An excusable delay is a delay to the work caused by something outside the contractor's control and not its fault, which entitles the contractor to more time and protects it from default or liquidated damages.
Plan reviews connect field conditions, drawings, and the next decisions on a job. AI-generated illustration.
Not every delay is the contractor's problem. An excusable delay is one the contract says the contractor should not be punished for, such as unusually severe weather, a strike, a fire, or an act of the owner. The usual remedy is a time extension. Whether the contractor also gets paid for the delay depends on whether it is also compensable.
Excusable, compensable, and inexcusable
Three kinds of delay
Type
Cause
Typical remedy
Excusable, non-compensable
Neither party's fault, such as unusually severe weather or a strike
Time only
Excusable, compensable
Owner-caused, such as late design or owner changes
Time and money
Inexcusable
Contractor or its subs and suppliers within its control
The FAR is a useful model. Under FAR 52.249-10, the default clause for fixed-price construction, the contractor is protected if the delay arises from unforeseeable causes beyond its control and without its fault or negligence. Listed examples include acts of God or the public enemy, acts of the government, acts of another government contractor, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, unusually severe weather, and delays of subcontractors or suppliers from those same kinds of causes. The contractor must notify the contracting officer in writing of the causes of delay within 10 days from the beginning of any delay, unless the contracting officer extends that time.
Private contracts use similar ideas, often in a force majeure clause, with their own notice periods and lists.
A worked example
Say a GC on a $3.2 million church addition loses 6 work days in February to rain. The contract allows extensions only for weather beyond normal for the location, and the spec lists expected rain days per month. February's normal is 5 lost days, and the superintendent's daily logs show 11. The GC sends written notice within the contract period, attaches the logs and local weather data, and shows the roofing activity on the critical path was stopped. The owner grants 6 days. No money changes hands, because weather is excusable but not compensable under this contract, but the GC avoids 6 days of liquidated damages.
Concurrent delay complicates things. If the owner was late approving a submittal during the same week the contractor's crew was short, both caused the delay. Many contracts and courts handle that by granting time but no money, but the result depends on the contract language and the jurisdiction. A clean, current schedule is the only way to show which delay actually drove the end date.
Common mistakes
Missing the notice deadline. Even a strong excusable delay can be waived by late notice.
Claiming weather days that did not hit the critical path. If the delayed work had float, the job end date did not move.
Assuming 'normal weather' means any rain. Most contracts only excuse weather that is unusually severe for the place and season.
Blaming a sub. Under the FAR clauses, a sub's delay excuses the prime only when the cause is beyond both their control and without fault.
What is the difference between excusable and compensable delay?+
An excusable delay earns more time. A compensable delay earns time and money. Owner-caused delays are often both; weather and strikes are usually excusable only.
Is bad weather an excusable delay?+
Usually only when it is unusually severe for the location and time of year. FAR 52.249-10 lists unusually severe weather as an example.
How much notice do I have to give?+
It depends on the contract. Under FAR 52.249-10, written notice is due within 10 days from the beginning of the delay, unless the contracting officer extends the time.
Can a supplier delay be excusable?+
Sometimes. Under the FAR clauses, it has to arise from causes beyond the control of both the contractor and the supplier and without their fault.
Alphabet's moonshot factory X just spun out Anori with $26 million in funding. The AI platform unifies developers, architects, engineers, and city officials to surface compliance conflicts in weeks instead of months. Permitting delays cost the US $100-140 billion annually. Anori targets 3-6 story multifamily first, then hospitals and data centers.
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Published transcript from Scaling Legends. It may contain transcription errors. View the source transcript.
You know that feeling when you are standing on a freshly graded lot, the sun is just coming up and you have like your entire crew lined up and ready to go. Oh yeah. Best feeling in the world until, well, you realize nothing is happening. Exactly. The heavy machinery is parked, the materials are staged, but the site is completely silent. Right. And the most agonizing part is that it is not a supply chain issue. It is not, um... a labor shortage it's the paperwork it's because a single piece of paper a permit is just stuck in some towering stack on someone's desk at City Hall. It really is a binary reality in this industry. Yeah, you either have the green light or you are bleeding cash every single day that lot sits empty. It truly is the ultimate bottleneck. I mean, we like to think of construction as this
dynamic, moving beast. But the reality is that so much of the life cycle is just, well, waiting. Yeah. It is a very visible, very frustrating pause button pressed on the entire physical world. Which is exactly why we were... tackling this head -on today. Welcome to this deep dive. Glad to be here. If you are a construction business owner, if you are part of the Scaling Legends community listening to this right now, this conversation is built specifically for you. Absolutely. Today, we are synthesizing a stack of tech specs out of Google's Moonshot Factory X, alongside some recent McKinsey data, and an exclusive market intelligence report to unpack a massive, honestly, almost unbelievable move in the industry. Yeah, the Google X development is huge. So get this. Google X has spent the last two years years quietly
building an AI platform called Inori. Right. And it just spun out. Exactly. It just spun out as its own independent company with $26 million in funding. And the claim they are making is incredibly bold. Extremely bold. They say this platform can slash construction approval times from years down to weeks. Which is a claim that demands serious scrutiny from our end. I mean, for anyone listening who actively manages a pre -construction pipeline, we really need to ask the core question here. Right. Is this real? Exactly. Is this just more Silicon Valley hype from people who have never actually worn a hard hat? Or is this a tangible, functional tool that will actually end permitting hell and completely change how you run your business? So here is the journey we are taking today to figure that out. Let's do it. First, we are going to diagnose
the multi -billion dollar root of this permitting problem. Then we are going to get into the actual mechanics of how Inori works. The how and the why. Right. Not just the what. And I am definitely going to push back on the messy reality of local politics versus clean tech. Fair enough. And finally, we will map out exactly how this impacts your business, your pipeline, and your competitive edge as we look toward 2026. Sounds like a plan. Because to really understand the value of a tool like Inori, we first have to quantify the sheer financial destruction caused by the current permitting process. It's massive. It is. Because it is not just an annoyance for a single contractor, right? It is a macroeconomic drain that affects everyone. Okay, let's unpack this. Just how bad are the numbers when we look at the industry as a whole?
Well, the direct spending on permitting in the U .S. alone sits between $5 and $14 billion annually. Wow. And that's just the direct costs. Yeah. That is just the administrative cost. Yeah. You know, the fees, the expediters, the paperwork itself. Right. But the real tragedy, like the silent killer of projects and pipelines, is the unrealized returns. Because the capital is just locked up. Exactly. Because projects are delayed in this bureaucratic purgatory, we are looking at between $100 and $140 billion in unrealized returns every single year. $140 billion. Every year. That is capital just tied up doing absolutely nothing. That is just insane. I mean, that is capital that could be building new businesses, funding affordable housing, upgrading infrastructure.
And instead, it is just sitting in a waiting room. Basically, yeah. How does that translate to the actual timeline of a project? Let's contextualize the timelines based on the source data here. Right now, a typical permitting process for a commercial or multifamily build takes... Four to five years. Four to five years? Four to five years, just to get the legal permission to build. That is wild. For context, complex manufacturing projects typically take two to three years to get through permitting. So building an apartment is slower than building a factory. Way slower. Even mining, which is an industry with massive environmental, geological, and safety hurdles, takes eight to nine years. Wow. Wow. The fact that a standard five -story building takes five years is just a structural failure. Completely.
Furthermore, McKinsey data indicates that construction costs increase by 24 to 30 percent over these extended project timelines, strictly due to these delays. Okay, so a $10 million project becomes a $13 million project before a single shovel even hits the dirt. Exactly. Let's anchor that for a second for everyone listening. In this industry, your pro forma is essentially your financial blueprint, right? It's the projected math that proves a project is actually viable to a lender. But when costs inflate by 30 % strictly due to holding delays, inflation, and material price shifts, that blueprint is completely wrecked. It totally blows up the budget. But why does it take so long? I mean, we have had building codes for a century. It's a fair question. To
me, the current process is like trying to write a single cohesive novel. But the developers, the architects, the structural engineers, the civil engineers, and the city planners are all locked in entirely separate rooms. Oh, that's a great way to put it. Right. And they are speaking completely different languages. They're using different software that just refuses to talk to each other. Yeah. So the architect writes a romance chapter, the structural engineer writes a sci -fi chapter, and months of duplicated work go by before anyone sits at a single table and realizes the chapters do not match up. Right. The plumbing is running straight through an elevator. Exactly. And that creates massive compliance conflicts. Your novel analogy hits the nail on the head. It is a systemic failure of communication. Yeah. And validating that exact point, Smart
Business Automator's Market Intelligence Report explicitly tracks this, noting that permitting currently stands as the number one source of pre -construction delays across the entire industry. Number one. Yep. It is those fragmented silos that cause the friction. Okay. I get the silo problem, but I have used construction management software before, and it usually just becomes, well, another silo. True. How is a tech spin -out going to force a 60 -year -old city planner, an architect, and a structural engineer to actually use the same tool? What does Inori actually do to break that cycle? What's fascinating here is the underlying mechanism of the technology. Inori uses parametric modeling and generative design. Okay, so not just digital blueprints. No, it is not just a digital drawing board. Think of it like a master chess player who can see
14 moves ahead. for every single discipline simultaneously. Oh, wow. Instead of an architect manually drawing a line and hoping it works, the AI ingests the city's specific messy PDF database of local building codes. Those are usually a nightmare to root. Oh, absolutely. But it turns them into mathematical constraints and then runs thousands of spatial simulations per second. So it's testing the building against the code in real time? Yes. It is optimizing across functionality, financials, compliance, zoning, efficiency, cost, materials, and design. all at the exact same time. So instead of the architect doing a drawing, passing the baton to the engineer to check the load, who then passes the baton to the estimator to check the cost,
who passes the baton to the city planner who says, no, this violates a setback rule, forcing everyone to start completely over for another six months, the AI is doing all of that complex math instantly. Exactly. It shifts the entire industry away from a sequential workflow. That makes so much more sense. It creates a collaborative, AI -assisted share workspace. The developers, the architects, and the city officials can all log into the same environment and view the trade -offs in real time. So they're literally on the same page. Exactly. If a city planner asks you to move a wall to satisfy a zoning setback, the AI instantly calculates how that impacts the material cost the structural load, and the project timeline. That is a total workflow revolution, and I guess it makes more sense when you look at the pedigree of the team behind this. It really
does. The CEO, Adrian Walker, isn't just some software guy who decided to, you know, disrupt construction. He brings deep operational experience. Very deep. He spent over nine years at Ford understanding complex, integrated manufacturing assembly lines, and then spent five years inside Google's X factory, specifically... building Inori. That manufacturing DNA is crucial here. Ford doesn't build cars in silos, right? They build them on an integrated assembly line. Right. Walker is essentially trying to build a digital assembly line for pre -construction. And Astro Teller, who is known as X's captain of moonshots, identified a very specific target for this technology. What was that? He called multifamily housing the most efficient way for people to live and an absolute necessity for the world to build in massive quantities. Which
explains Inori's strategic rollout. They aren't trying to boil the ocean and fix every single type of commercial construction at once. Right, they're starting focused. They are specifically targeting three to six story multifamily buildings first. Projects with like five to 100 units. From there, they plan to expand into hospitals and data centers. And if we connect this to the bigger macro picture, targeting multifamily housing first addresses a massive global urgency. The housing crisis. Exactly. We are looking at a reality where nearly 3 billion people may lack adequate housing by 2030. 3 billion. That's just staggering. It is. The traditional siloed method of building simply cannot scale to meet that demand. We physically cannot build fast enough
to house the global population if every single apartment complex takes five years just to permit. A shared workspace where an AI chess player instantly solves compliance is an incredible vision. But here is where it gets really interesting and, well, where I have to play the skeptic. Go for it. We are talking about the messy reality of the physical world. municipal planning departments are notoriously slow to adopt new technology. That is definitely true. You still have jurisdictions requiring physical stamped paper plans to be rolled up and dropped off at a desk. Furthermore, we all know that permitting delays are rarely just about math and setbacks. They're deeply political. You have intense zoning fights, aggressive community opposition, in -IMB -ism where neighbors
understandably want a say in their community's development, and fight tooth and nail against a new multifamily complex. Yeah, that's a huge factor. So can an AI really solve a deeply human, deeply political problem? This raises an important question, and it is crucial to separate Right. You can't shake hands. Exactly. It does not change the subjective desires of a community. What it does do, though, is accelerate the technical portion of that approval process. So it takes the math out of the debate, even if the debate still happens. Consider a scenario where a community raises a concern about a new building casting
shadows on a local park or, say, impacting traffic flow. Which happens all the time. All the time. Traditionally, the developer would have to go back to the drawing board for six months to redraw the plans, re -engineer the load, and reprice the materials. Just to answer one question. Right. But with this platform, the AI can instantly generate the revised models to address those shadow concerns in real time, proving compliance on the spot. Wow. Okay, that changes the dynamic of a town hall completely. It does. And to highlight just how localized and complex this issue is, Smart Business Automator's Market Intelligence Report actually tracks municipal permitting timelines by jurisdiction, revealing just how fragmented the adoption bottleneck truly is. Every single city has its own eccentricities. Uh -huh. So
synthesizing that reality, even if the political fights remain exactly as fierce as they are today, if Inori can compress just the technical administrative compliance phase from six months of back and forth emails down to six weeks of real time modeling, that alone is a totally transformative win. Exactly. You survive the town hall and instead of waiting another year for the revised plan approvals to clear the silos. You just start digging. It isolates the delay to just the political arena, removing all that bureaucratic friction that compounds it. So what does this all mean for the people actually pouring the concrete? Let's move from the software and the city directly to your bottom line. Good pivot. What does this acceleration mean for contractors bidding on and starting jobs as we look ahead to 2026? Well, if we connect
this to the bigger picture of industry capital, Inori is not an isolated event. It is part of a massive wave. A wave of funding. Yes. Property technology or prop tech funding hit $16 .7 billion in 2025. Silicon Valley is looking at the margins in construction and realizing that automating compliance is the next gold rush. Alphabet didn't just back Inori. They also backed a construction AI firm called Bedrock with $270 million. $270 million. Yeah. The market is aggressively moving toward this automation, which is evidenced by the search keyword construction technology, spiking 193 % on Google Trends. The wave is definitely coming. And the direct benefit for you as a contractor is clear. Faster permitting equals accelerated
project starts. Simple math. If developers aren't trapped in a five -year holding pattern, more work flows through your pipeline faster. But it also changes the nature of pre -construction bidding. How so? Contractors who deeply understand these digital compliance requirements, who can integrate with these shared AI workspaces, will gain a massive competitive advantage. If you can speak the AI's language, you become the obvious frictionless partner for the developer. That's a great point. And staying ahead these highly regional rules is actually getting easier for contractors who utilize the right tech stack. Right. For instance, Smart Business Automator's Market Intelligence Report highlights a compliance module designed specifically to flag permitting requirements by jurisdiction, keeping contractors
ahead of the curve before a conflict even arises. And this timeline compression isn't just about getting shovels in the ground faster. It radically alters your financial and tax strategy. Absolutely. If you are stuck in a five -year permitting loop, your capital's just tied up. But if platforms like Inori compress that to weeks, you are acquiring and deploying fixed assets much faster to keep up with the work. That's a good problem to have. It is. And that brings us to a crucial finding in the sources about your 2026 tax strategy. There are four key bonus depreciation tax tips for construction firms. Very timely. Just to anchor that, bonus depreciation allows you to deduct a large percentage of the purchase price of eligible heavy machinery and assets up front, rather than writing them off slowly over years.
But the most critical takeaway from the research is the intense pressure currently on IRS staff. Yes, this is huge. Because of the massive administrative backlog at the agency right now, the burden of proof is heavily on the business owner. Right. Submitting sloppy fixed asset documentation right now is like walking into a TSA line with your shoes still tied and metal in your pockets. You are guaranteeing yourself a massive delay and a brutal audit. Exactly. There is a critical, absolute need to meticulously document your fixed assets if you plan to utilize bonus depreciation. It all comes back to having your data organized and accessible, whether that is for a city planner looking at a digital permit model or an IRS agent
looking at a tax filing. Efficiency really is the new currency. It really is. So bringing this conversation full circle, whether Inori becomes the undisputed industry standard or whether it just paves the way for a dozen other platforms to tackle the issue, one thing is certain. The bottleneck is breaking. The $140 billion permitting problem is actively being solved right now. The imperative for you as a construction business owner is to position your business on the right side of that technological change. Do not be the one clinging to the fact machine when the rest of the industry is collaborating in real time. Well said. I'll leave you with a final forward -looking question to ponder. We spent a lot of time talking about how fragmented local jurisdictions are. Oh, yeah. But if AI platforms
like Inori successfully standardize the technical side of permitting across thousands of different municipalities, evaluating everything instantly, will we eventually see the emergence of a universal fast track building code? Oh, wow. Right. If an AI analyzes 10 ,000 local codes, it might eventually output the optimal super code. And if that happens, how will that fundamentally shift where developers choose to buy land and build their next massive projects? That is a fascinating thought. If the rules become universal and instant, the geographic map of where it is profitable to build completely changes. It really does. If you got value out of this deep dive, you know what to do. Subscribe to Scaling Legends on whatever platform you are using right now. Please leave a rating, drop a review and share
this with your colleagues, your project managers and your team. We want the whole community leveling up. Get the word out. And a massive thank you to our sponsor, Smart Business Automator. You can find them at smartbusinessautomator .com. Great platform. Look, we just talked about the absolute nightmare of admin, silos, and documentation. Smart Business Automator is an AI platform built explicitly for construction companies to scale without drowning in that paperwork. Which is what everyone wants. Exactly. It gives you smart document organization, auto -tagging your photos, plans, and RFIs so you never lose a file. It provides daily log and meeting summaries, document intelligence, natural language smart search, so you can just ask your database a question, and AI RFI assistance. It's super comprehensive. It is, and it goes deeper into your actual project
health too. Schedule risk detection, budget and variance insights, project health monitoring, change order impact analysis, automated report generation, and the compliance checking we talked about earlier. It really covers everything. They even offer custom AI workflows with API system integrations that connect directly into your accounting and ERP software. It is your entire back office brain automated. Visit smartbusinessautomator .com to check it out. Definitely worth a look. Next time you are standing on that silent Burt lot waiting for a piece of paper, just remember, the tech to clear that desk is already built. We'll catch you on the next one.
