Ownership of Float in Construction Programme

What You Need to Know About Float Ownership Part 1

Introduction
Who owns the float? It is a question that you probably will not find a definite answer for. You will
probably hear many interesting arguments that suggest that float is owned by one party or the other.
Each partys arguments appear to be valid which just adds confusion to complexity.
In my opinion, these arguments tend to distract from what matters most, regardless of who owns the
float, the first question to ask is: what are the implications of such ownership?
This article is addressing the matter in two parts; the first part focus is on providing background about
the arguments. The second part will look at a famous scenario which causes a lot of disputes and most
of the current forms of contracts does not address in an indisputable way. In these two parts, the focus
is not which party is correct; rather, the focus is more about the practical implications of the matter.

What does 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.
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.

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
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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 owners 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.
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.
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
clients benefit. They also counter the contractors 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.

References
1

Harris, R. A., & Scott, S. (2001). UK practice in dealing with claims for delay. Engineering, Construction and Architectural
Management, 317324.

Householder, J., & Rutland, H. (1990). Who owns float? Journal of Construction Engineering and Management, 116(1), 130133.

Project Management Institute (PMI). (2008). A guide to the project management body of knowledge (PMBOK Guide) Fourth
edition. Newtown Square, PA: Author.

Wickwire, J., Driscoll, T., Hurlbut, S., & Hillman, S. (2003). Construction scheduling: Preparation, liability, and claims. New York,
USA: Aspen Publishers, Inc

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What You Need to Know About Float Ownership Part 2

Introduction
Part 1 of this article discussed the various arguments in relation to the float ownership. In part 2, the
arguments are put into perspective and a famous disputed scenario is discussed. This article as well
proposes a balanced fair and reasonable solution to the dispute, from the author point of view.

Float from a Risk Management Perspective

From risk management perspective, the float is a crucial element in determining the severity of time
related risks that a project is exposed to, for instance, other things equal, a project with too many critical
activities is more sensitive to delays and time overruns than similar project with very few critical
activities.
One obvious reason for that is that float can be used to re-sequence activities and mitigate delays. If too
many activities are critical, there are very little options available for the project team to mitigate delays
and the probability of a delay event hitting a critical path is very high. Perhaps thats one rationalisation
for the proponents of view that the contractor owns the float, i.e. float is a risk contingency in the
contractors programme.
However, supporters of the view that the project should own the float argue that this rationalisation
overlooks the fact that there are two layers of contingency in the programme: the first is the contractors
risk contingency embedded in the planned durations and the second is the float; hence, the float serves
as a risk contingency for the project and should not be for the exclusive use of either the contactor or
the owner.

If too many activities are critical, there are very little

options available for the project team to mitigate delays
and the probability of a delay event hitting a critical
path is very high.

A Famous Disputed Scenario

One famous disputed scenario is when one of the parties consumes the entire float of a non-critical
activity such that this activity becomes critical to the completion of the project, what happens if the
other party then causes delay to this activity after it becomes critical?
The answer to this problem depends on what is in the contract, however, most contracts does not
clearly address the issue and even with the contracts which regulate the float utilisation between
parties by the inclusion of the joint ownership of float and/or non-sequestering of float clauses1,
such clauses are not always sufficient in all situations. Given the various arguments about float
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ownership, it is not easy to determine a fair and reasonable solution without having a clear clause
which explicitly covers this situation.
One famous disputed scenario is when one of the
parties consumes the entire float of a non- critical
activity such that this activity becomes critical to the
completion of the project, what happens if the other
party then causes delay to this activity after it becomes
critical?

Safe Float Range

The risk management standpoint of float provides that consuming float increases the riskiness level of
the project even if that did not directly impact the project completion. This is a major area of contentious
between parties and perhaps addressing this area fairly could very much end the float ownership
debate by solving one of the major underlying reasons of the conflict.
The questions, therefore, are; can such increase of riskiness be quantified? And if yes, how? Perhaps a
possible answer lies in the adoption of the safe float principle. Through analysing the programme and
the criticality of each activity, it is possible to determine the safe float range of each activity. The safe
float range presents a range in which the float consumption has ignorable impact on the project
riskiness, i.e. it is safe to consume the float within this safe range without increasing the risks of time
overruns.
For example, assume that after performing the analysis to determine the safe float range of the
programme activities, an activity with 10 days of float was found to have a range of safe float of 40%;
this means that the probability of finishing the project on time almost remains the same if this activity
is to be delayed by four days or less. If the activity is delayed more than four days, (although from the
CPM perspective it will still have float of 6 days) it will reduce the probability of the project being
completed on time and therefore increases the risk of time overrun.
If this principle is adopted, it could be reasonable to say that if the owner delayed the activity by four
days or less, there would be no liability on his part if the contractor delayed it further and eventually
caused critical delays to the project completion. On the other hand, if the owner initially delayed the
activity by more than its safe float range, i.e. four days in this example, the owner might partially be
liable if this activity was delayed later on and caused critical delay to the project completion

Conclusion
In my opinion, the debate in its generic form (i.e. who owns the float), is misleading and has proved to
cause disputes more than provide solutions, the question should not be who ones the float, instead, it
should be; how to determine liability under certain situations?

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In my opinion, the debate in its generic form (i.e. who

owns the float), is misleading and has proved to cause
disputes more than provide solution.
Whether to take strict view that the float is owned by the project and serves who uses it first, an extreme
view that it is owned by the one of the parties not the other, or a more balanced position adopting the
safe float range, the important thing is that the contract should include clauses to address the disputed
scenario(s) explicitly to avoid disputes.

References
1

De La Garza, J. M., Vorster, M. C., & Parvin, C. M. (1991). Total float traded as a commodity. Journal of Construction Engineering
and Management, 716727.

Householder, J., & Rutland, H. (1990). Who owns float? Journal of Construction Engineering and Management, 116(1), 130133.

Project Management Institute (PMI). (2008). A guide to the project management body of knowledge (PMBOK Guide)Fourth
edition. Newtown Square, PA: Author.

Sakka, Z., & El-Sayegh, S. (2007). Float consumption impact on cost and schedule in the construction industry. Journal of
Construction Engineering and Management, 124130.

Wickwire, J., Driscoll, T., Hurlbut, S., & Hillman, S. (2003). Construction scheduling: Preparation, liability, and claims. New York,
USA: Aspen Publishers, Inc

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