Tuesday, October 21, 2025

Environmental Due Diligence - What's The Hold Up?

Construction projects do not occur overnight. Regardless of project size, projects take anywhere from months to years to design, build, and complete. Perhaps one portion of the construction project that is always subject to criticism, particularly on large infrastructure projects, is environmental review and the applicability of environmental laws, requiring specific environmental thresholds, and the National Environmental Policy Act (“NEPA”). Contractors are well aware of the timeline and potential impacts that NEPA review might have on a project, and many contractors and national groups have expressed a desire to ensure that NEPA does not interfere with or altogether block the deployment of large infrastructure projects.

On federal funded or assisted projects, contractors must comply with strict environmental oversight because the project is tied to federal funding or federal agency accountability. Contractors must also comply with environmental and sustainability mandates under the Federal Acquisition Regulation (“FAR”). The FAR requires federal construction project contracts to include clauses concerning hazardous materials, emergency planning, waste reduction, environmental management systems, and greenhouse gas disclosures.

Beyond water and materials, federal project are subject to NEPA, which requires the public disclosure or environmental impacts as well as proposed alternatives to the project. NEPA requires federal agencies to prepare environmental impact statements for infrastructure projects if they do not meet a categorical exclusion. Where the environmental impacts are unknown, projects must undergo an environmental assessment (“EA”). If the EA concludes that the project will have an environmental impact, an environmental impact statement (“EIS”) is required. As the understanding of potential impacts to the environment posed by proposed construction evolves, so has litigation. In recent years, litigation has further posed potential impacts to projects, expanded the scope and complexity of environmental reviews, prolonged the process, and elevated compliance costs.

The Supreme Court was recently tasked with determining whether the NEPA has evolved from a public disclosure law to a tool used to block projects altogether in Seven County Infrastructure Coalition v. Eagle County, Colorado. Here, the Surface Transportation Board (“STB”) received a proposal for the construction of an 88-mile railway with potential to quadruple oil production in the Uinta Basin of Utah by connecting its oil fields to the national rail network and delivering crude to refineries on the Gulf Coast. The STB also published a final EIS report, totaling 3,650 pages. The EIS focused on the direct effects of the project itself rather than the potential downstream effects resulting from increased crude oil production from the project and transportation. Environmental groups filed suit, alleging violations of NEPA, the National Historic Preservation Act (“NHPA”), and more. These plaintiffs also contended that the NEPA analysis failed to address risk of accidents from the site and emissions in “environmental justice communities” on the Gulf Coast.

The D.C. Circuit Court of Appeals found for the environmental groups, holding that the STB acted arbitrarily and capriciously when it failed to quantify the downstream effects of increased oil and gas production. The DC Circuit also found that the STB did not assess indirect impacts to the environment and did not provide adequate attention to comments brought before them regarding the financial viability of the railway. In failing to properly weigh the economic and environmental costs of the project, the DC Circuit found that the STB failed to supply and acceptable rationale as to its consideration of relevant policies.

The Supreme Court  reversed the DC Circuit’s opinion in an 8-0 ruling. Writing for the Court, Justice Kavanaugh opined that federal agencies are only required to evaluate the environmental impacts directly tied to their decisions, not every potential consequence of a project. The STB “did not need to address the environmental effects of upstream oil drilling or downstream oil refining. Rather, it needed to address only the effects of the 88-mile railroad line. And the Board’s (study) did so.” The Court stressed that NEPA is a procedural statute – not one that dictates substantive outcome – and that courts must avoid micromanaging agencies’ judgment calls about the detail or scope of environmental review, deferring to reasonable agency choices. So long as the agency provides a rational explanation for excluding certain effects from analysis, the Court opined, agencies are entitled to substantial deference in making scoping judgments under NEPA. Justice Kavanaugh also wrote that courts must only intervene in agency decisions if the decision is outside a zone of reasonableness. Prior judiciary failure to do so has slowed down and blocked projects, causing “litigation-averse agencies to take ever more time and to prepare ever longer EISs for future projects.”

Though the impact of the Seven Counties decision remains to be seen, the opinion may go hand-in-hand with the current administration’s push for shorter review timelines and greater use of categorical exclusions to streamline approval for federal infrastructure projects. The decision reduces the scope and duration of environmental review for federal projects, allowing agencies to focus only on the direct and reasonably foreseeable impacts of the specific project. For the construction industry, the decision might result in fewer multi-year reviews that stall projects and require lengthy EAs and EISs. Additionally, the decision, coupled with the current administration’s push to hasten approvals for projects, might be the next step to ensuring that projects are not overturned due to speculative or minor analytical omissions.

Perhaps the biggest “winners” following the decision are construction companies often engaged in public-private partnerships (“P3s”). P3s rely on both federal approvals and private capital. The Seven Counties decision may make P3s more attractive and more predictable by reducing environmental-review uncertainty and the litigation risk that has consistently discouraged private investors. The narrower scope of NEPA review could result in faster environmental approvals, lower upfront due diligence costs, and fewer procedural challenges and litigation that delay projects. For construction companies that participate in P3s, the decision could lead to clearer timelines and reduced regulatory risk. The Seven Counties decision may also result in increased confidence and incentive for the federal, and perhaps state and local, government to engage in P3s.

The decision does not eliminate environmental safeguards applicable to projects; the FAR is still applicable to federal construction projects, as are regulations for stormwater pollution, hazardous waste, and more. Though this decision may have made project development and due diligence clearer in one respect, contractors still must comply with federal regulations and ensure they perform under the terms promulgated by the contract.


Author and Editor W. Tyler Lloyd is an attorney in Stites and Harbison, PLLC's construction group in Louisville, Kentucky. Tyler represents owners, general contractors and subcontractors in all phases of construction projects, including contract negotiation and conflict resolution. Tyler can be contacted at tlloyd@stites.com. 

Wednesday, October 15, 2025

Anatomy of a Zombie Schedule: From Field Planning to Forensic Diagnosis

Halloween season is upon us… a time for trick-or-treating with kids, dressing up in something fun and, of course, watching scary movies. When it comes to horror favorites, zombie movies often top the list. From Train to Busan and Dawn of the Dead to Zombieland, we can’t help but love a good tale of the undead. Zombies share a few distinct traits: they’re lifeless, without a real pulse, disconnected from reality and, worst of all, capable of infecting others.

Now, you might wonder why zombies belong in a discussion about construction law and project controls. Believe it or not, our industry has its own version of the undead: ”zombie schedules.“ Just like in the movies, these schedules look alive on the surface but are, in reality, lifeless and contagious. They spread confusion across the project, distort decision-making and drain energy from everyone involved. And, just like the heroes in those films, whether a lone survivor or a determined crew, our job is to identify, contain and cure the outbreak of zombie schedules before they take over a project.

What is a Zombie Schedule?

A zombie schedule is one that no longer reflects the project’s actual status, fails to account for changes in scope or sequence, and cannot provide an accurate plan forward or actual progress information from the past. As a result, schedule updates become a chore or a paper exercise, as their only purpose is to produce something that can be submitted as a checklist item. In a zombie schedule environment, project teams often compress and overlap remaining activities to mask delays, making the schedule even less realistic. The more disconnected it becomes, the less motivated the field team feels to engage in updates. This creates a vicious cycle, as sporadic and inaccurate updates lead to an even more “zombified” schedule, infecting project decisions and conclusions that rely on flawed data.

Fortunately, there are proven strategies to bring zombie schedules back to life, both during an active project and in forensic delay analysis.

How to Keep the Schedule Alive on Active Projects

On an active project with a zombie schedule, the goal is to get back on track. The best chance to do that is by taking the following steps:

  • Involve the Entire Team: Engage project managers, superintendents, project engineers and field staff to participate in regular schedule updates. When everyone contributes during the update, the schedule becomes a communication tool rather than a compliance task. Each team member will understand what each work activity represents, who oversees it and how it interfaces with others.
  • Establish a Regular Update Routine: It is good practice to establish good schedule update hygiene with recurring meeting invites and ensure all members either attend these meetings or provide updates and inputs via other means. The schedule printouts should be distributed to the team after each update.
  • Maintain the Right Level of Detail: Use a schedule that is detailed enough to manage the work, but not so granular that it becomes unmanageable. Activities with too short of a duration are cumbersome to update and monitor, while activities with too long of a duration fail to capture necessary interdependencies and are hard to status accurately. The schedule can develop and grow as the project progresses, becoming more detailed as necessary.
  • Capture Reality, Not Just Progress: Each update should record not only physical progress, but also changes in sequence, logic and added scope. Keep the schedule “alive” by reflecting what is actually happening on site. Additional scope could be introduced using “fragnets” (sub-sets of activities) or via changes to the existing activities (such as duration increases). The schedulers should keep a log of changes with the reasons behind each modification.
  • Monitor the Critical and Near-Critical Paths: The project team should monitor the project critical path, near-critical paths and the driving paths to the key milestones. Avoid gaps in logic and check for open ends, excessive constraints and out-of-sequence relationships. Regular schedule health checks ensure the network remains realistic and mathematically sound.
  • Review and Diagnose Changes Regularly: The project team should regularly review schedule updates and determine if the critical and driving paths changed, reasons for such changes and the reasons for delays. It is easier to stay on top of the issues as a project progresses rather than trying to identify what went wrong retrospectively, sometimes years later with a different team than your original project team. Delays that go unnoticed create a “waterfall effect” where small slips accumulate into major impacts. Regular schedule reviews allow timely responses to these delays.
  • Avoid the Temptation to “Crush” the Schedule: Re-planning and resequencing can help recover time, but arbitrary compression and overlap of trades often create unrealistic expectations and field congestion. A “crushed” schedule may look good in a meeting, but usually leads to inefficiency, trade stacking, and burnout.

In short, a healthy schedule breathes, it evolves with the project, reflects field reality and helps the team plan forward. Once it stops doing that, it may look alive, but it is already beginning to decompose.

Zombie Schedules in Forensic Delay Analysis

In a forensic setting, zombie schedules pose a different challenge because the objective is not to expect a perfect schedule, but to understand how it was used and what it represents. As AACE’s Recommended Practice 29R-03, Forensic Delay Analysis, emphasizes, CPM schedules are models of reality, not reality itself. The analyst’s role is to evaluate how well those models reflected actual project performance and decision-making at the time. A schedule that was imperfect, yet actively used by the project team to plan, track progress and make management decisions, often provides more reliable evidence than a “corrected” schedule created after the fact by the analyst. The goal in forensic analysis is, therefore, to determine how much analytical value remains in the contemporaneous schedules, not to reconstruct an ideal version that never existed. With that said, 29R-03 permits the analyst to make changes to a contemporaneous schedule and should consider this before abandoning the schedule analysis completely.

To review a potential zombie schedule during forensic analysis, the analyst and counsel should consider the following steps:

  • Review Contractual Schedule Requirements: Examine the contract and specifications to identify the standards the schedules had to meet, including update frequency, submittal and approval processes, baseline requirements and specific delay analysis clauses. It should be confirmed whether the contractor followed these requirements and determine how any deviations affect reliability.
  • Assess Schedule Health: Run a schedule health check based on contract requirements and/or general industry guidelines to identify open-ended activities, missing relationships, out-of-sequence logic, excessive constraints and other similar parameters. These signs may reveal when the schedule stopped functioning as a planning tool and became a reporting exercise.
  • Schedule Sequencing: In some cases, the analyst can identify issues with activity sequencing by reviewing how the schedule was actually used during the project, rather than how it was originally built. If the sequence shown in the contemporaneous schedule was actively used to manage the project and was physically achievable in the field, the analyst may generally treat that sequence as appropriate. However, if the schedule reflects sequences that are physically impossible, such as installing structural steel before completing foundations in the same area, the analyst may question the schedule’s reliability or consider correcting those logic ties before using it in a forensic analysis. This distinction highlights that schedule quality requirements differ between project controls and forensic delay analysis.
  • Verify Actual Progress and Dates: Generally, for critical and near-critical paths, cross-check reported progress in the schedules against contemporaneous project records such as site reports (daily, weekly or monthly reports), pay applications, RFIs, submittal logs, meeting minutes, photos and correspondence. These may confirm whether the schedule data reflects what truly happened in the field. As previously stated, you are not looking for perfection, so it is important to keep that in mind when analyzing actual progress and dates.
  • Evaluate Schedule Use and Intent: Determine how the project team used the schedule. Identify whether it guided field coordination and decision-making or served only to satisfy submission of a document that nobody looked at during the project. This distinction helps clarify whether the schedule ever functioned as a management tool. If a zombie schedule was used as a decision-making tool during the project, the credibility of a zombie schedule may still exist for the purposes of forensic analysis. It may also be useful to compare the master schedule against lookahead schedules to evaluate if those show similar or different scopes of work being performed on the project.
  • Determine Analytical Usability: Use the results of your checks to decide how much confidence you can place in the schedule, for a forensic analysis. If it remains reliable, apply quantitative methods such As-Planned vs. As-Built or Windows analyses. If your review shows characteristics of an unreliable and unused schedule, consider other methods for analysis. Since these decisions depend on the individual experts, it is likely that two experts may disagree on the usefulness of the schedules.

  • Isolate and Document the “Living” Portions: In cases where some part of a schedule is usable, identify and document the schedule segments that reflect reality. Based on the method of analysis, the expert may consider different methods and changes to schedules so that a set of reliable data can be used to perform an analysis and clearly show how deficiencies in the rest of the schedules affect the overall conclusions. The expert may have to choose an As-Planned vs. As-Built method that relies on the baseline schedule and as-built data, if the updates are deemed unreliable. If the updates are usable, methods as Windows Analysis or Half-Step Analysis maybe used by the expert.

Ultimately, zombie schedules demand a different level of scrutiny during forensic analysis. By verifying contract compliance, testing the quality of the schedules and isolating valid data, the analyst can separate what remains “alive” from what must be discarded and rebuilt, producing a credible and defensible delay analysis.

Conclusion

Zombie schedules may make for entertaining analogies, but in real projects, they create serious risk. But unlike in the movies, the zombies you encounter on your next construction project can be cured (if not avoided entirely) with consistent participation, honest reporting, and proactive management. When schedules stay connected to field reality, they not only help deliver projects successfully, but also serve as credible evidence if disputes arise.

Whether you are counsel trying to explain the risks of these schedules to your clients, a project manager fighting to keep your schedule alive, or a forensic analyst dissecting one that did not survive, the goal is the same: to understand what the schedule tells you about the life of the project and ensure the next one does not rise from the dead.


Co-Author Avi Sharma is a Director at Delta Consulting Group, serving as a consultant and expert in construction scheduling, delays, damages, loss of productivity, and project controls. He has international experience as a general contractor on major infrastructure projects spanning heavy civil, water and wastewater treatment, commercial, transportation, educational, healthcare, residential, sustainable, and mixed-use developments. Avi advises contractors, owners, design firms, and legal professionals on litigation support, expert testimony, construction claims, damages assessment, risk prevention, and claim avoidance. A recipient of the Denver Business Journal’s 40 Under 40 Award and AACE International’s Outstanding Young Professional Award, Avi has also authored and presented numerous papers and articles on construction scheduling, damages, and loss of productivity topics.

Co-Author Alena Rymkiewicz is an Associate Director at Delta Consulting Group. She has extensive practical and academic experience in construction industry, scheduling and forensic delay analysis. She developed delay analysis models and worked with schedules for large and small construction projects worldwide, including hydroelectric, nuclear and coal power plants, subways and railways, highways, bridges, canals and tunnels, ship building, sewage treatment, industrial complexes, hotels, shopping malls, medical buildings and housing projects located in North America, South America, Eastern Europe, Middle East, and Asia.

Tuesday, October 7, 2025

Understanding Common Risk-Shifting Provisions in Construction Contracts

Whether you are an owner, general contractor, subcontractor, or supplier, your relationship to the project will almost certainly be governed by a contract. While provisions governing payment and scope of work are essential, risk-shifting provisions that allocate certain risks and liabilities among parties play a critical role in protecting you in the event of disputes that, with enough projects, are inevitable. This article outlines some of the most common risk shifting provisions and why you should consider including them in your construction contracts.

1.   Indemnity

An indemnification provision is a contractual provision under which one party (the indemnitor) agrees to assume liability for the losses incurred by another party (the indemnitee). Most commonly, the indemnitor agrees to defend, reimburse, and hold the indemnitee harmless from certain specified liabilities, often those arising from the indemnitor's work or negligence. For example, a general contractor might require that its subcontractors indemnify the general contractor for any claim made against the general contractor that arises from wrongdoing relating to that subcontractor’s scope of work. However, parties should consult with an attorney to make sure that their indemnity language complies with applicable state laws. Most state statutes have provisions that set forth certain requirements for an indemnification provision to be enforceable and upheld in court.

2.   Force Majeure

Force majeure provisions in construction contracts, also known as “Act of God” provisions, excuse parties from liability for delays or failures to perform due to certain unforeseen events beyond their control. To qualify as a covered force majeure event, the event must have such a profound impact on the company or project that it could not have been avoided and forces a change in the conditions of the project that the company cannot avoid or control.  These provisions commonly apply when there is a natural disaster (i.e. hurricane, tornado, flood, earthquake), but these provisions also gained attention during the COVID-19 pandemic. Force majeure events can have massive impacts on a project by significantly increasing project costs or substantially delaying projects. Contractors should consult with an attorney to ensure that their construction contracts include, at a minimum, the force majeure events most likely to occur in the project’s location.

3.   Termination Provisions

Parties to a construction contract should carefully consider situations where termination of the contract may be appropriate. A construction contract should have clear termination rights when any party fails to perform. One common termination provision often included in construction contracts is a termination for convenience provision. A termination for convenience provision provides that a party may terminate a contractor or subcontractor at its convenience for no reason at all. These clauses should contain detailed information about what damages and fees a contractor would be entitled to receive if they are terminated at the owner’s convenience. Parties should consult with their lawyer to determine whether to include, or insist on excluding, such a provision in their contract.

4.   Pay-If-Paid Clauses

A pay-if-paid clause makes payment to a downstream contractor or supplier expressly contingent on receipt of payment by the higher tier entity. For example, a subcontractor subject to a pay-if-paid clause is not entitled to payment whatsoever from the prime contractor unless and until that prime contractor receives payment from the project owner. In contrast, a pay-when-paid clause merely fixes a time for payment rather than establishes entitlement to payment. Thus, to ensure a pay-if-paid provision is enforceable, it should be carefully drafted and include magic words such as “contingent upon and subject to” or “condition precedent” to clearly indicate that the payee is not entitled to payment unless and until the payor receives the funds itself. 

5.   Liquidated Damages

It is critical that construction projects are completed on time. Project delays can have enormous financial impacts. A liquidated damages provision attempts to account for the risk of delay by specifying a predetermined amount of compensation that a contractor must pay the owner for certain delays or failure to meet project milestones. Most commonly, liquidated damages provisions contain a set dollar amount for every day of delay. If an owner insists on a liquidated damages provision, the contractor should ensure that the liquidated damages provision equally accounts for any delays by the owner. Parties should consult with their lawyer to ensure that the liquidated damages provision in their contract complies with state specific authorities, as courts frequently refuse to uphold improperly drafted liquidated damages provisions for various reasons.

Conclusion

It is important to discuss these common risk shifting provisions with your attorney when negotiating a contract for a new project, drafting a new contract for your business you just started, or simply updating your existing contract. Whether you are an owner, general contractor, subcontractor, or supplier, early consideration and analysis of these provisions and concepts are likely to put you in a stronger position when the inevitable dispute arises.  


Author Troy Mainzer is an attorney in Carlton Fields, P.A.’s construction group in Tampa, Florida.  Troy represents owners, developers, general contractors, and subcontractors in connection with an array of construction disputes, including but not limited to commercial projects, infrastructure, residential home construction, site development, and other areas.  Troy can be reached at tmainzer@carltonfields.com or (813) 229-4239.