Chapter 5 Advanced CPM Deception and Mystery

Copyright © 2009Copyright © 2009T.L. Martin & Associates Inc.T.L. Martin & Associates Inc.

Chapter 5Chapter 5Advanced Techniques of Advanced Techniques of

CPM Deception and CPM Deception and MysteryMystery


A. The baseline scheduleA. The baseline schedule


The baseline schedule The baseline schedule Should represent a contractor’s realistic strategy for

constructing the project and meeting all contract requirements.

• It is to include all work activities, linked together based:– primarily on physical relationships – secondarily by contractor preference

• Work activity durations are based on:– work quantities, – Resources, and – reasonable production rates.

• A contractor’s estimated “means and methods” of its bid should be similar to the baseline schedule.


The baseline schedule The baseline schedule An accurate baseline schedule is an

extremely useful tool.

• It is the basis for many important decisions: – owner, contractor and subcontractor

commitments, – Financial and cash-flow requirements– personnel, material and equipment


The baseline schedule The baseline schedule • Specialty subcontractors should develop an activity

list with estimated work quantities, key resources and anticipated productions.

• The owner should also provide the general contractor anticipated work lists for which it assumes responsibility with appropriate durations.

• The general contractor then takes this information and develops a proposed as planned project CPM schedule.

• This proposed schedule should first be reviewed by specialty contractors.

• The contractor’s finalized baseline schedule should then be reviewed and approved by the owner and/or its representatives.


The baseline schedule The baseline schedule • The baseline CPM schedule has significance since it

may be used to prove delay to project completion. • Contractors use it as a basis to claim damages due

to alleged owner interference, delays and/or directed acceleration.

• Owners uses it to help defend against such claims.

(A baseline schedule may include some very deceptive tricks.)


The baseline schedule The baseline schedule Tricks and TrapsTricks and Traps

• A contractor under-resources the baseline schedule. – Stop an owner from rightfully complaining that the

project is being delayed due to contractor failure to resource the job correctly.

– The under-resourced scheduled may also set up an owner for an acceleration claim, with damages computed as the difference between the baseline and what was actually expended.



• Another favorite trick is to improperly prolong some work and cause follow-on activities to be crowded into an unrealistic performance periods.

• This often creates many critical activity paths during the crowded period, with high risk of completion delay. – The owner and contractor incorectly will

not view problems early-on as detrimental to overall project performance.



• Improperly prolonging some work and causing follow-on activities to be crowded into an unrealistic performance period often backfires.

• The Owner takes advantage of available float in early work – Delays to foundations, – Late owner furnished equipment and/or materials, – Late designs for follow-on work,– Will not appear critical, resulting in no entitlement

to additional time for contractor performance.



• A contractor may attempt to create many critical paths through a project’s CPM network.

• This however becomes a double-edged sword if the contractor causes a delay along one of the critical paths.

• The more probable result with multiple critical paths is concurrent delay. Both owner and contractor problems delay critical path work, which generally results in a non-compensable time extension for the contractor.

• Thus, an unrealistically crowded period in a CPM schedule harms both the contractor and the owner.


Key Issues to Watch Out for in the Key Issues to Watch Out for in the

Schedule Development ProcessSchedule Development Process

• Inadequate number of activities and missing work activities

• Excessive activity durations• The use of vague logic and missing logic ties for key

relationships• The use of manpower restraints and preferential logic

conditions which cause critical or near-critical paths• Excessive number or unreasonable constraints• Failure to include “ordinary” weather days

Typical problems encountered in the Baseline Network


Key Issues to Watch Out for in the Key Issues to Watch Out for in the Schedule Development ProcessSchedule Development Process

• Control and abuse of float• Owner durations for various approvals• Front-end cost loading • Deferring major features of work toward the

end of the project and not taking advantage of the opportunities that exist


B. Updating the project B. Updating the project scheduleschedule


Updating Updating

• Update - The process of incorporating actual event documentation into the baseline schedule or current approved schedule to forecast how the actual progress of the work compares to the plan

• Should be required with every pay requisition or at least monthly


UpdateUpdate

• Why Update a Schedule– Document and record actual progress

– Determine status of the job relative to completion or interim milestones

– Establish an accurate benchmark for payment- “earned value”

– To provide current activity start and finish dates


The Data DateThe Data Date

• DATA DATE - The first working day after the reporting period

• Generally at the end of the month to coincide with billing cycles


Goals of a Schedule UpdateGoals of a Schedule Update

• To limit surprises

• To preserve an accurate record of progress

• Accurately determine reasonable payment

• Forecast project completion or key project milestones

• Calculate the impact of progress (or lack there of) in the previous period


The Schedule Update ProcessThe Schedule Update Process

• Contractor develops a pencil copy

• Must accurately reflect both:

– Value of work in place based on actual quantities installed

– Required time to complete remaining work.

• Allow review of activity percent complete and resource percent complete.


The Schedule Update ProcessThe Schedule Update Process• A key area of trickery involves revisions to logic or lack

there of, during the update. • Major revisions to activity sequences with impacts to

critical work and/or causing previously non-critical work to become critical, require special review and understanding.

• Owner responsible changes should be added to the CPM schedule during the updating process, based on agreed to fragnets.

• The insertion of added or changed work into the CPM during the updating process should be done based on quantities of work, realistic resources and associated production rates.



• KEY ITEMS TO REVIEW (for Trickery)

• Calculation Setting –Retained Logic vs. Progress Override

vs. Actual Dates



• KEY ITEMS TO REVIEW (for Trickery)

• Calculation Setting Impact.–Retained Logic vs. Progress Override vs. Actual Dates

–Start to Start Lag Calculations


10

102

2

102

2

102

255

Start to Start Lag CalculationsStart to Start Lag Calculations

As Planned

Based on Actual StartBased on Early Start (of Remaining Duration)



• KEY ITEMS TO CHECK (for Trickery)

• Calculation Setting Impact.–Retained Logic vs. Progress Override vs. Actual Dates–Start to Start Lag Calculations

–Contiguous vs. Interruptible durations


Contiguous vs. Interruptible DurationsContiguous vs. Interruptible Durations

8

1 8

4

7 10

8

1 8

103

SS 2

FF 2

FF 2

SS 24



• KEY ITEMS TO CHECK (for Trickery)

• Calculation Setting Impact.– Retained Logic vs. Progress Override vs. Actual

Dates– Start to Start Lag Calculations– Contiguous vs. Interruptible durations– Start vs. Finish vs. Most Critical Total Float

Calculations



• KET ITEMS TO CHECK (for Trickery)

• Calculation Setting Impact

• Verify dates are not leveled or limited

• Review Out-of-Sequence work


Out of Sequence ProgressOut of Sequence ProgressExcavate (5)

Form (7)

Rebar (4)

Pour

2

2

3 1

As Planned

Excavate

Form

Pour

2

Update

Rebar 2

DataDate

This situation indicatesthat a problem existsthat must be fixed toget an accurate update

{

1 day gap equal tolag duration from

rebar to form

2


C. Manipulation of delayC. Manipulation of delay


Manipulation of delayManipulation of delay

• The insertion of owner responsible issues into a CPM schedule can result in misleading criticality.

• This will occur if the added or changed work is put into the plan based on preference, rather than physical dependency.

• Key resource constraints should be reviewed by both the contractor and the owner.


Manipulation of delayManipulation of delay

• The insertion of added and changed work is subject to all of the tricks noted above including: – imposed constraints on activities, – selected schedule calculation method, – resource leveling, – activity relationship exploitation, and – creating impractical periods of multiple critical

paths


D. Concurrency and other D. Concurrency and other imaginingsimaginings


Concurrency and other Concurrency and other imaginingsimaginings

• If a delay is encountered, during the updating process it must be determined if it has an impact to the overall project completion or to the completion of a contractual milestone date.

• If the delay has no affect on milestone or overall project completion, than the delay did not cause any damage or loss to either the contractor or the owner.

• This occurs as the delay simply reduced the float time along an activity path.



• The analysis and proof of liability, causation and damage becomes very complex when multiple delay issues are encountered.

• With each update, typically there are a number of activities that are not progressed as planned.

• The reasons for the lack of progress are many and varied and may simply result in logic revisions adjusting for contractor preferred sequences of work.

• Other issues affecting activity performance may not be as simply resolved.



• Sometimes a single activity may experience multiple causes of delay.

• For example, during one update period, the façade of the building may be delayed due to the crane being diverted for installation of added rooftop units, an owner responsible change,

• And also due to concrete structure errors preventing façade placement until concrete rework is performed, a contractor responsible delay.

• The question then becomes, did the contractor’s structure errors or the owner’s change delay the critical façade or a combination of both?



• The arguments are straightforward; • The contractor argues that the structural repairs

would have been completed much sooner but for the owner’s change diverting the crane.

• Simply, why hurry up to only wait for the crane to be freed from the changed work.

• The owner argues that the changed work was performed while the crane was unoccupied, awaiting contractor structural repairs, thus the contractor was not delayed by the change.



• If the delay period can be reasonably apportioned between the various causes of delay, damages are generally apportioned as well.

• If the delay cannot be apportioned, than generally the contractor is given a non-compensable time extension.



• Multiple delays may occur to different activities along the same activity chain or among different activity chains at the same time or at different times.

• For example, the installation of underground utilities is delayed by poor performance of a subcontractor that then delayed critical foundation work.

• The owner delays steel fabrication due to late changes to the structural drawings.



• Even though the underground delay occurs first, the contractor can argue that the drawing changes will critically delay steel fabrication and delivery, thus the foundation work can slip until the steel is ready for delivery.

• The owner will argue that since the underground utilities delayed the foundations, it can use that delay period to revise the steel requirements.



• If the contractor argues the “why hurry up to wait” theory, generally it must:– demonstrate that it could have completed

on time but for owner caused delay– and/or the Owner responsible delay was

an overriding significant delay affecting related work rendering the then current schedule meaningless. (John Driggs Co., ENG BCA Nos. 4926, 5061, 5081, 87-2 BCA ¶ 19,833 at 100,388.)



• If multiple concurrent delays occur, the party claiming damages must provide a reasonable basis for apportioning delay between the parties.

• If the concurrent delays can not be segregated, then nether party can recover monetary damages from the other and an excusable but non-compensable time extension is granted to the contractor.



• The resource loaded CPM schedule, becomes an important tool as various delays are apportioned between the parties.

• Various tricks can play apart as well including:– imposed constraints on activities, – selected schedule calculation method, – resource leveling, – activity relationship exploitation, and – creating impractical periods of multiple critical

paths.


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Chapter 5 Advanced CPM Deception and Mystery