WHAT IS SCHEDULE VALIDATION?
Schedule Validation is a process by means of which Owner and Contractor resort to the expertise of a third party to validate the schedule of a certain project in all its features and components.
The Validation is thus an external evaluation to ensure that a foremost contract instrument — the schedule — is correct in scope and assumptions, as well as free from all sorts of pitfalls and booby traps. The validated schedule should represent the model of how the Contractor intends to carry out the work plan’s activities, and how the Owner is supposed to get the project delivered.
It is routine to find investors resorting to second and third evaluations, e.g. due-diligence appraisals by mortgage investors, to gain a level of confidence in the outcome and the return on their investment. This typical validation process, however, is not a common practice in the construction area, but Owners and Contractors can have solid benefits by adopting scheduling validation procedures and periodic audits.
Validation occurs when the original work plan and, as an extension, the project schedule developed by the Contractor and their sub-contractors and suppliers is submitted to the Owner and is then evaluated by an external expert (or a team of experts) and approved as valid, reasonable, rational, and achievable — valid, to be accepted and recognized as an official instrument of communication and commitment; reasonable, because based on assumptions that do not go beyond the limits of common sense; rational, because it incorporates proper construction methods, production rates, calendars and resource availability compatible with the environment and location of the project; and achievable, because its goal is meeting the construction of the project’s requirements in terms of scope, time and resources.
Once the baseline schedule developed by the Contractor is submitted to its client, the “validators” run a general sanity check, assessing the reasonableness of the schedule in terms of observance of the milestones and completion date[s], productivity rates and resource allocations, and the contract’s logical work sequence. The validating team then checks if the entire scope of work is contemplated in the schedule, the means and methods proposed, requests adjustment of some assumptions, raises questions to the Contractor and points out problems regarding the form and/or the content of the schedule to both the Contractor and Owner.
Construction planning and scheduling practices have become more complex as they have matured and can produce a greater degree of management and control, but they also are vulnerable to incorrect procedures, illogical activity sequencing, misuse, abuse, and outright manipulation.
Even if supporting explanations and data are provided there can be still many hidden tricks and techniques that were used to develop the schedule.
In the Validation process the electronic database used to prepare the proposed schedule is broken down to reveal all of the date constraints, resource restraints, tools, processes, and techniques applied to the work organization, and schedule activities. All of this information is analyzed given the Contractor’s means and methods.
Standard practices and experienced judgment are then used to validate the correct application of schedule preparation and development principles and then determine the reasonableness, realism, and risk of the proposed work plan and schedules.
The final product, or deliverable, of the validation process is the validated baseline, a schedule that can efficiently serve as a reference for monitoring and controlling the progress of the project. The contract management and issues such as schedule performance index, project delays and claims resolution can then be carried out based on the validated schedule.
WHAT IS SCHEDULE AUDITING?
As progress proceeds, Auditing of performance in relation to the planned schedule (baseline) must be done. Typically a construction schedule shall be statused on a weekly, biweekly, or at least monthly. It is the Contractor’s responsibility to assess the status of the project, enter the status into the current schedule and analyze its outcome. In each one of these reviews deviations from the original plan invariably occur, due to, fluctuations of labor and/or equipment productivity, unforeseen and differing site conditions, labor shortages, external interferences, design defects, change orders, owner-directed or contractor-initiated accelerations, and force majeure.
The schedule database is audited for the correct entry of actual dates, resource utilization, and performance as to both productivity and in relation to the planned schedule.
A comparison of Actual Start and Finish dates to the Planned Start and Finish dates is made and actual versus planned resource histograms are charted.
In addition, the Earned Value charts for all significant resources (earnings, man-days, pacing resources, and/or material placement) are statused with the progress and performance as of the audit date, and a current Earned Schedule analysis is prepared.
As a result, the baseline schedule may need to be adjusted, or changed. In this new schedule, an activity’s new planned start/finish dates (as well as project completion date[s]) may be different from the baseline schedule previously validated. Also, individual duration and sequencing of activities may be different and some activities may need to be added to or removed from the Work plan and activity network.
This is why the initial validation alone is not enough. The validation process calls for a schedule auditing procedure that complements it and keeps transparency in the schedule.
By means of the auditing, the schedule continues as a valid, reasonable, rational, and achievable plan of work, to yield a high level of confidence in the outcome of the project.
Whereas the focus of the initial schedule Validation was on quality — completeness, adequacy of form, abidance to specifications —, in Auditing the focus shifts to changes. Statusing a schedule is all about monitoring how much modification it has undergone since the previous review. The modifications can be in scope, logic, durations and project completion date.
The main questions to be made by the schedule auditors are, among others:
- Has the project reasonably proceeded according to plan?
- Have the change orders approved by the Owner been incorporated into the work plan and schedule? Is their scope of work reasonably described in terms of new activities (or adjustment to planned activities)?
- Has the progress in the period impacted the project completion date?
- Have all changes and impacts been documented and addressed to the Owner?
It is important to note that McLaughlin and McLaughlin [M&M] is not a law firm and is not intending to provide legal advice. M&M is a consulting firm providing (among other services) non-legal expertise in dispute resolution and litigation support. The Resource Center is for the convenience of blog visitors and M&M does not offer this for commercial purposes. For further information on M&M services, please see www.McLaughlinandMcLaughlin.com.