path, only the definition for critical path is of utmost importance. Thus, the allimportant question that a delay analyst may face in determining the criticality of the
delays is whether all activities having total float less than or equal to zero are critical
(Total Float theory), or only those having the maximum negative float are critical
(Longest Path theory). The answer to this question would also decide which position
should be adopted in defining concurrent delays for setting-off compensability.
The SCL Protocols Figure 9 can be utilised here to illustrate the fundamental
difference of outcomes between these two theories. Two scenarios are considered for
this, using Path 1 and Path 2 as shown under After Change Event of Figure 9:
For the first scenario, it is assumed that the delay in Path 1 (the Longest Path with 7
days of negative float) has been caused by an employers excusable and compensable
delay and the delay in Path 2 (the subordinate path with 4 days of negative float) is
caused by a contractors non-excusable delay. According to Longest Path theory, the
contractor may consume a negative float (created by the longest delay of Path 1) up to
the (predicted) project completion date as long as the contractors non-excusable delay
in subordinate path (Path 2) finished earlier than the employers longest delay.
Consequently, the contractors delay is considered non-critical relative to the Project
Completion Date which is set by the Longest Path; in turn, he is entitled to recovery of
extended overhead expenses with extension of time for the entire length (7 days) of
the Longest Path delay. However, if Total Float theory is applied here, both Path 1 and
Path 2 delays are considered critical relative to the prevailing Contract Completion

Henry Boot Construction (UK) Ltd V Malmaison Hotel (Manchester) Ltd [1999] 70 Con L.R. 32
The Royal Brompton Hospital NHS Trust v Hammond And Others [2001] 76 Con L.R. 148
5
Raymond Construction of Africa, Ltd. v United States, [1969] 411 F2.D 1227 Ct. CI
6
Williams Enterprises, Inc. v Strait Manufacturing & Welding, Inc., [1990] 728f. Supp.12 D.D.C.
4

Date and concurrent as well to the extent of their overlapping. Consequently, although
the contractor is entitled to extension of time for the entire length of the Longest Path
delay his entitlement to recovery of extended overhead expenses is limited for the nonconcurrent (3 days) period only; in this instance the employer does not have to
compensate for extended overhead costs for the entire (7 days) Longest Path delay
period of employers compensable delay.
For the second scenario the delay causes are reversed: now the assumption is the delay
in Path 1 (the Longest Path) has been caused by a contractors non-excusable delay
while the delay in Path 2 (the subordinate path) is caused by an employers excusable
and compensable delay. According to Longest Path theory, the employer may
consume a negative float (created by the longest delay of Path 1) up to the (predicted)
project completion date as long as the employers delay in subordinate path (Path 2)
finished earlier than the contractors longest delay. Consequently, the employers
delay is non-critical relative to the Project Completion Date which is set by the
Longest Path, and in turn he is entitled to claim Liquidated Damages for the entire
length (7 days) of the Longest Path delay. However, if Total Float theory is
considered, both delays are treated critical relative to the prevailing Contract
Completion Date and concurrent as well to the extent of their overlapping. As a result,
the contractor is entitled to extension of time for the overlapping period (4 days), and
the employer is entitled to Liquidated Damages for the non-concurrent (3 days) period
only; in this outcome the employer is not entitled to Liquidated Damages for the entire
(7 days) Longest Path delay period of contractors culpable delay.

The SCL Protocol Figure 9 (Source SCL Protocol, 2002)

The foregoing illustrates a marked contrast of outcomes of entitlement and the liability
of each party based on which approach/theory is used to define the criticality for
offsetting the compensability.
In many jurisdictions, including the US and the UK, the CPM based forensic schedule
analysis is almost mandatory in delay claims resolution. Nevertheless, in the absence
of clear contract terms, the legal position as to which approach or theory to be
followed to define criticality for offsetting the compensability is not clear. Even in
the US where CPM based forensic schedule analysis is given more prominence than in
any other jurisdiction a debate is continuing on the issue. A landmark case in this

regard is Santa Fe, Inc.7. In this case, there was a Liquidated Damages (LD) clause in
the contract and as the contractor (Santa Fe) delayed, LDs were imposed. The
contractor appealed for a remission of LDs and sought extension of time. An express
provision of the Santa Fe contract entitled Adjustment of Contract Completion
Time stated as follows:
Actual delays in activities which, according to the computer-produced
calendar-dated schedule, do not affect the extended and predicted contract
completion dates shown by the critical path in the network will not be the basis
for a change to the contract completion date.
The above contractual provision was so clear that the criticality had to be determined
by the impact on the extended and predicted project completion date only and not
otherwise. Thus, it was decided that the contract required to use Longest Path
approach to measure criticality; in view of this express provision the tribunal
rejected the contractors argument any work sequence or CPM path which runs
past its contractually required completion date to be critical and any delays on those
work sequences to be on the critical path and held there is still a critical path
represented by the negative slack activities with the highest numerical designation (for
example -180 days versus -50 days), The activity chain representing the highest
negative slack (for example, the -180 days) represents the longest chain of activities
through the project in terms of time (Wickwire et al., 2003, p.376). It could have
been interesting to see how the Santa Fe would have been decided if that express
provision was not present in the contract, but the court did not make any comment on
that aspect.
On the other hand, in Fischbach & Moore8 case, though the CPM was used, the
tribunal considered the other critical paths as well together with the longest path for
determining the criticality of delays.
It is interesting to compare the stated positions between the two famous Protocols
published on either side of the Atlantic (i.e. US based RP No. 29R-03 of AACE
International and the UK based SCL Protocol) on choosing the critical path for
determining criticality. On one hand, the RP No. 29R-03 uses the Longest Path
theory as the valid criterion for criticality where negative float is shown (AACE
International, 2011, p.114). However, on the same page it acknowledges the relative
correctness of the two theories stating which one is correct depends on which
principles are considered.
On the other hand, the SCL Protocol (2002) takes the position Unless there is express
provision to the contrary in the contract...an EOT should only be granted to the extent
that the Employer Delay is predicted to reduce to below zero the total float on the
activity path affected by the Employer Delay (p.13) and Employer Delay to
Completion and Contractor Delay to Completion, both of which mean delay to a
contract completion date (p.55).[Emphasis added]; the SCL Protocols Figure 9 (reproduced above) clearly illustrates this position acknowledging that all activities
(regardless whether in the longest or the subordinate paths) having total float less than
or equal to zero are critical and the criticality is measured against the contract
7

Santa Fe, Inc., [1984] VABCA Nos. 1943-1946.

ASBCA No. 18.146,77-1 BCA '/112,300 (1976).

completion date and not the project completion date; this clearly corroborates with the
position of Total Float theory.
CONCLUSIONS
In the foregoing discussions, the paper has identified the characteristics and
mechanisms of Longest Path theory and Total Float theory as they are used for
determining the critical path proper for apportioning liabilities. It has also explored
some essential considerations as regards when to follow which theory, particularly in
the backdrop of concurrency of delays. The two theories clearly show that their
characteristics and mechanisms are different and mutually exclusive.
Having appraised the appropriate circumstances for the use of each theory the main
conclusions of the paper are as follows:
Between the two theories, there is no singularly correct definition for
criticality; the criticality can be set to either all activities on the Longest
Path only (represented by Longest Path theory or Lowest Float Value school)
or all activities with a negative float (represented by Total Float Value theory
or Zero Float school); which one is correct depends on which principles are
considered.
Although the delaying events being analyzed are the same, there could be
completely opposite outcomes of entitlement and liability of each party
depending on which theory/approach is used to define the criticality for
offsetting the compensability.
If the contractual considerations require only the CPM principles to be used
and consider only the path showing the maximum negative float should be
critical (to the Project Completion Date) for applying EOT or LD, the
Longest Path theory is correct; if the contractual considerations require to
consider all paths showing negative floats (albeit not equally) and EOT or LD
be applied to the extent of such negative floats are critical to the (prevailing)
Contract Completion Date, the Total Float Value theory is correct. Thus,
which theory to be followed is best agreed in the terms of contract, prior to the
onset of delays.
Their distinctive characteristics and potential contrasting results preclude
mixed use of the two approaches/theories; for example proponents of SCL
Protocol principles (which are based on concurrent effects of sequential
delays and treating both longest and subordinate delays as critical relative
to the prevailing Contract Completion Date) may find using Longest Path
approach to define the criticality for offsetting compensability is paradoxical
and a mismatch to SCL Principles.
Liability in contracts will depend upon the terms of the contract and the intention of
the parties (Atkinson, 2007). Thus, in conclusion, in deciding the appropriate theory
to define the criticality for offsetting compensability, the first port of call should be
the express contractual considerations. In absence of such considerations, the best
alternative is to make effort to decide it through mutual consent between the parties,
without being arbitrary or biased towards either theory.
It is hoped that the above submission may promote a broader dialogue in the delay
analysis domain wherein more objective and less bias approach is conscientiously
required for determining the critical path proper as to offsetting compensability.

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