It is often queried in programme discussions on a construction project: “Who owns the programme float”?
First, let's be clear on what programme float is. A good definition is as follows:
"Total Float represents the amount of time that a task can be delayed without affecting the completion date of the project, while Free Float represents the amount of time that a task can be delayed without affecting the start date of its subsequent tasks".
Also, whilst not strictly a defined term as part of the Critical Path Method, there is a type of float that exists where a project is tracking to reach “Practical Completion” before the contract “Date for Practical Completion” - let’s call this the “Terminal Float”, as illustrated below:
The significance of the question of who owns the float can vary depending on the scenario:
- The Contractor “owns” the float - If the contractor is running ahead of schedule but is then delayed by an excusable event, the Contractor may still claim an extension of time (EOT) — even if the delay doesn’t push “Practical Completion” beyond the contract’s specified “Date for Practical Completion”.
- The Client or the Project “owns” the float - If the contractor is running ahead of schedule but is then delayed by an excusable event, the Contractor is not entitled to an EOT until the Terminal Float is consumed, or put another way, until “Practical Completion” is delayed beyond the contract’s specified “Date for Practical Completion”.
Knowing who “owns” the float from the outset of a project will allow both parties to understand entitlement and therefore resolve any validly claimed EOT, amicably.
As is often the case in construction projects, when questions are asked about the way something should be administered, the answer can often be found by referring to the contract.
From experience of this query being asked time and time again, an interpretation of the contract’s EOT provisions to interpret whether the drafting indicates who owns the Terminal Float is a good starting point. Parties should look for wording in the EOT provisions that distinguishes between a delay to the “Date for Practical Completion” or a delay to “Practical Completion” entitling the Contractor to an EOT, as an indicator to which party owns the Terminal Float. In all circumstances, legal advice should be sought to the question of float ownership by the parties.
So next time you start on a project, whether as a Client or as a Contractor, be sure to understand 'who owns the float' so you can properly administer the programme and contract responsibilities.
- Cliff Tyler
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