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Project Delays—Tips for Avoiding and Handling

Delays seem to be a fact of life for all construction projects. The unfortunate results include cost overruns, contractor defaults, bond claims, lien claims and litigation. All of these consequences damage the project, the owner and the contractors. This article will suggest techniques for avoiding project delays. In some instances, delays cannot be avoided, and this article will also suggest how to most effectively minimize the consequences of delay.

The Contract

The construction contract should be very detailed in describing the scope of the work and should not be missing any information, or provide conflicting instructions or terms. The clearer the contract, the less likely there will be delays.

The first and most important step in managing construction delays is to ensure that the contract documents themselves contain carefully crafted provisions addressing the timing of the performance and the consequences for delay. Including "time of the essence," "force majeur," "liquidated damages" and "no damages for delay" provisions in the contract sets up initial protections to the owner for delay and partially shifts the risk of delay away from the owner. Other contractual clauses such as "acceleration" (requiring the contractor to speed up the work by adding manpower), "waiver of consequential damages" (preventing the contractor from recovering extra costs) and "early completion bonuses" also set the stage for keeping a project on track.

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