What is Critical Path Analysis?
Critical Path Analysis is a mathematically produced algorithm for scheduling a set of project activities.
The technique is to construct a model of the project that includes:-
A list of all activities required to complete the project;
The time or duration that each activity will take to complete;
The dependencies between the activities.
Using this data, the Critical Path Analysis calculates the longest path of planned activities to the end of the project and the earliest and latest that each activity can start and finish without making the project longer. This process determines which activities are critical i.e. “on the longest path” and which can be delayed without making the project longer.
In layman’s terms, the dependencies are simply, for example, that “you can’t do this activity until you have completed that” or “you must have commenced that activity before you can commence the next one”.
Construction contracts can be highly complex. They can be subject to a variety of factors which may cause delay. A structured, planned analysis of critical progress is therefore important. It can be very useful to reduce the complex interaction of activities to a relatively simply, graphic representation as an aid to management and programming.
Limitations of Critical Path Analysis
However the Critical Path Analysis must always carry a health warning. A qualification to its success is now almost inherent in the definition of the Critical Path Method. For example, Wikipedia states “A schedule generated using Critical Path techniques often is not realised precisely as estimations are used to calculate times: if one mistake is made, the results of the analysis may change. This could cause an upset in the implementation of a project if the estimates are blindly believed and if changes are not addressed promptly”.
Judicial Opinion
Those whose approach to life is largely systematic and logical are likely to embrace the Critical Path Analysis. Those with a more intuitive and experienced-based approach are always likely to question and challenge computer-generated Critical Path Analyses.
It is not surprising that the judicial approach to Critical Path Analysis fluctuates. Sometimes it is in favour, to the extent that it is de rigeur and any delay analyst who proceeds without Critical Path Analysis is open to criticism.
In John Barker Construction Limited –v- London Portland Hotel Limited [1966] 83 BLR31 the Court took the view that an Architect or Contract Administrator must undertake a logical analysis in a methodological way of the impact of relevant events on the Contractor’s programme. The application of an impressionistic rather than a calculated and rational assessment was not sufficient.
In Mirant Asia-Pacific Construction –v- Ove Arup, [2007] WWHC 918 (TCC) the Judge commented that without a Critical Path Analysis undertaken by suitably experienced experts, mistakes could arise and implied that a comprehensive Critical Path Analysis was almost a pre-requisite to prove a claim for damages.
However, in the case of City Inn –v- Shepherd Construction Limited [2008] BLR 269 the Scottish Courts, analysing the Scottish JCT Contract preferred the Contractor’s experts approach to that of the Employer’s expert. The Contractor’s expert had found it impossible to identify any critical path on the Contractor’s original programme. He considered that an attempt to replicate what might be the logic of the original programme was likely to lead to unreasonable conclusions. He examined the original programme and tested it for reasonableness and completeness. He then examined the factual evidence to determine where critical delay had occurred and to identify the cause of critical delay.
The Employer’s expert on the other hand, tried to construct an As-Built Critical Path using computer software. The Court decided that this approach had serious problems. Any significant error fed into the programme was likely to invalidate the entire analysis. Errors were likely to occur if a logic link was inserted which was not correct. The Employer’s expert conceded at trial that this had happened. The Court considered that that made the As-Built Critical Path Analysis “of doubtful value”. The Court went on “I think it necessary to revert to the methods that were in use before computer software came to be used excessively in the programming of complex construction contracts”.
So it was that in the City Inn case the Court disagreed with the Employer’s view that “an Expert could only give a meaningful opinion as to which activities in a project are critical on the basis of an As-Built Critical Path Analysis”.
Multiple Paths
It has been said that there can be more than one critical path. A project can have several parallel paths which are critical or at least near-critical.
The Broader Context
It is important to give discussion of Critical Path Analysis a practical context in which the following points are to be noted:-
a) In many construction contracts, and in particular the JCT forms, the programme is not a contract document. Neither party wants to be in a position whereby, if it does not execute a particular activity at a particular time precisely in accordance with programme, it is immediately in breach of contract. The programme is illustrative. The contractual promises are that the Contractor will complete the works and that the Employer will allow the Contractor to complete by the contractual completion date. The extent to which a programme is promissory is a grey area.
b) When one considers efficiency in programming and performance, it is interesting to note that there is no mention of efficiency in the JCT forms of contract. There is no promise to achieve any given level of efficiency. This is because contractors may tender on widely different bases. On tenderer may plan to complete in 6 months using a limited work-force. Another tenderer may plan to complete in 6 weeks using a very significant work-force. The contractual promise is simply to proceed regularly and diligently.
c) The method or “how” of the construction process is the province of the Contractor and not the Employer. It is up to the Contractor how he goes about his works. He is responsible for designing and employing the temporary works. The Employer has no right to dictate the method.
d) Many construction contracts are not new build contracts. They are not the creation of a new structure from the ground upwards. Many contracts are for maintenance or improvement or refurbishment. A Critical Path method may be less helpful for the management of these contracts. Greater efficiency may be achieved if the Contractor is allowed flexibility in programming and execution.
Conclusion
The Critical Path method of analysis is to be welcomed. What is to be avoided is a dogmatic inflexible approach to its application. Computer based analysis is to be welcomed so far as it improves our understanding of delay and enables contracts to be monitored better. However, its complexity can produce a secret language of its own and an exclusive brotherhood of planners claiming that they alone can interpret the mysteries of the critical path. To this extent the decision in the City Inn –v- Shepherd case is to be welcomed. Computers are only as good as the data put into them. If there is reason to doubt the data, then we must not be mesmerised by the software and method of analysis itself.
