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ANNEX 1 – Review of Programme development in relation to contract requirements for Contract D290 Contract Requirements The Contract Requirements in respect of programming are set out at Volume 6 Section 2.4. For convenience Section 2.4 (pages 10 to 21 inclusive of Volume 6 – D290) is included as Appendix PD1 to this report. Contractor’s Baseline Programme: The requirements for this are given at Section 2.4.1 of Volume 6. Some salient points from these requirements include:

- Use of Critical Path Method with Precedence Diagram Network technique - Use of Primavera P3 software - Clear identification of the Critical Path - Maximum duration of activities – 30 days - Limitation of use of constraints (and substantiation where used) - Clear delineation of activities (coding) - Incorporation of THSRC/ other parties’ review time - Supporting Information and Accompanying Narrative

The Supporting Information and Accompanying Narrative were to provide “details (of) the basis and assumptions upon which the programme has been drawn”. This was to include:

- a narrative description of work sequences - marked up plan detailing concrete pour dates for major sections - an overall manpower forecast as prescribed - typical cycle times - planned production outputs for major activities and areas - list of major items of plant and procurement lead times - cumulative output curves and histograms - any programme constraints with substantiation - total float listing - daily and weekly working hours and shift patterns - other information ( if any) requested by the Employer’s Representative (ER)

There was no requirement to provide Resource Loading of the programme at its first submission to the ER. This was contemplated only after the ER’s statement of no objection to the first submission (see Section 2.4.1. (d))

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D290 - The First Baseline Programme Submission The JV’s first submission of its Baseline Programme for D290 was by a transmittal dated 31 July 2003. The accompanying document (no. PrgBL-0307-001) contained a programme on Primavera P3 network programming software with the Primavera Project Group identifier T010 version 1.0. The programme contained 1194 activities. The accompanying narrative explained the coding system, much of which was prescribed by THSRC, and which appears to conform. A “library” of resources was present in the software but no quantities had been ascribed. This would be in keeping with the Contract at that stage. The accompanying document contained a printout in bar chart format on which the Preliminaries, Procurement and External Works activities had all been summarized and therefore it was not possible to identify on the printout exactly what activities they contained. The programme contained many activities with durations exceeding 30 days (contractual limit). These may be seen at Appendix PD2 hereto. There were 418 such activities representing 35% of all the activities on the programme. The programme also contained many dependencies with lags of what might be considered excessive magnitude. Notwithstanding that there is no contractual prescribed limit, there are 39 dependencies exceeding 7 days thus: T010 – LAGS GREATER THAN 7 DAYS

Activity Successor LAG (days)

Relationship (Start-Start, Finish-Start or Finish-Finish)

DMGR973000 DMIN7BD000 120 SS DMIN581000 DMIN732000 120 FS DMIN581000 DMIN736000 120 FS DMIN581000 DMIN737000 120 FS DMGR210000 DMMS116400 110 FS DMDS300200 DMDS3X2100 100 FS DMDR402500 DMIN521000 90 FS DMDR402500 DMIN522000 90 FS DMDR402600 DMIN521000 90 FS DMDR402600 DMIN522000 90 FS DMGR210000 DMMS116200 90 FS DMGR210000 DMMS116300 90 FS DMPR402400 DMIN521000 90 FS DMPR402400 DMIN522000 90 FS DMTE92100 DMTE91K100 90 FS DMTE92100 DMTE91K300 90 FS DMTE92100 DMTE91K500 90 FS DMTE92200 DMTE91K100 90 FS DMTE92200 DMTE91K300 90 FS DMTE92200 DMTE91K500 90 FS

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Activity Successor LAG (days)

Relationship (Start-Start, Finish-Start or Finish-Finish)

DMGR210000 DMMS116100 80 FS DMDS300200 DMDS320200 60 FS DMIN571000 DMIN72F000 40 FS DMPR401300 DMIN571000 37 FS DMDS300200 DMDS3M0600 36 FS DMGR210000 DMMS116500 30 FS DMIN504000 DMIN504020 29 FS DMIN560500 DMIN560600 24 FF DMIN541500 DMIN584000 21 FS DMDR402500 DMIN530000 20 FS DMDR402600 DMIN530000 20 FS DMPR402400 DMIN530000 20 FS DMIN504050 DMIN506000 15 SS DMIN613700 DMIN71H000 15 FS DMIN613700 DMIN71M000 15 FS DMIN556300 DMIN558100 12 FS DMIN556900 DMIN558000 12 FS DMMS101300 DMIN530000 10 FS DMIN540700 DMIN584000 9 FS

No commentary was given in the narrative to explain these lags. Many of them might better have reflected the JV’s intentions by the use of constrained or imposed start dates since it does not necessarily follow that a lag such as FS 120 will apply in a delay situation to the predecessor activity. This is depicted below: Although the Contract requires constrained dates to be minimized, it is considered that the JV could have used such methods as opposed to dependences with excessive lag values that tend to mask a contractor’s ability to mitigate (at no cost) any projected delay. The bar chart (or Gantt chart) in the accompanying narrative identified the critical path activities in red colour. A brief narrative stated:

FS 120 days

Calendar date determines start Delay to start

FS 120 no longer applies

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“CCTJV consider that the following activities are considered critical to the achievement of the trackwork interface dates. 6.1 AREA T5 (within the Main Workshop Building) …………….. ………………. 6.2 The Main Workshop Building( Remaining Area)” No attention was drawn to what was being determined by the programme logic and dependencies. This would be usually made by extracting the critical path activities separately, either by what is known as the “longest path” or by those activities with zero float. The end of the longest path for programme T010 is as follows: LONGEST PATH

It will be seen that the completion of Section 2 (Activity DMGR211000) is determined or “driven” by an artificial activity depicting “Project Duration” whose duration is 881 days. It is described as a “Cost and Resource Hammock”. However it is not a “hammock” in the technical sense (which is a flexible summary activity). Rather it is an activity “task”.

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The effect of this is to accord the JV the full contractual duration irrespective of what the durations and sequences of the planned work was determining. Whilst this is the right of a contractor, it is not considered good practice to introduce such an artificial activity for programming purposes. In the programme T010, the real critical path lay elsewhere. If one traces the sequence backwards from DMGR211000 (Project Duration) the following is found:

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ALL PREDECESSORS TO ACTIVITY “DMIN8MC000” HAVE FLOAT

And showing this float in the barchart…………………

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It may be seen that all of the predecessor activities to DMIN8MC000 have 49 days of total float save one activity which has 20 days. This means that that activity DMIN8MC000, prima facie, could have started earlier. One must query whether or not float has been concealed in some way. However a decision has apparently taken to delay it given the nature of the activity (Asphalt Surfacing) where it would be reasonable to wait until all asphalt surfacing would be executed in one operation. This has been achieved by the introduction of a “zero free float constraint” to the Asphalt Surfacing activity in the P3 software thus:

No explanation appeared in the narrative as to such constraints notwithstanding that this was required in the Contract. With reference to Appendix PD19 hereto, it will be seen that the Programme T010 contained some 284 activities to which zero free or total float constraints had been assigned. Not all of these activities will have rational management logic as the case above and may well simply conceal float. If the artificial activity DMMS18E000 (Project Duration) is given a zero duration, then it is possible to try to ascertain the real critical path of programme T010. The following sequence traces back the predecessors from Sectional Completion 2 after removing the artificial activity Project Duration:

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FINISH TO START 100 DAYS

It will firstly be seen that the Sectional Completion 2 shows 74 days float. Further that the head of the sequence contains a lag Finish to Start of 100 days. No explanation is given in the narrative and it might arguably be considered as a means of concealing float in the programme.

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The programme T010 also makes use of “negative lags”. These are dependencies that are sometimes wrongly used where concurrent working of activities can occur. The correct way to link such activities is with two dependencies of the type Start-to-Start and Finish-to-Finish. By using negative lags, the effect is to “bind together” the sequence such that when showing the effect of delay, any inherent float between activities is ignored. This is illustrated thus: In this sequence the start of each activity is 3 days after the start of its predecessor. However the completion of each activity can be delayed until 1 day before the completion of the next. An example might be the application of 1st coat plaster onto a block wall. Delay of 2 days in the first activity will not affect the remaining activities. However if there are negative lags, it will.

SS 3

SS3

SS3

SS3

FF1

FF1

FF1

FF1

SS 3

SS3

SS3

SS3

FF1

FF1

FF1

FF1

Delay 2 days

FS negative lags

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Adding 2 days delay to the first in the sequence: An example of how the JV has used negative lags in T010 is as follows:

In this example, any delay, however slight, in offsite steelwork fabrication will prevent the commencement of any steelwork painting offsite, which in turn will reflect a similar delay on the delivery to the site. This, practically, is a most unlikely situation.

Complete sequence delayed by 2 days

2 days delay

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Whilst the Contract requires the JV to provide “sufficient detail …….for monitoring and evaluating progress…” the Programme T010 has given only one activity for the Main Workshop concrete base slabs viz: DMIN560600 whose duration is 66 days (see above sequence). In the accompanying narrative, there is a transparent overlay that shows the breakdown into various areas of these slabs. However these are not reflected in the programme where it is considered it would have been reasonable to do so given the size of that structure. It will finally be observed in the above sequence that every activity is critical as a result of the negative lags. This is most unlikely to be the case. The programme T010 was not given the SONO status by the Employer’s Representative (THSRC letter dated 19 August 2003 ref 03D290S00180). It is outwith the scope of this report to comment on his reasons. However from the separate analysis made above, the decision would appear justified. D290 Subsequent Submissions Leading to SONO Numerous iterations of the Baseline Programme were exchanged between the JV and THSRC between T010, received by THSRC on 4 August 2003, and the “SONO programme” T053 received by THSRC on 23 June 2004. This latter programme was confirmed as having the SONO status by THSRC’s letter dated 8 July 2004 (ref 04D290S01667). A complete list of all programmes issued to THSRC by the JV (in soft copy) is given at Appendix PD3 hereto. THSRC has, perhaps misleadingly, requested the JV to add resources and cost loading to the first Baseline Programme submission by a letter dated 14 August 2003 ref 03D290S00161. This appears to be at variance with the Contract at Volume 6 item 2.4.1. (d) Resource loading which states: “Following the Employer’s Representative’s statement of no objection of the first submission of the Baseline Programme, the Contractor shall provide on the next submission of the Baseline Programme full resource details for major activities including but not limited to the substructure, superstructure, and architectural and building services fit out stages of the Works….” This expressly requires a SONO to be made in advance of the Contractor adding resources to its Baseline Programme (cf. the definition of Baseline Programme which states it is to be resource loaded). At that stage SONO had not been given. (cf THSRC letter dated 19 August 2003 which objected to programme T010) A further reference to lack of Resource Loading was made in THSRC letter dated 8 June 2004 (ref.04D290S01354) commenting upon Baseline Programme 5.2 (T052). Whilst a cursory glance at the correspondence between THSRC and the JV concerning the evolution of baseline programmes suggests that many of THSRC’s comments seem justified, the apparent “mixing” of resource loading into the comments before SONO was granted might be considered as a point of weakness in THSRC’s administration of

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the D290 contract and the apparent ambiguity1 in the Contract Documents exploited by the JV in formal proceedings. The SONO Programme T053 The programme finally given SONO status by THSRC had the Primavera P3 identifier of T053. The SONO programme still contained the artificial activity depicting Project Duration viz:

However in parallel to this the Longest Path may be extracted thus

1 Between the definition of Baseline Programme and Volume 6 item 2.4.1.(d)

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14

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It will be seen that the critical path correctly lies in the Main Workshop Negative lags have been removed as example below (see also Appendix PD10 hereto which shows there are no negative lags at all).

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Again with reference to Appendix PD10 , there remain a number of lags of excessive magnitude . However these appear to be confined in the main to activities setting various milestones in the programme. With reference to the bay layouts of the Main Workshop at Appendix PD4 hereto , the sequence of Primary Structural Steelwork erection in the Main Workshop commenced at Areas A1 and A2 in the centre of the building thus:

Whereas the sequence for Roofing, in keeping with the technical limitations of the product (viz: to be laid in one full extruded width), commenced at one end of the building at Grids 36 to 33 working along the building thus:

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Notwithstanding the “SONO” to programme T053, it has been explained to the author of this report by THSRC staff that THSRC always considered the JV’s intended sequence for the structural steelwork was flawed. Prima facie, this would appear to be a valid remark. It has further been remarked by THSRC staff that the whole process leading to the programme T053 has largely been a “paper exercise” and that in reality, the JV has never worked to T053. Major resources were ascribed to the various work activities in the programme T053. The resource “MCONC” -concrete material- is shown for the whole of the Works below:

These resources in Programme T053 have formed the basis for the comparative S-Curves of planned versus actual production that appear elsewhere in this report. The JV introduced resources into its programmes commencing with T021 received by THSRC on 7 October 2004. This was the next programme after T010 and would thus appear to be in conformity with item 2.4.1 (d) of Volume 6 of the Contract in terms of the timing for the adding of Resource Loading. It should be pointed out that there would appear to be an error in the ascription of the structural steelwork quantity to activity DMIN1300:

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There are 1630 tonnes of steel ascribed to this activity, which would not appear correct. The effect is to cause an uncharacteristic “spike” in the planned production curve thus:

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D290 Monthly Progress Updates The Contract requirements are set out at item 2.4.6 of Volume 6 (see Appendix PD1 hereto). No electronic copies were provided to THSRC prior to the achievement of the SONO status to T053. Since there was no contractual target Baseline Programme for comparison, then it might be considered correct for the JV to have withheld the electronic versions at that stage. The programmes included in Monthly Reports up to the point when SONO was obtained were thus only issued in hard copy. Those programmes were:

Month P3 Identifier Projected Substantial

Completion Date (Section 2)

Total Float (working days late)

Title

August 2003 0831 1 Oct 2005 Not shown but zero

Baseline v 1.0 (31 Aug 2003)

Sept 2003 0930 20 Oct 2005 Not shown Baseline v 2.0 (30 Sept 2003)

Oct 2003 1031 22 Oct 2005 Not shown Baseline v 2.0 (31 Oct 2003)

Nov 2003 1130 19 Oct 2005 -19 Baseline v 3.0 (30 Nov 2003)

Dec 2003 1231 1 Oct 2005 0 Baseline v 3.0 (31 Dec 2003)

Jan 2004 0131 2 Oct 2005 1 Baseline v 3.0 (31 Jan 2004)

Feb 2004 0229 17 Nov 2005 -47 Baseline v 4.0 (29 Feb 2004)

March 2004 0331 10 Nov 2005 -40 Baseline 4.0 (31 Mar 2004)

April 2004 0430 31 Jan 2006 -122 Baseline 5.1 (30 Apr 2004)

With reference to the above table, the JV commenced reporting significant slippage in February 2004. Once the Baseline Programme had achieved SONO status, the JV commenced a numbering system generally with “T” as a prefix in the P3 Project Group identifier. The programmes subsequently issued in monthly reports were:

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Month P3

Project Group name

Projected Completion

Section 2

Total Float -

working days delay

Title Number of

activities

May-04 T060 1-Oct-2005 0 Revised Baseline v 6.0 (31 May 2004) 1834 Jun-04 R080 1-Oct-2005 0 Recovery Programme Jul-04 T070 1-Oct-2005 0 Baseline 7.0 (31July 2004) 1757

Aug-04 T080 14-Oct-2005 -13 Revised Baseline 8.0 (31 Aug 2004) 1784 Sep-04 T090 1-Oct-2005 0 Revised Baseline 9.0 (30 Sept 2004) 1787 Oct-04 T100 1-Oct-2005 0 Updated Progress Programme 10.0 (31 Oct 2004) 1815 Nov-04 T110 Unavailable Dec-04 T120 1-Oct-2005 0 Updated Progress Programme 12.0 (31 Dec 2004) 1817 Jan-05 T130 1-Oct-2005 0 Updated Progress Programme 13.0 (31 Jan 2005) 1817 Feb-05 T140 11-Nov-2005 -41 Remaining Activity T140 (Based on v12.1) 2212 Mar-05 T150 16-Dec-2005 -76 Remaining Activity T150 (Based on v12.1) 2212 Apr-05 T160 17-Dec-2005 -77 Remaining Activity T160 (Based on v12.1) 2226 May-05 T170 15-May-2006 -226 Remaining Activity T170 (Based on v12.1) 2227 Jun-05 T180 5-Jun-2006 -247 Remaining Activity T180 (Based on v12.1) 2247 Jul-05 T190 5-Jun-2006 -247 Remaining Activity T190 (Based on v12.1) 2247

Aug-05 T200 31-May-2006 -242 Remaining Activity T200 (Based on v12.1) 2254 Sep-05 T210 4-May-2006 -215 Remaining Activity T210 (Based on v12.1) 2252 Oct-05 T220 2-Jun-2006 -244 Remaining Activity T220 (Based on v12.1) 2252 Nov-05 T230 30-Jun-2006 -272 Remaining Activity T230 (Based on v12.1) 2252 Dec-05 T240 30-Jul-2006 -302 Remaining Activity T240 (Based on v12.1) 2252 Jan-06 T250 29-Aug-2006 -332 Revised Baseline Programme T250 (based on v 12.1) 2252 Feb-06 T260 25-Sep-2006 -359 Revised Baseline Programme T260 (based on v 12.1) 2252 Mar-06 T270 25-Oct-2006 -389 Revised Baseline Programme T270 (based on v 12.1) 2252 Apr-06 T280 13-Nov-2006 -558 Updated T270(sic) Programme 28.0 (30 Apr 06) 4192 The above evolution of the predicted substantial completion dates may be plotted graphically thus:

D290 Predicted Substantial Completion dates Section 2

17-Feb-2005

28-May-2005

5-Sep-2005

14-Dec-2005

24-Mar-2006

2-Jul-2006

10-Oct-2006

18-Jan-2007

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Monthly Updates post SONO

Dat

e

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Notwithstanding its prediction of 122 days delay in April 2004, it can be seen that for nine months after SONO status, the JV generally predicted that Substantial Completion for Section 2 would be again achieved within the prescribed contractual limit. Thereafter the prediction took an upward trend culminating in Programme T290 in April 2006 where the Certificate of Substantial Completion was predicted on 13 November 2006. Extracts of programme T290 are given below showing firstly the Longest Path and secondly highlighting the activity depicting substantial completion

It is noteworthy that the JV has introduced activities for the correction of architectural work extending until September 2007 ! In the hard copies of programme updates submitted in monthly reports, the JV has rarely, if ever, shown the SONO programme T053 as a target bar to the current update. This was an express requirement of item 2.4.6 of Volume 6. However it would have been possible to add this to the electronic versions.

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The JV has further not complied with item 2.4.7 (e) of Volume 6 in that hard copies (not updated) of the Baseline Programme in bar chart “portrait” format were not present in the Monthly Reports. In all the updates, significant delays to Key Dates have been observed. However these are too numerous to be considered in this review. The exercises at Appendices PD20 and PD21 hereto make comparisons between two typical updates viz: T200 ( Aug 2005) and T210 ( Sept 2005). Appendix PD20 shows that only one significant decrease in original duration occurred and conversely 2 small increases occurred. In Appendix PD21 , it can be seen that only one change to a logic type occurred. The exercise has not extended to an examination of which activities were absent from each other. The basic point made is that the JV on D290 made minimal adjustments to programmes in mitigation. Overall impression on D290 Baseline Programme development and Programme Updates Notwithstanding THSRC’s requirement to Resource Load it, the first submission T010 was not in accordance with the Contract and generally fell below what would be considered a professional standard from a programming perspective. THSRC would appear to have had a difficult task in eliciting from the JV a Baseline Programme that complied with the Contract. When SONO was eventually granted, the project history had evolved to such an extent that the SONO programme T053 was perhaps out of step with actual sequences worked to by the JV. Its usefulness is considered to be limited (along with T010) to a statement of the JV’s original intentions in terms of work sequences and resources. The programme updates and Monthly Reports appear to be of limited use as a management tool. No comparisons were possible on the hard copies. The only means in the Monthly Reports for tracing slippage was by means of tables and a single S-Curve depicting overall progress for the whole project2. From the representative comparison of T200 and T210, it would seem that little attempt was made to critically appraise the activity durations or programme logic.

2 The basis for the S-curves in monthly reports is thought to be based upon financial value