Another Victory for “Actual” 

Any noun used in the construction and design industry that is modified by “actual” is revered by those that resolve disputes: actual costs, actual date, actual duration, actual schedule update, and so forth. In a delay dispute, the closer a delay evaluation method gets to “actual,” the more persuasive the delay evaluation will be. An as-built schedule evaluation and all its permutations based on actual dates (no matter how wrong) usually carries the day.  

            The reverse is true for “planned.” Anything “planned” invites questions about the quality of the plan, the reasonability of the plan, mistakes in the plan; and the experience and prestige of author of the plan. Anything modified by “planned” is as far from “actual” and persuasion as one can get. As a result, an “impacted as-planned” schedule evaluation starts out on the low-end persuasion.

             Accordingly, one should not be surprised that in a recent ruling the U.S. Court of Federal Claims rejected a contractor’s impacted as-planned schedule evaluation. In the case of K-Con Building Systems, Inc. v. The United States,¹ K-Con Building Systems, Inc. had contracted with the United States Coast Guard to design and construct a prefabricated metal building. K-Con sent its first set of design documents to the government for review and comment. There were issues with the design, and several emails were exchanged between the K-Con and the government. Meanwhile, K-Con requested extensions on the completion date due to delays it was encountering. The delays were attributed to an increased amount of site investigations, inoperable equipment, and additional equipment not known at the time of the bid. The contract was later modified and K-Con provided with a complete set of marked-up drawings by the government. K-Con ultimately failed to complete construction by the contract completion date and the government assessed liquidated damages, eventually terminating K-Con for default. A lawsuit between the two parties ensued.

             So what did the U.S. Court of Federal Claims say about the impacted as-planned method? In summary, according to the court, the parties presented diametrically opposed descriptions—K-Con submitted a delay evaluation based on an as-planned, forward-looking schedule. The government contended that the critical path of performance should be based on an as-built, backward-looking schedule. The court agreed with the government that the proper way to determine what activities were on the critical path of performance was to examine what actually occurred during contract performance. There were two reasons for the court’s conclusion. First, a critical path schedule that relied solely on the schedule set forth in the contract specifications did not account for any subsequent changes to the schedule authorized by the contracting agency. Second, the use of a contractually based critical path schedule did not reflect that K-Con did not actually perform in accordance with the contract schedule. As pointed out by the court, the approach advanced by K-Con and its expert, “does not fully reflect the reality of what occurred on the project.”² The court continued to explain that the government’s approach fully reflected that reality. By rejecting the impacted as-planned method, this U.S. Claims Court is in the mainstream.

            But sometimes the impacted as-planned is the only reasonable method. For example, if the delay starts before construction actually starts there are not “actual” dates. Such were the circumstances in Gilchrist Construction Company, LLC v. State of Louisiana Department of Transportation and Development,³ where the Louisiana court used an impacted as-planned because the owner refused to permit the contractor’s schedule to be modified to reflect changed circumstances disputed by the owner. Any as-planned method is cheaper than any as-built method. Limited information may also make an as-planned method attractive. The impacted as-planned was not a reasonable choice in K-Con and is most likely not a reasonable choice in most situations. But impacted as-planned schedule analysis will continue to be used. The trick is determining when to use that “planned” method.

Michael T. Callahan

President of CCL Construction Consultants, Inc.