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FORENSIC SCHEDULE ANALYSIS —
CHAPTER 2: DELAY ANALYSIS
ON NON CPM SCHEDULED PROJECTS
FORENSIC SCHEDULE ANALYSIS:
EXAMPLE IMPLEMENTATION, PART 3
RECOMMENDED CONTRACTUAL METHODS FOR
RESOLVING DELAY EVENTS
PROSPECTIVELY OR RETROSPECTIVELY
CONTENTS
COST ENGINEERING
TECHNICAL ARTICLES
4 Forensic Schedule Analysis—
Chapter 2: Delay Analysis On
Non CPM Scheduled Projects
James G. Zack Jr., CFCC FAACE and Steven A. Collins
17 Forensic Schedule Analysis:
Example Implementation, Part 3
Mark C. Sanders. PE CCP CFCC PSP
29 Recommended Contractual Methods
For Resolving Delay Events Prospectively
or Retrospectively
Patrick M. Kelley, PSP
ALSO FEATURED
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AACE International Board of Directors
Cost Engineering Journal Information
The 2014 ITCM Conference
The 2014 Annual Meeting
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Professional Services Directory
Index to Advertisers
The AACE International Online Store
Calendar of Events
COST ENGINEERING NOVEMBER/DECEMBER 2013
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COST ENGINEERING NOVEMBER/DECEMBER 2013
TECHNICAL ARTICLE
Forensic Schedule Analysis —
Chapter 2: Delay Analysis
On Non CPM Scheduled Projects
James G. Zack Jr., CFCC FAACE
and Steven A. Collins
Abstract: AACE International Recommended Practice 29R-03 – Forensic Schedule
Analysis, provides detailed insight in how CPM based schedule delay analysis
should be performed. This RP provides thorough and detailed protocols for each
of the nine methodologies identified. However, industry surveys from around the
globe indicate that a substantial percentage of construction projects do not employ critical path method scheduling techniques. Other industry studies indicate
that a large percentage of projects complete later than planned. Therefore, it can
only be concluded that there are a large number of delays and delay claims on
projects that do not use CPM schedules. RP 29R-03 offers no guidance concerning
the performance of schedule delay analysis if there are no CPM schedules on the
project. This article presents recommendations on how schedule delay analysis
can be performed on projects using nine different non-CPM scheduling techniques. The article also discusses the five types of constraints present on most, if
not all, construction projects and how these constraints must be used in non-CPM
schedule delay analysis. The goal of this article is to initiate Chapter 2 of RP 29R03 – Forensic Schedule Analysis on Projects with No CPM Schedules. This article
was first presented as CDR.815 at the 2012 AACE Annual Meeting in San Antonio.
Key Words: Bar charts, constraints, CPM, critical chain, milestones, and schedules
A
ACE International Recommended
Practice 29R-03 was issued
initially on June 25, 2007. It has
been twice revised, the first
time on June 23, 2009, and more recently
on April 25, 2011. The purpose of this RP,
however, has never changed. The stated
purpose is set forth in Section 1.1 as
follows:
“The purpose of AACE International’s
Recommended Practice 29R-03, Forensic
Schedule Analysis, is to provide a unifying
reference of basic technical principles and
guidelines for the application of critical
4
Author’s Note:
The opinions and information
provided herein are provided with the
understanding that the opinions and
information are general in nature, do not
relate to any specific project or matter,
and do not necessarily reflect the official
policy or position of Navigant Consulting,
Inc. Because each project and matter is
unique and professionals can differ in
their opinions, the information presented
herein should not be construed as being
relevant or true for any individual project
or matter. Navigant Consulting, Inc.
makes no representations or warranties,
expressed or implied, and is not
responsible for the reader’s use of, or
reliance upon, this article, nor any
decisions made based on this article.
path method (“CPM”) scheduling in Building (“CIOB”) in their survey of the UK
construction industry found that only
forensic schedule analysis.”
14% of the respondents had experience
The RP provides detailed insight into with fully linked critical path networks on
the performance of schedule delay their projects. Another 8% of the
analysis and thorough protocols for respondents had experience with, “…a
forensic scheduling using CPM schedules. partially linked network … to show some
However, the current RP 29R-03 does not of the priorities and sequence of tasks,
contain any discussion concerning but without the benefit of a dynamic
schedule delay analysis on those projects network.” The remaining 78% of the
survey respondents used bar charts
executed without CPM schedules.
Industry surveys indicate that a (54%); time chainage diagrams (1%); line
substantial percentage of projects of balance diagrams (1%); flow charts
executed globally do not use CPM (3%); meeting minutes (11%); and
scheduling. The Chartered Institute of correspondence (8%) to manage time on
COST ENGINEERING NOVEMBER/DECEMBER 2013
their projects. The CIOB report also
noted that a similar survey in Australia
found that in over 1,000 construction
schedules examined, less than 10% had
fully developed schedule logic [16]. In a
similar wide ranging survey of the
construction industry, and how it views
CPM scheduling, it was determined only
47.6% of the owners responding to the
survey indicated that CPM scheduling
was always required on their projects.
Contractors participating in this survey
reported that when CPM scheduling is
not required in their contracts,
approximately 33% do not use the CPM
scheduling methodology [11].
In a construction industry survey
released in December 2011, 84% of the
respondents reported that they had
experienced delayed completion on
their projects. The average delay was
17% over the planned or contracted
time of completion. Further, 76% of the
respondents had experienced disputes
and claims on their projects [17]. Thus,
it can be concluded that there are a large
number of delays on projects that were
completed without CPM schedules. It
can be further concluded that there are
a large number of requests for time
extension and/or delay claims on
projects executed without CPM
schedules.
Forensic schedule analysis is a
retrospective—backward
looking—
schedule analysis. That is, an event
occurred that delayed the project.
Under most contracts, the affected party
(typically the contractor) is required to
provide written notice of potential delay
to the other party (typically the owner).
Once the delay event is completed the
contractor is required under the contract
to submit a time extension request
(either excusable or compensable) and
document liability, causation and
damages related to the delay. This
article deals exclusively with the delay
aspect of the construction claims
equation; that is, how to prove the
extent of the delay arising from an
event.
Since forensic scheduling is
retrospective, forensic schedulers
typically are not retained until the
delaying event or even the entire project
is complete. Once on board, if the
forensic scheduler finds that the project
was executed without any CPM
scheduling, then RP 29R-03 offers no
guidance concerning non-CPM delay
analysis. This article outlines some
procedures for performing schedule
delay analysis in the absence of CPM
schedules. It presents an outline of how
to perform schedule delay analysis in the
following situations - no schedules, or
only
non-CPM-based
schedule
information is available.
•
•
•
•
•
•
•
•
•
No project schedules;
Bar chart/Gantt chart schedules;
Milestone schedules;
S curves;
Linear schedules;
Critical chain schedules;
Line of balance schedules;
Pull planning or location based
schedules; and,
Rolling wave scheduling.
Forensic schedulers are typically
required to deal with schedules that
exist on projects. If a forensic scheduler
is retained to perform a forensic
schedule analysis on a project that had
no CPM schedules, the scheduler must
deal with this fact and derive a method
for analyzing delays on the project. The
problem facing the forensic scheduler in
this situation is that non-CPM schedules
generally have no logic ties between
activities. Thus, on a bar chart, for
example, if activity A is delayed in its
start or completion this does not
necessarily mean that activity B is
subsequently delayed or even impacted.
The forensic scheduler must find a way
to create logic relationships between
activities in order to demonstrate the
following.
•
•
That these relationships actually
existed on the project even though
they were not shown on a schedule.
And,
That a delay to a specific activity or
set of activities actually resulted in
an impact to the end date of the
project.
A Theory of Constraints Applied to NonCPM Schedule Delay Analysis
Every project is faced with
constraints. These are factors, either
internal or external, which affect when
various activities on the project can be
scheduled. AACE International defines
the term “constraint” as follows.
“Constraint—In
planning
and
scheduling, any external factor that
affects when an activity can be
scheduled. A restriction imposed on the
start, finish or duration of an activity.
The external factor may be resources,
such as labor, cost or equipment, or, it
can be a physical event that must be
completed prior to the activity being
restrained. Constraints are used to
reflect project requirements more
accurately. Examples of date constraints
are: start-no-earlier-than, finish-nolater-than, mandatory start, and as-lateas-possible [2].”
There are five types of constraints
that may affect a project schedule. They
are presented in the order the authors
believe they should be applied to
forensic scheduling, —that is from hard
or mandatory logic to soft logic. The
application of these constraints in the
order presented is critical as they move
from a “should comply” status to a “may
be able to change” status, as the forensic
scheduler applies them to a schedule.
The five types of constraints a
forensic scheduler should consider and
the order in which they must be applied,
when analyzing schedule delay in a nonCPM scheduling environment are the
following:
1.
Physical Constraints (Also known as
Hard Logic)—These constraints
have absolute priority over all other
constraints—simply because, as
chief
engineering
officer,
Montgomery Scott, frequently
stated to Captain Kirk, no one can
“…change the laws of physics.”
Physical constraints or hard logic
exist on every project. Logical
relationships, such as one must
construct the foundation before
erecting the walls which must be
completed prior to constructing the
roof, are examples of physical
constraints. Site access may be
another example of a physical
constraint. If the project is being
constructed on a site with only a
single access road then this may
COST ENGINEERING NOVEMBER/DECEMBER 2013
5
mandate the manner in which the
project is constructed.
2.
3.
4.
6
External
Constraints—External
constraints are those constraints
imposed on the project by an
outside party over which neither
the owner nor the contractor can
exert any control. Examples of
external constraints may be
environmental permit restrictions
requiring that the work of the
project may not continue past May
1, nor commence again until after
Sept. 15, in order to protect the
environment on or near the project
site. Noise ordinances may restrict
working hours on the projects to 7
a.m. to 5 p.m., Monday through
Friday, with no weekend work
allowed.
Contract
Constraints—Contract
constraints are those constraints
imposed by the terms and
conditions of the contract. Owners
have the ability to impose
numerous constraints by including
them
in
their
contracts.
Contractors, once they have
executed the contract, have little
ability to change such constraints. A
prison authority may require that,
“All work on Building 1 shall be
completed within 270-days after
issuance of notice to proceed
(“NTP”). All work on Building 2 shall
be completed within 360-days after
issuance of NTP…” and so on and so
forth. A municipality may require,
by contract that, “All work on the
contract shall cease, all open
trenches shall be covered entirely
and all roads shall be fully opened to
traffic during the period between
May 15 and Sept. 15,” in order to
provide vacationers access to the
area during the summer season.
Such contractual requirements
force the contractor to proceed in a
certain manner or risk being default
terminated for a material breach of
contract.
constraints include a shortage of
skilled labor in the project area; a
shortage of critical materials;
delivery
delays
for
critical
equipment if the project is in a
remote location; and long lead
items necessary to complete the
work. If the contractor owns only
one 100-ton crane and did not
include the rental cost of a second
100-ton crane in their bid, this is an
internal resource constraint. If the
contractor owns two paving
machines, but one is tied up on
another project, which is taking
longer than planned, this too may
cause an internal resource
constraint which impacts the
project.
5.
Preferential Logic Constraints—
Preferential logic is defined as the
“contractor’s
approach
to
sequencing work over and above
those sequences indicated in or
required by contract documents.
Examples include equipment
restraints, crew movements, form
reuse, special logic (lead/lag)
restraints, etc., factored into the
progress schedule instead disclosing
the associated float times [7].” This
is frequently referred to as “soft
logic,” since it is not imposed by
physical or contractual constraints.
Whether this logic is used to
sequester float or is simply the
contractor’s plan for prosecuting
the work, to the forensic scheduler
this is a constraint nevertheless.
Once the contractor plans their
means and methods (preferential
logic), they typically commence
work following this plan. The plan
itself is, therefore, a constraint
albeit a self-imposed one. The
forensic scheduler performing
schedule delay analysis must treat
preferential logic as a constraint on
schedule activities, at least at the
outset of a project, simply because
the initial project planning
mandated the logic of the activities
in the field.
Resource Constraints—Resource
constraints may be caused by
internal and/or external situations.
Some examples of external resource
COST ENGINEERING NOVEMBER/DECEMBER 2013
Forensic Scheduling in Non-CPM
Schedule Delay Analysis
This article outlines a methodology
for forensic schedule analysis of delays
on a non-CPM scheduled project and
discusses some of the documentation
that a forensic scheduler should review
in order to document that the schedule
used for delay analysis is reasonable,
reliable and accurately represents the
schedule the contractor followed during
prosecution of the work. It is critical that
the forensic scheduler document a
baseline schedule to demonstrate that
the contractor had a reasonable and
achievable plan to construct the project
at the outset. Since US courts recognize
that project schedules are dynamic in
nature, then reasonably accurate
schedule updates are also required in
order to properly analyze project delays
in litigation [12]. It is acknowledged that
all of the cited cases dealt with schedule
delay analysis performed on CPM
schedules, but the thinking underlying
these decisions makes it likely that
courts and arbitration panels would
apply the same rules in non-CPM delay
situations.
Delay Analysis – No Project Schedules
Perhaps the toughest challenge a
forensic scheduler faces is to prepare
and present a schedule delay analysis on
a project that had no schedules. Since
there are no schedules on the project, a
baseline schedule and a series of
schedule updates must be constructed
in order to demonstrate schedule delay.
Methodology—It is recommended
that the forensic scheduler employ the
following methodology.
Baseline Schedule—
1.
2.
3.
Review all contract documents and
drawings to determine the scope of
work, the conditions of the contract
and determine what physical,
external and contractual constraints
were applicable to the work.
Determine how these constraints
affected the plan for the work.
Review the contractor’s bid to
ascertain the activities or portions
of the work bid and the cost and
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
a.
resources calculated for each
activity or portion of the work.
Determine whether the bid included
the full scope of work and if not,
what portion(s) of the scope of work
were left out.
Make a judgment on whether there
were sufficient resources to
accomplish the full scope of work
within the contractual time of
performance.
Interview the estimator(s) who
prepared the bid, the project
manager, superintendent and trade
foremen (the project team) to
document the initial “plan” for the
work.
Determine whether the plan was
successful at least at the outset and
how long the contractor was able to
follow this plan.
If the plan was not successful
initially, determine from interviews
why not and prepare appropriate
documentation.
Review daily, weekly, and monthly,
reports from 1 to 3 months after
NTP to determine if there were any
changes or delays to the work
during this initial period.
If there were none, and relying on
the assumption that the initial
period of the work most likely
followed the initial plan, examine
project documents to determine
what events occurred and the
duration of each event.
Establish a list of activities and a
work breakdown structure (“WBS”)
coding structure.
Construct the baseline schedule
based upon the information
gathered in the previous steps.
Apply the following constraints, in
order, as and if applicable—
Physical
Constraints—First,
determine what physical constraints
impacted the work by determining
what activities physically had to be
complete prior to other activities
starting; what activities had to be
partially completed before follow on
activities can start; and what
percentage they had to be
complete; etc.
Once physical
constraints are identified and
calculated, adjust the draft schedule
to reflect these constraints.
b.
External
Constraints—Second,
determine what external constraints
impacted the plan such as local
permitting
requirements,
environmental restrictions, noise
ordinances, etc. These constraints
come second in the order of
application as they are typically
imposed by governmental entities
over which neither the owner nor
the contractor has any control.
Input these constraints into the
draft
schedule
and
make
appropriate adjustments as needed.
c. Contract
Constraints—Third,
determine from the terms and
conditions of the contract what
constraints were imposed by the
owner. Since the forensic scheduler
is performing a retrospective
schedule analysis, unless it can be
determined
from
project
documentation that the owner
specifically waived one or more of
the contract constraints, apply these
constraints to the draft schedule
and make appropriate changes as
necessary.
d. Resource
Constraints—Fourth,
determine from analysis of the
contractor’s bid and interviews with
the project team what resource
constraints actually occurred during
the performance of the work. Was
there a shortage of skilled craft
labor; a shortage of critical
materials; a shortage of cranes or
earthmoving equipment, etc., and if
so, how did these resource
constraints actually impact the
work? Apply these constraints to
the draft schedule as appropriate.
e. Preferential
Logic—Finally,
determine from interviews and
project
documentation
what
preferential logic was applied to the
schedule at the outset of the work
and apply this constraint to the
baseline schedule. And,
14. Test the baseline schedule against
the information gathered earlier and
have the project team validate or
correct the baseline schedule.
Schedule Updates—
1.
2.
3.
4.
5.
6.
Review
available
project
documentation including meeting
minutes; project status reports;
project
photographs;
correspondence; change orders;
requests for information (“RFI”), etc.
to determine how the project
actually progressed on a period by
period basis.
Interview the project team to
determine what happened on the
project; when it happened; who
caused the event or issue; and the
impact.
Determine what changes were
made to the plan; when they were
made; who caused the changes; and
the impact of these changes.
Prepare periodic schedule updates
based upon the information
gathered above.
Have key project personnel review
the schedule updates to validate
them.
Develop and maintain records to
document each of the tasks
performed above.
Schedule Delay Analysis—
1.
2.
3.
Apply method implementation
protocol (“MIP”) 3.5 – observational
/ dynamic / modified or recreated to
document what events or activities
drove the project delay.
From the project documentation
determine whether the contractor
provided actual or constructive
notice of any or all of these delays.
Determine the amount of delay
caused by those events or
actions/inactions of the owner, their
representatives or events for which
the owner assumed liability.
Delay Analysis—Bar Chart/Gantt Chart
Schedules
A bar chart is defined as a, “graphic
representation of a project that includes
all activities that make up the project,
placed on a time scale. Bar charts are
time scaled, show activity numbers,
description, duration, start and finish
dates, and an overall sequencing of the
flow of work. Bar charts do not generally
include the logic ties between activities
COST ENGINEERING NOVEMBER/DECEMBER 2013
7
[1].” Bar charts are sometimes referred
to as Gantt charts which is defined as, “A
time-scaled bar chart named after Henry
L. Gantt,” the early 20th century
mechanical engineer who created this
scheduling methodology [4].
In this situation, the forensic
scheduler has a schedule to work with.
The bar chart should show all major
activities required to complete the work;
provide activity descriptions; set forth
start and finish dates for all activities;
and may provide activity numbers. If
activity numbers are not provided the
forensic scheduler needs to create a
numbering system in order to track
activities during the delay analysis.
Generally, a bar chart is time scaled and
shows the flow of work from upper left
to lower right on the schedule. The
problem with bar charts with respect to
schedule delay analysis is that a delay to
Activity 100 does not mean that any
following activities were delayed or even
impacted. The challenge for the forensic
schedule in this situation is to construct
appropriate logic ties between activities.
Many activities on bar charts are not
planned in a finish to start relationships.
Therefore, the forensic scheduler has to
construct logic ties with leads and lags
based on the constraints applicable to
the project. Additionally, the forensic
scheduler must create well documented
schedule updates for the duration of the
work.
Methodology—It is recommended
that the forensic scheduler employ the
following methodology.
5.
6.
7.
8.
9.
10.
11.
Baseline Schedule—
1.
2.
3.
4.
8
Assuming the baseline bar chart
provided was not rejected by the
owner, then this initial submittal is
the best starting point for forensic
scheduling.
Review all contract documents and
drawings to determine the scope of
work, the conditions of the contract
and what physical, external and
contractual constraints impacted
the work.
Determine how these constraints
affected the work.
Review the contractor’s bid to
ascertain the activities or portions
12.
13.
14.
of the work bid and the cost and
resources calculated for each
activity.
Determine whether the bid included
the full scope of work and if not,
what portion(s) of the scope of work
were left out.
Make a judgment on whether there
were sufficient resources planned to
accomplish the full scope of work
within the contractual time of
performance.
Interview the project team to gain
their understanding of the baseline
schedule and determine whether
and how long the contractor was
able to follow the plan set forth in
the bar chart.
Determine from these interviews
the leads and lags that had to
physically occur in the field in order
to efficiently prosecute the work.
For example, how much framing on
each floor had to be in place before
the rough in mechanical, electrical
and plumbing (“MEP”) could start;
how much of the MEP on each floor
had to be in place before the
sheetrocking on the floor could
start; and so on and so forth.
If the bar chart plan was not initially
successful, determine from these
interviews why not.
Construct the revised baseline
schedule by inserting the required
logic leads and lags in order to
create a network based upon the
information gathered.
Apply the following constraints as
discussed above, in order, as and if
applicable –
a.
physical constraints;
b.
external constraints;
c.
contract constraints;
d.
resource constraints;
and,
e.
preferential logic
Revise the baseline schedule
appropriately to account for the
applicable constraints.
Test the revised baseline schedule
against the information gathered
earlier and have the project team
validate or correct the baseline
schedule as needed. And,
Determine the delay, if any, caused
by events that necessitated revision
of the baseline schedule.
COST ENGINEERING NOVEMBER/DECEMBER 2013
Schedule Updates—
1.
2.
3.
4.
5.
Review
available
project
documentation to determine how
the project actually progressed on a
period by period basis.
Interview the project team and
document what happened on the
project; when it happened; who
caused the event or issue; and the
resulting impact.
Determine what changes were
made to the schedule; when they
were made; who caused the
changes; and what the impact of the
changes.
Prepare periodic schedule updates
based upon the information
gathered above. And,
Have key project personnel review
the schedule updates to validate
them.
Schedule Delay Analysis—
1.
2.
4.
Apply MIP 3.5—observational /
dynamic / modified or recreated to
document what events or activities
drove the project delay.
From the project documentation
determine whether the contractor
provided actual or constructive
notice of any or all of these delays.
And,
Determine the amount of delay
caused by those events or
actions/inactions of the owner, their
representatives or events for which
the owner was contractually liable.
Delay Analysis – Milestone Schedules
A milestone schedule is defined as,
“a schedule comprised of key events or
milestones selected as a result of
coordination between the client’s and
the contractor’s project management.
These events are generally critical
accomplishments planned at time
intervals throughout the project and
used as a basis to monitor overall project
performance. The format may be either
a network or bar chart and may contain
minimal detail at a highly summarized
level [6].”
The forensic scheduler in this
situation has an agreed upon baseline
schedule and most likely has some
schedule updates to work with. If the
project’s milestone schedule is in the
form of a network or logic diagram,
forensic
scheduling
should
be
performed in accordance with RP29R03. If the milestone schedule is in the
form of a bar chart, then forensic
scheduling should be performed in
accordance
with
the
previous
discussion. (See “Delay Analysis – Bar
Chart/Gantt Chart Schedules” above.)
There is a third form of milestone
schedules not mentioned in the AACE
definition cited above. This third form is
a list of milestone events showing the
milestones on the vertical axis on the
left side of the schedule.
The
completion dates on for each milestone
are simply shown as asterisks to the
right of each milestone description
(example: * M/S 16 – May 11, 2012) .
The problem with this type of
milestone schedule is that it does not
show logical relationships between
milestones nor does it show the planned
start dates and durations of each of the
activities required to complete each
milestone.
The challenge for the
forensic scheduler is to flesh out the asplanned milestone schedule by
calculating and documenting the
planned starting dates and durations of
each set of activities leading to each
milestone date and then determining
logic ties and leads and lags between
sets of activities. Subsequently, the
forensic scheduler must revise the
periodic schedule updates performed on
the work to take into account the logic
created for the baseline schedule.
Methodology—It is recommended
that the forensic scheduler employ the
following methodology.
4.
5.
6.
7.
8.
9.
10.
11.
Baseline Schedule—
1.
2.
3.
Assuming the baseline milestone
schedule was agreed to this should
be the starting point for forensic
scheduling.
Review all contract documents and
drawings to determine the scope of
work, the conditions of the contract
and what physical, external and
contractual
constraints
were
applicable to the work.
Determine how these constraints
affected the work.
12.
13.
Review the contractor’s bid to
ascertain the activities or portions
of the work bid and the cost and
resources calculated for each
activity or portion of the work
leading to each milestone.
Determine whether the bid
included the full scope of work or
what portion(s) of the scope of
work were left out, if any.
Make a judgment on whether there
were sufficient resources planned
to accomplish the full scope of work
for each milestone by the milestone
date.
Interview the project team to gain
their understanding of the baseline
schedule and determine whether
and how long the contractor was
able to follow the plan set forth in
the baseline.
Determine from these interviews
the activity relationships and leads
and lags that had to physically occur
in the field in order to efficiently
prosecute the work. For example,
how long did each deck have to be
cured before the shoring and
forming could be jumped to the
next elevation.
If the milestone schedule missed all
or most of the initial as-planned
dates, determine from these
interviews why this occurred.
Construct the revised baseline
milestone schedule by inserting the
required relationships and leads
and lags in order to create a logic
network.
Apply the following constraints as
set forth earlier, in order, as and if
applicable—
a.
physical constraints;
b.
external constraints;
c.
contract constraints;
d.
resource constraints;
and,
e.
preferential logic
Revise the baseline milestone
schedule appropriately to account
for applicable constraints.
Test the revised baseline milestone
schedule against the information
gathered earlier and have the
project team validate or correct the
revised baseline schedule.
Schedule Updates—
1.
2.
3.
4.
5.
Review
available
project
documentation to determine how
the planned milestone dates were
actually accomplished on a period
by period basis.
Interview the project team and
document what happened on the
project; when it happened; who
caused the event and the resulting
impact.
Determine what changes were
made to the schedule; when they
were made; who caused the
changes; and the impact of the
changes to the plan.
Prepare periodic schedule updates
based upon the information
gathered above. And,
Have key project personnel review
the schedule updates to validate
them.
Schedule Delay Analysis—
1.
2.
3.
Apply MIP 3.5 – observational /
dynamic / modified or recreated to
document what events or activities
drove the project delay.
From the project documentation
determine whether the contractor
provided actual or constructive
notice of any or all of these delays.
And,
Determine the amount of delay
caused by those events or
actions/inactions of the owner,
their representatives or events for
which the owner was liable under
the contract.
Delay Analysis—S-Curves
An S-curve “is a graphic display of
cumulative costs, labor hours, progress
or other quantities plotted against time
[9].” S-curves are also known as
cumulative distribution charts, velocity
diagrams and S-plots. According to
AACE Recommended Practice 55R-09.
“Prior to developing an S-curve, a
project baseline schedule needs to be
developed. The baseline schedule
should employ best scheduling practices
… The baseline schedule should also
contain cost and/or quantity data
information if that type of S-curve is
desired. The S-curve produced from the
COST ENGINEERING NOVEMBER/DECEMBER 2013
9
baseline early dates is often referred to
as the ‘target S-curve’ which reflects
projected or planned progress on the
project if all tasks are completed on their
original early finish dates [9].”
If a forensic scheduler is retained to
work on a project where an S-curve has
been developed from a CPM network (as
is implied by RP 55R-09) then all forensic
schedule analysis should be performed
on the underlying CPM schedules in
accordance with RP 29R-03. Having said
this, S-curves on linear projects, for
example, earthmoving projects, and the
like are often created by spreadsheet
analysis only—not by the calculation of
resource loaded CPM schedules. In this
event, the guidance offered in RP 29R-03
is insufficient to perform a forensic
analysis on this type of S-curve.
The challenge for the forensic
scheduler in a situation such as this is to
locate and document the underlying
calculations that supported the baseline
S-curve; identify and document events
on the project which drove the schedule
late; and analyze those events for
liability, causation and damages.
Methodology—It is recommended
that the forensic scheduler employ the
following methodology.
accomplish the scope of work by the
contract completion date.
7. Interview the project team who
prepared the S-curve to determine
their understanding of what was
required to complete work in
accordance with the S-curve.
Determine whether and how long
the contractor met the S-curve
numbers.
8. If the contractor missed the initial
as-planned S-curve quantities,
determine from these interviews
why this occurred and document
these findings.
9. Apply the following constraints as
discussed above, in order, as and if
applicable –
a.
physical constraints;
b.
external constraints;
c.
contract constraints;
d.
resource constraints;
and,
e.
preferential logic.
10. Revise the baseline S-curve
appropriately, if needed, to account
for the applicable constraints. And,
11. Test the revised baseline S-curve
against the information gathered
earlier and have the project team
validate or correct the revised
baseline S-curve.
Baseline Schedule—
Schedule Updates—
1.
2.
3.
4.
5.
6.
10
Assuming that the baseline S-curve
provided was agreed to at the
outset of the project this is the
starting
point
for
forensic
scheduling.
Review all contract documents and
drawings to determine the scope of
work, the conditions of the contract
and what physical, external and
contractual
constraints
were
applicable to the work.
Determine how these constraints
affected the work plan.
Review the contractor’s bid to
ascertain the activities or portions
of the work bid and the cost and
resources calculated for each
activity or portion of the work.
Determine whether the bid included
the full scope of work or what
portion(s) of the scope of work were
left out, if any.
Make a judgment on whether there
were sufficient resources to
1.
2.
3.
4.
As projects using S-curves typically
are routinely updated based on
actual progress, valid schedule
updates should be available for the
forensic scheduler to review.
Each updated S-curve should be
reviewed to determine actual
progress recorded. Earned value
analysis as discussed in RP 55R-09
should be performed on each
update including earned schedule
analysis to determine what
variances occurred during the
performance of the work and in
what time periods these variances
occurred.
Review
available
project
documentation to determine how
the S-curve schedules actually
progressed on a period by period
basis. And,
Interview the project team and
document what happened on the
COST ENGINEERING NOVEMBER/DECEMBER 2013
project; when it happened; who
caused the event or issue; and the
resulting impact.
Schedule Delay Analysis—
1.
2.
3.
Apply MIP 3. – observational /
dynamic / contemporaneous as-is to
document the events or activities
drove the project delay.
From the project documentation
determine whether the contractor
provided actual or constructive
notice of any or all of these delays.
And,
Determine the amount of delay
caused by those events or
actions/inactions of the owner, their
representatives or events for which
the owner was liable.
Delay Analysis—Linear Schedules
AACE defines the linear scheduling
method (“LSM”) as a, “scheduling
method that may be used on horizontal
projects (pipelines, highways, etc.).
Highly repetitive tasks make up the
majority of the work. LSM schedules use
‘velocity’ diagrams representing each
activity. LSM scheduling is not widely
used [5].” Another author wrote that,
“The linear scheduling method has been
developed
to
meet
highway
construction’s demands for improved
planning, scheduling and management.
Linear scheduling is a simple diagram
representing the location and time at
which a given crew will be performing a
given operation. Graphic symbols are
used to represent construction
operations and visually communicate
the construction plan and schedule
[18].”
Methodology—It is recommended
that the forensic scheduler employ the
following methodology.
Baseline Schedule—
1.
2.
Assuming the baseline linear
schedule was agreed to at the
outset of the project, then this
schedule is the starting point for
forensic analysis.
Review all contract documents and
drawings to determine the scope of
work, the conditions of the contract
and what physical, external and
contractual
constraints
were
applicable to the work.
3. Determine how these constraints
would have or should have affected
the plan for the work.
4. Review the contractor’s bid to
ascertain the activities or portions
of the work bid and the cost and
resources calculated for each
activity or portion.
5. Determine whether the bid included
the full scope of work or what
portion(s) of the scope of work were
left out, if any.
6. Make a judgment on whether there
were sufficient resources to
accomplish the full scope of work by
the planned dates.
7. Interview the project team who
prepared the baseline linear
schedule to determine their
understanding of what was required
to complete work in accordance
with the baseline schedule.
8. Determine whether and how long
the contractor met the velocity
diagrams.
9. If the contractor missed the initial
as-planned velocity diagrams
determine from these interviews
why this occurred.
10. Apply the following constraints as
discussed above, in order, as and if
applicable—
a.
physical constraints;
b.
external constraints;
c.
contract constraints;
d.
resource constraints;
and,
e.
preferential logic.
11. Revise the baseline linear schedule
appropriately, if needed, to account
for the applicable constraints. And,
12. Test the revised baseline linear
schedule against the information
gathered earlier and have the
project team validate or correct the
revised baseline.
Schedule Updates—
1. Projects using linear schedules
typically have routine updates. Thus
reasonably valid schedule updates
should be available for the forensic
scheduler to review.
2.
3.
4.
Each updated schedule should be
reviewed to determine actual
progress recorded.
Review
available
project
documentation to determine how
the planned velocity diagrams
actually progressed on a period by
period basis. And,
Interview the project team and
document what happened on the
project; when it happened; who
caused the event or issue; and the
resulting impact.
Schedule Delay Analysis—
1.
2.
3.
Apply MIP 3.3—observational /
dynamic / contemporaneous as-is to
document what events or activities
drove the project delay.
From the project documentation
determine whether the contractor
provided actual or constructive
notice of any or all of these delays.
And,
Determine the amount of delay
caused by those events or
actions/inactions of the owner, their
representatives or events for which
the owner was liable under the
contract.
Chain
Delay
Analysis—Critical
Schedules
The critical chain method is defined
in the following manner. “Differentiated
from the critical path method, this
project planning and management
technique considers resources that
constrain the work, not only the
precedence of activities. The method
determines the longest duration
sequence of resource constrained
activities through a project network—
thus the shortest possible project
duration—the critical chain. Algorithms
for application of the method are both
deterministic and stochastic. Time
buffers are included to protect
completion dates and provide adequate
solutions, since contingency is removed
from durations of individual activities
[3].” Thus, the critical chain is, “That set
of tasks which determines the overall
duration of a project, after considering
resource capacity. It is typically regarded
as the constraint or leverage point of a
project [3].” The critical chain method
was developed by Dr. Eliyahu M. Goldratt
in his books, Critical Chain and The Goal
[13, 14].
The forensic scheduler working on a
project using the critical chain method
will have less of a challenge than some of
the earlier project situations discussed.
A critical chain method schedule is a
time scaled, logic network, but one
driven by resource constraints rather
than estimates of activity durations.
Thus, the forensic scheduler will have an
approved baseline and a series of
schedule updates available for analytical
purposes.
Methodology—It is recommended
that the forensic scheduler employ the
following methodology.
Baseline Schedule—
1.
2.
3.
4.
5.
6.
7.
8.
Since a critical chain method
schedule is a time scaled logic
diagram, based on resource
planning and allocation the forensic
scheduler has a thorough and well
thought out baseline schedule to
work with.
Assuming that the baseline
schedule was agreed to at the
outset of the project, then this
schedule is the starting point for
forensic scheduling.
Review all contract documents and
drawings to determine the scope of
work, the conditions of the contract
and what physical, external and
contractual
constraints
were
applicable to the work.
Determine how these constraints
would have or should have affected
the work plan.
Review the contractor’s bid to
ascertain the activities or portions
of the work bid and the cost and
resources calculated for each
activity or portion of the work.
Determine whether the bid included
the full scope of work or what
portion(s) of the scope of work were
left out, if any.
Make a judgment on whether there
were sufficient resources to
accomplish the full scope of work.
Interview the project team who
prepared the baseline critical chain
schedule to determine their
understanding of what was required
COST ENGINEERING NOVEMBER/DECEMBER 2013
11
9.
10.
11.
12.
13.
to complete work in accordance
with the baseline schedule.
Determine whether and how long
the contractor met the planned
schedule.
If the contractor missed the initial
as-planned schedule determine
from these interviews why this
occurred.
As a critical chain schedule is
already based on an analysis of
resources constraints, apply the
following constraints as discussed
above, in order, as and if applicable
–
a.
physical constraints;
b.
external constraints;
c.
contract constraints;
and,
d.
preferential logic.
Revise the baseline critical chain
schedule appropriately, if needed,
to account for the applicable
constraints. And,
Test the revised baseline critical
chain schedule against the
information gathered earlier and
have the project team validate or
correct the revised baseline
schedule.
2.
3.
Delay Analysis—Line of Balance
Schedules
A line of balance (“LOB”) schedule is
defined as, “A graphical display of
scheduled units versus actual units over
a given set of critical schedule control
points on a particular day. The line of
balance technique is oriented toward
the control of production activities.” An
LOB schedule is similar to a linear
schedule and thus analysis of the
baseline and schedule updates is the
same.
Methodology – It is recommended
that the forensic scheduler employ the
following methodology.
Baseline Schedule—
1.
Schedule Updates—
1.
2.
3.
4.
As projects using critical chain
schedules typically have routine
updates of the schedule, reasonably
valid schedule updates should be
available for the forensic scheduler
to review.
Each updated schedule should be
reviewed to determine actual
progress recorded.
Review
available
project
documentation to determine how
the project actually progressed on a
period by period basis. And,
Interview the project team and
document what happened on the
project; when it happened; who
caused the event or issue; and the
resulting impact.
Schedule Delay Analysis—
1.
12
Apply MIP 3.3 – observational /
dynamic / contemporaneous as-is to
document the events or activities
drove the project delay.
From the project documentation
determine whether the contractor
provided actual or constructive
notice of any or all of these delays.
Determine the amount of delay
caused by those events or
actions/inactions of the owner, their
representative or events for which
the owner was liable.
2.
3.
4.
5.
6.
Assuming that the baseline LOB
schedule was agreed to at the
outset of the project, this schedule
is the starting point for forensic
scheduling.
Review all contract documents and
drawings to determine the scope of
work, the conditions of the contract
and what physical, external and
contractual
constraints
were
applicable to the work.
Determine how these constraints
would have or should have affected
the work plan.
Review the contractor’s bid to
ascertain the activities or portions
of the work bid and the cost and
resources calculated for each
activity or portion of the work.
Determine whether the bid included
the full scope of work or what
portion(s) of the scope of work were
left out, if any.
Make a judgment on whether there
were sufficient resources to
accomplish the full scope of work
for each LOB activity by the dates
required.
COST ENGINEERING NOVEMBER/DECEMBER 2013
7.
Interview the project team who
prepared the baseline LOB schedule
to determine their understanding of
what was required to complete
work in accordance with the
baseline schedule.
8. Determine whether and how long
the contractor met the LOB dates.
9. If the contractor missed the initial
as-planned LOB dates determine
from these interviews why this
occurred.
10. Apply the following constraints as
discussed above, in order, as and if
applicable—
a.
physical constraints;
b.
external constraints;
c.
contract constraints;
d.
resource constraints;
and,
e.
preferential logic.
11. Revise the baseline LOB schedule
appropriately, if needed, to account
for the applicable constraints.
12. Test the revised baseline LOB
schedule against the information
gathered earlier and have the
project team validate or correct the
revised baseline schedule.
Schedule Updates—
1.
2.
3.
4.
Projects using LOB schedules
typically have routine updates.
Therefore,
reasonably
valid
schedule updates should be
available for the forensic scheduler
to review.
Each updated schedule should be
reviewed to determine actual
progress recorded.
Review
available
project
documentation to determine how
the work actually progressed on a
period by period basis. And,
Interview the project team and
document what happened on the
project; when it happened; who
caused the event or issue; and the
resulting impact.
Schedule Delay Analysis—
1.
Apply MIP 3.3—observational /
dynamic / contemporaneous as-is to
document the events or activities
drove the project delay.
2.
3.
From the project documentation
determine whether the contractor
provided actual or constructive
notice of any or all of these delays.
Determine the amount of delay
caused by those events or
actions/inactions of the owner, their
representative or events for which
the owner assumed liability under
the contract.
Delay Analysis—Pull Planning/Location
Based Schedules
Pull planning or location based
scheduling has been described as “the
marriage of CPM and lean construction
[15].” Pull planning has been described
by one advocate of this scheduling
system as, “…a tool that has been
adapted to lean projects from the Toyota
production system and evolved from the
research of Greg Howell and Glenn
Ballard of the Lean Construction
Institute. In general, it starts planning
with the proposed finished product (the
completed project or some series of
milestones) as goals on the right end of
the schedule and pulls backward (left) to
discover and incorporate all the steps
that get to the finished product. Instead
of ‘pushing’ a project through
production, pull planning establishes
what is necessary to pull it towards
completion [10].”
In a private telephone interview
with the author of the above during the
preparation of this article, the question
was posed concerning how one
performs a forensic schedule analysis on
a project using pull planning? The
response was that pull planning by itself
cannot be used for schedule delay
analysis. However, the author went on
to explain that pull planning is only a part
of what he termed “three wall
scheduling” which is comprised of the
following—
CPM Scheduling—Which tells the
project team what has to be done and
when.
Line of Balance Scheduling—Which
tells the project team where things have
to be done.
Pull Planning—Which tells the
project team how things have to be done
(that is, what resources are needed to
accomplish the above – labor, materials
and construction equipment).
The author concluded that the value
of the weekly pull planning charts in the
context of forensic scheduling is that
these weekly (or more frequent at times)
documents are very detailed daily
reports (agreed to by all parties on the
project) but with a great deal more
detailed information and credibility than
typical daily reports.
Since pull planning always has an
underlying CPM schedule the analysis of
the baseline schedule and all schedule
updates and the forensic schedule
analysis can rest upon the pull planning
charts as documentation when the
forensic scheduler is employing any of
the MIP’s from RP 29R-03.
Delay Analysis—Rolling Wave Scheduling
Rolling wave planning has been
defined as a “cost and schedule planning
method where details are developed for
near term and general or summary
allocations are made for out periods.
Detail is developed for the out periods as
information becomes available to do so
[8].” Rolling wave scheduling is more
common in engineer-procure-construct
(“EPC”) or design build (“D/B”) projects
than in the classic design/bid/build
project. This is because at the outset of
a typical EPC or D/B project there is less
information available to prepare and
issue a fully developed schedule in
comparison to design-bid-build projects
for which design is fully developed at the
project outset. Rolling wave schedules
may be either CPM schedules or detailed
bar charts. In the situation where a
project was constructed using a rolling
wave schedule based on CPM scheduling
the forensic scheduler should apply RP
29R-03. If the rolling wave schedule was
prepared and maintained as a bar chart
the forensic scheduler can apply the
procedure outlined above for Bar
chart/Gantt chart schedules.
Conclusion
It is well known that many projects
proceed without any CPM schedules.
Industry studies indicate that many
projects complete later than planned.
Therefore, it is safe to conclude that time
extension requests, delay claims and
assertions of liquidated damages are
common on these projects. When this
happens, forensic schedulers need to
perform schedule delay analysis. At the
present time, there is no guidance for
performing forensic schedule analysis on
non-CPM schedules. Such guidance is
needed. The intent of this article is to
outline procedures for performing
forensic schedule analysis on non-CPM
scheduled projects. The authors’ believe
that this paper can serve as the basis or
starting point for Chapter 2 of RP 29R-03
which should address, in more detail,
how to perform schedule delay analysis
on those projects with no CPM schedule.
◆
REFERENCES
1. AACE Recommended Practice 10S90, Cost Engineering Terminology,
AACE International, Morgantown,
WV, page 10.
2. Ibid, page 21.
3. Ibid, page 30.
4. Ibid, page 49.
5. Ibid, page 61.
6. Ibid, page 68.
7. Ibid, page 78.
8. Ibid, page 94.
9. AACE Recommended Practice 55R09, Analyzing S-Curves, AACE
International, Morgantown, W.V.
(November 10, 2010): page 1.
10. A discussion of Pull Planning on the
ReAlignment Group, Ltd. Website by
Dan Fauchier, President at
www.projectrealign.com/pullplanning.php.
11. Galloway, Patricia D., CPM
Scheduling and How the Industry
Views Its Use, AACE International
Transactions, CDR.07 (2005).
12. George
Sollitt
Construction
Company v. U.S., 64 Fed. Cl. 229
(2005); Sterling Millwrights, Inc. v.
U.S., 26 Cl. Ct. 49, 75 (1992); Fortec
Constructors v. U.S., 8 Cl. Ct. 490,
505, aff’d, 804 F.2d 141 (Fed. Cir.
1986); Blinderman Construction
Company v. U.S., 39 Fed. Cl. 529
(1997).
13. Goldratt, Eliyahu M., Critical Chain,
North River Press, Great Barrington,
MA (1997).
14. Goldratt, Eliyahu M., The Goal,
North River Press, Great Barrington,
MA (1984).
COST ENGINEERING NOVEMBER/DECEMBER 2013
13
15. Huber, Bob and Paul Reiser, The ABOUT THE AUTHORS
Marriage of CPM and Lean
Construction, Proceedings, 11th
Annual Conference, International
James G. Zack, Jr.,
Group for Lean Construction,
CFCC
FAACE,
is
Blacksburg, VA (2003).
Executive
Director,
16. Managing the Risk of Delayed
Navigant Construction
Completion in the 21st Century,
Forum in Boulder, CO.
He can be contacted by
Chartered Institute of Building,
sending e-mail to:
Englemere, Kings Ride, Ascot,
jim.zack@navigant.com
Berkshire, U.K. (2008).
17. “Mitigation of Risk in Construction:
Strategies for Reducing Risk and
Maximizing Profitability,” McGraw
Steven A. Collins, is
Hill Construction Research &
with
Navigant
Analytics, Bedford, MA (2011).
Consulting, Inc., of
18. Parvin, Cordell M. and Dr. Michael C.
Boston, MA. He can be
Vorster, Linear Scheduling: Visual
contacted by sending
Project Planning & Management,
e-mail to:
P&W Publications, Inc., Richmond,
scollins@navigant.com
VA (1993).
TM
14
COST ENGINEERING NOVEMBER/DECEMBER 2013
Curtis Sohn is 3rd Quarter
Member-Get-a-Member Winner
Curtis
Sohn,
Project
Controls/Project Manager at HNTB
Corporation in Minnesota, has been
named winner of the AACE third
quarter
Member-Get-a-Member
drawing. He wins $250 worth of
AACE products and services for recommending Steven Schantzen to become a member of AACE
International.
The random drawing was Sept.
30. Sohn was instrumental in the formation of the Minnesota Section,
and has held office in the section
since it was chartered. He is currently helping organize a PSP Certification Workshop for the section.
If you would like to be entered
in the fourth quarter drawing, or the
grand prize drawing, be sure that
everyone you recruit identifies you
on their membership application.
TIME FOR A DECISION
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If you desire to be recognized for strong skills
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TECHNICAL ARTICLE
Forensic Schedule Analysis:
Example Implementation, Part 3
Mark C. Sanders, PE CCP CFCC PSP
Editor’s Note:
This article is the third and final
installment in a series that presents a
forensic schedule analysis (FSA)
example implementation, prepared to
address the application of procedures
described in AACE Recommended
Practice 29R-03—Forensic Schedule
Analysis [1]. The techniques presented
in this article provide additional
variations on the techniques presented
previously.
All three articles in this series will
be available at the AACE Virtual Library.
The first article in the series, “Forensic
Schedule Analysis: Example Implementation,” was presented at the 2008 Annual Meeting as CDR.11, and is
available as item number 21534. In
2011, CDR.493 was presented at the
Annual Meeting and then published in
the January 2012 Cost Engineering
journal. It is available as item number
21970. In 2012, CDR.870; was presented. It is being published as the following reprint. It is available as item
number 22022.
Abstract: This article was first presented at the 2012 AACE Annual Meeting in
San Antonio, Texas. It was the final installment in a series of Annual Meeting presentations that presented example forensic schedule analyses, performed according to the Method Implementation Protocols outlined in AACE Recommended
Practice 29R-03. This article presents the remaining analysis methods—MIPs 3.4,
3.5, 3.6, and 3.9. Each of these techniques is a variation on one of the techniques
previously presented at the AACE Annual Meetings. This article focuses on comparisons between the techniques and the reasons behind the different results
found in each analysis. Finally, recommendations are provided for the continued
development of example analyses, the continued refinement of analysis techniques, and the development of industry consensus in the area of objective forensic schedule analysis.
Key Words: Critical path, delay, forensic schedule analysis, and projects
M
onstruction M IPs 3.4 and
3.5 are dynamic logic
techniques similar to MIP
3.3. However, MIP 3.4
isolates a specific step for the analysis of
logic changes made during the project,
while MIP 3.5 addresses the modification
of updates to correct errors and the
recreation of updates that are missing.
MIP 3.6 is the single-base application of
the fragnet insertion technique of MIP
3.7, which was presented in Part 1 of this
series. MIP 3.9 is the multiple-base
application of the collapsed-as-built
technique of MIP 3.8, which was
presented in Part 2 of this series.
The structure of this article is similar
to the prior articles in the series. The
major sections are as follow:
•
•
•
•
•
•
•
•
•
Model project to be analyzed.
Analysis by inserting progress and
identifying delays, then analyzing
logic changes.
Observational/dynamic/
contemporaneous split analysis per
MIP 3.4.
Analysis by modifying or recreating
updates.
Observational/dynamic/modified or
recreated analysis per MIP 3.5.
Analysis by inserting fragnets into
the baseline schedule to model
delays.
Modeled/additive/single base
analysis per MIP 3.6.
Analysis by removing delay events
from the schedule updates.
Modeled/subtractive multiple base
analysis per MIP 3.9. And,
•
Comparison,
conclusion.
commentary,
and
Model Project to be Analyzed
The sample project referenced in this
article is the same project used in the
example implementations presented in
the prior two articles in this series [2, 3].
COST ENGINEERING NOVEMBER/DECEMBER 2013
17
Editor’s Note: Figures and Tables Are Not Included in the Electronic and Print
Versions of this Article
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of figures and tables included with this article made it too large to include the 8
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The description of the sample project
presented in that article is reiterated
here for reference. The original sample
project was provided for the
consideration of the participants in the
RP development committee and had
been used previously for the comparison
of various delay analysis techniques [4].
The model project is the
construction of a storage building. The
building will be used to store nonhazardous, dry materials. The design
consists of tilt-up concrete panels with a
steel-framed, metal roof. A much smaller
receiving and reception area is attached.
The reception area is framed with metal
studs and enclosed with an exteriorinsulating and finishing system (EIFS).
Personnel arrive through the reception
area and goods are delivered by truck to
the all-weather docking unit in that area.
The available information for the
project includes a baseline schedule, six
schedule updates, and a summary of
project events based on the contractor’s
and owner’s files. Please follow the link
to view figures 1 and 2. Figure 1 depicts
the as-planned schedule as a bar chart,
and figure 2 shows the logic diagram.
In the example project schedule, the
project start milestone has start-to-start
relationships with its successors, and the
punchlist activity has a finish-to-finish
relationship with the project finish
milestone. All other relationships are
18
finish-to-start, and there are no lags.
Durations are in weeks, and the project
is planned to take 16-weeks to complete.
The baseline critical path begins with
project start and proceeds through
excavation, foundation, tilt-up joining
wall, remaining tilt-up walls, beams and
roofing, install racking, punchlist, and
project finish. There are no constraints in
the schedule. Figure 2 details the
relationships in the baseline schedule
and figure 3 shows the as-built schedule
for the same project.
The project actually took 24 weeks
to complete, as shown in figure 3. Follow
the link to view figure 3. Relevant
information from the project records is
summarized in table 1, outlining the
events that occurred during the project.
Follow the link to view table 1.
The summary of project information
will be used in conjunction with the
project schedules. The goal of the
schedule analysis will be to identify the
specific activity delays that resulted in
the overall eight-week delay to project
completion. Including the as-built
schedule, there were six updates to the
baseline schedule. The updates were
completed after every four weeks of
work.
Thus, there will be six windows
analyzed, as listed in table 2. Follow the
link to view table 2.
COST ENGINEERING NOVEMBER/DECEMBER 2013
Analysis by Inserting Progress and Identifying
Delays, then Analyzing Logic Changes
Observational/Dynamic/Contemporaneous
Split Analysis per MIP 3.4
This analysis will be performed
based on the method implementation
protocol (MIP) described in Section 3.4
of AACE RP 29R-03. The analysis is
classified as retrospective because the
analysis is performed after the delay
events and the impacts of those events
have occurred and the outcome is
known. The analysis is observational
because no activities are added or
subtracted from the schedule to model
delays or changes to the plan; each
schedule update is simply compared to
the previous update. The analysis is
dynamic because the critical path shifts
according to the progress of the project;
the baseline critical path is not
considered to be the only critical path
throughout the project duration. The
analysis is contemporaneous because it
relies on the schedules created during
the project, not on models created after
the fact.
The analysis uses a split
methodology to analyze delays. Each full
step of the analysis has two parts, which
together identify the net delays that
occurred during one period of the
project. In the first half-step, delays that
are associated with the late start or
slower-than-planned
progress
of
activities are identified. Savings
associated with the early start or betterthan-planned progress of activities are
also identified. Then, in the second halfstep, delays (or savings) associated with
logic revisions made when the schedule
was updated are identified.
According to the RP, MIP 3.4
recommends
the
minimum
implementation of the source validation
protocols (SVPs) as follow: SVP 2.1
(baseline validation) and SVP 2.3 (update
validation). MIP 3.4 also recommends
implementation of SVP 2.2.D.2 (as-built
validation, creating a fully progressed
baseline schedule). However, it is likely
that reference is meant to be to SVP
2.3.D.2 (Bifurcation: creating a progressonly half-step update). SVP 2.3.D.2
specifically references MIP 3.4, whereas
SVP 2.2.D.2 references procedures for
creating an as-built schedule from the
baseline. Those procedures would be
more likely to be used in MIPs that rely
heavily on the as-built schedule, such as
MIPs 3.1 or 3.8 [5].
MIP
3.4
recommends
the
implementation of SVPs 2.2 (as-built
validation) and 2.4 (delay identification
and quantification) for enhanced
implementation.
Other
recommendations from the RP include:
(1) recognize all contract time extensions
granted and (2) identify the critical path
activity that will be used to track the loss
or gain of time for the overall network.
For the purpose of this example
implementation, all updates will be
analyzed and no periods will be grouped.
All of the information sources have been
evaluated based on the SVPs and
deemed to be reliable sources of project
information for the analysis. There have
been no contract time extensions
granted. The activity that will be used to
track delays to the overall network will
be Activity M990. There are no
intermediate milestones on the project
[2, 3].
•
•
In the prior presentation of MIP 3.3,
it was noted that there were no
logic changes in the project updates
that must be considered in the
analysis [2]. Under MIP 3.4, the
AACE RP notes that in this specific
case, MIP 3.3 would be more
appropriate. However, the RP also
notes that it is rare for a project to
be executed with absolutely no logic
changes made in the schedule
updates over the course of the
project. In fact, implementation of
MIP 3.3 and 3.4 will produce exactly
the same results if there are no logic
changes made over the course of
the project.
In order to have a useful discussion
of MIP 3.4, a logic change will be
introduced into the model project.
Interestingly, just one small logic
change made during the project can
have a significant effect on the
retrospective analysis of the project
schedules.
No logic changes were made in
updates 1 or 2 of the schedule. Analysis
of those periods is not presented here as
the analysis would be identical to that
previously presented for MIP 3.3.
Recalling that analysis, the critical path
shifted one week after the start of
update 2, when the remaining tilt-up
walls activity was completed more
quickly than planned. Figures 4 and 5
show the project status in update 2 and
with one additional week of progress
entered into update 2 to depict that
critical path shift. Follow the link to view
figures 4,5,and 6.
Figure 6 shows update 3 from the
model project, as it was presented
originally in the first article in this series.
Although the critical path shifted one
week after the data date of update 2, the
project updates were only produced
every four weeks. Interim updates may
have been produced, but they were not
included in the project records. If update
3 were distributed to all parties, it would
have been the first project document to
show that the critical path of the project
had shifted from erection in the
storehouse area to fabrication of the
docking unit for reception.
Recognizing the delay by its docking
unit supplier, the contractor may
attempt to mitigate it by revising the
plan for the completion of the work once
the docking unit arrives on site. Suppose
that the contractor decides that it can
modify the relationship between the
install docking unit and punchlist
activities from finish-to-start to finish-tofinish. The basis for this change may be
that the contractor does not anticipate
any punchlist items associated with the
docking unit as it is a packaged
assembly; the contractor will bring
additional resources to bear on the
installation to ensure that there are no
issues; or the contractor is willing to bear
the risk of delay if any punchlist issues
are identified with respect to the
docking unit. In any event, the
contractor is seeking to reduce the
overall duration of this path of activities
in order to mitigate the delay. Figure 7
depicts update 3 with the logic change.
Follow the link to view figure 7.
The logic change and differences in
float values that result from the logic
change are highlighted in figure 7. It may
be debated whether the logic change is a
legitimate attempt to mitigate the delay
of the docking unit supplier or is
motivated by an attempt to shift
responsibility for project delays to the
owner (who may have some
responsibility for the delay associated
with beams and roofing); however, the
logic change was made during the
project and will be incorporated into the
schedule analysis.
Figure 6 shows the complete
analysis of the progress during Window
3 of the analysis. This constitutes the
first half-step for the period for MIP 3.4.
The presentation of this portion of the
analysis looks the same as it did in the
presentation of MIP 3.3. It appears in
table 3. Follow the link to view table 3.
The effects of logic changes will now
be incorporated in the second half step.
The schedule with the logic change
shown in figure 7 (which would have
been the schedule available during the
project) is compared to the schedule
without logic changes shown in figure 6
(which was produced by adding progress
to update 2, until it incorporated all of
the progress shown in update 3, but
none of the logic revisions).
One significant result of the logic
change is that it results in a one-week
savings to the project. Without the
change, the project was forecast to finish
in week 20. With the change, it is
forecast to complete in week 19.
Another significant result is that it
reduces the float on the path of
activities through beams and roofing
and install racking, making them critical.
There are now two critical paths. This
would not be the case had the change
not been made. These findings are
incorporated into the analysis results in
table 4. Follow the link to view table 4.
Now that this logic change has been
made, it will carry through the remaining
schedule updates. Figures 8 through 12
and tables 5 through 7 show the results
of the analysis of the remainder of the
project. Follow the link to view figures 8
through 12 and tables 5-7. Even with no
further logic changes, the results are
significantly different than they would
be had the change in update 3 not been
made. Differences between the figures
presented here and those originally
presented for MIP 3.3 are highlighted in
yellow.
Fab/deliver docking unit started in
week 12, the last week of window 3. In
the first half-step for the analysis of
COST ENGINEERING NOVEMBER/DECEMBER 2013
19
window 4, progress from update 4 is
now inserted into update 3, and activity
delays are evaluated. Inserting progress
from the first week of window 4—week
13—we see that fab/deliver docking unit
continued to make progress; however,
beams and roofing did not begin as
planned in update 3. The forecast project
completion date is pushed from week 19
to week 20, and fab/deliver docking unit
drops off of the critical path. Fab/deliver
docking unit now has one week of float,
compared to beams and roofing.
Recall that the forecast project
completion date in update 3 would have
been week 20 had the logic change
between install docking unit and
punchlist not been made. After the logic
change, the forecast project completion
date was week 19. Once window 4
began, the failure to start beams and
roofing immediately pushed the forecast
completion date back to week 20. If the
logic change had not been made, this
would not have been a critical path
delay. However, with the logic change, it
is.
Beams and roofing did not start until
week 16. By that time, its failure to start
had pushed the forecast project
completion date to week 22. Fab/deliver
docking unit made only one week of
progress in window 4. This can be
determined based on the fact that its
remaining duration was five weeks at the
start of the period (see update 3) and
four weeks at the end of the period (see
update 4). By week 16, the slower-thanexpected progress of fab/deliver docking
unit caused it to return to the critical
path, but only because beams and
roofing made one week of progress in
that week and caused no additional
delay to the forecast project completion
date. In week 16, fab/deliver docking
unit used the one week of float it had at
the start of the period. There were no
logic changes made in update 4. Follow
the link and view table 5.
As the analysis of window 5 begins,
one week of progress from update 5 is
inserted into update 4. The docking unit
is delivered that week—week 17 of the
project. In update 4, the docking unit
was forecast for delivery in week 20, and
the path through delivery and
20
installation of the docking unit was cocritical with the path through the
completion of the storehouse structure
and racking.
The early delivery of the unit causes
its installation to drop off of the critical
path. Beams and roofing made one week
of progress in week 17, as planned in
update 4. Thus, project completion
remains forecast for week 22, as it was in
update 4. In addition, the failure to
proceed with select racking system has
finally caused that activity to appear on
the critical path. It is now co-critical with
the remainder of beams and roofing.
The remainder of the period is
analyzed by inserting the remaining
progress from update 5 into update 4.
Beams and roofing was completed as
planned in update 4. Select racking
system was completed as soon as it
became critical in week 18, and install
racking began in week 19. Install docking
unit also began in week 19, but made
only one week of progress during the
period. This absorbs two of the three
weeks of float that were created by the
completion of fab/deliver docking Unit
earlier than planned in update 4. There
are no logic changes in update 5. The
complete analysis of window 5 is
presented in table 6. Follow the link and
view table 6.
Window 6 begins with update 5 and
ends with update 6, which is the
complete as-built schedule for the
project. The as-built schedule is shown in
figure 12.
In window 6, install racking and
install docking unit proceed in parallel
until week 23, when they are both
completed. However, install racking
drives the critical path from the start of
the period in week 21 until it is
completed in week 23 because it has a
finish-to-start
relationship
with
punchlist, whereas install docking unit
has a finish-to-finish relationship with
punchlist. The completion of install
racking two weeks later than planned in
update 5 causes two weeks of delay to
the forecast project completion.
Following the completion of install
racking in week 23, Punchlist is then
completed in week 24.
Based on the contractor’s logic
change from update 3, the last week of
COST ENGINEERING NOVEMBER/DECEMBER 2013
install docking unit could have been
completed in parallel with punchlist. We
did not get to see whether that was truly
possible because install docking unit was
completed before the punchlist began.
It would be informative to review
whether there were any punchlist items
associated with the docking unit. If there
were, we might question the prior logic
change and even whether the project
schedule is a good model for what is
truly driving the completion of the
project. However, it was the model that
was used to manage the project, and it
may be challenging to argue that a better
model can be created after the fact.
No logic changes were made in
update 6. The results of the analysis of
window 6 are presented in table 7.
Follow the link to view table 7.
At the end of window 6, the analysis
of project delays is complete. The
activity delays and logic changes that
compose the eight weeks of total project
delay have been identified according to
MIP 3.4. Further analysis may proceed to
determine responsibility for each of the
individual
activity
delays
that
contributed to the overall project delay.
The delays identified are summarized as
follows:
•
Three weeks of delay associated
with excavation (presented in MIP
3.3 implementation).
• One week of savings associated with
remaining tilt-up walls.
• Two weeks of delay associated with
fab/deliver docking unit.
• One week of savings associated with
a logic change to install docking unit.
• Three weeks of delay associated
with beams and roofing. And,
• Two weeks of delay associated with
install racking.
These delays explain the eight-week
net delay to project completion. Further
analysis may be undertaken regarding
the relationship change made in update
3. If the relationship change is
determined to be improper, windows 3
through 6 will need to be re-analyzed
without the relationship change. In this
example, that analysis is available. It was
completed in the implementation of MIP
3.3 in the first article in this series.
Results from both analyses will be RP. This oversight should be corrected in
compared at the end of this article.
revision 3. The SVP on bifurcation may be
applicable for the implementation of an
Analysis by Modifying or Recreating analysis method similar to MIP 3.4, once
Updates Observational/Dynamic/Modified the updates had been recreated, but SVP
or Recreated Analysis per MIP 3.5
2.3.D.3 should be referenced for the
This analysis will be performed based update reconstruction, itself [5].
on MIP 3.5. The analysis is classified as
Significant language contrasting MIPs
retrospective because the analysis is 3.3 and 3.4 to MIP 3.5 was added to
performed after the delay events and the revision 2 of RP 29R-03, and much of this
impacts of those events have occurred language is included in SVP 2.3.D.3.
and the outcome is known. The analysis is Language was also added to MIPs 3.3 and
observational because no activities are 3.4 to allow for ‘minor’ corrections of
added or subtracted from the schedule to updates without considering the analysis
model delays or changes to the plan; each an implementation of MIP 3.5. For
schedule update is simply compared to distinctions between what is a minor
the previous update. The analysis is correction and what is a significant
dynamic because the critical path shifts correction, the reader is referred back to
according to the progress of the project; SVP 2.3.D.3.
the baseline critical path is not
MIP
3.5
recommends
the
considered to be the only critical path implementation of SVPs 2.2 (as-built
throughout the project duration.
validation) and 2.4 (delay identification
The analysis relies on modified or and quantification) for enhanced
recreated schedules because schedule implementation. These are the same
updates were not created during the SVPs recommended for enhanced
project, or because one or more updates implementation of MIPs 3.3 and 3.4.
were not maintained in the project file. Other recommendations from the RP
They may have been deleted when the include: (1) recognize all contract time
project was completed or destroyed extensions granted and (2) identify the
because of computer hardware damage critical path activity that will be used to
or a computer virus. Regardless of the track the loss or gain of time for the
reason, schedule updates are not overall network.
available for analysis.
For the purpose of this example
While MIP 3.5 is described as implementation, all available updates will
observational, it might better be be analyzed and no periods will be
considered as the bridge between the grouped. All of the information sources
observational and modeled MIPs. While have been evaluated based on the SVPs
activities are not added or subtracted to and deemed to be reliable sources of
the schedule model specifically for the project information for the analysis.
purpose of modeling delay events, MIP There have been no contract time
3.5 allows for changes made to the extensions granted. The activity that will
schedule model during the analysis and be used to track delays to the overall
even allows for the wholesale recreation network will be Activity M990. There are
of missing updates. If the analyst is no intermediate milestones on the
making significant changes or recreating project [2, 3].
updates in their entirety, MIP 3.5 might
In implementing MIP 3.5 for the
be better described as a modeled purpose of this example, we must
methodology.
suppose that one or more of the updates
MIP 3.5 recommends the minimum presented previously were not available
implementation of the source validation in the project file. Therefore, assume that
protocols (SVPs) as follow: SVP 2.1 updates 3 and 4 were not available.
(baseline validation) and SVP 2.3 (update Update 3 captured the critical path shift
validation), including sections 2.3.D.1 from the storehouse structure activities
(reconstructed updates) or 2.3.D.2 (which were critical in update 2) to the
(bifurcation: creating a progress-only fabrication and delivery of the docking
half-step update). SVP 2.3.D.3, which has unit. Update 4 provided a snapshot of the
obvious applicability to MIP 3.5 is not project status at a time when those two
referenced by MIP 3.5 in Revision 2 of the paths of activities were very close to co-
critical (as presented in MIP 3.3) or
actually co-critical (as presented in MIP
3.4).
If those two updates were not
available, the analyst must contend with
a window that extends from update 2
(completed at the end of week 8) to
update 5 (completed at the end of week
20). Moreover, assume that the baseline
schedule and updates 1, 2, 5, and 6 were
only available in hard copy, and the
relationship information was not shown.
Updates 2 and 5 are presented in figures
13 and 14, follow the link to view these
two figures.
The project experienced a net delay
of three weeks between updates 2 and 5,
and it is clear there were significant
activity-level variances during the period.
The path of activities that appeared to be
critical as of update 2 experienced a
significant gap in its progress, and the
path through the docking unit, which
appeared to have float as of update 2, has
been delayed five weeks.
Based on update 5, it is clear that the
remaining tilt-up walls were completed
more quickly than planned in update 2.
Because this appears to be the first
activity on the critical path in update 2, it
is reasonable to investigate whether that
better-than-planned progress led to a
critical path shift. Also recall that the
project records included a notice from
week 5 that stated that fabrication of the
docking unit would not begin until week
11. That information was available at the
time of update 2. It was not incorporated,
but it could have been. It could be argued
that it should have been, and it will be
incorporated into the recreated update,
which will be prepared with logic
interpolated by the analyst at a data date
of week 10. The recreated update
appears in figure 15. Follow the link to
view figure 15.
In this simple example, it is easy for
the analyst to interpolate the
relationships between activities exactly
as they were in the CPM schedule that
was used on the project. However, in a
more complex project, the chances of an
exact recreation of the schedule logic are
extremely slim. For example, the logic
change made in the implementation of
MIP 3.4 would not be apparent unless the
analyst had access to relationship or float
information, and that logic change will
COST ENGINEERING NOVEMBER/DECEMBER 2013
21
not be included in this example for that
reason.
However, the recreated update does
incorporate information that was
available to the analyst, but which was
not incorporated into the schedule on the
project as of week 10. The forecast start
of fab/deliver docking unit is modeled by
placing a constraint on activity R100 so
that it can start no earlier than week 11,
as indicated in the fabricator’s letter from
week 5. The critical path begins with this
constraint and continues through
fab/deliver docking unit, install docking
unit, punchlist, and project finish.
The forecast completion date of the
recreated update is the same as it was in
update 2, so there is no net delay to
explain between update 2 and the
recreated update. However, it is noted
that no savings was realized as a result of
the better-than-planned progress on
remaining tilt-up walls. No savings is
realized because the available logic and
information incorporated into the
recreated update resulted in a schedule
with a critical path through the docking
unit activities that will not allow the
project to complete earlier than week 19.
The project had experienced a net
delay of three weeks as of update 2. That
delay was evaluated in the presentation
of MIP 3.3 in the first article in this series.
The remaining presentation of MIP 3.5
will incorporate the progress from
updates 5 and 6 into the recreated
update in figure 15, in order to evaluate
the remaining delays. Follow the link to
view figure 16.
Two weeks after the data date of the
recreated update, it is clear that
fab/deliver docking unit has caused an
additional one week of project delay.
Although the fabricator had indicated
that it would begin fabrication in week
11, update 5 indicated that fabrication
did not actually begin until week 12. Once
progress begins on the critical path,
beginning with fab/deliver docking unit,
the path of activities beginning with
beams and roofing begins to absorb its
float relative to the critical path. By week
14, the paths are both driving the
forecast project finish, as shown in figure
17. Follow the link to view figure 17.
By week 15, beams and roofing is
driving the sole critical path and causes
an additional week of project delay, as
22
fab/deliver docking unit continues to
proceed, as shown in figure 18. Follow
the link to view figure 18.
The following week, beams and
roofing still does not begin, and it causes
an additional week of delay, as shown in
figure 19. Follow the link to view figure
19.
Six weeks after the data date of the
recreated update, all delay between
updates 2 and 5 has been explained. The
recreated update with progress inserted
from update 5 now forecasts the same
project finish date as did update 5.
Figure 20 shows that select racking
system becomes critical in week 18, in
parallel to beams and roofing. Follow the
link to view figure 20. However, update 5
shows that it was completed in week 18,
as soon as it became critical. It caused no
further project delay. Once all progress
from update 5 has been inserted into the
recreated update, the two schedules are
identical.
The period between update 5 and
update 6 (the complete as-built schedule)
was previously analyzed under MIP 3.3
and 3.4. Because the recreated update
did not incorporate the logic change
noted in the implementation of MIP 3.4,
the presentation of MIP 3.3 should be
referenced for the results of the analysis
of this period. The results, as they pertain
to the implementation of MIP 3.5, are
summarized as follows:
•
•
•
•
Three weeks of delay associated with
excavation (presented in MIP 3.3
implementation).
One week of delay associated with
fab/deliver docking unit.
Two weeks of delay associated with
beams and roofing. And,
Two weeks of delay concurrently
associated with install racking and
install docking unit (presented in MIP
3.3 implementation).
These delays explain the eight-week
net delay to project completion.
Analysis by Inserting Fragnets Into the
Baseline Schedule to Model Delays
Modeled/Additive/Single Base Analysis
per MIP 3.6
This analysis will be performed based
on MIP 3.6. The analysis is classified as
retrospective because the analysis is
COST ENGINEERING NOVEMBER/DECEMBER 2013
performed after the delay events and the
impacts of those events have occurred
and the outcome is known. The analysis is
modeled and additive because activities
are added to the schedule to model
delays or changes to the plan. The
analysis uses a single base from which to
begin measurement of delay—namely,
the baseline schedule.
MIP 3.6 recommends the minimum
implementation of the source validation
protocols (SVPs) as follow: SVP 2.1
(baseline validation), SVP 2.3 (update
validation), and SVP 2.4 (delay
identification and quantification). MIP 3.6
recommends the implementation of SVP
2.2 (as-built validation) for enhanced
implementation.
Other
recommendations from the RP include:
(1) recognize all contract time extensions
granted and (2) identify the critical path
activity that will be used to track the loss
or gain of time for the overall network.
In addition, revision 2 of AACE RP
29R-03, contains cautionary language
that specifically affects single-base
analysis techniques. Section 1.5.B.7 of
the RP now states:
Regardless of the method
selected for analysis, all
available sources of planning
and schedule data created
during the project, including but
not limited to, various versions
of baselines, updates and asbuilts, should be examined and
considered, even if they are not
directly used for the analysis [1].
The schedule updates previously
presented will not be used in the
implementation of MIP 3.6. As stated
previously, MIP 3.6 is a single-base
method, and only one schedule will be
used as the basis from which to measure
delays. The other updates may be
considered but dismissed based on the
fact that they were not accepted by one
of the parties during project execution; or
they may be dismissed based on the
conclusion that they did not reflect an
accurate plan for the project (either due
to error or intentional manipulation).
Regardless of the reason for which they
are dismissed, they will not be used in the
analysis. However, the analyst should
take care in dismissing available schedule
updates as the RP specifically advises that
they must be considered as a possible
source of project information.
For the purpose of this example
implementation, the baseline schedule
has been evaluated based on SVP 2.1 and
deemed to be a reliable source of project
information for the analysis. There have
been no contract time extensions
granted. The activity that will be used to
track delays to the overall network will be
Activity M990. There are no intermediate
milestones on the project.
An additive, multiple-base method
was presented in the implementation of
MIP 3.7 in the first article in this series [2].
This presentation will use fragnets that
are similar to those presented in that
article, but insert them all into the
baseline schedule. As the schedule will
not be updated to a point close to the
insertion point of the fragnet, some of
the fragnets will have slight differences
from those used in MIP 3.7, to better
depict the relationships between the
schedule activities and the fragnet
activities. The delays and their associated
fragnets, which were presented in the
first two articles, are reiterated here for
the convenience of the reader [2, 3].
Delay A—Discovery of UST (differing
site condition), Testing, Removal, and
Mitigation— Excavation began as
planned in week 1. However, at the end
of the week, an underground storage
tank was discovered in the building
footprint. Excavation proceeded, but was
suspended in the area of the storage
tank. One week was spent testing the
surrounding soil for contamination and
developing appropriate remediation
efforts. Then, two weeks were spent
removing the UST and contaminated soil
before completing excavation activities.
Fragnet A was developed to model the
work associated with the UST, as shown
in figure 21. Follow the link to view figure
21. Activities that are added are
highlighted in the figures (light blue). The
other activities shown in the fragnet
graphics are included to show logical ties
between the fragnet activities and
existing schedule activities. That
information is noted in the Successors
column.
Delay B—Docking Unit Supplier
Delay— Fabrication of the docking unit
was initially scheduled to begin in week 1.
Based
on
review
of
project
documentation, the contractor’s supplier
indicated that it would not begin
fabricating the docking unit until week 11
because its factory was operating at
capacity on other projects. The supplier
wrote a letter to the contractor detailing
the delay at the start of week 5. Through
continued communications with the
supplier, the contractor learns that the
fabricator actually begins work in week
12. Fragnet B was developed to model
the delay, as shown in figure 22. Follow
the link to view figure 22. The delay is
modeled as 10 weeks, based on the
supplier’s letter.
Delay C—Drawing Dimension
Discrepancies and Field Modifications of
Roof System—Based on project
documentation, structural steel arrived
on site at the start of week 13. The steel
was fabricated in accordance with the
contract drawings and the accepted shop
drawings. However, when the erected tiltup panels were surveyed, it was
determined that there was an error in the
contract drawings that caused numerous
roof members and metal roof panels to
be fabricated too long.
The specifications contain a preapproved procedure for cutting the steel
members in the field. However, the
specifications do not allow metal roof
panels to be field cut or bent, and the
owner will not waive that requirement
because it would void the roof warranty.
Thus, the panels will be returned to the
supplier for modification. The field
cutting of structural steel is expected to
take one week, but the panel
modifications are expected to take four
weeks.
The panels will be shipped in two
partial deliveries in order to minimize the
delay. The first half will be returned to the
project site at the end of the second
week, and the second half will be
returned at the end of the fourth week.
Fragnet C was developed to model the
delay, as shown in figure 23. Follow the
link to view figure 23.
Delay D—Installation of Electrical
and Inventory Systems for Racking
System—
At the start of week 21, the owner
informed the contractor that it had
expected general contract work to be
complete by now. The owner had
scheduled an electrical contractor to
install a computerized receiving and
inventory system during weeks 21 and 22.
The electrical contractor will occupy the
majority of the docking area and
storehouse during that time. Fragnet D
was developed to model the delay, as
shown in figure 24. Follow the link to view
figure 24.
These fragnets are now inserted into
the baseline schedule in the order that
the delays occurred, and the resultant
impacts are assessed. Figure 25 shows
the analysis schedule after the insertion
of fragnet A. Follow the link to view figure
25. The insertion causes a three-week
delay to the forecast completion date.
Follow the link to view figure 26,
which shows the analysis schedule after
the insertion of fragnet B. Although there
are now two concurrent critical paths, the
insertion causes no further impact to the
forecast project completion. The project
remains forecast for completion in week
19.
Follow the link to view figure 27
which shows the analysis schedule after
the insertion of fragnet C. The insertion
causes an additional two-week delay to
the forecast project completion, and the
path of activities beginning with the
delayed fabrication of the docking unit is
no longer driving.
Follow the link to view figure 28,
which shows the analysis schedule after
the insertion of fragnet D. The insertion
causes an additional three weeks of delay
to the forecast project completion date.
The racking and docking unit work cannot
be completed until after the completion
of the owner’s electrical work. Once they
resume, those two activities will take one
week to complete. Punchlist will then
proceed for one week, and the project
will be finished in week 24. That forecast
is consistent with the actual delay to the
project.
Figure 28 shows the analysis
schedule after the insertion of Fragnet D.
The insertion causes an additional three
weeks of delay to the forecast project
COST ENGINEERING NOVEMBER/DECEMBER 2013
23
completion date. The racking and
docking unit work cannot be completed
until after the completion of the owner’s
electrical work. Once they resume, those
two activities will take one week to
complete. Punchlist will then proceed for
one week, and the project will be
finished in Week 24. That forecast is
consistent with the actual delay to the
project.
The implementation of MIP 3.6
could be summarized in tabular format,
as the implementation of MIP 3.7 was in
the first article in this series. However, it
may not be. Some analysts may draw
conclusions directly from the tabular and
graphical information presented in the
preceding figures. The project delays
could be summarized as follows:
•
•
•
•
Three weeks of delay associated
with excavation
Two weeks of delay associated with
beams and roofing
Three weeks of delay associated
with the suspension and completion
of install racking and install docking
unit (50 percent of delay attributed
to the suspension/resumption of
each activity)
The decision to attribute 50 percent
of the final delay to the install
docking unit activity could be
questioned as the activity from the
baseline schedule is not on the
critical path in the final analysis
schedule. However, the fragnet
activity inserted encompasses the
completion of both the racking and
the docking unit. That activity could
have been presented as two parallel
activities, but the network
calculation would be the same,
essentially. In this example, it is
concluded that the racking and
docking unit were completed in
parallel before the punchlist, and
they concurrently drove the final
delay to the project.
Analysis by Removing Delay Events from the
Schedule Updates Modeled/Subtractive
Multiple Base Analysis per MIP 3.9
This analysis will be performed
based on MIP 3.9, which was added to
RP 29R-03 in revision 1 in 2009. The
analysis is classified as retrospective
because the analysis is performed after
24
the delay events and the impacts of
those events have occurred and the
outcome is known. The analysis is
modeled and subtractive because
activities are removed from the schedule
to model delays or changes to the plan.
The analysis uses multiple base
schedules from which to begin
measurement of delay—namely, the
periodic schedule updates.
MIP 3.9 recommends the minimum
implementation of the source validation
protocols (SVPs) as follow: SVP 2.2 (asbuilt validation), SVP 2.3 (update
validation), and SVP 2.4 (delay
identification and quantification). MIP
3.6 recommends the implementation of
SVP 2.1 (baseline validation) for
enhanced implementation. Other
recommendations from the RP include:
(1) recognize all contract time extensions
granted and (2) identify the critical path
activity that will be used to track the loss
or gain of time for the overall network.
As with the other implementations
presented here, there were no contract
time extensions granted, and Activity
M990 will be used to measure delays.
MIP 3.9 also recommends that the
analyst tabulate and justify changes
made to the as-built schedules and
perform a constructability analysis of the
resultant collapsed as-built.
In performing this implementation
of MIP 3.9, all of the fragnet delays that
were implemented in MIP 3.8 are
inserted into the as-built schedule. Note
that these are the as-built fragnets from
MIP 3.8, presented in the prior article in
this series. They differ in some respects
from the fragnets that were used in MIP
3.6 in this article. The primary difference
is that they use as-built durations as
opposed to as-planned durations. They
also differ from the as-built fragnets that
were used in MIP 3.8 in that the
constraints that were used to maintain
the scheduling of activities in MIP 3.8 are
not necessary because the schedule will
be collapsed window-by-window. There
is less need to hold delay events (with no
planned predecessor in the network) in
place so that they do not fall back to the
data date of the baseline schedule. The
complete as-built schedule is shown in
figure 29. Follow the link to view figure
29.
COST ENGINEERING NOVEMBER/DECEMBER 2013
The as-built schedule in figure 30
includes the logic change introduced in
update 3 in the implementation of MIP
3.4. Follow the link to view figure 30. A
primary feature of MIP 3.9, as compared
to MIP 3.8, is that it considers logic
changes made in the updates. Therefore,
it is appropriate to include a logic change
in this example implementation.
After entering the fragnets, the
schedule is de-statused from update 6 to
update 5, so that the last period of the
project can be analyzed for delays. Figure
31 shows the schedule, de-statused to
the data date of update 5. Follow the link
to view figure 31. Activities S160 and
R130 are shown ‘necked’ in the graphic
to indicate that there is no progress on
the activities during the period in which
Activity D100 is underway. It may be
helpful to show suspended activities in
graphics in this fashion, but it is not
necessary.
Removing fragnet D results in a
savings of two weeks. Thus, the analyst
might conclude that the project would
have completed two weeks sooner, but
for the suspension of work on the install
racking and install docking unit activities.
Whether or not the activities should
have been completed prior to the
conflict with the owner’s electrical
contractor is a separate matter;
however, the specific activity delays that
contributed to the critical path delay
during the period have been identified.
Both before and after the fragnet is
removed, install docking unit is not on
the critical path because of the
difference in the relationship between
the install docking unit and the punchlist,
compared to install racking and the
punchlist. What portion of the delay
should be associated with the docking
unit as opposed to the racking may be
open to debate. The docking unit may
have been less critical before the delay,
but both activities were completed in
parallel after the delay. In this example,
the two-week delay is associated with
install racking, as the schedule logic
allows install docking unit to be
completed in parallel with the punchlist.
Clearly, both activities were suspended
because of the owner’s electrical work.
Follow the link to view figure 32.
The next period of the analysis
begins by de-statusing the project to the
data date of update 4. In update 4, the
fab/deliver docking unit activity was
critical because it had a remaining
duration of four weeks and install
docking unit had a remaining duration of
two weeks and was scheduled to
complete in parallel with the punchlist.
However, based on the as-built
durations of these activities, they are not
on the critical path. Restoring their asplanned durations (as of update 4) would
put them on the critical path, but it
would not cause a project delay. At this
point, the collapsed schedule already
shows the same completion date as
update 4, and the analyst knows that the
docking unit was actually delivered in
week 17. Therefore, the durations of
these activities were not restored.
Follow the link to view figure 33.
De-statusing the schedule to update
3, as shown in figure 30, reveals that the
docking unit path would be even less
critical if its as-planned durations were
restored. As of the data date of update 3,
the de-statused schedule shows that the
fragnet activities related to the
storehouse roof revisions are driving the
project. These activities are collapsed,
resulting in the schedule shown in figure
34. Follow the link to view figure 34.
Collapsing the roofing delays results
in a one-week savings to the forecast
project finish date. Now, all incomplete
activities in the schedule are critical,
based on their as-built durations, except
for select racking system. The next delay
that is collapsed in this period is the
extended duration of the docking unit
installation, as shown in figure 35. Follow
the link to view figure 35.
It is noted that the extended
duration of install docking unit that is
collapsed in this window is unrelated to
the owner’s electrical work. Install
docking unit was originally planned as a
two-week activity, but it had been in
progress for three weeks prior to the
start of the owner’s electrical work and
was incomplete. Thus, its as-built
duration was four weeks. Collapsing it
results in a two-week savings in this
analysis window. Follow the link to view
figure 36.
In the final step in this analysis
window, the extended duration of
reception walls is collapsed, which
matches the analysis schedule to the
version of update 4 presented in MIP 3.4.
No further savings results from that step.
The analyst could question whether to
reverse the logic change made in update
3 at this point, as we know that install
docking unit and the punchlist were not
actually completed in parallel. However,
we don’t know that they could not have
been if necessary. Reversing the logic
change at this point would result in a
one-week project delay, which we would
most likely associate in some way with
the docking unit. It is not clear how that
result would tie to reality at this point in
the project, and the logic change is not
reversed here. Follow the link to view
figure 37.
In the next step of the analysis, the
schedule is de-statused to the data date
of update 2. The critical path shifts to the
docking unit supplier delay, based on its
as-built duration, which delayed the start
of fabrication to week 12. Follow the link
to view figure 38.
The docking unit supplier delay is
collapsed in this period, resulting in a
two-week savings to the forecast project
completion date. Note that install
docking unit and the punchlist are still
scheduled to proceed in parallel, based
on the logic change that was made in
update 3. The reception walls are now
the first activity on the critical path, and
the extended duration of that activity
will be collapsed. Follow the link to view
figure 39.
Collapsing the extended duration of
reception walls results in a one-week
savings to the forecast project
completion date, and the critical path in
the analysis schedule shifts to both
fab/deliver docking unit and remaining
tilt-up walls. Fab/deliver docking unit is
scheduled with its as-planned duration,
which happens to match its as-built
duration. Therefore, there seems to be
no opportunity to collapse it. However,
remaining tilt-up walls was accelerated.
Restoring its as-planned duration results
in a three-week delay to project
completion, as shown in figure 40.
Follow the link to view figure 40.
If the remaining tilt-up walls had not
been accelerated, the project would
have been forecast to complete in week
19 at this point. Based on this analysis,
accelerating the work improved the
forecast project completion date by
three weeks. Also in this final part of the
collapse to update 2, the logic change
from update 3 is reversed. The relevant
activities are not critical at this point,
and reversing the change does not make
them critical. Once reversed, all
remaining work is scheduled as it was in
update 2, and the float values match
what they were in update 2. Follow the
link to view figure 41.
Now the schedule is de-statused to
the data date of update 1. The activities
are scheduled as they were in update 1,
and there are no delays to collapse.
Therefore, the analysis proceeds with
de-statusing back to the data date of the
baseline schedule, as shown in figure 42.
Follow the link to view figure 42.
One constraint is introduced into
the de-statused baseline to hold the test
for contamination activity in the week in
which it actually occurred. Perhaps that
fragnet could have been better modeled
with a start-to-start relationship from
excavation and a new activity for the
completion of excavation as it was in the
implementation of MIP 3.6. However,
the point of this fragnet is to show the
activities that were delaying excavation,
which did proceed partially during the
UST removal.
In order to collapse the delay, the
fragnet activities are removed (or their
durations are set to zero) and the
planned duration of the excavation
activity is restored. This results in a
three-week savings, and produces a
schedule that is identical to the original
baseline schedule, as shown in figure 43.
Follow the link to view figure 43.
The analysis is complete. The delays
identified are summarized as follows:
•
•
•
•
•
•
•
Three-week delay associated with
excavation.
Three-week savings associated with
remaining tilt-up walls.
One-week delay associated with
beams and roofing.
Two-week delay associated with
install racking.
Two-week delay associated with
fab/deliver docking unit.
One-week delay associated with
reception walls.
Two-week delay associated with
install docking unit
COST ENGINEERING NOVEMBER/DECEMBER 2013
25
These activity delays resulted in the
The process of developing,
net eight weeks of delay to the overall publicizing, and debating RP29R-03 has
project.
stirred some significant debate, and if this
debate continues, the community of
Comparison, Commentary, and Conclusion practitioners may be able to arrive at
Table 8 consolidates the results of all some consensus on a method or methods
nine analyses performed over the course that can be used universally to assist in
of this series. Follow the link to view table parsing delays from CPM schedules more
8. While at least one delay was identified consistently than is the case currently.
consistently across all nine methods, the The following arguments have been
results are significantly different for each made regarding the various methods
analysis.
presented in RP29R-03:
The implementation of MIPs 3.4 and
Proponents of MIPs 3.1 and 3.2,
3.9 included a logic change that resulted argue that the schedule update process is
in a forecast completion in updates 3 and often influenced by the knowledge of
4 that is one week earlier than used for forensic scheduling practices and that too
those updates in the other MIPs. Had the many updates are manipulated to shift
logic change not been made, the results responsibility for delay to the other party,
of MIP 3.4 would be identical to those of rather than to proactively manage the
MIP 3.3. The logic change would not be project. Once a project is delayed
relevant to the implementation of MIPs significantly, it is not uncommon for
3.1, 3.2, or 3.6, and it was considered changes to the schedule to be made by
unknown in the implementation of MIP one party and rejected by the other in
3.5. It could have affected the results of attempts to position for a claim.
MIPs 3.3, 3.7, and 3.8 if it were Meanwhile, the project has no agreed
implemented in those analyses. The upon schedule, or two schedules—one
analyst may or may not be aware of the used to frame the responsibility debate
change, depending on the information and one used to manage the project. If
available.
the project has an accepted baseline
The key purpose of forensic analysis schedule, which was consistent with the
of CPM schedules is to identify the bid and the contract and agreed upon as
individual activity delays that contributed the plan for execution prior to any of the
to an overall project delay. Then, delays, perhaps that is the only plan that
responsibility for those individual delays is uninfluenced by the parties’ attempts
can be evaluated as opposed to debating to position for a claim.
general contributions to the problems of
However, MIPs 3.1 and 3.2, which
a troubled project. Unfortunately, rely on the baseline schedule and often
consensus has yet to develop among disregard changes to the schedule logic
forensic CPM analysts as to which and critical path over the course of the
methods produce the best results most of project are dismissed by many
the time or if any method can be said to practitioners for two main reasons:
produce better or more correct results
than another under most circumstances. • The critical path method should be
Since the publication of RP29R-03,
used to dynamically manage the
there has been significant discussion of
project; as conditions change, the
why practitioners prefer the techniques
plan should change;
that they do. Too few of these • Analysis techniques that fail to
preferences are explicitly documented,
recognize the dynamic nature of the
perhaps because most advanced
critical path have been dismissed in
practitioners serve or wish to be able to
some legal forums based on
serve as expert witnesses and do not
precedent rulings that require
wish to publish explicit preferences that
forensic schedule analysis to treat it
might be used in cross examination to
as such. While both parties may have
contradict the methods that they use in a
agreed on the baseline schedule at
specific case. Regardless of the reason,
the start of the project, critics of
general public debate on the merits and
MIPs 3.1 and 3.2 argue that actual
failings of particular methods had been
project conditions at the time that a
limited.
delay event occurs must be
26
COST ENGINEERING NOVEMBER/DECEMBER 2013
incorporated into the analysis in
order to properly evaluate the
impact of that event.
Proponents of MIPs 3.3 and 3.4
believe that comparisons of the most
current schedules in use on the project
with actual project events result in the
best analyses and have the least
likelihood of undue influence by the
forensic analyst. Instead of identifying
delays and modeling them in the
schedules, the schedules themselves are
used to identify the delays, and the
causes behind the delays are then
investigated. It is impossible to model
every day-to-day event on a complex
project and every relationship between
those events. Therefore, modeled
analysis techniques are subject to bias by
their very nature. It is better for the
analyst to look at the project from the
standpoint of a project participant and
evaluate how the plan was impacted by
actual events on the project on a
periodic, or even day-by-day basis.
Critics of MIPs 3.3 and 3.4 have
stated that observational techniques do
not constitute analysis. Delays should be
modeled by an experienced practitioner
with the ability to interpret and model
project events in a way that
demonstrates which events impacted
project completion and which did not.
Proponents of MIP 3.5 have stated that
CPM techniques can be used to model
projects and identify delay, even if the
model is created after the fact. The CPM
network is simply a mathematical model
of the project. If developed by a skilled
practitioner, it can be used to determine
which activities were critical at given
points in the project and which were not;
which delays were critical, and which
were not. Opponents have argued that
these models are typically created for
presentation in a claim forum and are
more frequently biased than not.
Proponents of MIPs 3.6 and 3.7 favor
use of modeled techniques for the
reasons noted above. Those that prefer
3.6 place more faith in the contractor’s
as-bid plan for performing the work than
on updates that do not reflect as-bid
conditions and may have been
manipulated over the course of the
project. Those that prefer 3.7 believe that
a more current update serves as a better
base for modeling delay at a given point
in a project.
Proponents of MIPs 3.8 and 3.9 favor
the use of as-built durations and
relationships over the estimated
durations that are prepared at the
beginning of the project. They often
ascribe to the concept of the as-built
critical path as an indicator of what was
really driving the project completion
date, as opposed to what the schedule in
use on the project might have said. For
example, if the durations in the schedule
were unachievable with the resources on
hand, it would not have indicated the
proper critical path. Those that favor MIP
3.9 are seeking a more detailed analysis
than many of the one-step as-built
collapses that have been presented in the
past. Tying the collapsed as-built analysis
to progress over the course of the project
and incorporating logic changes brings in
many of the elements of MIP 3.4,
although with a completely different
approach.
Opponents of MIPs 3.8 and 3.9
simply do not believe in the mathematics
of the collapsed as-built technique, or
believe that the significant work that is
often done to develop a CPM model with
as-built durations and relationships is too
subject to bias to be credible. Also, they
assert that proximity does not imply
causation, and too many as-built models
create CPM relationships based on when 2. Sanders, M. CDR.11—Forensic
activities occur in relation to one another
Schedule
Analysis:
Example
in time, whereas an explicit relationship
Implementation,
2008
AACE
of the same type and duration did not
International Transactions. AACE
exist in the project schedules or in the
International, Morgantown, WV
records of the project participants.
(2008)
3. Sanders, M. CDR.493—Forensic
Conclusion
Schedule
Analysis:
Example
In order to facilitate continued
Implementation, Part 2 2011, AACE
progress toward a consensus in the
International Transactions AACE
forensic analysis of schedules, additional
International, Morgantown, WV
examples like those presented in this
(2011)
series should be developed, and the 4. Zack, J. “Schedule Delay Analysis: Is
results of the analyses should be
There Agreement?” Presentation of
compared and scrutinized for logical
example
project
including
inconsistencies. In the end, the
presentation slides, schedules, and
community of practitioners must work
brief project description (2003)
toward a set of practices that can be 5. Note: The corrections to the SVP
applied universally. There will always be
references under MIPs 3.4 and 3.5
variations, but for experienced analysts
have
been
submitted
for
to parse the same schedules and arrive at
incorporation into the next revision
completely different conclusions does not
of RP29R-03.
serve to advance the state-of-the-art of
forensic
schedule
analysis.
The ABOUT THE AUTHOR
techniques that we apply must have a
mathematical basis and the results must
be reproducible. ◆
Mark C. Sanders, PE
CCE CFCC PSP, is with
REFERENCES
Alpha 3 Consulting,
1. Hoshino, K. et al. Recommended
LLC. He can be
Practice 29R-03: Forensic Schedule
contacted by sending
Analysis,
AACE
International,
e-mail to:
Morgantown, WV. Note: The version
referenced here is Revision 2, which msanderspe@comcast.net
was published in 2011.
BANGKOK, THAILAND TO HOST THE 2014 ITCM CONFERENCE
Bangkok, Thailand and Istanbul, Turkey will be the locations of the next two AACE International Total Cost Management conferences in 2014 and 2015 respectively.
The 2014 ITCM Conference will be Nov. 12-13, at the Millennium Hilton Bangkok, Thailand. Current plans call for the
conference to be a two-day meeting. It will commence with an opening plenary session on Nov. 12 and will feature a keynote
speaker and then will divide into two tracks of peer-reviewed technical presentations over the balance of the two days.
As with the first ITCM Conference, AACE is also planning to host continuing education seminars on the two days prior
to the ITCM Conference, Nov. 10-11, 2014.
Continental breakfasts and lunches will also be offered each day of the conference along with energy breaks in the
planned exhibit area. Early registration for the conference will be $695 for members, $795 for non-members until Sept. 30,
2014. After Oct. 1, registration fees will be increased by $100. AACE International organizers anticipate between 200-250
registrants for the Bangkok conference. Registration for the Bangkok conference is available by visiting:
www.aacei.org/mtgs/ITCMC/.
AACE will release a call for papers by Sept. 1, 2013. The ITCMC will use the same peer-reviewed process used for selecting papers for the Association’s highly acclaimed Annual Meeting.
The Millennium Hilton Bangkok is a stunning new ultra-contemporary hotel perched high over the sweeping majesty
of the Chao Phraya River. With picture-perfect river views from every room, innovative restaurants and a refreshingly bright
and modern spa, it is no surprise that Millennium Hilton Bangkok has been recognized as one of Asia Pacific’s best new
business hotels by readers of Business Traveler. Registrants will receive a $150 (US) per night room rate. Optional educational seminars will be offered Nov.10-11 at the Millennium Hilton. Details about the optional seminars will be released by
early 2014.
COST ENGINEERING NOVEMBER/DECEMBER 2013
27
AS AN AACE MEMBER
IF YOU’RE ONLY READING COST ENGINEERING,
YOU’RE MISSING OUT ON AACE INTERNATIONAL’S
SOURCE MAGAZINE, THE OTHER HALF OF YOUR
MEMBER BENEFIT. GET 100% OF YOUR BENEFIT
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COST ENGINEERING journal, with digital editions, and six digital only
issues of AACE’s SOURCE magazine.
TECHNICAL ARTICLE
Recommended Contractual Methods For
Resolving Delay Events
Prospectively or Retrospectively
Patrick M. Kelly, PSP
Abstract: The reality of construction projects is that the oft-mandated methodology for granting a contract time extension is ignored during the press of work.
This can result in a significant change in the risk allocation between the parties.
The traditional risk allocation model requires performing a prospective time impact analysis (TIA), with agreements on time and money prior to corrective work
commencing. Yet, when the work is performed before negotiation, the risk allocation has shifted significantly. This article makes recommendations for two contractual paths for resolution of changes with potential time impacts, to balance
risk and responsibility for cost control. The first method, occurring prior to the
start of corrective work, uses a prospective TIA to determine entitlement to time,
and bilateral negotiation to manage costs. The second method occurs immediately upon completion of corrective work, tracks costs through stringent time and
material cost accounting, and determines time through a contemporaneous period analysis. Having two methods for resolution gives project managers additional
tools to resolve time-related issues early and prior to contract completion, minimizing potential disputes. This article was first presented as CDR.923 at the 2012
AACE International Annual Meeting in San Antonio, Texas.
Key Words: Construction, contracts, cost, project management, and risk
T
he
AACE
Total
Cost
Management
Framework,
Section
10.3,
“Change
Management,” states:
Change management refers to
the process of managing any
change to the scope of work
and/or
any
deviation,
performance trend, or change to
an approved or baseline project
control plan. The change
management process is used to
approve or disapprove changes
in the scope and baseline plans,
thereby closing the project
control cycle loop. The process
includes the identification,
definition,
categorization,
recording, tracking, analyzing,
disposition (i.e., approval or
disapproval for incorporation
into approved or baseline
project control plans), and
reporting of deviations, trends,
and changes [14].
Furthermore, regarding the analysis
of changes, “Section 10.3.2.5 “Assess
Impact” states:
Having defined the nature and
cause of trends and the scope
and cause of deviations and
change requests, corrective
action
alternatives
are
developed and assessed using
the forecasting process (Section
10.2). Forecasting applies the
methods of integrated project
planning (Chapter 7) in the
context of a project that is
progressing while demanding
quick and effective change
management decisions.
The
change
management
process may identify alternative
actions to implement changes
and to correct performance
trends
(including
process
improvements). These are
generally
simple
action
statements
(e.g.,
“revise
schedule logic”). The forecasting
process develops the proposed
action
statements
into
actionable
control
plan
alternatives
for
further
assessment (e.g., “complete
activity B before activity A”).
Additional alternative actions
may be identified in this process
[15].
COST ENGINEERING NOVEMBER/DECEMBER 2013
29
This article does not address the
correction of performance trends
described in the TCM; however,
deviations and change requests resulting
in the need for analysis and possible
alternative actions requires a proactive
change management plan within the
project controls process.
The Problem
While
executing
construction
contracts, contractors often encounter
problems which were not foreseen by
either party, and which are not covered
by the contract. Additionally, the needs of
owners occasionally evolve after the
award of a contract, necessitating a
change to the contract.
These issues can be described as
having the following three parts.
•
•
•
The discovery of an interference or
changed condition, (hereafter
referred to as the, “event”);
The time necessary to resolve the
contractual issues related to the
change, (hereafter referred to as the,
“resolution time”); and,
The work necessary to overcome the
event and return to the original
contract scope, (hereafter referred to
as the, “added work”).
For example, the discovery of an
abandoned duct bank not shown on the
plans would be the “event,” while the
“added work” would involve the
excavation and demolition of the duct
bank. Once the added work is complete,
the event has been overcome, and
original contract work can resume.
In between the event and the added
work lies a lag time, during which the
administrative processes designed to
establish a means for payment and to
determine the necessity of a time
extension take place. This is the
“resolution time,” and minimizing this
time is a key way to reduce the overall
impact of changed conditions. It is
essential, however, to ensure that before
the added work begins, the contractual
methods to compensate the contractor
(for both time and money) are in place.
The contractor should not wish to
proceed until there is assurance that he
will be compensated for the time and
effort associated with the added work.
30
Furthermore, it is very important that the
owner be given the opportunity to
understand the event and the
implications of the added work, prior to
that work taking place. It is possible that
the cost or time implications of the added
work may cause the owner to alter his
plan for proceeding. The owner may, for
instance, delete scopes of work in order
to account for the time and money
associated with the added work, or may
use another contractor to perform the
work.
For some owners, whether or not to
proceed with the work may be contingent
upon whether the owner has sufficient
funds to pay for the added work related
to the changes. And, if money is available
but on-time completion is a must, the
owner may also need to decide whether
to pay for acceleration of future work in
order to meet the original contract
completion date.
All these options are denied to the
owner when the contractor moves
forward with work prior to analysis and
agreements. Failure to reach any sort of
formal agreement prior to the start of the
added work therefore puts both parties
at risk. It is in the interests of both parties
to arrive at such an agreement as early as
possible, but before the start of the
added work.
Figure 1—Elements of the
Fragnet
These three parts together make up
the essential elements of the
fragmentary network, or “fragnet,” which
represent the total impact that the
changed condition can have on the
project. As a result of many of these
events, resolution time, and added work,
the contractor’s ability to finish the scope
of work within the original contract
duration may be impacted.
Construction contracts need a
method to analyze the effects of events
and added work to the overall duration of
the project. In a contract that requires
CPM scheduling, the discussion of the
COST ENGINEERING NOVEMBER/DECEMBER 2013
time effects of changes relates to
whether the event and added work have
impacted activities which define the
project’s critical path. In other words, if
the event and added work do not impact
a critical activity, then it is merely
impacting the float of a non-critical
activity and not the overall duration of
the project.
When events such as these occur, the
contractor is typically required to submit
a request for time extension (RFTE) which
provides analysis and justification for a
modification to contract time, resulting
from a critical path delay. In most
contracts, the mandated form of RFTE is
the time impact analysis (TIA). However,
given the stringent requirements that
exist for the correct performance of a
prospective TIA, it is problematic to have
this as the sole contractual means for
resolution of a time-related dispute
during project performance.
Should there not be sufficient time to
perform a TIA in a prospective manner, it
is helpful to have an alternate means for
the determination of entitlement to a
time extension. On occasions where it is
impractical to perform a prospective TIA,
a contemporary period analysis (CPA) can
show entitlement to a time extension in
the period immediately following the
completion of the event, resolution time,
and added work. (Note that while this
article refers to AACE Recommended
Practice 29R-03, Forensic Schedule
Analysis, it is intended that the CPA be
conducted while the project is still in
progress; that is, prior to project
completion. In fact, it is best if the CPA is
conducted in the update period
immediately following the completion of
the added work.) Closely linked to the
analysis method that should be used to
determine or control the aspect of
changes related to time is the selection of
the contract type that should be used to
determine or control the aspect changes
related to cost and risk.
Construction Contracting: The Balance
between Cost Control and Risk
Construction is fraught with risks for
both parties: risks to cost, time, and
performance. Design of the construction
contract is the process of building an
agreement between the two competent
parties—the owner and the contractor—
that clearly defines the scope of work and
establishes a price for the work (which
contains a fair and reasonable profit). The
contract serves as a legally binding
agreement, wherein the contractor
promises to perform the work described,
and the owner agrees to pay.
The Contract
The contract consists of the basic
agreement, which forms the legally
binding agreement described above. It
can also consist of supplemental
agreements (also called modifications),
when the basic agreement must be
altered for some reason. A supplemental
agreement will alter the contract in
scope, quantity, or schedule. These
supplemental agreements can either be
bilaterally negotiated and agreed upon,
or can be unilaterally issued by the
owner.
Beyond this basic definition of a
contract, however, there are many
different types of contracts, which are
appropriate to use depending on the
circumstances of the project. The Federal
Acquisition Regulations (FAR), Part 16,
Types of Contracts, provides a standard
taxonomy for the contract types. (Clearly,
not all construction projects are
performed under the FAR; however, the
FAR definitions are a convenient method
of describing the many contract types in
use in the industry.) FAR, Part 16, lists the
following five major groups of contract
types:
•
•
•
•
•
Fixed Price contracts [4];
Cost Reimbursement (CR) contracts
[5];
Incentive contracts[6];
Indefinite Delivery (IDIQ) contracts
[7]; and,
Time and Materials (T&M) contracts
[8].
For the purposes of this article, the
three contract groups that are most
relevant to the performance of an
individual construction project are firm
fixed price (FFP), CR, and T&M contracts.
FFP contracts establish a price that is
not subject to any adjustment on the
basis of the contractor’s cost experience
in performing the contract [11]. The FFP
contract is suitable for acquiring services
on the basis of a reasonably definite
functional or detailed specification, when
the owner can establish a fair and
reasonable price. A FFP contract usually
establishes a price based on the
contractor’s understanding of that
developed scope of work, with respect
also paid to market conditions and the
likely prices of competitors also seeking
the contract. Given that the price is fixed,
maximum incentive for cost control is
placed upon the contractor. It provides
maximum incentive for the contractor to
control costs and perform effectively and
imposes a minimum administrative
burden upon the contracting parties.
CR contracts allow for payment of
allowable incurred costs, to the extent
prescribed in the contract. These
contracts establish an estimate of total
cost for the purpose of obligating funds
and establishing a ceiling that the
contractor may not exceed (except at its
own risk) without the approval of the
contracting officer.
A Cost-Plus-Incentive-Fee contract
(CPIF contract) is a specific type of costreimbursement contract that provides for
an initially negotiated fee to be adjusted
later by a formula based on the
relationship of total allowable costs to
total target costs [12]. Such contracts
should be used when circumstances do
not allow the owner to define its
requirements sufficiently to allow for a
FFP contract, or uncertainties involved in
contract performance do not permit costs
to be estimated with sufficient accuracy
to use any type of fixed-price contract.
Since CPIF contracts use a predetermined formula for judging the
contractor’s time and cost performance,
and that formula calculates the level of
profit that the contractor earned. In this
way, the CPIF provides a method of
incentivizing performance, though the
incentive is often not as great as the
potential incentive in a FFP contract.
T&M Contracts allow for acquiring
supplies or services on the basis of direct
labor hours at specified fixed hourly rates
that include wages, overhead, general
and administrative expenses, and profit;
and actual cost for materials [13]. A T&M
contract may be used only when it is not
possible at the time of placing the
contract to estimate accurately the extent
or duration of the work or to anticipate
costs with any reasonable degree of
confidence. A T&M contract provides no
positive profit incentive to the contractor
for cost control or labor efficiency.
Therefore, it is essential that the owner
provide surveillance of contractor
performance in order to ensure that
efficient methods and effective cost
controls are being used. Cost controls are
therefore typically provided by daily
submission of cost records, and proper
cost accounting methods which will
allocate labor and equipment specific to
the event and added work.
Generally
speaking,
the
reasonableness of a price is established in
one of the following ways:
•
•
•
•
There is adequate price competition.
There are reasonable price
comparisons with prior purchases of
the same or similar supplies or
services made on a competitive basis
or supported by valid certified cost or
pricing data.
Available cost or pricing information
permits realistic estimates of the
probable costs of performance. And,
Performance uncertainties can be
identified and reasonable estimates
of their cost impact can be made,
and the contractor is willing to
accept a firm fixed price representing
assumption of the risks involved.
Among the factors that FAR, Part 16,
recommends for consideration are the
following [9]:
•
•
Price competition—The process of
full and open competition for a
contract is generally accepted to
create a fair and reasonable price.
Multiple contractors bidding on a
common scope of work will typically
result in a situation where the lowest
responsive bidder’s price represents
the best price available for that
scope of work within that particular
market. This is typically how a
reasonable price for a base
agreement is reached, particularly in
FFP contracts.
Price analysis, or, if necessary, cost
analysis—If
full
and
open
competition is not an option (for
instance, in the creation of
supplementary agreements) then it
may become necessary for the
COST ENGINEERING NOVEMBER/DECEMBER 2013
31
owner to analyze the proposed price
or costs in order to determine
reasonableness. Price or costs can be
compared to the price or costs for
similar services within similar
markets, or can be compared to data
in appropriate estimating guides.
Type and complexity of the
requirement
—
Complex
requirements usually result in a
greater level of risk being borne by
the owner. This selection factor
relates, at least in part, to the
owner’s ability to fully define the
scope of work.
Urgency of the requirement—If the
owner has a requirement that is
urgent in nature, it is likely that the
owner will be required to accept a
contract type in which he accepts
more of the risk.
Adequacy of the contractor’s
accounting system—If the owner is
considering using a contract type
other than FFP, it is essential that the
owner verify that the contractor’s
accounting system is sophisticated
enough to support the additional
cost accounting that CPIF and T&M
contracts require. Given that the
owner must rely on the contractor’s
accounting system to provide the
support for the reasonableness of
the costs incurred, the owner will not
want to issue a T&M or CPIF contract
to a contractor who cannot support
that level of accounting.
Therefore, the selection of a contract
type must balance all these factors, with
an understanding that the selection of a
contract type has implications for the
price to perform the work and for the
balance of risk and administrative
requirements placed on each party. In
•
other words, and owner should not think
that his administrative burden will be the
same for a T&M contract as it is for a FFP
contract—at least not if the owner
intends to get the work performed in the
most efficient manner possible.
As the owner’s cost risk increases,
the owner must be willing (and able) to
•
provide the additional oversight
necessary to ensure that the costs are
reasonable and fully documented. In the
event that a contract cannot be FFP in its
entirety, because of the particular
circumstances of that project, then it is
•
possible (or even preferable) to combine
contract types [10]. In these cases,
specific portions of a project’s scope are
performed under a sub-agreement that is
a different contract type from the basic
agreement.
There are many different ways to
contract for construction services. And,
there are many different ways to analyze
the time-related effects of a change to
the scope of work. It is important, then,
to pair the schedule analysis technique
with the proper contract type (to be used
in issuing the supplemental agreement),
to achieve the proper balance of cost risk
and profit incentive, while also
accounting for the time in the best way
The key factor, however, in selection possible.
of a contract type is the balance of risk
within the contract. Each contract type Path #1: The TIA and the FFP
has a different method of allocating risk Supplemental Agreement
between the two parties, and balancing
AACE International’s Recommended
that risk is the ability to define the Practice 52R-09, Time Impact Analysis –
contract scope. In general, as the owner’s As Applied in Construction, describes the
ability to fully define the scope of work TIA this way:
increases, so does the owner’s ability to
design a contract vehicle which places
The TIA is a ‘forward-looking,’
more cost risk on the contractor.
prospective
schedule
analysis
Conversely, if the owner is unable to fully
technique that adds a modeled delay
define the scope, the owner will likely
to an accepted contract schedule to
have to accept more of the cost risk.
determine the possible impact of
Figure 2 shows the complex
that delay to project completion. This
relationship between the balance of cost
practice is not recommended for a
risk and the profit incentive, along with
retrospective (hindsight or forensic)
the level of scope definition that the
view taken after a significant passage
owner can provide.
of time since the delay event [1].
32
COST ENGINEERING NOVEMBER/DECEMBER 2013
Note that this article does not refer
to AACE RP 29R-03, Forensic Schedule
Analysis, in its definition of the TIA. The
TIA described in RP 29R-03, Method
Implementation Protocol (MIP) 3.7, is a
retrospective TIA. This article is providing
a prospective perspective, in as much as
the TIA is concerned. The inherently
retrospective nature of the CPA (MIPs 3.3
and 3.4) will be addressed separately, in a
manner that is in keeping with the
recommended contract type.
A TIA compares two schedules with
the same data date—one schedule that
does not represent the event, resolution
time, or added work, and one schedule
that does represent the event, resolution
time, and added work through the
addition of activities and logic. The first
schedule is the most recently accepted
schedule with a data date prior to the
event—the “unimpacted schedule.”
(Note that it is a good practice, if the
unimpacted
schedule
does
not
adequately represent the status of
progress at the time of the event, that it
should be statused and updated to the
day just prior to the event.)
The second schedule has the same
data date, but also contains the fragnet—
those added activities and logic which
represent the event, resolution time, and
added work. This is the impacted
schedule. The comparison of the
completion dates of the two schedules
(before and after the fragnet) determines
whether there is entitlement to a time
extension.
In figure 3, a fragnet has been
inserted in the impacted schedule,
affecting the start of Activity A. As a
result, the predicted completion date was
delayed from July 12, 2012, to August 1,
2012. The difference between the two
schedules’ predicted completion date is
the basis of the negotiations for a time
extension.
With regards to entitlement,
however, the reviewer must remember
that the existence of a delay does not
necessarily equate to entitlement to a
time extension. There are any number of
issues which can delay a project which
are not excusable (such as contractorcaused delay events), or which are
excusable
but
non-compensable:
Figure 2—Balance of Risk and Profit
(meaning time but no money, such as
force majeure events like weather
delays). Therefore, the reviewer must
determine whether the event is
excusable and compensable, in terms of
the contract.
Given this understanding of the
technical process necessary to perform a
proper prospective TIA, it is important to
note that the creation of a fragnet—
before the performance of the added
work—that
accurately
represents
everything the contractor will have to do
in order to overcome the change and
return to base contract work, is in fact
directly related to the owner’s ability to
define the scope of work. In this way, the
prerequisite for selection of this
methodology is very similar to the
prerequisite for using a FFP contract. And,
in fact, the bilateral supplemental
agreement that would be the result of
this version of the change process is a
small FFP contract—the owner and
contractor are agreeing up front on a
scope of work to be performed, a time to
perform it, and a price. The contractor
then has control of his costs (and by
extension his profit), but also is
responsible for conforming to the time
for performance. The risk is appropriately
balanced between the parties, since the
analysis method and the contracting
method are aligned. Note that the TIA
process itself does not directly address
the cost aspect of changes. RP 52R-09
states:
This TIA practice concerns itself with
time aspects, not cost aspects of
projects. The time impact must be
quantified prior to determining any
cost implications. No practical
advantage is obtained by including
cost factors into a time impact
analysis. Linking time and cost into
one analysis implies that time
impacts are a function of costs,
which for the purposes of a
prospective TIA is not true.
Separating time analysis from cost
analysis makes TIA inherently easier
to
accomplish
and
accept
contractually; eliminating the costdriven considerations from both
‘creator’ and ‘approver’ of the TIA
[2].
As
discussed
above,
the
reasonableness of FFP contracts is most
commonly determined through price
competition. In absence of price
competition, FAR, Part 16, suggests price
or cost analysis. Therefore, if a delay is
shown to exist, the reviewer must then
conduct the process of determining the
reasonableness of the costs requested by
the contractor. The costs will, in this case,
include both direct costs (those costs
related to the labor and materials
necessary to perform the work) and
indirect costs (the time-related costs
associated with the extended contract
duration).
On the other hand, if an event is
shown to not have an effect on the critical
path, the reviewer must still determine
whether that change had any cost
COST ENGINEERING NOVEMBER/DECEMBER 2013
33
supplemental agreement. Instead,
owners and contractors should use an
alternate path to resolution.
Figure 2—Balance of Risk and Profit
impacts to the contractor. In this case,
there should only be direct costs, since
there are no time-related costs. The
reviewer should also consider the
possibility that the changes that have not
affected the critical path may have
caused disruption to the contractor’s
work. The contractor is also possibly due
these costs related to disruption (to the
extent they can be quantified). Ignoring
the non-critical impacts of changes,
however, will deprive the contractor of
money he is likely due, and increase the
chances that the contractual relationship
will become adversarial. This pushes the
contract closer to claim.
It is important to understand that the
time between the occurrence of the
event and the start of added work—the
resolution time—must be minimized as
much as possible, but that the resolution
time is necessary to ensure that the time
and cost of the added work is fair and
reasonable and that the contractor has an
incentive to keep his costs and
performance period within reasonable
boundaries. The resolution time, then, is
34
the price that the owner pays to ensure a
finalized resolution of changes which are
his responsibility. Should the owner
choose to actively avoid spending
resolution time on finalizing a
supplemental agreement, or passively
avoid it by allowing the contractor to
proceed with added work prior to the
supplemental agreement, the owner is
likely to find himself in a situation where
he is either paying too much for a change,
or is involved in a post-completion claim.
However, use of this combination of
analysis technique and contract type is
also predicated upon the urgency of the
work. It is possible that once the event
occurs, both parties can immediately
agree (with a reasonable level of
certainty) that the added work will affect
the critical path. Furthermore, the owner
may believe that time is more important
than money, and that he would prefer the
contractor to immediately begin the
added work (thus minimizing or
eliminating the resolution time).
In these cases, Path #1 (the TIA/FFP
option) is not valid for reaching a
COST ENGINEERING NOVEMBER/DECEMBER 2013
Path #2: The CPA and the T&M (or CPIF)
Supplemental Agreement
The second possible path for
resolution of changes involves using a
T&M contract type (or possibly a CPIF, if
the owner’s contracting organization is
sufficiently sophisticated to handle the
development and execution of the
formulas for calculating the incentive
fee). As discussed, the T&M contract type
is used when the owner cannot
sufficiently define the scope of work, or
when the urgency of the work is such that
the owner is willing to accept a greater
portion of risk in order to achieve faster
completion (i.e., minimizing the
resolution time to the maximum extent
possible).
In cases where the owner cannot
sufficiently define the scope, it is not
realistic to compel the contractor to
estimate, with any degree of accuracy,
the durations of activities for the added
work. However, with most contract
specifications, the prospective TIA is the
only method available to the contractor
to justify an RFTE. The other option—to
perform
the
work
without
a
supplemental agreement, and “take care
of it at the end of the project”—is
unacceptable because it can confuse the
parties as to where the responsibility for
cost and time control lies. If both parties
think that the other is responsible for
controlling costs and time, it is likely that
neither party will pay the appropriate
amount of attention to these factors. It is
here that the seeds of disputes and
claims related to changes are planted,
and it is because of these incongruities
that a second path is needed.
According to AACE RP 29R-03,
Forensic Schedule Analysis, Method
Implementation Protocols (MIP) 3.3 and
3.4 are commonly called, “windows
analysis or contemporary period analysis”
[16]. This will be the common term used
to describe these two methods, and the
method will be further described and
refined herein. The CPA “is retrospective
technique that uses the project schedule
updates to quantify the loss or gain of
time along a logic path and identify the
causes. Although this method is a
retrospective technique, it relies on the
forward-looking calculations made at the
time the updates were prepared. That is,
it primarily uses the information to the
right of the updates’ data date.”
Furthermore, RP 29R-03 states:
“[The Contemporaneous Period
Analysis] is an observational
technique since it does not involve
the insertion or deletion of delays,
but instead is based on observing the
behavior of the network from update
to update and measuring schedule
variances based on unaltered,
existing logic models.”
Because the method uses schedule
updates whose logic may have changed
from the previous updates, as well as
from the baseline, it is considered a
dynamic logic method.
It is labeled contemporaneous
because the updates it relies on were
prepared contemporaneously with the
project execution…. [17].
A CPA compares two schedules with
successive data dates. The first schedule
is the most recently accepted schedule
with a data date prior to the event. For
the purposes of this article, this will be
called the “pre-impact schedule.” (Note
that it is a good practice, if the pre-impact
schedule does not adequately represent
the status of progress at the time of the
event, that it should be statused and
updated to the day just prior to the
event).
The second schedule is the next
update schedule after the completion of
the added work. For the purposes of this
article, this will be called the “postimpact schedule.” This schedule will be
logically identical to the pre-impact
schedule. The only difference between
the two schedules should be the inclusion
of status information—actual start and
finish dates, percents complete, and
remaining durations—to represent the
progress of activities which were
originally included in the schedule series,
and a series of added activities for the
fragnet.
It is very important to note, however,
that these fragnet activities will be added
to the left of the data date, so that they
do not affect the forward and backward
pass calculations of the CPM algorithm. In
this way, the scheduler can help
document the responsibility for different
portions of the delay shown in the
analysis. The fragnet will not, however,
forward-project the effects of future
delays. No activities should be added to
the right of the data date, and the critical
path of the post-impact schedule will be
driven by the progress information input
into the original schedule activities,
rather than by the effects of the fragnet.
For a detailed discussion of documenting
delays in this manner, see reference [3].
In figure 4, the pre-impact schedule,
calculated as of Feb. 4, 2012, shows a
predicted completion date of July 12,
2012. The post-impact schedule has been
statused with progress information
through the next update’s data date,
March 4, 2012. Note that activities for the
event, resolution time, and added work
have been added to the post-impact
schedule, but that they are all actualized
at 100 percent complete and cannot
affect the CPM calculations. The progress
information also shows that Activity A
and Activity B started and progressed;
however, the start of Activity A was
delayed to the point where the critical
path was delayed overall. The fact that
Activity A has delayed the critical path
(regardless of cause or responsibility)
makes Activity A the “causal activity.”
Because of the effects of the start delay
to the causal activity, the post-impact
schedule shows a later predicted
completion date. The difference in
predicted completion dates between
these two schedules is the duration of the
time extension in the final supplemental
agreement.
It is possible that after the postimpact schedule has been submitted,
that either or both of the parties may
decide that it is preferable to condense
the remaining portion of the work in
order to regain the original predicted
completion date. In these cases, it is
preferable to submit a third schedule,
having the same data date of the postimpact schedule but containing network
revisions to the uncompleted schedule
activities. These network revisions may
represent compensable acceleration, or
possibly the deletion of other future
work, in order to regain the completion
date.
This “post-impact revised schedule”
can serve as the basis for additional
negotiation and compensation, which can
be definitized in either the second
supplementary agreement or in a
separate supplementary agreement,
depending on the needs of the project.
However, it is very important to use
separate schedules for the post-impact
schedule and the post-impact revised
schedule, so that the effects of progress
(i.e., the delay to the causal activity
caused by the actualized fragnet) can be
clearly separated from the effects of
network revisions (i.e., revisions to future
activities, logic, or durations).
Only by separating these two
schedules can the reviewer clearly
delineate responsibility for the gains or
losses seen in the schedules, and provide
justification to the contracting authorities
for the size of the costs and time in each
of the extensions. In figure 5, the
remaining duration of Activity A, as well
as the original durations of Activities C
and D, were reduced in order to regain
the original predicted completion date of
July 12, 2012.
Note that the comparison of the preimpact schedule to the post-impact
schedule is a simple Contemporaneous
Period Analysis, as described in MIP 3.3,
whereas the comparison of the preimpact schedule to the post-impact
schedule to the post-impact revised
schedule
is
a
Bifurcated
Contemporaneous Period Analysis, as
described in MIP 3.4. The difference lies
in the existence of network revisions and
in the quantification of responsibility for
those revisions as they relate to changes
in predicted means and methods.
This
more
immediate
implementation of the CPA (i.e., using the
two updates encompassing the fragnet as
soon as the added work is complete,
rather than waiting until the end of the
project an performing a full CPA across
the project) is the main way in which this
implementation differs from the one
described in RP 29R-03. While the
methodology is the same, the
methodology described in RP 29R-03, is
generally performed on the entire
duration after project completion. This
article envisions the CPA as a part of the
in-stream project management process.
COST ENGINEERING NOVEMBER/DECEMBER 2013
35
In other words, while the analysis is
technically a retrospective analysis, it is
being performed contemporaneous with
project progress, and as soon after the
completion of the added work as
possible. This results in a basis for
approval of an RFTE as early as possible.
Schedule specifications can be
designed to create this second path, that
would establish a general scope of work
(detailed to the extent possible), a first
supplemental agreement that would
establish a basis of payment (most likely a
T&M contract that will cover direct costs
and profit), and an agreement that the
time effects of the change would be
judged using a CPA immediately following
the completion of the added work. The
CPA would result in an agreement on the
time impact of the event, resolution time,
and added work. This time impact would
then be included in a second
supplemental agreement which would
compensate the contractor for the time
and indirect costs associated with the
change.
The need for owner-provided
oversight to costs is essential in Path #2.
As described in FAR, Part 16, the
contractor has little incentive to control
costs in a T&M contract, and in fact has a
much smaller profit incentive than with a
FFP contract. It must be clear in the
specification (and in the first
supplemental agreement establishing the
T&M) that the contractor is required to
provide detailed cost accounting records,
establishing a relationship between all
the labor, equipment, and materials that
are used in the execution of added work.
This data should be submitted daily,
and the owner must have personnel on
staff that is capable of reviewing the
information, establishing a correlation
between the written records and the
work observed in the field, and verifying
the reasonableness of the costs through
detailed cost analysis. If the contractor
cannot provide this level of cost
accounting, or the owner cannot provide
this level of administrative support and
analysis, then Path #2 is not an
appropriate method for establishing a
cost and time basis for a supplemental
agreement.
If that is the case, then the owner
must accept that he cannot minimize the
resolution time, and must spend as much
36
Figure 4—Contemporaneous Period Analysis
time as necessary to fully develop the
scope of the added work, such that Path
#1 becomes feasible.
Furthermore,
by including language in the schedule
specification describing a methodology
for use after an event has occurred, the
owner has provided for a means to
analyze the schedule retrospectively.
If no agreement can be reached
during the project on the time impacts,
the CPA becomes the method for
analyzing the project’s delays after the
fact. This averts any assertion that the TIA
is the “contractual method for
establishment of entitlement to a time
extension.”
The use of a TIA after the fact would
mean performing a retrospective TIA.
While there are occasions when such an
analysis may be necessary, retrospective
TIAs are very difficult to perform,
commonly misrepresent delays and their
impacts, and tend to ignore the
contemporaneous understanding of
criticality [18].
Recommended
specification
language describing this process is
included as Attachment #1.
COST ENGINEERING NOVEMBER/DECEMBER 2013
Conclusion
The goal of this project management
method is to minimize the resolution
time, while ensuring that the risks for cost
and time control are well-defined and
definitized in a supplemental agreement.
Note that in both paths, a supplemental
agreement to the contract is in place prior
to the start of the added work. However,
in Path #2, the finalized agreement for
time is left until after the work is
complete. But a T&M (or CPIF) agreement
is already in place for the work. The
contractor is not performing work
without an agreement in either case.
Performing work without an agreement is
a good way to drive the project to claim.
But it also the goal of this project
management method to ensure that the
analysis methodology is linked with an
appropriate contractual methodology, in
order to have similar levels of
responsibility and risk balance.
For Path #1, the TIA is a method that
prospectively estimates the time
necessary to perform the added work and
whether that time will impact the critical
time and cost before start of added work.
This may lengthen the resolution time,
but will benefit the owner in the long run
because the risk is placed on the
contractor, in a manner consistent with
the FFP nature of the basic agreement.
The contractor, however, should not fear
Path #1. Because of his experience with
construction, the contractor is likely in a
position of superior knowledge, and in a
FFP agreement his profit incentive is
maximized.
However, as discussed, Path #2 has
its benefits, most notably in that it
minimizes resolution time and limits the
need for full scope definition. These
benefits come with clear trade-offs for
the owner, who will bear significantly
more risk under this scenario. And both
parties will be under significant
administrative
burden,
for
cost
accounting and delay analysis, using this
method.
Regardless of the method used,
however, it should be the goal of both
parties to reach agreement on the time
and cost impacts of changes as early as
possible. Having two paths will maximize
Figure 5—Regaining Schedule Through Revisions
the opportunities for resolution of these
path. The FFP supplemental agreement is
This is the proper balance of analysis changes, and as a result minimize the
a method that prospectively estimates methodology and contract method. If chances for disputes. ◆
the cost of performing that work. In both the parties mix these methods, it is likely
cases, the contractor is responsible for that a muddled contractual situation will REFERENCES
the estimation and is in the position to result. For instance, if the contractor 1. Calvey, Timothy T.; and Ronald M.
Winter. Overview, RP 52R-09, Time
control the costs and the time, in order to receives a FFP supplemental agreement
Impact Analysis – As Applied in
come in under budget on both. As a for direct costs related to the added
Construction, AACE International, pg.
result, the contractor has the best work, but no agreement is reached
1.
opportunity to maximize profits.
between the parties as to how the time
2.
Calvey, Timothy T.; and Ronald M.
For Path #2, the CPA is a method that impacts will be judged and paid, the
Winter Overview, RP 52R-09, Time
retrospectively determines the time that contractor is essentially operating in an
Impact Analysis – As Applied in
was taken to perform the added work informal T&M environment.
Construction, AACE International.
and how much of that time impacted the
The contractor is in a position where
pg.1.
critical path. The T&M supplemental it may be to his benefit to perform the
3.
Carson, Christopher W. “Claims
agreement
is
a
method
that work at a slower rate than possible in
Analysis Nested in Schedule
retrospectively tracks the costs expended order to maximize indirect costs and
Updates,” AACE International
in performing the work. In both cases, associated profits; however, the
Transactions (2006): PS.06.
the contractor is operating without a contractor will be unsure of whether he
4.
Federal Acquisition Regulations
clear upper boundary, and work is being will be given a supplemental agreement
through FAC 2005-55, Subpart 16.2,
performed at the owner’s cost and time for these indirect costs. In that same
Fixed Price Contracts, effective
risk (more or less). In this case, the owner case, since the contractual responsibility
January 3, 2012.
must provide significantly greater for performance is unclear, the owner will
5.
Federal Acquisition Regulations
oversight to ensure that costs and time be in a position where he may not notice
through FAC 2005-55, Subpart 16.3,
are reasonable.
As a result, the that the responsibility has, by default,
Cost Reimbursement Contracts,
contractor is in a position where his risk fallen to him to ensure performance.
effective January 3, 2012.
of exceeding costs is less, but his profits
The best method for the owner is
6.
Federal Acquisition Regulations
will likely be lower.
likely Path #1, and to use it means that
FAC 2005-55, Subpart 16.4,
through
the owner must achieve agreement on
COST ENGINEERING NOVEMBER/DECEMBER 2013
37
Incentive Contracts, effective January
3, 2012
7. Federal Acquisition Regulations
through FAC 2005-55, Subpart 16.5,
Indefinite-Delivery
Contracts,
effective January 3, 2012.
8. Federal Acquisition Regulations
Through FAC 2005-55, Subpart 16.6,
Time-and-Materials, Labor-Hour, and
Letter Contracts, effective January 3,
2012.
9. Federal Acquisition Regulations
through FAC 2005-55, Subpart
16.104, Factors in Selecting Contract
Types, effective January 3, 2012.
10. Federal Acquisition Regulations
through FAC 2005-55, Subpart
16.104, Factors in Selecting Contract
Types, effective January 3, 2012.
11. Federal Acquisition Regulations
through FAC 2005-55, Subpart
16.202, Firm-Fixed-Price Contracts,
effective January 3, 2012.
12. Federal Acquisition Regulations
through FAC 2005-55, Subpart
16.304,
Cost-Plus-Incentive-Fee
Contracts, effective January 3, 2012.
13. Federal Acquisition Regulations
through FAC 2005-55, Subpart
16.601,
Time-and-Materials
Contracts, effective January 3, 2012.
14. Holloman, John K., ed. Section 10.3,
Change Management, Total Cost
Management Framework. First
Edition, AACE International, pg. 215.
15. Holloman, John K., ed. Section
10.3.2.5, Access Impact, Total Cost
Management Framework. First
Edition, AACE International, pg. 219.
16. Hoshino, Kenji P. Section 3.3
Observational/Dynamic/Contempora
neous As-Is (MIP 3.3) and Section 3.4
Observational/Dynamic/
Contemporaneous Split (MIP 3.4). RP
29R-03, Forensic Schedule Analysis,
Pgs. 43-55.
17. Hoshino, Kenji P. Section 3.4
Observational/Dynamic/Contempora
neous Split (MIP 3.4) RP 29R-03,
Forensic Schedule Analysis, Pg. 51.
18. Livengood, John. “Retrospective TIAs:
Time to Lay Them to Rest,” AACE
International Transactions, (2007):
CDR.08.
ABOUT THE AUTHOR
Patrick M. Kelly, PSP, is
with Arcadis. He can
be
contacted
by
sending e-mail to:
Patrick.kelly@arcadis-us.com
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COST ENGINEERING
Vol. 55, No.6/November/December 2013
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Pages 4-14
Forensic Schedule Analysis — Chapter 2:
Delay Analysis On Non CPM Scheduled Projects
James G. Zack Jr., CFCC FAACE and Steven A. Collins
This article was first presented as CDR.815 at the 2012 AACE Annual Meeting in San
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Article Reference Number - 22215
Pages 17-27
Forensic Schedule Analysis:
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Mark C. Sanders, PE CCP CFCC PSP
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Recommended Contractual Methods For Resolving
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Cost Engineering is a copyright protected AACE
International intellectual property product. For permission to photocopy individual articles for personal
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COST ENGINEERING NOVEMBER/DECEMBER 2013
41
AACE INTERNATIONAL ONLINE STORE
more online at www.aacei.org
Skills and Knowledge of Cost
Engineering, 5th Edition, Revised
Scott J. Amos, Editor, 2007
This updated and expanded guide for
fundamentals is an excellent choice for anyone
interested in a concise reference to all aspects of
the profession. The new 5th edition includes
twenty-seven
chapters
on
estimating,
manufacturing and operating costs, scheduling,
planning progress and cost control, and much
more. This is a very useful book for those studying
for the certification exam. 450 pages
1595-02zip - Download - US$50.00 member/US$80.00 nonmember
Paper version available through our Amazon.com link
CCC/CCE Certification Study Guide,
3rd Edition
Michael B. Pritchett, CCP, Editor, 2006
The AACE International CCC/CCE Certification
Study Guide provides an all-encompassing
reference text to prepare for the exam. The
CCC/CCE Certification Study Guide provides
background information on how to become
certified; gives those studying for the certification
exam a single reference text that includes theory,
worked problems with answers, references, and a
full discussion of key topics; allows students to
maximize their study time; and provides a concise
overview of the fundamentals of cost and project management.
1825-36zip - Download - US$45.00 member/US$55.00 nonmember
Paper version available through our Amazon.com link
PSP Certification Study Guide, 1st Edition
Peter W. Griesmyer, Editor, 2008
This study guide is intended to assist you in your
study and review of the overall topics as one step
toward successful Planning and Scheduling Professional certification. The outline provides a listing of
the terms you should know & topics for which you
should have a good understanding of how to apply
the concepts to solve problems. Each chapter also
contains sample exercises, which test your knowledge of that chapter's concepts. Additional sample
questions are provided in an appendix.
1820-38zip - Download - US$45.00 member/US$55.00 nonmember
Paper version available through our Amazon.com link
EVP Certification Study Guide,
2nd Edition
Ken Cressman, CCP EVP and Gary C. Humphreys,
Editors, 2009
This study guide is intended to assist you in your
study and review of the overall topics as one step
toward successful Earned Value Professional certification. The outline provides a listing of the terms
you should know & topics for which you should
have a good understanding of how to apply the concepts to solve problems. Each chapter also contains
sample exercises, which test your knowledge of that
chapter's concepts.
1820-40zip - Download - US$45.00 member/US$55.00 nonmember
Paper Version available through our Amazon.com link
Cost Engineering
The international journal
of cost estimation,
cost/schedule control,
project management,
and total cost
management.
Subscriptions are
accepted on an annual
basis. An automatic
benefit of AACE
International
membership, also
available to nonmembers.
5060-07 - US$72.00 (US)
- US$90.00 (other countries)
Please add US$8.00 for airmail
- US$61 electronic subscription
Cost Engineers’ Notebook
This CD-ROM is an important reference for any
project or cost professional. It includes data and
procedures related to basic skills and knowledge
that all cost engineers should possess, extensive
material on capital and operating cost estimation,
and papers in four subject areas: cost control,
planning and scheduling, project management, and
economic analysis and business planning.
4060-28zip - Download
- US$65.00 member/US$80.00 nonmember
AACE International Recommended Practices
Cost Engineering Terminology; Cost Estimate
Classification System; Estimate Preparation Costs in
the Process Industries; Project Code of Accounts;
Required Skills and Knowledge of a Cost Engineer;
Roles and Duties of a Planning and Scheduling
Engineer; Profitability Methods; plus many more.
4060-05zip - Download
- US$70.00 member/US$110.00 nonmember
The Total Cost Management Framework
John K. Hollmann, PE CCP, Editor, 2012
4060-20zip - Download
- US$50.00 member/US$80.00 nonmember
Paper Version available through Amazon.com
2013 AACE International Transactions
5220-13 zip Download
- US$90.00
member
- US$115.00
nonmember
For CD-ROM
version please
contact AACE
International
Headquarters
The
The AACE
AACE International
International Professional
Professional Practice
Practice Guides
Guides (PPGs)
(PPGs)
Value; Earned Value Reporting; Applications of Earned
Value Project Management; and more.
PPG#6: Construction Cost Estimating, 3rd Ed.
Dr. Douglas D. Gransberg, PE CCP, and Carla Lopez
del Puerto, CCP, Editors, 2011
Covers: Recommended Practices; Estimating Theory;
Conceptual, Parametric, and Range Estimating; Estimating Factors and Indices; Estimating Material Costs
and Quantity Surveying; Estimating Labor Costs; Estimating Equipment Costs; Subcontracting Costs; Estimating Overhead and Indirect Costs; Profit,
Contingencies, and Mark-Ups; Estimating International Construction Costs; and more.
(PPGs) are a series of reference s that
consists of selected Cost Engineering
articles, AACE International Transaction
papers, and other previously published
documents to which AACE has rights.
Price per PPG:
Download Member Price US$50.00
Download Non-Member Price US$70.00
Price for the PPG Package
includes all 21 PPGs:
Download Member Price US$874.00
Download Non-Member Price
US$1223.00
PPG#1: Contracts and Claims, 4th Ed.
James G. Zack Jr., Editor, 2008
Covers: Contract Administration; Management of
Construction Schedules; Schedule Control; Schedule
Float Ownership; Cost Control; Management of
Change; Cost Impacts; Productivity Impacts; Management and Analysis of Delay; Concurrent Delay Issues;
Pricing of Delay; and more.
PPG#2: Risk, 3rd Ed.
David C. Brady, P.Eng., Editor, 2012
Covers: Dictionary; Capital Investments; Cash Flow;
Competitive Bidding; Contingency Analysis; Contracts;
Cost Engineering; Currency Rates; Decision Trees; Economic Analysis; Escalation; Human Factors; Manufacturing; Research & Development; Safety & Health;
Schedule; Technological Risk; and Value Engineering.
PPG#3: Cost Engineering in Aerospace and Aviation
Sarwar A. Samad, Editor, 1998
Covers: Aerospace and Aviation.
PPG#4: Planning and Scheduling, 3rd Ed.
Trevor X. Crawford, CCP, Editor, 2011
PPG#7: Cost Engineering in the Utility
Industries, 2nd Ed.
Dennis M. Thompson, Editor, 2007
Covers: Auditing; Cost Estimating; Cost Modeling;
Cost/Schedule Control; Generation Power Plant; Natural Gas Industry; Nuclear Power Plant; Other Energy
Related Topics; Planning and Scheduling; Project
Management; Utility Rates; and Utility Property Valuation.
PPG#8: Contingency, 3rd Ed.
Kul B. Uppal, PE CEP, Editor, 2010
PPG #15: Life-Cycle Cost Analysis
Dr. Carla Lopez del Puerto, CCP, and Dr. Douglas D.
Gransberg, PE CCP, Editors, 2012
Covers: Life-Cycle Cost Theory; Life-Cycle Cost Methods,
Determining Discount Rate; Estimating Capital Cost of
Design and Construction; Estimating Operating Costs;
Estimating Salvage/Residual Value; Estimating Sustainability; Life-Cycle Cost Risk Analysis; Life -Cycle Cost
Case Studies; Life-Cycle Cost Analysis in the International Context
PPG #16: Cost Engineering in the
Global Environment, 2nd Ed.
Kul B. Uppal, PE, Editor, 2011
Covers: General Topics on International Projects; Applicable AACE International Recommended Practices; Cost
Estimating Methodology; Risk and Contingency; and
Miscellaneous Topics
PPG #17: Public Sector Estimating
PPG #10: Project Delivery Methods, 2nd Ed.
Covers: Basis of Estimates; Labor Costs; Overhead and
Profit; Soft Costs; Bid/Estimate Reconciliation; and
Change Orders
Dr. Douglas D. Gransberg, PE CCP, Tammy L. McCuen, and Keith Molenaar, Editors, 2008
Covers: Design-Bid-Build (DBB) – DBB Estimating, DBB
Scheduling, DBB Project Management; Construction
Management (CM) – CM Estimating, CM Scheduling,
CM Project Management; Design-Build (DB) – DB Estimating, DB Scheduling, DB Project Management; International Project Delivery; Constructability; and
Partnering.
PPG #11: Environmental Remediation &
Decommissioning, 2nd Ed.
Richard A. Selg, CCP, Editor, 2009
Covers: Environmental Remediation Planning and
Scheduling Methodology; Cost Estimating, Project Controls, Cost Modeling, and Reporting; Contingency Management, Risk Analysis, and Environmental Regulations;
Benchmarking and Lessons Learned; Economics of Environmental and Waste Management; Cost-Effective
Waste Minimization and Pollution Prevention; Design,
Construction Practices, and Other Related Topics.
PPG #12: Construction Project Controls, 2nd Ed.
Dr. Douglas D. Gransberg, PE CCP,
and Eric Scheepbouwer, Editors, 2010
Covers: Introduction to Construction project Controls;
Cost Control; Schedule Control; Quality Control; Document Control; Computer Applications; and International Project Controls
PPG #13: Parametric and Conceptual
Estimating, 3rd Ed.
Larry R. Dysert, CCP CEP, and Todd W. Pickett, CCP
CEP, Editors, 2012
PPG#5: Earned Value, 2nd Ed.
Covers: Parametric/Conceptual Estimating; Classification; Methodology; Capacity Factoring; Process and
Non-Process Industries; and Systems
Covers: Why Use Earned Value?; Basics of Earned
Value; Cost/Schedule Control System Criteria; Actual
Physical Percent Complete; Productivity and Earned
Covers: Enterprise Management: General Imperatives and
Concerns; Asset Requirements Elicitation and Analysis;
Asset Planning and Investment Decision-Making; Asset Performance Assessment and Change Management; and Program Management.
Covers: General Topics On Contingency; Cost Estimating and Contingency; Risk Analysis and Contingency;
and Other Related Topics.
Covers: Planning; Schedule Development; Schedule
Management/Control; and Classics.
Robert A. Marshall, Editor, 2007
PPG #14: Portfolio and Program Management,
2nd Ed.
Randy R. Rapp, PE CCP, Editor, 2007
Joseph L. Macaluso, CCP, Editor, 2007
PPG #18: Green Building, 2nd Ed.
Joseph L. Macaluso, CCP, Editor, 2012
Covers: Recognition of Affects and Economic Costs on
the Environment; Formulating Ways of Addressing
Green Building Strategies and Associated Economic
Costs; Specific Green Building Strategies and Project
Costs; Budgeting and Justifying the Cost of Sustainable
Practices; Evaluating Competing Sustainable Strategies:
Using Value Engineering; Evaluating Competing Sustainable Strategies: Other Techniques
PPG #19: Leadership and Management
of People
John J. Hannon, CEP, Editor, 2008
Covers: Leadership; Teams; Leadership Roles; Motivation; and Ethics.
PPG #20: Forensic Schedule Analysis
James G. Zack, Jr., CFCC, Editor, 2008
Covers: Recommended Practice No. 29R-03 Forensic
Schedule Analysis; Synopsis of Recommended Practice;
Basics of Schedule Delay Analysis; MIP-Observational
Static Gross; MIP-Observational Static Periodic; MIP-Observational Dynamic Contemporaneous As-Is; MIP-Observational Dynamic Contemporaneous Split;
MIP-Observational Dynamic Modified or Recreated; MIPModeled Additive Single Base; MIP-Modeled Additive
Multiple Base; MIP-Modeled Subtractive Single Simulation; Non-CPM Schedule Delay Analysis Techniques;
General Schedule Analysis Articles
PPG#21: Cost Engineering in the Process
Industries
Kul B. Uppal, PE CEP, Editor, 2009
Covers: General Topics on Process Industries; Cost Estimating Methodology; Project Management; International Projects; Scheduling; Construction Activities;
Risk Management; Project Controls; and Applicable
AACE International Recommended Practices.
More AACE Publications at the Online Store - www.aacei.org
CALENDAR OF EVENTS
NOVEMBER 2013
FEBRUARY 2014
NOVEMBER 2014
1-3 Fall Symposium 2013,
26-28 2014 Int’l Roofing Expo,
11-13 AACE International
Total Cost Management
Conference,
AACE International
Millenium Hilton Bangkok
Bangkok, Thailand
AACE International’s
Southern California Section
Hyatt Regency Indian Wells
Indian Wells, CA
Hanley Wood Exhibitions
Mandalay Bay Convention
Center
Las Vegas, NV
Contact: Justin Preston, Annual
Symposium Chair
phone 702.896.6926
jpeterson@ocmi.com
Contact: info@theroofingexpo.com
www.theroofingexpo.com
JUNE 2014
15-18 AACE International’s
18-20 IPM 2013 - 24th Annual International Integrated Program
Management Conference,
College of Performance Management (CPM)
Bethesda North Marriott Hotel and
Conference Center
Bethesda, MD
2014 Annual Meeting,
AACE International
Sheraton New Orleans Hotel
New Orleans, LA
Contact: phone 1-800-858-COST
fax (304) 291-5728
info@aacei.org
www.aacei.org
Contact: www.ipmconference.org
44
COST ENGINEERING NOVEMBER/DECEMBER 2013
Contact: phone 1-800-858-COST
fax (304) 291-5728
info@aacei.org
www.aacei.org
Please submit items for future
calendar listings at least 60
days in advance of desired
publication.
AACE International,
1265 Suncrest Towne Centre Dr,
Morgantown, WV 26505-1876
USA
phone: 304-296-8444
fax: 304-291-5728
e-mail: editor@aacei.org
website: www.aacei.org
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