by: john livengood, psp, cfcc cdr-842: multi-primes and multiple critical paths

By: John Livengood, PSP, CFCC

CDR-842: Multi-Primes and Multiple Critical Paths

2

John Livengood, Esq., AIA, PSP, CFCCDegree:

– B.Arch, Syracuse University– J.D., Catholic University

Years of Experience:– 37 years of experience

Professional Field:– Expert Witness– Construction Claims– Schedule Delay Analysis– Productivity Analysis– Construction Cost Analysis

Something you do not know about me:– My favorite music is produced by Female Pop Artists

Characteristics

Owner contracts directly with several prime contractors to provide the full scope of services.

Between 3 and 20 prime contractors on a particular job. Each prime contractor goes through the entire procurement system

of reviewing technical drawings, submitting a bid, having the bid evaluated, and issuance of a contract.

The owner has more management of the bidding process. The owner may not have the necessary staff or expertise to manage

this greater workload. Often hires an Agency Construction Manager (CMa) to provide

coordination and management for the owner. Designer may have had to package the technical documents in a

manner that supports/enables multi-prime bidding.

Why Multi-Prime Contracting?

Five Reasons

1. State statutes require it for certain types or values of construction.

2. The owner may have specific contractors it wishes to work with. 3. The owner may use the system in anticipation of costs savings by

using specialized contractors and eliminating overhead. 4. The project may be a fast-track project where it is important to

have work advance on portions designed even if the total scope and cost is unknown.

5. The owner may wish to minimize potential prime-subcontractor problems.


Private Use

Private use of multi-prime contracting lies primarily in large EPC (Engineer Procure Construct) contracts.

The EPC contractor administers and coordinates the numerous major equipment supplies as well as the more incidental construction contractors.


State LawMulti-prime contracting is almost exclusively a creature of state legislatures. Very few owners who are not mandated to use multi-prime contracts by law, do so. Reasons given:1. Speeds the payment process. 2. Eliminates the risks of non-paying general contractors. 3. It is claimed to be less expensive:

Lower Risk -- eliminating potential bid-shopping; Lower Risk -- prompt payment and reducing risk of non-

payment. 4. Savings associated with the reduction of general contractor

overhead and profit.

Why States use Multi-Prime Contracting?

Cost Savings Studies support the conclusion that multi-prime construction is less

costly. 1970s through 2007 5-10% less costly

Savings due to elimination of double OH. Studies ignore increased Owner Management Cost.

Why States Use Multi-Prime Contracting?

Implied Duty Owners have an implied duty to coordinate and schedule the

work of the prime contractors. General contractor has the duty to coordinate in a typical prime

contractor – subcontractor agreement. Owners have limited ability to delegate the coordination

obligation. This is true even in the case where one of the primes is a so-called

“general contractor.” This responsibility of the owner can only be delegated where there is a very specific delegation.

Owners’ Responsibilites in Multi-Prime Contracts

Coordination Duty Long established. Site access. Prompt decision. Scheduling management. Non-interference. Prompt time extensions. Resolve time-related disputes. Failure of this coordination could result in delay damages

against the owner.


Avoidance of Coordination Duty Delegation to prime contractors. Owner agents (CMa). Contract Clauses:oNo-damages-for-delay clauses.oAnti-concurrency.oPrimes required to coordinate amongst themselves.


What does a Prime Contractor Say? I was delayed by other prime contractors failing to perform a

timely manner. The owner or its agent (CMa) had coordination and schedule

responsibility. My coordination responsibility was limited to near-term

coordination/schedule. I had no control over the entire schedule. I had little input into its development and updating.

Disputes and Multi-Prime Contracting

What does an Owner Say? I hired a CMa to manage the project. The CMa was responsible for all coordination and schedule

control. Whatever schedule and coordination responsibilities remained

were delegated to the contractors. Whatever disputes exist must be settled among the prime

contractors first.


What does a Construction Manager Say? The owner made me do it. The owner directed it. The owner agreed to it. The owner approved all the major decisions. The prime contractors were required to coordinate/schedule

amongst themselves. My only obligation was to push paper between the parties -

facilitate the coordination and scheduling between the contractors and the owner.

Whatever disputes exist must be settled among the prime contractors first.


Multi-party disputes The owner generally resolves each disputes w/o the other parties. Inconsistent decisions possible. Arbitration Clauses may prohibit multi-party proceedings The CMa will not be helpful. The owner has limited knowledge because of the role of the CMa. Each contractor will make its case against the owner only without

regard to the other prime that might be involved. Contract may require primes to resolve disputes among

themselves before pursuing the owner.


What issues does a Schedule Delay Analyst face?

The project is likely to be large and inherently complex; There are multiple parties, which will necessitate detailed review

and investigation of multiple sets of documents; The schedule development and conceptualization is likely to be

defective; The schedule updates are less likely to be accurate since the CMa’s

power over the prime contractors for data requests is weak; There will be a project critical path, but most of the delays

experienced by the prime contractors will exist off of that project critical path;

Each prime contractor will have its own critical path, which will only occasionally be coincidental with the project critical path; and

Each of the multi-primes is likely to have their own schedule.


0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Months

Project Planned Critical Path

Excavation

Plan

ned

Subs

tanti

al C

ompl

etion

Contractor E

Foundation

Structure

Window Wall

MEP Rough-in

Interior Rough-in

Interior Finishes

Roof

Commissioning/Punch

MEP Finishes

MEP Underground

Contractor C

Contractor D

Contractor B

Contractor F

Contractor A

Planned Project Critical Path

NTP

Planned Project Critical Path through six prime

contractors

Multi-Prime Critical Path


Project Critical Path Normal forensic schedule delay process may actually be

counterproductive. Identification of the project critical path disguises the real delays

that are at issue. The real delays are particular to each of the multi-prime

contractors.


Project Critical Path Both Planned critical path and the As-built critical path will likely

fall on several major prime contractors during the course of the project.

Each prime contractor often argues that it was on the project critical path for only a short time and any delays that occurred during that time were minimal.

Sometimes the prime contractors jointly hire a scheduling consultant.


0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Months

MEP Planned Critical Path

Excavation

Planned Substantial Completion

Contractor E

Foundation

Structure

Window Wall

MEP Rough-in

Interior Rough-in

Interior Finishes

Roof

Commissioning/Punch

MEP Finishes

MEP Underground

Contractor C

Contractor D

Contractor B

Contractor F

Contractor A

Planned MEP Critical Path

NTP

Planned MEP Critical Path through MEP Prime

contractor

Plan

ned

Subs

tanti

al C

ompl

etion

MEP Critical Path


0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Months

MEP Planned Critical Path

Excavation


Contractor E

Foundation

Structure

Window Wall

MEP Rough-in

Interior Rough-in

Interior Finishes

Roof

Commissioning/Punch

MEP Finishes

MEP Underground

Contractor C

Contractor D

Contractor B

Contractor F

Contractor A


NTP

Only part of MEP Critical Path that

is also on the Project Critical

Path

Part of MEP Critical Path that is NOT MEP work

Plan

ned

Subs

tanti

al C

ompl

etion

MEP Critical Path


0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

MEP Planned Critical PathMonths

Excavation


Contractor E

Structure

MEP Rough-in

Commissioning/Punch

MEP Finishes

MEP Underground

Contractor C

Contractor D

Contractor B

Contractor F

Contractor A


NTP

Part of MEP Critical Path that is NOT MEP work

Plan

ned

Subs

tanti

al C

ompl

etion

MEP Critical Path


Baseline and Update Issues

Baseline Schedules are usually developed by the CMa using input from each of the prime contractors:o The schedule is released for review by the primes.oComments and corrections are incorporated. oCMa often lacks the authority.o The iterative process may take longer.o The schedules are prone to gaps.

Monthly Schedule Updates:oCollection of progress data. oChaotic amalgamation creates defects.oPrimes often maintain completely separate schedules.oRadically different sequences.


Methodology Dependent on availability of data. Seldom is there a series of carefully maintained logical schedules. Selected methodology must be able to accommodate these

defects. RP29R-03 MIP 3.3 or 3.4 is preferred – Contemporaneous Period

Analysis. RP29R-03 MIP 3.7 (Time Impact Analysis) may require so much

remedial work on the underlying schedule as to make its use inadvisable.

Identifying Multiple Critical Paths

Contemporary Period Analysis Essentially, the CPA methodology compares the planned sequence on a period-by-period basis at the outset of the period with the actual performance at the end of the period, with delays measured in each individual period along the as-built critical path for that period, as follows:


0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

First DelayMonths

Excavation

Plan

ned

Subs

tanti

al

Com

pleti

on

Contractor E

Foundation

Structure

Window Wall

MEP Rough-in

Interior Rough-in

Interior Finishes

Roof

Commissioning/Punch

MEP Finishes

MEP Underground

Contractor C

Contractor D

Contractor B

Contractor F

Contractor A

Planned Project Critical Path

NTP

Proj

ecte

d Su

bsta

ntial

Com

pleti

on

Two Month Delay

Data Date

Actual Delay of onemonth

ProjectedDelay of

onemonth

First Delay


CPA – Step One: Identify the schedule activities for a single multi-prime in the

“first” schedule. In many CPM schedules contractor codes are used as an identifier.


CPA – Step Two: Identify the schedule activities for a single multi-prime in the

second schedule. This can be a true challenge, particularly in the beginning of a

project, as schedules are often refined repeatedly during the first months.

Each multi-prime contractor modifies its proposed performance in light of other prime contractor’s work.


CPA – Step Three: Match the activities. In theory this mapping should be easy – but seldom is. If the project undergoes a major re-baselining process due to a

major event or as a result of a series of events, such mapping can be extremely complicated.

Consult with project personnel.


CPA – Step Four: Compare the Progress Compare the Duration Compare Float Compare the Logic (MIP 3.4) There will likely not be a continuous series of activities that form the as-built critical path because many of these activities will be associated with other prime contractors.


CPA – Step Five: Process is partly mathematical because it identifies the activities

with the least float at any given moment. Process is partly expert judgment on the reasonableness of the

identified sequence. The critical path identified will likely NOT be a continuous set of activities. This information, coupled with a careful review of the actual events on the project based on the daily reports and the analyst's experience, will enable a detailed identification of that month’s as-built critical path as well as when the critical path shifted from one activity to another.


CPA – Step Five (cont.):

It is important that the number of days identified for delay during a period actually match the change in the month being studied. It is also likely that the overall CPM changes WILL NOT MATCH the calculation for a particular month since schedule updates usually contain modifications to future activity durations or logic that changes the overall project’s projected end date.


CPA – Step Six: Delay Causation Prime Contractor being evaluated Other Prime Contractors Identify excusable, compensable and non-compensable time.

Delays that are associated with other prime contractors or owners are likely all to be portrayed as compensable to the multi-prime being analyzed.


CPA – Step Seven: Repeat process for all prime contractors being evaluated. Perform all analyses for a single time period, then move to next

time period. Based on experience, it is better to analyze the performance of all the prime contractors during a particular period because it allows an evaluation of the causes and responsibilities for delay each month amongst the prime contractors before moving to the next month.


Too much work Entire project needs to be analyzed, even for one multi-prime. Importance of contract remedies (no-damages-for-delay). Weather and Force Majeure. Multi-prime delay analysis is more difficult than on single prime

contractor projects. Analysis often occurs during a period of negotiation: The Owner often has little data The Contractor has little data The CMa is often unhelpful

Practical Tips

Multi-prime contracting is less popular today than it has been in the past.

State exceptions to the general requirement for the use of multi-prime.

More prime contractors successfully negotiating or litigating delay claims.

Modern forensic schedule analysis has the tools to provide effective analysis.

Convincing the prime contractors, and their experts that their delay will be measured on their own critical path, rather than the project critical path can be a significant challenge.

CONCLUSION

Questions??

by: john livengood, psp, cfcc cdr-842: multi-primes and multiple critical paths

Documents

prime contractors

multiprime construction

multiprime contracts

multiprime bidding

general contractors

specialized contractors

specific contractors

values of construction