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Contractual MIlestones

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Edniel Recamadas
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All,

Is it acceptable on a programme to have contractual milestone having floats?

Please contribute.

Best of all,
Edniel

Replies

R. Catalan
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Rafael,

Thanks for the link, a good article about the subject.

Best regards,
R. Catalan
Rafael Davila
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Proper Use of Milestones and Constraints

“One of the biggest pitfalls encountered in using milestones occurs when trying to
restrict a milestone to a particular date in the schedule, as opposed to being logic
driven.”

Best regards,
Rafael

ashraf alawady
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Dear All,
i do agree that milestone with float is NOT acceptable.

milestone is the starting or finishing of main stage of the project and it should have specific date .

for example the commencemnt date of the project is a contracual milestone and the original completion date is a contracual milestone .
furthermore the employer may add in the contract document some more contractual milestones to complete certain protions in certain date in order to use these protons which may also connected to another cercumnstances and the contractor has to finish these protions on time otherwise a separate penaleties will be emposed on the contractor due his failure to comlpy with his obligations.
Rafael Davila
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Trevor

Since there is so much wrong with putting Must Finish On constraints on intermediate finish milestones or on overall project finish milestones, why use them at all? Why not remove them permanently rather than temporarily?

I agree with you, it is enough to show Contractual Milestones as a fixed flag as suggested by Gary (see post #11) and let the schedule move the Projected (but without any constraint) as per true CPM logic without disrupting the backward computations.

Unfortunately many US specifications have adopted the suggestion for using "locked-in dates” through use of finish constraints on contractual milestones and total job must finish following the reasoning by some.

“Establishing milestones as a contractual requirement helps the owner to control the project’s progress, and it provides a definite area to control the performance of the contractor.” O’Brien and Plotnick further recommend, “One answer is to lock in the contract dates to the milestones so that when a project is behind schedule it will exhibit negative float.”

Ironically the same specs do not allow the Contractor to use his own constraints. Why, because they are aware assigned constraints override computer calculations at the core of CPM scheduling.

Sorry I don’t have a copy of one of our many specs that require the use of constraints, otherwise I would post a copy on rapidshare. The copy I have on hand allows for constraints on Contractual milestones but do not makes it a requirement, it do prohibit the use of constraints on other activities though.

Please follow the link for an excellent reference on how to deal with multi milestones:

http://www.ronwinterconsulting.com/multi_milestones.pdf

The theory on longest path is still valid an useful even when no constraints are applied to Contractual Milestones, I recommend anyone to read it.

Best regards,
Rafael
Trevor Rabey
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"When you do not apply any finish constraint the Critical Path will always have zero float, here you will never get an activity with negative float and logic will be easier to follow. Therefore my preferred way to show critical path is by temporarily setting off the job must finish by constraint. It would be better if the specs do not require you to apply finish constraints on the CPM."

Since there is so much wrong with putting Must Finish On constraints on intermediate finish milestones or on overall project finish milestones, why use them at all? Why not remove them permanently rather than temporarily?
Do you have an example of specs that do require finish constraints? If they do, they are wrong. This is not something which is just a bit annoying but has to be lived with, anymore than going along with the owner if he says black is white.
Rafael Davila
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The critical path is that set of activities from the start of the project through to the end that have the minimum total float. This total float is a shared property of all activities on the critical path. The minimum total float can be positive, zero or negative.

You got to look at your software for the options to show critical path. I use SureTrak and under Schedule/Options menu I can define Critical Path as Critical Path Activities have total float less than a number of my choosing (usually the minimum total float).

When you do not apply any finish constraint the Critical Path will always have zero float, here you will never get an activity with negative float and logic will be easier to follow. Therefore my preferred way to show critical path is by temporarily setting off the job must finish by constraint. It would be better if the specs do not require you to apply finish constraints on the CPM.

Intermediate contractual milestones are as good as Project Completion as contract conditions to which I have no objection. Using software constraints is is a different issue, even when required by the contract, yes we have to live with it. Please follow next link for furhter reading on how constraints can be misleading.

http://www.pmicos.org/fse.asp

from above _"Assigned constraints: Overrides computer calculations at the core of CPM scheduling. Result: According to one scheduling expert, "If you do this, it’s a bar chart" and not a traditional CPM network diagram and schedule."

Best regards,
Rafael
A D
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FLOAT IS GOOD and everybody wants float in their program. But, if there is float everywhere in the program, then how critical path will come?

Client will ask for intermediate milestones and in this fast-track age, we as a Contractor dont have liberty to negotiate to push further these dates.

Using 2-3 programs, is good for monitoring but NOT useful for the consultant / Client and as a Contractual TOOL definitely.

Intermediate contractual milestones are as good as Project Completion date and NO client will accept float with the intermediate contractual milestones.

and rafael, i agree totally with ur’s disagreement with finish constraint hiding logic.

Cheers,
Rafael Davila
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Raviraj

As you just showed Contractual Milestones are a valid and justified requirement, no doubt about it.

I have issues on how specifications do require you to apply those in the CPM. Most constraints when applied to CPM schedules break the rules of logic. I have no problem with start constraints these might break the rules of logic but generally do not hide logic. The problem is with finish constraint hiding logic.

When you apply certain finish constraints you set the software to calculate backward pass using the constraint date as the latest finish date of the constrained event instead of the logic calculated date. This allows for negative float to be shown and hides CPM logic, the same with the overall project finish constraint.

If I were the author of the CPM specs I would prohibit these finish constraints that hide logic and would require to set a fixed Flag as suggested by Gary, of course with the addition that the unfixed Flag would not be constrained with any of the constraints that hide logic.

In addition I would require my contractors to plan with some buffer, yes to purposely provide some float along all paths, say 15% of the path total duration, 50% as per original Buffer theory is nuts. The Monte Carlo approach is the scientific way to determine appropiate buffers.

The scientific approach, Monte Carlo, tells you deterministic durations schedule is always optimistic and most probably will never be met as planned that you should use buffers and target for early dates in the hope to finish on time. Owners that do not allow you to schedule with the use of buffers are the main reason why many CPM schedules finish late. Yes they are a bunch of morons (morons falls short but my adjective would be banned), we have no other option than to live with it until use of Buffers becomes an accepted practice.

Meanwhile in order to uncover logic the only practical way is to temporarily release the finish constraints or use Longest Path Theory for each constrained event.

Zero float means you are on the critical path, a single delay day means you will get late by a day, this is borderline scheduling. Negative float means you are behind, you are in trouble. Positive float means you have some buffer, that you are ahead, and this is good.

FLOAT IS GOOD, WHY PROHIBIT FLOAT?

Sammer,

I agree with you and Vladimir, and would like my software to provide more functionality for what-if analysis. The use of separate baselines for this purpose is somewhat rudimentary.

Best regards,
Rafael
Samer Zawaydeh
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Hi,

This is a case of how to model the float in the program. The consultant will not accept a program of works wihtout contingency time or float to meet the milestone. It the Contractor actually submits a program with zero float to achieve the milestones, chances are that the milestone will not be on time.

Have two or three schedules is actually what happens. Management will start creating scenarios and taking the necessary precautions in the event delay will occur.

It would be more appropriate to have a small report with the Program showing the amount of float in the activities. This can be based on Optimistic, Most Likely, or Pessimistic Duration. Accordingly, you will have a Milestone with Zero Float in the Program of Works, but you will know the float in your model.

With kind regards,

Samer
A D
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1st Question is, why there is a need for a contractual milestone and second, what is the purpose of a Float.

1. Mostly Contractual milestones are linked with the revenue generation for Client or linked with some other other contracts wherein the other contractor may ask for extra sum of money.

If Mr. Contractor is keeping float for any contingency, then it means Mr. Client can’t get his revenues and so, to compensate those revenues he will have LD clause in the Contract.

Recently, I was involved into a project wherein there was an Intermediate Contractual Milestone of commissioning of 1st Chiller. If we can’t commission the Chiller, then it means Client has to run temporary Chiller for extended time and he has to suffer this loss.

So, first of all, how a Contractor can submit a program having LD attached to intermediate milestone with FLOAT. NO Logic in the world can justify this.

Second important question. Why Mr. Contractor wants float within the program? Contarctor shud give technically correct justification for provision of Float for that contractual milestone.

So, going back to teh main question, Consultant will never accept float with the Contractual Milestones. U can use 2 or 3 programs for monitoring, but can’t exceeed the contractual dates, otherwise u may end-up with LD’s.

Rafael,
two is good but three is better.
Yes, without Spider Project it means additional work for the planner. But the results are worth the efforts.

Best Regards,
Vladimir
Rafael Davila
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Vladimir

On posting no 4 you already asked for two; don’t make it even more difficult unless Spider Project can do the trick with ease keeping the versions under separate files as not to give the owner confidential data when you are required to submitt electronic files.

Best regards,
Rafael
3 schedules are even better:
Optimistic for setting the tasks to the workers,
Realistic with contingency reserves for yourself,
Contractual with management buffers for the Owner.

Best Regards,
Vladimir
Rafael Davila
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Edniel

We got to accept reality whether we like it or not. In this case I would keep 2 separate schedules one for managing the job another to satisfy the Owner unreasonable request.

Yes Cotto is on a heavier weight to his advantage but lately he had been seriously cut and I wonder if his days as a Boxer are already over and this might be his last moneymaking fight.

Best regards,
Rafael
Edniel Recamadas
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Rafael,

I have the same argument with our previous Consultant, but he still manage to remove the floats.

Best,
Edniel

Cotto is maybe stronger to take Pacquiao’s deadly left straights and fast right hooks than Hatton, and for this reason I’ll give him till Round 6.



Rafael Davila
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Gary

Unfortunately our software dos not provide the functionality of buffers like Powerproject or Spider Project.

Spider Project even goes the extra mile by providing Monte Carlo so you can determine the appropiate level of buffers.

I like your approach to keep the Target Milestone Fixed on the Gantt Chart so you can compare it visually against the projected date for the Contractual Milestone.

Best regards,
Rafael
Rafael Davila
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Edniel

On the run, not necessarily the best example;

Assume on a 12 months job you are required to deliver one building at month 10. If you schedule the finish of this building by month 10 other remaining work to be performed after the milestone will not be finished by month 12 therefore in order to finish on time your overall job you must get over this milestone before contractual date for this milestone.

To establish this milestone is not necessarily bad as sometimes liquidated damages are applied individually to intermediate milestones as well as to project completion date. What I am questioning is for not allowing these intermediate milestones to show float.

You are holding the contractor on each leg, on each hand, by the head and by the b?lls, leave him some room to plan.

Best regards,
Rafael

on november Cotto will take over Paquiau
Gary Whitehead
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I prefer having 2 milestones. One is linked to the final activity, unconstrained, and called "planned completion". The second is linked to the first, constrained as per contract, and called "contractual completion".

Depending on the software you are using, you can also add a buffer or terminal float activity between the two.

Cheers,

G
Rafael Davila
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Edniel

I agree with your point of view. Float should be viewed as a buffer, good to the Owner as well as to the Contractor, in no way meaning a change in contractual conditions. If by this date the Owner will not be able to receive this portion of the work, just make it clear but let the Contractor finish early, better early than late.

Perhaps legal interpretation and forensic theory is against this common sense principle. I don’t see any reason not to allow for the float.

Best regards,
Rafael
Shah. HB
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Regarding contractual milestone i have come across a situtation in which a project completion is mentioned under contractual milestone WBS but it has zero float and acting as critical activities ,when program went on submission to consultant it got accepted.
Edniel Recamadas
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Rafael,

Would you mind elaborating your last statement?

Edniel
Edniel Recamadas
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That’s a good point Rafael.

This become more interesting to me.

Best,
Edniel
Edniel Recamadas
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Raviraj,

But from Contractor’s side, I could argue that as long as my contractual milestones dates are complying with the Contract, and dates were just calculated from an honest cpm network, then having postive floats are normal scheduling practice.

Maybe the experts can shed more lights on this issue.

Best,
Edniel
Rafael Davila
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Raviraj

What if an intermediate contractual milestone is so relaxed that eliminating float by using all available time in the particular milestone longest path makes it impossible to schedule the remaining work to finish on time?

Use of Contractual Milestones is a kind of double edge knife.

Best regards,
Rafael
So there is a need for at least two schedules - one is contractual, the other one for internal needs.
Best Regards,
Vladimir
Edniel Recamadas
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Thanks Raviraj,

Any other inputs why it is not acceptable for contractual milestones in baseline programme to have floats?

Best,
Edniel
A D
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NOT acceptable.

When the program is submitted for consent, consultant is also accepting the late finish dates. If float is available, then late finish date is different and so, Float is not acceptable.