Float Ownership & CPM Schedules – 2015

    Norman F. Jacobs, Jr., 

    What does your specification say about CPM Schedules and float ownership?

    Today we live in a new era of construction cooperation. When it comes to project float, sharing it between the contractor and owner is in, while exclusive float ownership by either party is out. Although “float” is generally understood in the construction industry as extra time or leeway for  completing a project schedule, its use remains controversial. At stake in the float debate are hundreds of millions of dollars lost or won in timely completions or delays. Some say float calculations are fraught with deceptions.

    What is the variability of float? The calculation process to determine float is arithmetically precise, but the data used in the calculation is a collection of estimates, guesses, simplifications and assumptions. Once created, float is ephemeral; the effluxion of time will of itself destroy float [there is no float on completed activities].  Similarly, float cannot be bought, sold, stored or transferred, it only exists as a result of an arithmetic calculation, on some future activities in a schedule and any changes that occur during the execution of the project can have dramatic effects on the overall schedule and all of its embedded float values.

    Sharing float is rarely clear in case law regarding contracts, and it harms contractors in significant ways. By depriving contractors of use and control of the schedule they create and execute in carrying out the work, float-sharing cuts the connection between risk, responsibility and control. If  timely completion resides in the contractor’s domain, control of time belongs there, too.

    Float can lead to other problems. Float, for example, has been described as the period between the earliest possible start time for an activity not on the critical path and the latest time the activity can possibly finish, minus the actual number of days to do the work. Be very sure to know the terms such as total float, free float, activity float and project float that are confusing because they carry different meanings.

    The Project Manager must know the consequences of consuming float. Float unquestionably provides a contingency within the schedule that can be used to offset problems and delays, but any reduction in float increases the risk of project overrunning.  As more paths through a schedule approach criticality there is an increased likelihood that a delay on any one of the near critical paths will cause the project to finish late.

    Gaming and manipulating float is a common worry of some construction people. Any gamesmanship up front, if even possible, will likely yield unintended consequences to the project CPM Schedule.

    The benefit and ability to manage float should always follow the responsibility of managing and meeting the schedule. Float is one of the most important and least understood aspects of project management.

    Check specifications as to the use of any CPM Schedule 3m’s; such as manage, massage or manipulate.

    Article: William H. Gordon Associates, Inc., v. Heritage Fellowship Church

    William H. Gordon Associates, Inc., v. Heritage Fellowship Church

    Engineer’s liability for failure of rain tank that it designed; reliance on manufacturer’s information; standard of care; and contractor’s responsibility

    Written by Hugh Anderson, EJCDC Legal Counsel

    Published February 23, 2016, in EJCDC Newsletter February 2016, by Linda Yelton

    Issue: Engineer’s liability for failure of rain tank that it designed, including issues of reliance on manufacturer’s information regarding the tank, standard of care, and contractor’s responsibility. William H. Gordon Associates, Inc., v. Heritage Fellowship Church. Supreme Court of Virginia (2016).

    Summary: Heritage Fellowship Church retained Gordon to conduct various civil engineering tasks associated with the site of a new church. Gordon designed a rain tank that would be located ten feet under the new parking lot—the tank would be an initial collection point for stormwater. As the project proceeded, the contractor raised concerns about the suitability of the rain tank, noting that the local water table was high, and posing questions about the details of installation. Gordon did not reevaluate the rain tank, or provide any additional information about installation, but did provide assurances to the contractor that the ground water level would not affect the rain tank. Several months after installation, the tank and the parking lot above it collapsed, resulting in a substantial rework, and delays in occupancy of the church.

    In subsequent litigation, the contractor and the owner offered expert testimony that Gordon had breached the professional standard of care. In reply, Gordon’s experts contended that the failure of the rain tank was the result of construction errors by the contractor, and that Gordon had met its standard of care by relying on the tank manufacturer’s product information. The trial court concluded that the contractor had adhered to Gordon’s design, and that the sole cause of the collapse was Gordon’s failure to meet the professional standard of care. Gordon appealed.

    Decision: The Supreme Court of Virginia affirmed the lower court’s ruling against Gordon. (The court did decide in Gordon’s favor with respect to certain damages issues, and remanded the case for consideration of the impact of the owner’s settlement of a claim against an inspection firm.) The court examined the record and found ample basis for affirming that Gordon had not met the professional standard of care.

    The court noted testimony that the specifications regarding the rain tank were prescriptive, and the contractor’s duty was to follow them—refuting the notion that the construction contract had shifted design liability or duties to the contractor. Expert testimony in the trial court had also been critical of Gordon’s reliance on manufacturer’s generic literature, and failure to conduct due diligence on the tank’s location and the impact of the high water table. The design was labeled “not clear, constructible, or very likely to serve its purpose,” apparently with respect to lack of direction regarding the need for a very level tank base and “nearly perfectly perpendicular” vertical panels. The engineer’s failure to answer the contractor’s question regarding installation was criticized.

    The decision cites testimony from the contractor’s and owner’s experts favorably, but the point seems to be that there are factual grounds for affirming the lower court—the intent does not seem to be to establish broad precedential rules of law regarding what is and what is not within the standard of care. For example, in general support of the lower court’s finding that the engineer did not meet the standard of care, the court cites testimony by an expert that the standard of care requires an engineer “to reexamine its original plan when the contractor submits an RFI about the suitability and performance of a structure.” That may have been a valid point in the context of the church project, but perhaps was not intended by the Virginia high court as a new rule of law for design professionals. As another example, the court reported that an expert had opined that “an engineer that adopts the general plans and specifications prepared by the non-engineer manufacturer falls below the standard of care.” It would seem reasonable to take this as a project-specific statement regarding Gordon’s liability, rather than a holding that has absolute application to all claims against design professionals; in some situations, a design professional’s reliance on third-party information may be routine and entirely justified.

    Comment: The court here correctly employed a professional standard of care analysis in determining Gordon’s liability. That liability was strongly supported by expert testimony offered by the owner’s and contractor’s witnesses at trial.

    EJCDC recognizes that it is sometimes necessary for an engineer to rely on information from others. E-­500 provides that:

    Subject to the standard of care set forth in Paragraph 6.01.A, Engineer and its Consultants may use or rely upon design elements and information ordinarily or customarily furnished by others, including, but not limited to, specialty contractors, manufacturers, suppliers, and the publishers of technical standards.

    Note that this is not meant as a blanket statement, to be blindly applied, but rather should be applied in coordination with the professional standard of care. The engineer must use professional judgment in deciding when reliance is appropriate, and to what degree site-specific or project-specific factors must also be taken into account.

    Article republished with permission of EJCDC.  The Engineers Joint Contract Documents Committee (EJCDC) is a joint venture of three major organizations of professional engineers.

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