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Using Two Schedules

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Aaron Melton
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I am working for a contractor I am considering a fundamental flaw in their approach to scheduling. I wanted to get other peoples opinion about this. They want to use two schedules. One is the approved baseline schedule and the second is an unapproved internal schedule. I consider this a fundamental flaw because the data in the two will never align. Their reasoning for using two schedules is they want to show in the baseline schedule all their contractual time used. So in the case a change order is necessary, they can possibly be compensated time and money for it. They believe showing an early finish on an approved baseline will not allow them extra time and money with a change order as the client will request them to use remaining float. The internal schedule will be used to manage the subcontractors. It will show them needing to be done earlier than necessary so in case they are late to a small degree, they are not likely to still have float in the baseline. Reading Ron Winter's baseline review (http://www.ronwinterconsulting.com/rabaseline.htm) I see on line 45 that: "If you accept a schedule that shows an early completion date earlier than the required completion date as specified by contract, it often means that the Owner must compensate the Contractor for Owner's Delays to the project even if that delay did not cause the project to finish past the original required completion date." So my question is how would you handle this? Would you try to manage two schedules? Would try to have one schedule showing you finish earlier hoping the client approves it? Could you make one schedule and somehow get the subcontractors to finish earlier than possible?

Replies

Rafael Davila
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A schedule with high probabilities of meeting time and cost targets is better than a schedule with low probabilities of meeting time and cost targets. 

How it is done is well documented and is very simple; make a plan that targets for completion completion that is earlier than contractual date. It shall be a feasible plan, with enough resources to make it but as we all know, there will be no magic and even this one will be delayed, but hopefully will still make it on time.  Schedules with no buffer are doomed for failure.
We know things usually starting with the letter "S" do happen.

Google for:

Theory of Constraints

Monte Carlo

Schedule Margin

Student Syndrome & Parkinson Law

Mike Testro
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Hi Rafael

"It is a matter of a better approach in the quest for meeting contract milestones."

What is better than a fully resource modelled schedule that closes the Scope Money Time triangle?

Best regards

Mike Testro

Rafael Davila
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The management of schedules considering the non deterministic nature of activity duration [production rates], the effect of what is known as Parkinson's Law and Student Syndrome are well known by some schedulers but not all, judging from the comments of a few. 

There are advocates for different approaches to the non deterministic nature of schedules but essentially they all target for an optimistic schedule whose duration is less than the contractual.

Some might argue Monte Carlo is the best but I believe it will depend on the schedule requirements, for simple schedules a single deterministic schedule is ok, for other schedules a two schedules approach is ok while for others full Monte Carlo and/or three schedule approaches are better.

At the end no matter what, the deterministic target dates will prevail in contractual terms, even when usually are better managed using non-deterministic approach than using "old School" deterministic approach.

I would dare to say the traditional deterministic approach that consumes all contractual duration is the worst in most occasions.

USUALLY DETERMINISTIC APPROACH IS A LIE - NO MATTER IF YOU UNDERSTAND WHAT IT MEANS OR NOT

The key is to getting a Baseline with high probabilities of success, theoretical but better than deterministic. A model with enough buffer or margin.  The theory for delay analysis are still the same, any projected delay on Target Schedule [schedule with margin] early dates represent a delay.  But when mathematically correct probabilistic model is not accepted then the Contractor has no other option than to keep two parallel versions to satisfy the whims of others.

Anyway it is naive to believe either the Target with some margin or a Deterministic Target will be fixed in time and will happen as if written in stone.  It is a matter of a better approach in the quest for meeting contract milestones.

Mike Testro
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Hi Patrick

In my opinion there is nothing wrong with a contractor having two programmes for the same job.

One with a set of shorter durations for sub-contractors - set on a 10 hr day and another with the full duration - 8hr day - for the employer.

It is not a lie when the contractor and the sub-contractor sign up for there own deal independent of the main contract.

The trick is not to get the two mixed up when reporting progress.

Best regards

Mike Testro

Patrick Weaver
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I agree 100% with Dieter - 2 schedules at best means on is a lie.  And if you are proven to be dishonest in one place, no one will believe you anywhere. 

Evgeny, I expect that the reasons may be different in different countries.

General Contractor manages overall project where subcontractors are responsible for subprojects. These subprojects may be linked and delays in one project may cause delays in another. Detailed schedule helps to notice potential problems ASAP and then try to find the reason. One of potential reasons is the lack of required resources. That is why subcontractors shall submit resource loaded schedule. In this case it is easy to compare the number of workers that should work with actual number of subcontractor workers on site. If required number is larger than actual General Contractor may insist on adding subcontractor workforce.

Revising subcontractor schedule it is possible to understand how the subcontractor plans to achive project milestones. In other case their achievement is not reliable. You may trust but it is risky,

Zoltan Palffy
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you posted it on a forum in linked-in so please look at your post there.

Evgeny Z.
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Sorry, that I intervene in this construction schedule dialogue.

But question is: would it not be a right thing to manage subcontractors based on the milestones and not on the detailed schedule and letting them to determine themselves on how they reach these milestone as well as on how much contingency they set for themselves?

If one requests an internal detailed schedule from contractor, this sort of implies, that subcontractor is not trusted to do his job correctly and also that the contracting authority goes into the business of micromanagement of subcontractor, which is not exactly the idea of having subcontractor in the 1st place, because then you treat subcontractor as the part of your internal organisation.

Or, am I missing something?

Regards.

Evgeny

Aaron, this is the usual practice and is reasonable. Contractor shall have contingency reserves to be able to finish on time. So his internal schedule shall be tighter. His reserve may be called buffer but it is created for his internal schedule risks and it is natural that he does not want that this reserve will be used by the Client. Actually there are three schedules that are used by General Contractor:

Contract schedule that includes both contingency (for known unknowns) and management (for unknown unknowns) reserves of General Contractor,

General Contractor project team schedule that includes only contingency reserves,

Subcontractor and project work force schedule that  does not consider General Contractor risks (optimistic).

Aaron Melton
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Zoltan,

That is great you answered it. Could you provide a link to the forum?

Zoltan Palffy
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already answered this in the other forum 

Dieter Wambach
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Hi Aaron

First 'I absolutely don't like multiple schedules with same content but different dates and durations for the same project. Big risk for mistakes, maybe the client will feel betrayed, it's not honest.

Early finish earlier than contractual finish: Why not include activities "Buffer" at those places where you'll need it? In my opinion this will avoid a discussion on EOT claims due to the differeence between early finish and contractual finish. EOT may happen later.

 

Regards

Dieter