What is “float”?
Any construction project is made up of many individual operations (activities) which have to be completed in a logical sequence. Float can be described as either:
1. The length of time between when an activity is due to start and when it must start if it is to avoid being on the critical path; or
2. The additional time needed or allowed to complete an activity over and above the shortest time that is reasonably required.
The critical path is the shortest time to complete the project given the interdependencies of the various activities. No activity, once it is on the critical path, possesses any float.
Why is it important?
It is relevant to judgments on extensions of time (EOT) and hence liquidated damages (LADs). Will delays on particular activities give the contractor the right to an EOT to the project completion date and give him dispensation from LADs?
How do I find it?
Float will be found by analysing the programme, however:
• Under traditional forms (JCT and ICE) the programme is not part of the contract and whilst there will probably be one produced, it does not have to show the float.
• Under the newer NEC form, The Accepted Programme is part of the contract, shows the float, and is the baseline against which “compensation events” are measured.
• Under FIDIC Red Book the programme is more detailed than JCT, but less than NEC, and in particular there is no requirement to show the float.
Also the calculation of float in a programme is not only an arithmetical exercise. It also calls for judgment and hence is liable to be disputed.
What does the contract say?
How the float is to be used depends on the wording of the EOT clause, however the clause will probably not mention float by name.
The clause will usually set out a number of occurrences that will give the contractor the right to an EOT to the contractual completion date. JCT calls them “relevant events”, the NEC “compensation events”.
Where the EOT is only to be granted if these events lead to a delay to the contractual completion date then this implies that the contractor cannot preserve his float. He will not be allowed an EOT for his own delays (which may erode his own float) and any employer delays which are not on the critical path will not entitle the contractor to an EOT either. This may lead to unfairness if early employer delays eat up the float leaving none for subsequent contractor delays, which therefore lead to a failure to complete on time.
If the EOT wording allows the contractor more time every time an event delays his planned programme then he probably can preserve his float in those individual activities.
Hence:
• Under the JCT forms the question is whether the relevant event is likely to cause the contractual completion date to overrun; and
• Under the NEC form the project manager has to assess the length of time that, due to the compensation event, planned Completion is later than the planned Completion as shown on the Accepted Programme.
Neither of these contracts, on its own, tells the project manager / architect how to deal with float, however the JCT clause, in allowing an EOT only if the event delays the project beyond the then current contractual completion date, imply that the contractor cannot preserve his float. Here the float is “owned” by whoever needs to claim it first, in other words by the project.
Contrast that with the NEC which assesses the impact of delay by reference to the contractor’s planned completion date, not the contractual completion date. Hence in this case contractor's float is preserved.
The Delay and Disruption Protocol
In 2002 The Society of Construction Law produced a Protocol. It provides “useful guidance” but is not intended to be either a contract document or a statement of the law.
Under the Protocol float is considered in two contexts:
• In relation to EOT; and
• In relation to compensation.
Of course one consequence of float is that, if no one uses it up (there are no delays to the project) the contractor will finish earlier than the contractual completion date.
The Protocol’s position is:
• On EOT: the contractor will only be granted an EOT if there is no remaining float in the programme. Hence, the contractor cannot preserve his float in the face of employer delays.
• On compensation: the contractor will get compensation if employer delays cause it to complete later than its programme date, but only if contract, the float / early completion intention is both known, discussed and agreed as realistic and achievable.
In this way the Protocol hopes to draw a fair and reasonable balance.
Please note: These key points are only intended to give general guidance and are no substitute for specific legal advice on any given situation.