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In the context of construction projects, the term "float" usually refers to the amount of time that an activity can be delayed without impacting subsequent activities and/or the contractual completion date. In essence, it is a time contingency that is built into the programme to allow for unforeseen issues.
There are several types of float, including the following:
- Total float: The length of time that an activity may be delayed without delaying the contractual completion date/impacting the critical path.
- Free float (or activity float): The length of time that an activity can be delayed without impacting activities that immediately follow.
- Terminal float: The length of time between the contractor's planned completion date and the contractual completion date.
Ownership of float
There is no universal approach to which party owns the float as this usually depends on the terms of the contract. Float may be owned by:
- The contractorwho may use it to absorb delays for which it would not otherwise be entitled to an extension of time (EoT).
- The employerwho may require the contractor to absorb delays caused by the employer's actions using the available float.
- The project whereby float is treated as a shared resource to be used on a "first-come first-served" basis.
The main authority on the ownership of float is Ascon Contracting Limited v Alfred McAlpine Construction Isle of Man Limited (1999) 66 Con. L.R. 119, in which it was found that float was owned by the project where the contract was silent on the matter. This principle is reflected in the Society of Construction Law's Delay and Disruption Protocol (2nd edition, February 2017) which suggests that, absent any express provision to the contrary, float is not for the exclusive use or benefit of either the employer or contractor.
Treatment in standard form construction contracts
Float is treated differently across the main standard form construction contracts.
JCT and FIDIC
Neither the JCT nor FIDIC expressly defines float or its ownership. Under both the JCT and FIDIC, the contractor's entitlement to EoT is conditional on the contractual completion date being delayed, meaning that any float must usually be exhausted before the contractor can claim an EoT.
NEC4
Contrastingly, the contractor's EoT entitlement is not determined by actual or likely delay to the contractual completion date, as is the case under the JCT and FIDIC. Under NEC4, the contractor's EoT entitlement is assessed by reference to the length of time that, due to a compensation event (i.e. a delay caused by the employer or at the employer's risk), the contractor's planned completion is later than the planned completion date shown on the accepted programme (see clause 63.5 ECC). NEC4 therefore provides for terminal float that cannot be used to mitigate the effect of a compensation event. In that way, it might be said that the contractor owns any terminal float in the programme.
Conclusion
Float is an important scheduling tool, but its legal implications will depend on the precise drafting of the contract. To avoid disputes, parties should clearly define ownership of the float and how it operates in the event of delay.
* This article was originally published as part of the "Legal Terms Explained" series of Construction Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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