Ep. 651 When Projects Go Off Schedule Navigating Construction Delays and Disputes Shay Kulkarni

Surety Account Executive Josh Hill is joined by construction attorney Shay Kulkarni, Partner with Peckar & Abramson to discuss the realities of delays, disruptions, and disputes on construction projects. They share practical guidance on contract review, project documentation, notice requirements, and risk management strategies that can help contractors protect their interests and strengthen their position when conflicts arise.

Show Notes: ⁠⁠Subscribe to Rancho Mesa's Newsletter⁠⁠, Peckar & Abramson, P.C.

Host: Josh Hill

Guest: Shay Kulkarni

Producer/Editor: Megan Lockhart

Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production

© Copyright 2026. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Josh Hill: You’re listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive.  I’m your host, Josh Hill, Surety Account Executive, and I’m joined today by Shay Kulkarni, Partner with Peckar & Abramson Law...

Shay, welcome to the show.

Shay Kulkarni: Thank you so much, Josh. Thanks for having me.

JH: Yeah, so I know a couple weeks ago we met over at the AGC here in San Diego and we were kind of talking about topics such as delays in projects, disputes, how to handle those things, best ways to protect yourself. Obviously, I think documentation is the key in that case. So I kind of wanted to cover some of those subjects today with a lot of our listeners because I think they probably encounter this every day. And I know that you'd mentioned within construction projects, what percentage will experience some sort of delay or dispute?

SK: Yeah, I think it's somewhere above 70% of all projects will have some sort of a delay or a disruption.

JH: Right. So it's commonplace in the industry to experience these things. And it's just best to be kind of prepared and know what you need to do with the documentation side of things. So when a client of ours, you know, approaches an attorney to dispute their case, you know, how to be best prepared to do that.

SK: Right.

JH: So a couple of things I wanted to talk about. First of all, just what are some of the common disputes? that come out of the construction industry in general that you see when you get phone calls each day.

SK: Awesome. Yeah, so I would say that the most common types of disputes are change order disputes, differences of opinion about what is required under the contract documents, what kind of performance we are supposed to do as the contractor or subcontractor versus what any upstream party might think that we're supposed to do. And then, you know, getting a little bit further than just the baseline of a disagreement about the contract, it's delays and disruptions. Delays tend to be... thing that we as construction lawyers deal with a lot because we say this all the time nobody ever argues about the existence of a delay because everybody's got a calendar everybody knows that a project is late or it isn't so what ends up being the dispute is a dispute over first of all liability who's responsible for causing that delay and then secondly damages okay if we can at least come to some sort of understanding about who's at fault here. And just to be clear, it's very rarely one party or the other.

There's usually some mix of responsibility from activity to activity. And it kind of goes with what you were saying earlier about disputes. Why are there disputes on 70% of construction projects? Because you don't build projects on paper, you build them in the real world, right? And so there's no such thing as a perfect construction project. But yeah, in a general sense, it's disruptions, delays, acceleration sometimes, things that happen when things don't go exactly as you plan on paper.

JH: Yeah, in the real world, we have different things that happen, right? You have weather that comes into play, people get hurt, they get sick, equipment breaks down, so it can cause a lot of disruptions just in the project in general and timelines that you're not anticipating.

SK: Absolutely, yeah and sometimes, you know, you're talking about... delays or, you know, we're all sort of traumatized still by the experience of COVID, right? But those are examples of things that sort of is a no harm, no foul, right? It's a thing that delayed the project, but it's not either parties. real responsibility because it's a thing that just happened. So in a situation like that, you end up with what I like to call a days but not dollars situation where we'll agree to extend the contract time, but neither party owes the other party money because, you know, it was not within the control of either party. Those things can be valuable, especially if as a contractor you're looking at again, there's no dispute, there's a huge delay, and you're trying to make sure that you can get some relief from liquidated damages. You know, an extension of time, an uncompensated extension of time could be huge because that means that that's less money that's coming out of your pocket.

But yeah, I mean, other than that, you have the ones that really have teeth to them, which is, you know, from the contractor side, it's usually something that is... cause and that's usually there's something wrong with the plans there's something wrong with the designs potentially there's something wrong with the site because as an as an owner your obligation to me as a contractor is give me a place to work right give me give me the, the not just a place to work but the place that I anticipated when I put together my bid so if I’m anticipating that I’m going to be able to use an access road or I’m going to be able to use this part of the site as a lay down area and then something changes and now I got to adjust on the fly. Well, that's going to affect how quickly I can do the work, but it's also going to affect my costs, right? It's going to affect the sequencing. It's going to affect my means and methods. And as a contractor, that's what the deal is, is that I will give you exactly what you tell me that you want as long as you let me do it in whatever manner that I want to in order to deliver that finished result, right? And so that's why we're very protective.

I say we a lot because I'm a construction lawyer, and so whoever calls me up and hires me first is the party that I will typically represent. I do often represent real estate developers, you know, not really public owners that much, but sometimes we do have those clients. But as a construction lawyer, my heart and my identification, the people that I sort of like cast my lot with are the contractors, right? You're going to hear that a lot. You're going to hear me being prejudiced towards contractors and against owners because that's kind of who my people are.

JH: Sure, sure, and in my experience from the Surety side of things, most parties just want to work it out, right? No one's looking to kind of put a stop to the project and it's kind of a gotcha situation. They want to come together, figure out what we need to do to continue with the project because it's money on both sides.

SK: Absolutely. It's completely unproductive to say, oh, we got them now let's set them up for this huge claim because all you're really doing, people have this misconception that like I think because there's an analogy in their minds to like it's a slip and fall or something where it's like oh I’m hurt and now there's this huge check that's going to come out of the sky um you know because we have legal liability on the other side but in a construction contract scenario your damages are basically just you getting back all the money that you lost on the front end. Right. So there aren't really a ton of scenarios where you're going to get everything that you would have gotten otherwise plus something. Right. And that's a very big misconception that people have. So trying to set yourself up to make a claim bigger. I mean, if you're going to put your head down and finish a job and then we're going to try and, you know, sift through the documents to figure out what's the biggest defensible claim that we can assert. Sure, certainly that's what we do, Right. But it would be super unproductive in the middle of some dispute to be like, you know what? Instead of working cooperatively to get this job finished, let's kind of do this or do that because it'll make our claim bigger. Well, it's like no dummy. What you're doing is you're just making yourself spend more money on the front end and hoping that you can get it back on the back end. And that's not smart.

JH: Right, right. Exactly. So let's say you come into one of these situations where it's. We're at a sticking point, right? We're trying to figure out how to move forward, and everyone's like okay we're not coming to a common place where we need to work through this. So on your part, what kind of documentation are you looking for from the people that you're representing to help them support their claim and their process to help justify their position and their argument?

SK: It's a great question. Okay, so I think that to answer your question, I want to take a step backwards and I want to make sure that we start before the claim. Because you asked me earlier, what's the most common thing that happens when my phone rings and what would be the step-by-step? Well, step one for me is always, okay, show me your contract. Let's read through your contract and figure out exactly what your obligations are and what the other party's obligations are. And in a claim scenario, what I'm looking for is, okay, let me confirm that your remedies are the ones that... you have.

We're here talking primarily about delays and disruption claims. And in California, if you're on the public side, you have public policy and you have statutes that preserve your right to seek delay damages from an owner or if you're a sub, from a general contractor. By law, you're entitled to recover that. So if you're on a public project, I don't have to worry about that. But if you're on a private project, It's perfectly legal and valid for people to put in there something called a no damages for delay provision, which is something that says, hey, even if I'm responsible for delaying you, you're limited to extra time, but no money, right? So a lot of times we have clients that, you know, they call us up and they're like, man, this owner was the worst. The owner's rep was the worst. The plans were a mess. I have this, you know, multi-million dollar claim, and then you take a look at their contract and you say, well, I agree that the owner was the worst. I agree the plans were the worst. It seems like this construction manager was awful. But because it's a private project and because your contract has a no damages for delay provision in it, you already waived those claims whenever you signed the contract, right? And there are very valid reasons for a contractor to enter into a no damages for delay contract, right? If the money is good enough, if you're trying to develop a relationship with a customer, if you've baked into the amount of your bid, the notion that if there's delays, you're not going to get compensation for it, right?

All of that's great. And if you're doing that, then as you're a lawyer, God bless you, I'm happy for you, right? But what I hate to see is when people think that they have certain legal rights and then it turns out that they don't because of a misunderstanding of what the contract allowed them to do. That's what I call a law by surprise situation, a law by ambush situation. And that's what I'm trying to avoid with all of my clients, right? So step one, take a look at the contract. I want to make sure that whatever the contractual notice provisions say, in the contract that we have the ability to say that we either 100 complied with them or I want to know what's the very closest that we can get to showing that we complied with that provision right because as a lawyer if I know that we have problems with you know following the contract and what it requires you to do to make a claim I’m going to soft pedal that to the extent that I can I’m not going to answer questions about that unless they're direct questions and also it's going to affect in my mind what the reasonable settlement value of your claim is right but if I don't know that and I later find out that there's a notice issue that's really bad for you and it's bad for me too because I may have now told you that you have a claim that's worth x and now it's worth less than that and that's you know that's certainly not a good look for me as a lawyer to you know be down the road with somebody and then and then go whoops you know right um but you asked about uh claim documentation.

Okay so in a delay situation everything is about your ability to prove how the project was supposed to go and how the project actually went so I’m going to want to see every single schedule that's been created on the project right I want to see your initial schedule I want to see your monthly updated schedules with lookaheads I want to see an as-built schedule right I want to be able to see whatever documentation I can to show contemporaneously what was happening on any given day so for us sort of one of the, the biggest things that we always look at are daily reports, right. But even if you're doing daily reports, it's great if you have them. But if the information on there is not useful, then it kind of doesn't help us out quite as much, right. So I like to encourage clients to think of their daily reports as their opportunity to in real time, tell the story of how the project is going from their perspective, right. If you know that there's a delay situation that's happening. You want to be able to show in your daily reports things like the amount of workers you had out there, what equipment you had out there, what you were doing with that equipment, what obstacles there were that prevented you from, you know, attaining the production level of whatever activity you're doing. on that day, and it's okay. They can be a little bit subjective, okay? Because, you know, I'm doing them, our subs are doing them. The owner's probably not doing them, but they're, you know, they have a construction manager who is, you know, from his own slanted perspective, you know, putting together, he's a view of what's going on, right? So that's what the function is of daily reports for me.

I always like to tell people, like, there's a great movie called “A Few Good Men” that all lawyers always reference all the time. It's a great movie. And there's a part where Tom Cruise's character says to one of his co-lawyers, he says, it doesn't matter what I think. It only matters what I can prove, right? So what is proof? Proof is testimony, right? Like I can get you on the stand and say, you know, Josh, tell me what happened in this project. And you can speak honestly and truthfully. But guess what? There's going to be another guy who's speaking. And from his perspective, he's going to tell his side of the story, right? So it's very hard to differentiate between those two testimonies about what the truth is, but if there is contemporaneous documentation that shows on a day-by-day or month-by-month basis exactly what was happening and my testimony falls into line with that and matches up with that, it's very, very hard for somebody to get on the stand and tell a different version of that story and not have it smell and look like BS, right? So that's kind of what I'm looking for from contemporaneous documentation.

JH: Sure, so if I think I'm hearing you right here, it's unless you're a seasoned professional used to looking at contracts and all the verbiage on those contracts, probably wise to consult with your attorney first before entering into a contract to know if there's any hidden loopholes are in there regarding damages that you're not aware of, but then also you want to make sure that you're using certain... systems software systems to track your schedules, change orders cost timing projects everything like that and I know for kind of simple projects or smaller contractors like Microsoft has a basic platform that they can use all the way up to general contractors who are on more complex projects where they might use something called like Primavera and I’m sure there's other program, programs out there as well but those produce reports and schedules that you would need to generate proof when defending the position of your client.

SK: Yeah I think that's right I mean the beauty of the construction industry is that it's as old as dirt. It's as old as people have been doing stuff. People have been, you know, building things. But the industry evolves and technology evolves. So when I first started doing this 20 years ago, there are no such thing as iPads. There was no such thing as smartphones, right? And people still put together schedules and they still did daily reports, but it was very much more of a pen and paper thing than it is today. And if people ask me, do I have a particular preference or recommendation from this project management software or that, I really don't because there are a lot of different factors that go in from like a cost, size of business, what part of the industry you're in, whether you're a general contractor or subcontractor, et cetera. There's this whole embarrassment of options out here. Like there's so much out there that people can use. And every time you go to a trade show or a conference, there's like some new vendor with some new spin on it, right?

But it all kind of does boil down to the same thing is that whatever it is that you as a contractor can do to actually implement the use of the thing right it's like um the software can't be like the driver that I have in my bag right that like it costs a lot of money but i don't know how to use it so I’m still slicing all over the place you know and it kind of leads you to the broader point which is that as a contractor to the extent that you can implement systems and practices that as long as you follow them it narrows down and limits the amount of ways that you can be caught having not done something you're supposed to do better so like for instance we talked about this the last time you know I got together but I had a client one time that you know as a matter of practice every week at their OAC meeting they would have these excel spreadsheets and there was a page called uh you know potential delays and notices right and every week they would dump into that spreadsheet every potential delay that was coming up everything that they were noticing from their project folks on that week and they would circulate it to the owner and to the architect right so the contract that they had like all contracts there's going to be a provision in there that says if you want to claim a change order or a delay you have to provide written notice to me within x amount of days of the thing happening right and so As long as the amount of days in that contract was more than seven days, which usually it is, then just by virtue of having that process implemented, where they were just carpet bombing notice every seven days of any potential delay, what they did is they took off the table. the possibility that later on they might have some big delay that actually needed to turn into a claim or a change order, but then they would have an issue with notice because they'd already, by that process, completely eliminated the idea of not being timely with their notice, right?

So that's not a software thing, but that's a process thing, and I think that that's the type of conversation that our clients should be having is what can we do internally to make sure that we're eliminating the amount of ways that we can get screwed over later on for a thing that we were supposed to do beforehand, right?

JH: Sure, absolutely yeah, yeah and I think you know the software trade shows thing that you're mentioning you know we see that in every industry right and they're always coming up with these new platforms and they're the latest and the greatest and they can track everything top to bottom and it's really about utilization of it right like right what are you going to actually utilize on a day-to-day basis that's going to be relevant and important to what it is that you're doing as a business right it doesn't have to have all the bells and whistles but it needs to give you the critical data that you need you know to fight a dispute or a delay or something like that so um I think you're right. There's a lot of software that comes out there. It sounds great, but it really comes down to the user actually executing the software and using it for what they needed and its intended purpose for what they do.

SK: Absolutely. I mean, if you were to look at my phone right now, the amount of apps that I have on there that I downloaded once, never used, don't even know what it is. So I'm not the best person in the world to look to as a role model or an example for this sort of thing, right? But I always try and remember that our clients, are not insurance professionals, insurity professionals, and they're not lawyers. They actually build things for a living, right? And so the things that matter to me in doing my job for them, or that might matter to you in doing your job for them, are kind of ancillary to the thing that they're actually doing for a living, right? So it's kind of like busy work in a sense. But to the extent that they can be disciplined about at least implementing some... you know, set list of things that they do and then stick to them, right? It's like working out, right? Like if I get a kettlebell and work out twice, five times in one week, but then don't pick it up for the next, you know, six weeks, I'm not going to get the results that I'm looking for, right? So if there's one thing to take away from the podcast is don't let your project management software be like a kettlebell. Or like the apps on Shay's phone.

JH: Understood. Well, Shay, thanks for coming in today and talking to us about the topic. I think a lot of people will find it useful, things to think about when looking at contracts, things that they need to be able to generate to support there are cases if a dispute arises. So if somebody needed to get a hold of you, what's the best way to contact you?

SK: Well, you can always email me or you can reach out to Josh and Josh puts you together with me. Peckar & Abramson’s website is www.peclaw.com. Not to brag, but for the third year in a row, we were named the construction law firm of the year, nationally by chambers. And we're always in the top two of the construction executive, top 50 construction law firms. So we think of ourselves as one of the industry leaders in the construction law space.

JH: Great, well, you definitely are, and thank you for coming in. So thank you for tuning in to our latest episode produced by StudioOne™. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.