WHO OWNS THE FLOAT?

By Paul McArd MAIQS, CQS

When considering who owns the float, one first must understand the various definitions of 'float' typically associated with construction projects. Secondly, one must understand the applicable contractual clause relating to claiming an extension of time.

WHAT IS FLOAT?

Most people will associate float with the CPM (critical path method) of scheduling. The critical path is determined by the sequence of activities within a program that dictates the overall program duration, i.e., the 'critical path' has zero total floats.

However, there are several other applicable definitions of float, namely:

• Free float: the amount of time an activity can be delayed without impacting upon the start time of its immediate successive activities.

• Interfering float: the difference between the total float and free float.

• Internal float: built-in float between the planned start and completion dates within the program (time contingency).

• External float: float between the Date for Completion and the Date of Completion.

The consideration of 'external float' raises the question of 'who owns the float?'.

The contractor may argue that it 'owns' the float because they plan how the work should be carried out and in what sequence. They may also allow a 'buffer' or contingency between its likely Date of Completion and the Date for Completion.

Suppose, therefore, there is a delay to the contractor's progress for which the contractor is not responsible¹ and the time contingency has not been fully exhausted. In this case, the contractor may contend that they are entitled to an extension of time, even if the delay to progress did not result in the Date for Completion being impacted. Rather, the delay merely 'eroded' its planned time contingency. In this scenario, the contractor is asserting ownership of the float.

On the other hand, the employer may consider that the contractor has no contractual relief for being prevented from completing the works before the contractual Date for Completion. Meaning, the contractor is not entitled to an extension of time unless the excusable delay results in the Date for Completion being impacted. In this scenario, the project (i.e., the employer) is claiming ownership of the float.

The expression 'float' is rarely, if ever, defined in the conditions of the contract. Where the wording of the extension of time clause is such that an extension of time is only to be granted if the employer delays completion beyond the Date for Completion, then the likely effect of that wording is that all external float must be 'consumed' before an extension of time will be due.

Suppose the wording of the extension of time clause is such that an extension of time will be due whenever the employer delay event adversely impacts the Date for Completion date. In that case, the external float will not be available for the benefit of the employer in the event of an employer related delay.

Contractual Requirements

The SCL Protocol maintains the following regarding float ‘ownership’:

Unless there is express provision to the contrary in the contract, where there is remaining total float in the program at the time of an Employer Risk Event, 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 critical path affected by the Employer Delay to Completion.²

In other words, unless the contract says otherwise, the float is owned by the project. The following unamended (Australian) standard forms of contract demonstrate the specific wording regarding (external) float 'ownership'. All three examples deem the contractor to 'own the float'.

AS2124-1992 35.5

In respect of an extension of time claim, in determining whether the contractor is or will be delayed in reaching Practical Completion regard shall not be had to:

1. Whether the contractor can reach Practical Completion by the Date for Practical Completion without an extension of time; Whether the contractor can, by committing extra resources or incurring extra expenditure, make up the time lost.

AS4902-2000 34.4

In assessing each EOT, the superintendent shall disregard questions of whether:

1. WUC can nevertheless reach Practical Completion without an EOT; or

2. The contractor can accelerate, but shall have regard to what prevention and mitigation of the delay has not been affected by the contractor.

AS4300-1995 35.5

In determining whether the contractor is or will be delayed in reaching Practical Completion, regard shall not be had to:

1. Whether the contractor can reach Practical Completion by the Date for Practical Completion without an extension of time; or

2. Whether the contractor can, by committing extra resources or incurring extra expenditure, make up the time lost. The three examples of time clauses entitle the contractor to claim for an extension of time to the Date for Completion regardless of the status of the works at the time of the delaying event.

For example, a contractor is contracted to a November Date for Completion. However, the works are progressing quicker than planned and an earlier Date of Completion of some three months sooner is reported, in August. The employer has accepted the contractor's progress and approved the updated contractor's program. A variation direction has been demonstrated to have impacted the program by a month, meaning the Date of Completion is likely to be September.

Is the contractor entitled to an extension of time to the Date for PC?

Yes. The contractor 'owns' the float. The contractor has made the time and is entitled to use the time, i.e., what if a subsequent contractor delay event meant that all that float was subsequently consumed?

The float is the contractor's opportunity.

KEY TAKEAWAYS

1. Read and fully understand the contract.

2. A claim for an extension of time (and its proximate impact) should be made at the time the delay event occurs.

3. Program float can sometimes be misinterpreted as a method of planning contingency into a project. However, since there is some ambiguity between who actually ‘owns’ the float, it is best practice to determine program contingency and delay allowances and drawdown on the allowances as the pre-determined delays, such as the effects of weather, are realised. This can be facilitated by extending planned discrete activity durations or having a pre-determined delay allowance between the forecast Date of Completion and the Date for Completion.

4. Avoid using internal ‘target’ programs in parallel with the project program. This is unnecessary, even if the project ‘owns’ the float, if proper delay allowances and contingencies have been ‘built’ into the program (internal float). This practice also makes it difficult to prove causation, as only the approved project program can be used to demonstrate entitlement to an extension of time.

¹ And three-part chain of causation is satisfied.

² Society of Construction Law 2017, Delay and Disruption Protocol, 2nd edn, Society of Construction Law (UK), Leicestershire, Section 8, pp. 27-29.

This article was written by Paul McArd MAIQS, CQS from Accura Consulting