A Practical approach to Baseline Programme Maintenance (Revised Baseline) under a NEC ECC Framework Contract

Introduction

This article aims to discuss the concept of the ‘Accepted Programme’ in the Engineering and Construction Contract (ECC) and the New Engineering Contract (NEC) suite in general and its relationship to the baseline programme concept commonly used in the traditional project management environment. It also seeks to explain the principle of how a revised baseline programme can be developed and the logic behind it.

The article aims to be practical as much as possible in reflecting real life planning practices observed and as such aims to be flexible in the approach and solution indicated herein. 

Baseline Programme and the Accepted Programme

The meaning and purpose of the baseline programme or revised baseline programme often seems to be misunderstood among project planning and project control professionals as well as the wider project management community especially when operating under the NEC ECC Contract. The programme referred to as the baseline at any given point in time and the principle guiding how a revised baseline programme can be structured is also often misconstrued. Much of available literature on project planning lay more emphasis on what a baseline programme is and less on the definition, description and structure of a revised baseline programme.

The project baseline (often referred to as the performance measurement baseline, or PMB) is an approved plan for the project, against which project performance is measured to facilitate management decision making and action (Association for Project Management, 2015). In its planning, scheduling, monitoring and control book, ‘The Practical Project Management of Time, Cost and Risk, the Association for Project Management describes the purpose of a project baseline, is to enable the performance of the project to be understood and controlled. From the above, it stands to rationalise from a planning and scheduling perspective that the definition of a project baseline and a revised baseline should be different. The above definition of a baseline programme refers to the first programme when none of the work related to a project contract has started. However, a revised project baseline definition should almost mimic the same definition above but with reference to remaining scope of work. That is, a revised baseline schedule can be defined as an agreed plan that reflects the remaining scope of work for the project or programme, against which project performance is to be measured to facilitate management decision making and action.  

In project planning practice, there are different types of baselines in a project. The types often seem to be different depending on the country or contract where one is working or operating under. The term contractual and comparison baselines seem to be the common types in play. The NEC framework contract, however, does not make use of the term ‘baseline’ in its discussion relating to programme. It uses the term an ‘Accepted Programme’ in relation to project planning and scheduling, which can be equated to a baseline programme or a revised baseline programme in the traditional project management sense. Clause 11.2(1) of the NEC ECC contract defines ‘The Accepted programme’ as the latest programme accepted by the project manager. This definition applies only to the long form contract. When a contract is awarded, the first programme submitted by a contractor and accepted by the PM or employer becomes the accepted programme. This first accepted programme therefore becomes the first baseline or the first performance measurement baseline (PMB) in relation to the traditional baseline concept. Each subsequent periodic (updated) programme submitted by the contractor to the project manager becomes the Accepted Programme upon acceptance, superseding the previous programme (Mitchell & Trebes, 2012). The previous accepted programme, or first baseline programme is no longer relevant except for carrying out a delay analysis or historical review. It is also important for the programme to be in alignment with the commercial aspect of the contract to produce same result and avoid confusion. This is especially relevant when there is a project impact resulting from a compensation event or programme delay caused by other factors. A compensation event (CE) in a NEC ECC contract is an event(s) that is/are at the Employer’s risk under the contract and that entitles the contractor to an assessment of the effect the event has on Prices, the Completion date and Key dates (Mitchell & Trebes, 2012). Therefore, for every programme iteration and subsequent programme acceptance by the employer or project manager, the remaining portions of the contract scope of work will constitute the basis on which the revised Baseline Programme will be developed.

In a NEC contract, the concept of the accepted programme necessitates a revised baseline programme be produced when the submitted programme is accepted by the project manager or employer. However, this may not always be the case. The thought and effort of always wanting to periodically change the baseline may seem daunting, but from a planning and scheduling point of view, if there has not been any Compensation Event (CE) to the project or any significant change regarding remaining in scope work between the previous accepted programme and the latest accepted programme, the baseline in use does not necessarily have to change for every accepted programme.

The Revised Baseline Programme

Before a revised baseline programme is developed, it is imperative for an impact analysis or delay analysis to be carried out. Such an analysis would identify and apportion any incurred delays to the responsible entities and that would greatly facilitate the decision-making process as to what the new programme milestone dates will finally be. The question now is, how a revised baseline programme can be produced and structured when operating under a NEC ECC contract? It is important to mention that there are different principles applied in producing a revised baseline programme. The focus here is to provide a less cumbersome approach and of course the appropriate way to achieve this to save the planner enough time to focus on evaluation and analysis of the programme. The proposed methodology and structure in developing a revised baseline requires that the programme principle and parameters below be applied;

• Accepted programme- the latest accepted programme will form the basis of the new revised baseline programme. This latest accepted programme stems from the latest updated programme due to its high relevance to the current status of the project, where key progress information can be extracted from.

• Past PV, EV, CPI & SPI figures be unchanged– given that a revised baseline programme is a copy of the accepted programme though with some programme modifications, the methodology employed in producing this revised baseline programme (in P6) makes the PV & SPI of the completed activities under the latest revised baseline programme different from that inherent in the previous baseline programme. This would mean that PV, which is a cumulative figure, of the last baseline up to the data date (DD) and the PV(s) of the latest baseline (from DD) will not be continuous. That is, the PV(s) of the last baseline and the latest revised baseline are totally different and are points in the S-curve graph.  The data from the previous baseline programme and the revised baseline programme can be combined to produce a single S Curve to reflect the trend and current status of the project. This would require the PV, EV & SPI data to be managed in a different environment outside P6, preferably in excel. It is also possible (in P6) to select to display the project S Curves prior to the DD of the revised programme by applying the relevant baseline programme.

• Separating in-progress tasks into completed portions and in-complete portions– it is essential that in using the accepted programme as the baseline that only two activity status be present in the revised baseline programme – completed and not-started activities. As such, any in-progress activities should be split between the completed portion and the incomplete portions to distinguish what has been earned from what is to be earned.

Based on the definition of a revised baseline as given previously, a revised baseline programme would normally consist only of the remaining portions of the scope of work related to the project. For practical purposes – to get the overall EV figure of the project, it is recommended that the activity actuals be part of the revised baseline programme. However, the monitoring of the project performance will be exclusively based on the ‘Not Started’ tasks apparent in the revised baseline programme to protect the integrity of the EV calculations and provide the project team with pragmatic performance data. 

Conclusion

The detailed methodology in producing a revised baseline programme in practice from the above-mentioned principle will not be discussed in this article and will be the subject of another paper given the lengthy write-up required. It is important to mention that it requires in-depth planning and scheduling knowledge to implement, as many inter-related planning parameters are involved.

To surmise, the first performance measurement baseline (PMB) is not static under the NEC ECC contract. The latest accepted programme automatically forms the basis of the latest revised baseline to be used for performance measurement in the next reporting period. When submitting a programme accompanying a quotation in a NEC ECC contract based on a CE, the language of a revised baseline programme should not be used but an updated programme which when it is submitted and is approved or accepted becomes the latest accepted programme. 

The concept of the latest accepted programme becoming the latest baseline under an NEC ECC contract ensures that the baseline programme continues to be realistic and relevant at any point in time.

Association for Project Management. (2015). The Practical Project Management of Time, Cost and Risk. Buckinghampshire: Association for Project Management.

Mitchell, B., & Trebes, B. (2012). Managing Reality - Book 4 - Managing Change, 2nd edition. London: ICE Publishing.

Mitchell, B., & Trebes, B. (2012). Managing Reality, Book Three, Managing the Contract, 2nd edition. London: ICE Publishing.