Who owns the float time in the contractor's programme, the architect or engineer, or the contractor?
Contractors build float into their programmes to absorb their own risk. Whether the employer may use that float free of cost, or the contractor keeps its benefit, has no single answer, but the English decisions have settled on a clear direction.
There is no fixed rule, but the English decisions treat float as belonging to the project and available first come, first served, so an employer delay absorbed by float without pushing out completion attracts no extension of time, while the Engineering and Construction Contract preserves terminal float to the contractor
There is no hard and fast rule, but the English decisions treat float as belonging to the project rather than to the contractor. A contractor includes float to absorb its own risks and corrections, which argues for the float being its own; against that, an employer delay that consumes float without pushing out completion causes no compensable delay. The courts have preferred the project view. In Ascon Contracting Ltd v Alfred McAlpine Construction Isle of Man Ltd the main contractor could not treat five weeks of float as its own to absorb its delays, and having taken the benefit of the float against the employer could not also claim against subcontractors who had used it; float was available first come, first served. Royal Brompton Hospital NHS Trust v Hammond went further, the judge holding that a contract administrator must take unused float into account, because an extension of time is granted only where completion would otherwise be delayed beyond the current completion date. Industry delay guidance is to the same effect: remaining float is taken up before any extension. The Engineering and Construction Contract differs on terminal float, which it preserves to the contractor.
| Two views | Float as the contractor's own, or float as the project resource |
| English position | Float belongs to the project, available first come, first served |
| Ascon | No double recovery; the main contractor could not claim the float twice |
| Royal Brompton | Unused float is taken into account; extension only if completion slips |
| ECC | Terminal float from an early planned completion is preserved to the contractor |
The problem
A prudent contractor builds some contingency into its programme. Bad ground, weather, strikes, shortages of labour and materials and its own mistakes are increasingly the contractor's risk, so it allows an element of float to absorb them. The question is who gets the benefit of that float. If the architect is late with drawings, or the employer causes delay, can the employer use up the contractor's float free of charge, on the footing that the float is off the critical path and so nothing is lost? Or does the float belong to the contractor who put it there?
The two competing views
There is no single rule, and two views compete. On one view the float belongs to the contractor: it included the float to cover its own risks and its own corrections, so the employer or architect cannot object if the contractor later reprogrammes and uses it up, and equally the employer should not be able to consume it for free. Against that, the float may be regarded as the project's, available to whoever needs it first, so an employer delay that eats into float but does not push out completion causes no compensable delay. The English decisions have leaned towards the second view.
The United States position
Decisions of United States contract appeals boards have generally favoured the contractor. They treated the contractor's original cushion of time, not needed for performance, as something to be preserved when an extension of time was granted for employer-caused design delay, and recognised the contractor's right to reprogramme and so take the benefit of the float. A distinction was drawn between total float, usable to programme the work of all contractors, and free float, belonging to one contractor for programming a single activity, with neither to be consumed by variations.
The English decisions
The English courts have taken a firmer line in favour of the project.
The subcontract carried five weeks of float. McAlpine argued that the float was for its own benefit, to absorb its own delays, and that because the subcontractors had used it up it was entitled to recover its lost benefit. The judge rejected that argument. Float was of value in that delays could be accommodated within it, avoiding an overrun and any liability for liquidated damages to the employer. A main contractor that had taken the benefit of the float against the employer could not also claim against the subcontractors who had used it. Float, on this approach, is available on a first come, first served basis.
The judge held that the contract administrator must consider unused float when applying the extension-of-time clause, because an extension of time is granted only where the event would otherwise move completion beyond the operative completion date. He recognised the unfairness this can cause where an employer delay occurs before a contractor delay, and said that where that happens the administrator should tell the contractor that if the administrator later causes delay, an extension will be granted for a period not exceeding the float.
Delay guidance and the ECC
Industry guidance on delay takes a similar line. The Society of Construction Law Delay and Disruption Protocol provides that, unless the contract says otherwise, where float remains when an employer-risk event occurs, the programme may show float and an extension of time should be granted only to the extent the employer delay is predicted to reduce the total float on the affected activity paths below zero. In short, remaining float is taken up first, and an extension follows only if completion is then threatened. Contractor delays after the float is spent, which push out completion, expose the contractor to liquidated damages.
The Engineering and Construction Contract goes the other way on terminal float. It requires the contractor to show the completion date, planned completion and the float, and assesses delay as the length by which planned completion is pushed later than on the accepted programme. On that method, terminal float arising from an early planned completion date is preserved, so the contractor keeps the benefit of it.
Practical steps
Do not assume the float is yours to keep. English decisions treat float as belonging to the project and available first come, first served.
If you want the float protected, say so in the contract. Express words displacing the first come, first served approach are the surest route.
Do not claim the benefit of the float against the employer and also against a subcontractor who used it; you cannot recover twice.
Remember that an extension of time is granted only where completion would otherwise slip beyond the current completion date, so an employer delay absorbed by float may attract no extension.
Under the Engineering and Construction Contract, show the float on the programme; terminal float from an early planned completion is preserved to you.
Authorities
The United States position is described in general terms.
| Authority | Citation | What it decides |
|---|---|---|
| Ascon Contracting Ltd v Alfred McAlpine Construction Isle of Man Ltd | (1999) 66 Con LR 119 | Float in the programme was available to accommodate delay on a first come, first served basis; a main contractor that took the benefit of the float against the employer could not also claim its lost benefit against subcontractors who had used it |
| Royal Brompton Hospital NHS Trust v Hammond | (2001) 76 Con LR 148 | A contract administrator must take any unused float into account, because an extension of time is granted only where completion would otherwise be delayed beyond the current completion date |