Change Orders after the Contract Completion Date and Contractual Defects in the 'Longest Path' Theory

摘要

A contentious point of discussion between forensic schedule delay analysts and contracts practitioners is the means by which the critical path is determined in a project delay situation after the lapse of the contract completion date. One school of thought is called the negative float theory (the contracts practitioner's preference), in which the critical path is determined with reference to the contract completion date. Under this theory, any work performed after the contract completion date is considered critical. The second is called the longest path theory, in which the critical path is the longest critical path up to the forecast completion date. Therefore, only the delay to activities on the longest path is considered critical, even if another delay takes place after the contract completion date. The distinction between the two theories is exemplified in a situation in which a change order or an owner-caused delay takes place after the contract completion date when the contractor was already in delay. An examination of the literature and case law demonstrates that the longest path theory has wider application and preference in the United States and abroad. This paper goes against the tide and illustrates, from a contracts practitioner's standpoint, that there are challenges to the application of the longest path theory. Several contractual and practical (from a contract management perspective) factors are elaborated upon to prove this point, and recommendations are provided in conclusion. The objectives of this paper are (1) to present, from a contract practitioner's viewpoint (as opposed to the common forensic planner's viewpoint), critical contractual flaws in the application of liquidated damages using the longest path theory when owner delays are encountered by a contractor after the lapse of the contract completion date; (2) to make recommendations as to how to alleviate these contractual flaws; and (3) to stimulate intellectual discourse and provoke thought on this much-debated topic of changes taking place after the contract completion date and the application of liquidated damages in this situation.