Float Ownership – What does total float mean?
Haziran 13, 2014 Yorum bırakın
What does total float mean?
Float is a vital attribute of each activity in a network or programme. There are few types of float but generally speaking the Total Float is the most used one and is the focus of this article. When activity is said to have a float (total float) of certain amount, it means the activity can be delayed by that amount without affecting the project completion, if the entire float amount was consumed (the delay period equals the total float amount), the activity becomes a zero float activity. In a free flowing network, i.e. no constraints, an activity with zero float (either initially or after its float was consumed) is critical to project completion, and any delay to such activity means the project is in risk of being delayed by the same amount unless recovery measures were taken, i.e. acceleration and/or re-sequencing of the remaining activities.
Background of the arguments
The significance of the argument about who owns the float has two folds, first its ability to directly or indirectly influence the construction methodology and/or sequence once the project execution has started, and secondly, the potential entitlement of extension of time (EoT) and the application of liquidated damages (LDs). There are mainly three views of the matter which are presented hereinafter.
The ‘contractor owns the float’ argument
This is the traditional view and still has its appeal among many practitioners. This view implies that the contractor is entitled to utilise float for his own risk events and recovery rescheduling. The argument is mainly based on the fact that the contractor was the party who developed the programme and the float is a characteristic or attribute to the activities in that programme. While developing the programme, the contractor had exclusive ability to influence the float of the activities and decide on the sequence which directly causes activities to be critical or not. In doing so, the contractor developed the programme so the float will be his own contingency for any unforeseeable events. In extreme cases, they argue that even if a non-critical activity was delayed, this increases the riskiness of the project and the contractor should be given an extension of time to maintain the same level of contingency before the owner’s risk event occurred. Not so far ago, a survey in the United Kingdom suggested that 80% of the respondents assumed that the contractor owns the float; not surprisingly, the majority of those respondents were contractors.
The ‘client owns the float’ argument
This is just the opposite of the view above, the proponents of this view argue that the client has paid for the project and the programme is one of the tools to manage the project and monitor progress, therefore, the client should be able to control the float to reduce costs and control progress, especially when the programme is a contractual requirement in which the contractor has developed it for the client’s benefit. They also counter the contractor’s argument in relation to delaying the non-critical activity by saying that the only effect in this instance is reduction of float, without affecting the project completion, therefore, it is not fair or reasonable to grant the contractor an extension of time while the contractor did not, in fact, suffer any delays to project completion.
The ‘project owns the float’ argument
This view basically says float is owned by neither the contractor nor the owner. The project owns the float which means “float is not for the exclusive use of any of the parties and it serves whoever needs it first” as long as it is used in good faith. Many modern forms of contracts, especially internationally, indirectly take this view by building the clauses to regulate the float utilisation rights as discussed later in this article.
Thanks to Walied Ali Abdeladyem, PMP, ACIArb.
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