Do We Have All the Time in the World?
A plan, programme, or schedule, call it what you may, but what is it, and why do we need one?
All construction projects invariably face challenges, one of those being time.
Despite what Louis Armstrong sang, Contractors do not Have All the Time in the World. Their time to complete a project is defined by their Contract and the commercial reality that they need to make a profit.
In the 25 years or so that we have been involved in live planning and programme delay analysis, we have seen a variety of programmes that have ranged from the over-simplistic to the incomprehensible; whilst others were simply abject nonsense. That being said, many programmes that we have seen, and been involved with are well-structured, comprehensive, and comprehensible.
In this short article, we examine the benefits of preparing a detailed construction programme using the Critical Path Method (CPM) and highlight the key considerations and merits of adopting such an approach when planning and programming construction projects.
Introduction to Critical Path Method (CPM) Programming
Since the late 1970s, the construction industry has generally embraced the practice and use of CPM programming as a project management tool to plan, coordinate and programme the execution of the Contractual Works using project management software such as Artemis Project Management Systems, Primavera Systems, and similar computer project management software suites.
The construction contract often plays a key role in identifying the requirements of the Contractors programming needs, and the requirements should be accurately adhered to when preparing a baseline programme.
However, in circumstances where the Contract is largely silent regarding planning expectations, all parties to a contract should still understand the merits of a well-constructed programme.
It is common practice, before the commencement of a construction project, for a baseline or Contract CPM programme to be developed to provide a clear understanding of how the Contractor intends to plan, coordinate and programme their Works within the time constraints of the Contract.
Clear and concise programming is an essential tool to manage the project, and it ought to be borne in mind that the need for a Contractor to prepare a programme is exactly that, to manage the project, their Subcontractors and their Suppliers.
The baseline programme, as subsequently developed and approved by the Employer, becomes the Contract programme, and is used as a reference from which to measure the status of the Works, and the impact of any delays. It is also used to assist with establishing any entitlement to an Extension of Time and forms an essential element in claims management.
Methodology
The essential technique for preparing a baseline programme is to construct a practical representation of the Works based on the Employer’s requirements and Contract specifications, which would normally include the following:
- The work activities required to undertake the Works associated with the project (which are typically assigned within a work breakdown structure or coding structure);
- The time duration that each activity will take to complete;
- The resources, plant and equipment required to complete each activity;
- The dependencies (and interdependencies) between the activities; and
- The Contractual completion obligations.
Using this data, the planning engineer can calculate the activities which make up the longest single path of the planned activities through to the end or completion of the project, and more importantly, the earliest and latest dates that each activity can start and finish without delaying a project completion milestone.
This process determines which activities are deemed “critical” (i.e. those on the longest path) and those activities which have “total float” (i.e. those activities that can be delayed without delaying a project completion milestone or the general Works).
The Critical Path is the sequence of activities that, in total, equates to the longest overall duration, or longest path. This sequence determines the shortest time to complete the project and in doing so, any delays to an activity on the critical path directly impact the planned project completion milestone.
The baseline programme should be produced via a properly assessed network of interlinked activities, then generally presented in a bar chart format, and contain, but not be limited to:
- Activity Identification;
- Activity Description;
- Activity Duration;
- Computed or Specified Early Start Dates;
- Computed Early Finish Dates; and
- Total Float.
The baseline programme should indicate all elements of the Works and contain all major key dates and work activities required to complete the Works.
In summary, the programme could contain the following work elements:
- Engineering / Design;
- Interface Requirements;
- Procurement;
- Manufacturing and Fabrication;
- Construction;
- Testing and Pre-commissioning;
- Commissioning, Performance Tests; and
- Trial Operation and Acceptance.
If the above points have been considered, and the Contract requirements met, the programme administrator should be able to submit the programme for review and / or approval by the Employer.
Once approved, the programme is then generally referred to as the “As Planned”, baseline or Contract programme, and is used as the base from which to monitor progress against, and determine the impact of any changes, delays, and disruptions.
Advantages
Once the programme is approved, the programme administrator is generally required to update the programme to reflect the rate of progress and record the as-built records for the activities detailed in the approved programme.
This plays a key role for the Contractor to monitor and assess the programme of Works in terms of responsibility and quantum i.e. claims management.
Any of the Contractors failures to achieve the programme generally require the programme administrator to suggest recovery measures for implementation into the programme and re-issue for approval. Once approved, this becomes an approved programme.
Any Employer risk events require the programme administrator to incorporate the instruction and propose the relevant programme detail for the instructed works to be approved and incorporated into the revised approved programme. Once approved, this becomes an approved programme.
Based on our experience, if the programme administrator follows the above steps when preparing and updating the baseline programme, the programme becomes the tool to assess and manage risks and accurately coordinate its Works with the Subcontractors and the Employer.
Disadvantages
When things go wrong (and let’s face it, projects going awry are not unknown), delays and extra costs follow. If not resolved amicably, then disputes occur, and Contractors often have a need to be recompensed for their losses.
All the above advice would be almost worthless if things go wrong on the project and the Contractor has not kept comprehensive and comprehensible records of actual progress.
Those losses can and do result from a multitude of factors, including delays. Protracted disputes can and do occur, and sometimes, if not resolved, end up in arbitration. For any Contractor who has watched his losses mount on a live project, the additional costs of a large, protracted dispute can be eye-watering. Anyone who has sat in an arbitration where the collective costs of Lawyers, Experts, and the Arbitrators themselves can be a sobering experience. We have been involved in several arbitrations where the costs involved can easily amount to in excess of USD 75,000 per day. This does not even address the costs of preparing for arbitration and the costs of an Arbitrator’s award.
This is where a well thought out carefully constructed programme, coupled with comprehensive record keeping of actual progress linked to the programme, come into their own.
It may appear to be an overly complicated and unnecessary expense, but the savings in cost engendered on a live project of a well-structured, comprehensive, and comprehensible programme cannot be overestimated. On the other hand, the costs of a poorly structured, poorly managed inadequate programme with inadequate records of progress and causes of delay may be but guessed at.
To quote from our colleague Iain Wishart’s article “How to save money in Disputes and Arbitration”:
It was Voltaire who said:
“I was never ruined but twice; once when I lost a lawsuit and once when I won one.”
A Lesson Learnt
Recently, we have experienced a case where a Contractor attempted to project manage the Works using a simple Gantt chart, which failed to interlink the work activities or assign resources to work activities. In this instance, the Contractor was unable to identify and illustrate the criticality of key work activities and interface its Works with the Employer’s master programme.
When delays occurred, the Contractor was also unable to demonstrate the impact of events solely attributable to the Employer. As a consequence of failing to adopt CPM programming techniques, the Contractor was suffering both time and commercial losses.
We have since assisted our Client to draft a compliant baseline programme and established a programming and project controls systems for future projects.
Summary
In summary, we strongly advise Contractors to implement CPM programming techniques when programming the Works. In doing so, this enables the Project Manager to assess, coordinate, manage and resource its programme of Works with greater accuracy.
Clear and concise programming is an essential tool to manage the project and it ought to be borne in mind that the need for Contractors to prepare a programme is exactly that; to manage the project; their Subcontractors; and their Suppliers. It is normally a Contract requirement, and it also enables the Consultants engaged on the project to monitor progress.
It is therefore important that when Contractors submit a programme for approval, the key necessity for it is for themselves to manage the project and to permit their Subcontractors and Suppliers to be made aware of their obligations to construct the project in an efficient manner. By the same token, it is also used to measure progress and to identify any delays, actual and potential and may serve as an early warning system if things start to go wrong.
In this latter regard, it is an essential element in warning Contractors and Consultants alike prior to delays occurring.
On projects of any magnitude therefore, the information flow from Consultants, Contractors, Subcontractors, and Suppliers is an essential element in the overall management of the Contract. In this latter regard it is our individual and collective experience that delays occur on all projects ranging from the everyday slippages to the catastrophic. A good programme will identify early slippages and will serve as an alert for immediate remedial or corrective action.
As Dwight D. Eisenhower opined:
“Plans are worthless. Planning is essential.”
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