16038113 is often exempted from the penalty and/or allowed








Research Method Dissertation Proposal submitted to the

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University of Northumbria


January 2018























  The construction
industry is a major sector that is very important for the development of United
Kingdom economy. Through construction the UK has developed its economy maximally.
However, it is becoming more difficult because of the complexity and the large
number of parties involved in the construction process i.e. clients,
contractors, suppliers, and consultants.

Delays are common feature in construction projects and they frequently
lead to disputes between the parties involved. In resolving these disputes, it
is necessary to have a robust approach for analyzing delays. It is necessary to
have guidance in the form of a documented contract and an explanation on how
they can be implemented. As a result, NEC3 contract has been uniquely designed
with distinctive characteristics: They encourage
good management of the relationship between the two parties to the
contract and hence, of the work involved in the contract, they are clear, simple and written in plain
English language and have a structure which is uncomplicated and easily

The main objective of this study is to determine how the use
of NEC3 contract will improve forensic delay analysis. This study is carried
out based on literature reviews and questionnaire survey.















Table of Contents



Chapter 1. 3
Project Background. 4
Project Justification. 5
(Research Questions). 6
Purpose of study. 7
Aim and Objectives. 7
Chapter 2. 8
Review of
Literature. 8
Chapter 3. 12
Methodology. 12
Chapter 4. 14
Conclusion. 14
References. 15




















Chapter 1



Project Background

The construction industry is an important sector of the
economy of UK. It accounts for £103 billion, 9.5% of the economy, 2.1 million
jobs. (Office of National Statistics, 2015). Most construction projects involve
the participation of various parties, and their relationships are regulated by
contract agreements. According to Alkass et al
the duration of contract performance has a direct consequence on the
profitability of construction projects from the perspective of all stakeholders.
For project owners, loss of profits arises from being unable to meet
contractual obligations deadlines while to the contractor, additional cost will
be incurred due to prolonged stay on site (Jergeas & Hartman, 2004). There
are provisions in most standard forms of contract for anticipated delay brought
about by the actions and/or inactions of the owner or the contractor. The
contractor is often exempted from the penalty and/or allowed compensation for
any costs owing to delays resulting from events or conditions that are outside
its control (Jergeas & Hartman, 2004). Provisions in the contract also permit
the owner to recover liquidated damages from the contractor for failure to
deliver the project within the contract performance period. Liquidated damages
clauses permit the owner to recovery of a precise sum of money for each day or
week of liable delay. In both cases, a thorough schedule delay analysis is necessary
to look into the events that have actually caused the project to overrun. In
the past, owners and contractors have used different Delay Analysis Techniques
(DATs) to accomplish this. However, majority of cases, the parties are unable
to reconcile delay claims amicably ensuing in costly disputes after the project
is completed (Zack & James, 2016).

Consequently, delay claims are now a key source of disagreement
in the construction industry and also one of the most difficult to resolve.
This has generated considerable efforts from researchers and industry
practitioners, working on how to improve the application of existing DATs and
the development of good practice documents that will provide guidance to
practitioners on what the best application of the diverse techniques entails
and the conditions that dictate their proper use, of such documents is the use
of NEC3 contract.

According to
Pickavance (2007) NEC3 contract is essential to engineering projects being
completed successfully. The New Engineering and Construction Contract (NEC3) is
a family of contracts distinctive in providing a total end-to-end project
management solution for the whole project life-cycle; from arrangement,
defining legal relationships and procurement of works, all the way through to
project completion, management and beyond. The contracts are appropriate for
procuring various ranges of works, services and supply, ranging from major
framework projects through to minor works and the purchase of supplies and
goods (Divya
& Ramya, 2015). NEC3 contracts have been beneficial
to both national and international projects in terms of cost savings, time, and
improved quality. NEC3
contracts have grown to be the public sector contracts of choice (Jergeas &
Hartman, 2004). They are extensively used for major projects in the UK by private
and public corporations. This is because of the exceptional value they offer in
terms of, they:

Stimulate good management relationship
between the two parties involved in the contract.
They can be applied in a wide
variety of commercial situations, work and locations
They are simple to understand, clear
and written in plain English




Project Justification


claims are a major source of conflict between the contractor and the clients in
the construction industry and one of the most difficult to resolve. Hence, the
initiative on how to enhance the application of existing DATs and the development
of good practice documents for providing guidance to practitioners with the use
of NEC3 contract is a welcome development.

Hypothesis (Research Questions)


The research questions for this proposal are:

1.      What
is delay and why is it a problem?

2.      How has delay affected construction
projects with NEC3 contract?

3.      What
background information is necessary to fully understand this problem?

4.      What are the major problems
associated with forensic delay analysis with reference to NEC3 contract?

5.      What are the existing means of
solving the problem?

6.      Can
computer application (apps) be developed specifically to analyze delays and proffer

7.      Based
on research, why is the necessity for development of forensic delay analysis
application (apps)?


Scope of the Project

The scope of
the project is primarily to focus on the literature review on the topic of
interest and to carry out primary questionnaire survey.  The questionnaire survey would be designed to
look into: the causes of construction delays, effects of construction delays
and how NEC3 contract can be used to improve forensic delay analysis.

Limitations and delimitations


Although this research was carefully
prepared, it is not without its limitations and shortcomings. First, since
constructions are carried out by different engineering field. The focus of this
research is on civil engineering construction projects.

Second, because of unwillingness of
some companies to release data on their past projects, this research was
conducted on a smaller size population of 10 than intended. Therefore, to
generalize the results, the study should have involved more sample size.

Purpose of study

The purpose of this study is exploring delays in NEC3
contracts and proffer ways of minimizing them, which not much has been done in
the area of research. And to develop an application to perform delay analysis
hereby eliminating time spent in delay analysis.  


Aim and Objectives

This research study aims at identifying the major causes of
delay, effect of delay, methods of minimizing delays in construction projects
and how the use of NEC3 contract will improve forensic delay analysis. To
achieve the aims, the following objectives have been identified as following:

  a)  To explore reasons for delays in NEC3 contract

To explore the relationship between compensation events and delays in
NEC3 contract      projects.

c)  To explore the effect of NEC3 contract in minimizing
construction delays.

d)  To explore the development of an application
to ease forensic delay analysis in construction projects.


Chapter 2

Review of

The construction industry has consistently recorded poor outcome
with respect to early completion of projects (Zack & James, 2016). The more,
the complexity of a construction project, the more likely it is to encounter
time delays, which may result into unfavorable financial implications. Delays
can be defined as an unexpected extension to the overall planned time period
for completion of a project (Divya & Ramya, 2015). They are very common in
construction projects and they are the costliest problem encountered on
construction projects (Bubshait & Cunningham, 2008).

Ramon (2013) classified delay as client related, consultant
related, contractor related, design related, equipment related, labour related
and project related. These could be classified as excusable delay events, non-excusable
delay events; and neutral delay events. The events are caused by the awareness
of a risk, the responsibility for which ought to have been allocated between
the parties within the construction contract. The analysis of construction
delays has become an essential part of construction project. Even with
computerization and managements understanding of project management techniques,
construction projects continue to suffer delays and project completion dates
still get pushed back (Zack & James, 2016). In a study conducted by Divya and
Ramya, 2015 the effects of delays are time overrun, cost overrun, dispute,
arbitration, total abandonment and litigation. Certainly, delays are costly to
all parties concerned in the construction industry and often result in dispute
resolution through adjudication, arbitration and litigation.

& Ramya (2015) stated that the costs resulting from delays can have far
reaching effects on the annual profitability of a contractor, as a single
project could represent a sizeable proportion of a firm’s annual turnover.

According to Alkass, Mazerolle & Harris (2006) in
examining a contractor’s obligation to complete his work by a fixed time,
construction contracts differ very markedly from nearly all others, as the
contractor can be expected to have expended very heavily in performing the
contract prior to any relatively trivial delay to completion. He also notes
that upon fixing of the work to the soil, the property will have passed to the
owner, irrespective of the degree of payment, thus conferring a major and
irretrievable benefit on the owner as against a possibly only minor or nominal
loss suffered by him. For these reasons, he notes the courts have shown an
exceptional assiduity in avoiding a ‘time of the essence’ interpretation of the
contractor’s completion obligation in construction contracts. This, he states,
would seem the position even in cases where express language has been used in
the contract.

Where the contractor acts in the course of a business, it
will be an implied term of the contract that he will complete the works within
a reasonable time. Failure to achieve completion by the completion date or within
the time for completion or within a reasonable time is a breach of the contract
terms and will entitle the employer to seek recovery of its loss, often termed damages
(Divya and Ramya, 2015). The actual loss incurred due to this breach will have
to be proven by the employer. As proving such a loss is complex, employers
often seek to ascertain these losses in advance and define them in the
construction contract. The pre-estimate of loss is termed liquidated damages.

The term delay analysis is used for both extension of time
submissions and any time-related aspects of delay claims (Divya and Ramya (2015).
It is the analytical process through which a professional employs CPM, together
with a forensic review of project documentation and other pertinent data, to
evaluate and apportion the effects of delays and other impacts on the project
program (Zack & James, 2016). Yang
& Kao, 2012 listed 4 methods of carrying out delay analysis vis: As planned
vs as built, impacted as planned, Time impact analysis and Window analysis vs
as suggested. In summary, delay analysis may be
simplified as: a forensic investigation into the problem of what has caused a
project to be completed late or the task of investigating the events that led
to project delay for the purpose of determining the financial responsibilities
of the contracting parties arising from the delay (Assaf & Sadiq, 2006). However,
with NEC3 contract, to prove the occurrence of a delay, the contractor must
follow duo step process that a compensation event has happened and that the
event has led to extension to the project completion date.  Kevin, 2013. See Fig. 1 below delay
construction framework.


Construction Delay Framework – Fig.
1 – Source: N. Hamzah et al.

Chapter 3

Research Methodology

Research Philosophy. The philosophy choosing is
positivism. Dealing with objective approach to the theory of forensic delay
analysis with NEC3 contract.

Research Approach. Deductive approach from theory to
data collection and data collection and analysis.  

Research Design.  Survey data would be sourced out through the use of
questionnaire. The general goal of this research is to explore forensic delay
analysis with NEC3 contract.

Research Choice. Mono method. Administration or questionnaires.

Time Horizon. Cross-sectional of the population is
taken which is obtaining data from 10 different construction firms.

Techniques and Procedures

Data collection and data analysis. Once the quantitative data has
been collected, statistical analysis is carried out and inference are drawn
from the data. The starting point will be to group the raw data into categories
to visualize it. Bar charts will be used to summarize the data. The chart gives
an immediate picture of the data, this is important because it will show
straight away whether the data are grouped together,
spread about, tending towards high or low values, or clustered the around a
central point. See fig. 2 for Research Methodology framework.


Research Methodology – Fig. 2






Chapter 4


there is a delay in construction, it is no question that the project owner
suffers financially, but the extent to which the project owner can recover his loss
from the contractor, and more importantly lessen the risk that delays will
occur depends mainly on how the construction contract was drawn up. The
New Engineering Contract 3 (NEC3)
suite describes a well-ordered step-by-step process for an employer and
contractor or consultant to initiate, price and deliver a compensation event.
NEC3 contract contains the condition for the contractor or consultant to offer
a quotation, and states the associated time limits for the employer to accept
or replace such quotation. The NEC3 contract conditions clearly envisage that
the process for implementing a compensation event is carried out prior to the
works being completed, and is thus thought to be a potential way of reducing
conflict due to delay between the contractor and the project owner. The use of NEC3 contract in forensic
delay analysis will thus bring multiple benefits to all the parties involved in
the construction process.






















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