16038113 is often exempted from the penalty and/or allowed

    16038113  Research Method Dissertation Proposal submitted to the University of Northumbria  January 2018                    Abstract   The constructionindustry is a major sector that is very important for the development of UnitedKingdom economy. Through construction the UK has developed its economy maximally.However, it is becoming more difficult because of the complexity and the largenumber of parties involved in the construction process i.e. clients,contractors, suppliers, and consultants.Delays are common feature in construction projects and they frequentlylead to disputes between the parties involved. In resolving these disputes, itis necessary to have a robust approach for analyzing delays.

It is necessary tohave guidance in the form of a documented contract and an explanation on howthey can be implemented. As a result, NEC3 contract has been uniquely designedwith distinctive characteristics: They encouragegood management of the relationship between the two parties to thecontract and hence, of the work involved in the contract, they are clear, simple and written in plainEnglish language and have a structure which is uncomplicated and easilyunderstood.The main objective of this study is to determine how the useof NEC3 contract will improve forensic delay analysis. This study is carriedout based on literature reviews and questionnaire survey.              Table of Contents   Contents Chapter 1.

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3 Project Background. 4 Project Justification. 5 Hypothesis (Research Questions). 6 Purpose of study. 7 Aim and Objectives.

7 Chapter 2. 8 Review of Literature. 8 Chapter 3. 12 Research Methodology. 12 Chapter 4. 14 Conclusion. 14 References. 15                     Chapter 1 IntroductionProject BackgroundThe construction industry is an important sector of theeconomy of UK.

It accounts for £103 billion, 9.5% of the economy, 2.1 millionjobs. (Office of National Statistics, 2015). Most construction projects involvethe participation of various parties, and their relationships are regulated bycontract agreements. According to Alkass et al(2006)the duration of contract performance has a direct consequence on theprofitability of construction projects from the perspective of all stakeholders.

For project owners, loss of profits arises from being unable to meetcontractual obligations deadlines while to the contractor, additional cost willbe incurred due to prolonged stay on site (Jergeas & Hartman, 2004). Thereare provisions in most standard forms of contract for anticipated delay broughtabout by the actions and/or inactions of the owner or the contractor. Thecontractor is often exempted from the penalty and/or allowed compensation forany costs owing to delays resulting from events or conditions that are outsideits control (Jergeas & Hartman, 2004). Provisions in the contract also permitthe owner to recover liquidated damages from the contractor for failure todeliver the project within the contract performance period. Liquidated damagesclauses permit the owner to recovery of a precise sum of money for each day orweek of liable delay. In both cases, a thorough schedule delay analysis is necessaryto look into the events that have actually caused the project to overrun.

Inthe past, owners and contractors have used different Delay Analysis Techniques(DATs) to accomplish this. However, majority of cases, the parties are unableto reconcile delay claims amicably ensuing in costly disputes after the projectis completed (Zack & James, 2016).Consequently, delay claims are now a key source of disagreementin the construction industry and also one of the most difficult to resolve.This has generated considerable efforts from researchers and industrypractitioners, working on how to improve the application of existing DATs andthe development of good practice documents that will provide guidance topractitioners on what the best application of the diverse techniques entailsand the conditions that dictate their proper use, of such documents is the useof NEC3 contract.

According toPickavance (2007) NEC3 contract is essential to engineering projects beingcompleted successfully. The New Engineering and Construction Contract (NEC3) isa family of contracts distinctive in providing a total end-to-end projectmanagement solution for the whole project life-cycle; from arrangement,defining legal relationships and procurement of works, all the way through toproject completion, management and beyond. The contracts are appropriate forprocuring various ranges of works, services and supply, ranging from majorframework projects through to minor works and the purchase of supplies andgoods (Divya& Ramya, 2015). NEC3 contracts have been beneficialto both national and international projects in terms of cost savings, time, andimproved quality. NEC3contracts have grown to be the public sector contracts of choice (Jergeas &Hartman, 2004). They are extensively used for major projects in the UK by privateand public corporations.

This is because of the exceptional value they offer interms 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 Delayclaims are a major source of conflict between the contractor and the clients inthe construction industry and one of the most difficult to resolve. Hence, theinitiative on how to enhance the application of existing DATs and the developmentof good practice documents for providing guidance to practitioners with the useof NEC3 contract is a welcome development.Hypothesis (Research Questions) The research questions for this proposal are:1.

      Whatis delay and why is it a problem?2.      How has delay affected constructionprojects with NEC3 contract?3.      Whatbackground information is necessary to fully understand this problem?4.      What are the major problemsassociated with forensic delay analysis with reference to NEC3 contract?5.      What are the existing means ofsolving the problem?6.      Cancomputer application (apps) be developed specifically to analyze delays and proffersolutions?7.      Basedon research, why is the necessity for development of forensic delay analysisapplication (apps)?  Scope of the ProjectThe scope ofthe project is primarily to focus on the literature review on the topic ofinterest and to carry out primary questionnaire survey.

  The questionnaire survey would be designed tolook into: the causes of construction delays, effects of construction delaysand how NEC3 contract can be used to improve forensic delay analysis.Limitations and delimitations Although this research was carefullyprepared, it is not without its limitations and shortcomings. First, sinceconstructions are carried out by different engineering field. The focus of thisresearch is on civil engineering construction projects.Second, because of unwillingness ofsome companies to release data on their past projects, this research wasconducted on a smaller size population of 10 than intended. Therefore, togeneralize the results, the study should have involved more sample size.

Purpose of studyThe purpose of this study is exploring delays in NEC3contracts and proffer ways of minimizing them, which not much has been done inthe area of research. And to develop an application to perform delay analysishereby eliminating time spent in delay analysis.   Aim and ObjectivesThis research study aims at identifying the major causes ofdelay, effect of delay, methods of minimizing delays in construction projectsand how the use of NEC3 contract will improve forensic delay analysis. Toachieve the aims, the following objectives have been identified as following:  a)  To explore reasons for delays in NEC3 contractprojects.

b) To explore the relationship between compensation events and delays inNEC3 contract      projects.c)  To explore the effect of NEC3 contract in minimizingconstruction delays.d)  To explore the development of an applicationto ease forensic delay analysis in construction projects. Chapter 2Review ofLiteratureThe construction industry has consistently recorded poor outcomewith respect to early completion of projects (Zack & James, 2016). The more,the complexity of a construction project, the more likely it is to encountertime delays, which may result into unfavorable financial implications. Delayscan be defined as an unexpected extension to the overall planned time periodfor completion of a project (Divya & Ramya, 2015).

They are very common inconstruction projects and they are the costliest problem encountered onconstruction projects (Bubshait & Cunningham, 2008).Ramon (2013) classified delay as client related, consultantrelated, contractor related, design related, equipment related, labour relatedand project related. These could be classified as excusable delay events, non-excusabledelay events; and neutral delay events.

The events are caused by the awarenessof a risk, the responsibility for which ought to have been allocated betweenthe parties within the construction contract. The analysis of constructiondelays has become an essential part of construction project. Even withcomputerization and managements understanding of project management techniques,construction projects continue to suffer delays and project completion datesstill get pushed back (Zack & James, 2016). In a study conducted by Divya andRamya, 2015 the effects of delays are time overrun, cost overrun, dispute,arbitration, total abandonment and litigation. Certainly, delays are costly toall parties concerned in the construction industry and often result in disputeresolution through adjudication, arbitration and litigation.

Divya& Ramya (2015) stated that the costs resulting from delays can have farreaching effects on the annual profitability of a contractor, as a singleproject could represent a sizeable proportion of a firm’s annual turnover.According to Alkass, Mazerolle & Harris (2006) inexamining a contractor’s obligation to complete his work by a fixed time,construction contracts differ very markedly from nearly all others, as thecontractor can be expected to have expended very heavily in performing thecontract prior to any relatively trivial delay to completion. He also notesthat upon fixing of the work to the soil, the property will have passed to theowner, irrespective of the degree of payment, thus conferring a major andirretrievable benefit on the owner as against a possibly only minor or nominalloss suffered by him. For these reasons, he notes the courts have shown anexceptional assiduity in avoiding a ‘time of the essence’ interpretation of thecontractor’s completion obligation in construction contracts.

This, he states,would seem the position even in cases where express language has been used inthe contract.Where the contractor acts in the course of a business, itwill be an implied term of the contract that he will complete the works withina reasonable time. Failure to achieve completion by the completion date or withinthe time for completion or within a reasonable time is a breach of the contractterms 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 haveto be proven by the employer. As proving such a loss is complex, employersoften seek to ascertain these losses in advance and define them in theconstruction contract.

The pre-estimate of loss is termed liquidated damages.The term delay analysis is used for both extension of timesubmissions and any time-related aspects of delay claims (Divya and Ramya (2015).It is the analytical process through which a professional employs CPM, togetherwith a forensic review of project documentation and other pertinent data, toevaluate and apportion the effects of delays and other impacts on the projectprogram (Zack & James, 2016). Yang& Kao, 2012 listed 4 methods of carrying out delay analysis vis: As plannedvs as built, impacted as planned, Time impact analysis and Window analysis vsas suggested.

In summary, delay analysis may besimplified as: a forensic investigation into the problem of what has caused aproject to be completed late or the task of investigating the events that ledto project delay for the purpose of determining the financial responsibilitiesof the contracting parties arising from the delay (Assaf & Sadiq, 2006). However,with NEC3 contract, to prove the occurrence of a delay, the contractor mustfollow duo step process that a compensation event has happened and that theevent has led to extension to the project completion date.  Kevin, 2013. See Fig. 1 below delayconstruction framework.  Construction Delay Framework – Fig.1 – Source: N.

Hamzah et al.                                                                    Chapter 3Research MethodologyResearch Philosophy. The philosophy choosing ispositivism. Dealing with objective approach to the theory of forensic delayanalysis with NEC3 contract.

Research Approach. Deductive approach from theory todata collection and data collection and analysis.  Research Design.

 Survey data would be sourced out through the use ofquestionnaire. The general goal of this research is to explore forensic delayanalysis with NEC3 contract. Research Choice. Mono method. Administration or questionnaires.Time Horizon.

Cross-sectional of the population istaken which is obtaining data from 10 different construction firms. Techniques and ProceduresData collection and data analysis. Once the quantitative data hasbeen collected, statistical analysis is carried out and inference are drawnfrom the data.

The starting point will be to group the raw data into categoriesto visualize it. Bar charts will be used to summarize the data. The chart givesan immediate picture of the data, this is important because it will showstraight away whether the data are grouped together,spread about, tending towards high or low values, or clustered the around acentral point. See fig. 2 for Research Methodology framework.  Research Methodology – Fig. 2     Chapter 4ConclusionWheneverthere is a delay in construction, it is no question that the project ownersuffers financially, but the extent to which the project owner can recover his lossfrom the contractor, and more importantly lessen the risk that delays willoccur depends mainly on how the construction contract was drawn up.

TheNew Engineering Contract 3 (NEC3)suite describes a well-ordered step-by-step process for an employer andcontractor or consultant to initiate, price and deliver a compensation event.NEC3 contract contains the condition for the contractor or consultant to offera quotation, and states the associated time limits for the employer to acceptor replace such quotation. The NEC3 contract conditions clearly envisage thatthe process for implementing a compensation event is carried out prior to theworks being completed, and is thus thought to be a potential way of reducingconflict due to delay between the contractor and the project owner. The use of NEC3 contract in forensicdelay analysis will thus bring multiple benefits to all the parties involved inthe construction process.                   References AlkassS, Mazerolle M, Harris F (2006).

Construction delay analysis techniques.ConstructionManagementEconomics 1996; 14(5):375-394. AssafS., & Sadiq A (2006) “Causes of Delay in Large Construction Projects”, InternationalJournal of Project Management, Vol. 24, pp. 349-357.

 BubshaitA, & Cunningham M (2008). Comparison of delay analysis methods.  Journal of Construction Engineering ManagementASCE 1998; 24 (4):315-322. Divya.R& S.Ramya (2015) Causes, Effects and Minimization of Delays in ConstructionProjects,National Conference on Research Advances in Communication, Computation,Electrical Science and Structures. JergeasG, Hartman T (2004).

Contractors’ construction-claims avoidance. Journal ofConstruction Engineering and Management ASCE 1994;120(3):553-560. Kevin H.

(2013). Understanding the NEC3 ECC Contract: A PracticalHandbook (Understanding Construction) 1st Edition. PickavanceK (2007). The proof of excusable delay in building contracts without records.Construction Law Journal, 1997;13:243-252. Yang, J.

B., & Kao, C. K. (2012). Critical path effect based delay analysis methodfor construction projects. InternationalJournal of Project Management, 30,385-397.

 Zack F & James G(2016). Schedule Delay Analysis: Is There Agreement? Presentation of exampleproject Inc.