FEATURED PAPER
By Pat Weaver
Melbourne, Australia
Introduction
For the last 50 or more years, the internationally recognized approaches to assessing delay and disruption have been based on the forensic assessment of a CPM schedule. The premise being there is a well-developed critical path schedule that defines the way the work of the project will be, or has been, accomplished. However, there was no concept of a critical path before the 1957[1], and in the 21st century, there are many projects where the critical path method (CPM) is simply not used, or does not represent the way the work is accomplished.
The legal concepts of delay, disruption, extensions of time, and liquidated damages (the legal framework), were defined many decades before CPM was developed. In more recent times the advent of agile, lean, and other team-driven approaches to managing projects have been shown to be incompatible with the fundamental concepts of CPM. Earlier papers in this series have also shown distributed projects such as erecting wind farms, or repairing potholes after a flood, are another type of project that has no particular requirement for the work to be undertaken in any pre-defined order, which again makes CPM suboptimal[2].
The key management objective in both agile and distributed projects is optimizing resource utilization and consequently the effect of any intervening event has to be considered in terms of the delay and disruption caused by the loss of resource efficiency, rather than its effect on a predetermined, arbitrary, sequence of activities.
The focus of this paper is to offer a practical solution to the challenge of assessing delay and disruption in agile and distributed projects where the traditional concept of a critical path that must be followed simply does not exist.
The foundations of the legal framework
The need to assess delays and disruptions affecting the delivery of a project is directly linked to the existence of a contract requiring the predefined scope of a project to be completed to the required standards, within a defined period. If there are no contractual obligations (typical with internal projects) normal project control functions that meet the requirements of the organization’s management are appropriate[3]. This requirement changes as soon as there is an external client and a contract.
When a contract is in place, the obligations defined in the contract documents are legally enforceable. The premise contained in the common law[4] is that the contract defines the agreement between the two parties, and both are bound to comply with all of the contract terms and conditions. This means that if one party fails to perform its obligations under the contract, the other party is entitled to be compensated for the resulting breach of the contract terms.
In law, the damages caused by a breach of contract are usually reduced to a financial payment that will, as nearly as practical, leave the disadvantaged party in the same position it would have been had the breach of contract not occurred[5].
The common law framework also includes a presupposition that the only way a contract can be altered is by mutual agreement. This works perfectly well for simple transactions, and in situations where the parties to the contract are willing to work together. In more complex situations, the contract document needs to be drafted to deal with a range of foreseeable issues such as the need to make changes to the scope of the contract, and how other unavoidable delays will be dealt with.
Consequently, most well drafted contracts will incorporate clauses defining the processes for:
- Determining the extent of any change required by the client, including incorporating the change into the contract, and modifying the contract to adequately compensate the contractor for the time and costs involved in implementing the change.
- Allocating the risk of foreseeable delay events between the parties and compensating the contractor for the occurrence of events that are the client’s risk.
These processes should be fair to both parties but may not be. However, Common Law expects both parties to honor the contract they have chosen to sign.
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How to cite this paper: Weaver, P. (2024). Assessing Delays in Agile & Distributed Projects; PM World Journal, Vol. XIII, Issue IV, April. Available online at https://pmworldlibrary.net/wp-content/uploads/2024/04/pmwj140-Apr2024-Weaver-Assessing-Delays-in-Agile-Distributed-Projects.pdf
About the Author
Patrick Weaver
Melbourne, Australia
Patrick Weaver, PMP, PMI-SP, FAICD, FCIOB, is the Managing Director of Mosaic Project Services Pty Ltd, an Australian project management consultancy specializing in project control systems. He is a Fellow of the Chartered Institute of Building, Australasia (FCIOB) and a Fellow of the Australian Institute of Company Directors (FAICD). He is a member of the PMI Melbourne Chapter (Australia), as well a full member of AIPM, and the Project Management College of Scheduling (PMCOS).
Patrick has over 50 years’ experience in Project Management. His career was initially focused on the planning and managing of construction, engineering and infrastructure projects in the UK and Australia. The last 35 years has seen his businesses and experience expand to include the successful delivery of project scheduling services and PMOs in a range of government, ICT and business environments; with a strong focus on project management training.
His consultancy work encompasses: developing and advising on project schedules, developing and presenting PM training courses, managing the development of internal project control systems for client organizations, and assisting with dispute resolution and claims management.
In the last few years, Patrick has sought to ‘give back’ to the industry he has participated in since leaving college through contributions to the development of the project management profession. In addition to his committee roles, he has presented papers at a wide range of project management conferences in the USA, Europe, Asia and Australia, has an on-going role with the PGCS conference in Australia and is part of the Australian delegation to ISO TC258.
Patrick can be contacted at patw@mosaicprojects.com.au or at www.mosaicprojects.com.au.
To read previous works by Pat Weaver, visit his author showcase in the PM World Library at https://pmworldlibrary.net/authors/patrick-weaver/
[1] For more on the development of CPM see A Brief History of Scheduling (page 8), download from: https://mosaicprojects.com.au/PMKI-ZSY-020.php#Overview
[2] See Scheduling Challenges in Agile & Distributed Projects: https://mosaicprojects.com.au/PDF_Papers/P208_Scheduling_Challenges_in_Agile_+_Distributed_Projects.pdf
[3] See Predicting Completion in Agile & Distributed Projects: https://mosaicprojects.com.au/PDF_Papers/P214_Predicting_Completion_In_Agile_+_Distributed_Projects.pdf
[4] Common Law is the legal framework used in the UK, most of the USA, and most Commonwealth countries. Other legal frameworks include Civil Law used in Europe and many other countries, and Islamic Law.
[5] The way the amount of damages to be paid for a breach of contract are assessed was defined in Hadley & Anor v Baxendale & Ors [1854] EWHC J70. It sets the leading rule to determine the extent of consequential damages: a breaching party is liable for all losses that the contracting parties should have foreseen.
Download from: https://mosaicprojects.com.au/PMKI-ITC-020.php#Cases
