Construction – Early Completion, Who Owns the “Float”?

August 10, 2018

Acceleration and early completion of a construction project, ahead of schedule, has many potential advantages, including economic as well as physical advantages, for both the Owner and the Contractor. But, who owns the “Float” ?

Float time has been defined as the time associated with non-critical activities; i.e. those which may be delayed or performed without causing actual delay in the scheduled completion of the overall project. However, when the performance of an activity interferes or impacts the schedule under the CPM – Critical Path Method being employed on the project, that interfering activity is charged to the CPM, which may increase or delay the actual project completion by a number of days between the activity dates for “Early and Late Start Dates” – thereby also impacting the “Float Time”.

Early completion may provide the Contractor with a reduction in project overhead costs, thereby increasing the ever-important bottom line. The Owner may also benefit by early occupancy and the revenue to be recognized from such tenancy. However, early completion may also reduce or completely eliminate an important construction advantage – “float time”.

Contractors value float time, which permits the performance of work sequentially, with a single work crew, as opposed to having to employ multiple crews to perform the work concurrently. Owners frequently claim the rights to float time as having been incorporated in the terms of the contract and the price. These diverse claims frequently result in heated controversy, claims, and litigation over who truly owns the “Float”? Also, additional claims may arise over extended overhead and loss of productivity.

Where the contract terms fail to provide for float time ownership, the contractor may be free to accelerate the work striving for early completion. In such event, the Owner may not hinder, obstruct, or delay the contractor. Case law decisions provide the Owner must facilitate the contractor’s performance for such early completion, or suffer liability for failure to do so. In order to prevail for claims of lost float time, the contractor must maintain well-detailed project records necessary to clearly and convincingly support and prove such claims.