This Subject Series addresses the sources and implementation of a contract schedule specification. The Subject Series structure is presented in multiple parts and the series is a logical extension of the series titled MANAGING RISK OF DELAY. The intention is to capture sources of best practice in Time Management as it relates to implementing a professional schedule specification.
The overview of this series is:
- Managing Risk of Delay – Schedule Preparation and Maintenance (Part 4)
- Managing Risk of Delay – Schedule Specification Sources and Implementation (Part 8)
- Schedule Specification Implementation Overview (Part 2)
- Schedule Specification Implementation Specific Issues (Part 3)
- Schedule Specification Implementation Weather Delays and Approved Schedule (Part 4)
- Schedule Specification Implementation Claims Avoidance and Schedule Updates (Part 5)
- Schedule Specification Implementation Recovery Plans and Conclusion (Part 6).
The balance of this post is from the paper. In general, this informative work compares two approaches to schedule specification implementation.
This extract from the paper covers:
- RECOVERY PLANS
A good scheduling specification requires the Contractor to monitor progress against the plan and to propose solutions to overcome problems as they occur. The Corps spec requires the Contractor to submit a narrative report with each monthly update including a description of the problem areas, current and anticipated, delaying factors and their impact; and an explanation of corrective actions taken or proposed. It also requires the Contractor to revise the schedule when the Contractor decides to either change the sequence of activities affecting the critical path or significantly change the approved schedule.
CHANGING THE APPROVED SCHEDULE
Changes to the approved schedule, particularly changes made to incorporate a recovery plan, can cause serious problems for the Owner. If a Contractor is 30 days behind schedule six months into a project, the traditional recovery plan shortens durations along the critical path for a total of 30 days between the schedule status date and the contract completion date. However, if a Contractor has lost 30 days along the critical path in the first six months, it is highly unlikely that the Contractor will be able to meet the planned durations for the remaining critical activities and virtually impossible that the Contractor will be able to regain the 30 days already lost. If the Owner approves such a recovery plan, the float on non-critical paths is reduced by 30 days, and several paths with float in the original schedule now become critical. If the Owner initiates a change on one of these newly critical float paths, the Owner becomes liable for a time extension and very likely delay damages as well whether the accelerated critical path is reasonable or not.
Contract language is required to prevent the Contractor from benefiting at the Owner’s expense when the Contractor falls behind schedule. The DFW Airport spec states,
“The Contractor shall not artificially improve its progress by revising schedule logic restraints or shortening planned activity durations. The Contractor may improve its progress by performing sequential activities concurrently or by performing activities more quickly than planned, but such improvements shall not be recorded on the Schedule until they have actually been achieved by the Contractor.”
This clause requires the Contractor to improve progress through actions taken on the site rather than through schedule manipulations. When a Contractor falls behind the approved schedule adjusted by any excusable delays, it is senseless to consider that the Contractor is back on schedule unless the measurement is made against the same adjusted approved schedule. Thus, while a recovery plan is necessary to give the Owner confidence that the Contractor really does have a program to get back on schedule, the recovery plan should not take the place of the approved schedule for either monitoring progress or measuring the impact of changes or delays on contract completion.
RECOVERING TIME LOST
The DFW Airport spec includes another clause designed to answer one of the toughest questions in controlling a project. Does the Contractor have an absolute right to recover time lost (by the Contractor) during construction? If the answer to this question were yes, then the Owner could not use any of the float originally available on a five day float path once the Contractor were more than five days behind schedule (assuming that the Contractor had slipped an equal amount of time on both the critical path and the five day float path). For example, suppose that critical activities were five days behind schedule and the Owner had used one day of float on the five day float path. Even if the Contractor were later to recover the five days lost on the critical path, the project would finish one day late because the Owner had used the one day of float when the Contractor was behind schedule.
The Owner has answered this question no. The Contractor does not have the right to recover time lost. The Contractor has the obligation to recover time lost, but the Contractor’s right to recover time lost is superseded by the Owner’s right to use available float. The DFW Airport clause states,
“It is understood and agreed that when the Contractor falls behind in meeting the Schedule as presented in the current monthly Schedule Update, the Contractor has extended the critical path for achieving project completion and affected the schedule float time available for use by the BOARD.”
Note that the Owner has the same right under the Corps spec which states, “Extensions of time for performance under any and all of the provisions of this Contract will be granted only to the extent that equitable time adjustments for the activity or activities affected exceed the total float along the channels involved at the time a delay occurred or notification of a change was issued”. Thus, to the extent that the Owner uses contingency time that exists on a path other than the longest path to contract completion when a change or delay occurs, the Contractor is not entitled to a time extension. By stating that when the Contractor falls behind schedule the Contractor has extended the critical path and affected the float time available to the Owner, DFW is providing additional language reinforcing the basic Corps NAS provisions.
Any scheduling specification must do more than set out the basic requirements for using CPM techniques to develop an approved schedule and monthly updates. The specification must communicate the importance of utilizing project control techniques and include provisions for resolving disputes when they occur. The Dallas/Fort Worth International Airport is now on the leading edge in trying some new contract provisions to accomplish these objectives. The provisions are designed to reward the Contractor who performs according to a reasonable plan and submits legitimate and timely requests for equitable adjustments. Contractors who don’t properly follow the scheduling specification will experience delays in progress payments. And, Contractors who fall behind schedule risk receiving acceleration notices as well as warnings of pending terminations for default.
Scheduling specifications are in a state of evolution. Changes will continue to be made to clarify the Owner’s needs and resolve future disputes. The Business Roundtable has concluded that modern management systems are a little used tool in construction and that CPM scheduling, despite having been used by some builders for more than two decades, is still not being used to its full potential. Adopt a new scheduling specification, customize it to fit your needs and insure using network analysis on your projects to its full potential before a third decade goes by.
This series of posts will be concluded (one more part) with a summary of the entire content and some useful links.
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