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Revised Programme-Clause 14.2

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Khalil Masoud
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According to clause 14.2, the Engineer can ask the Contractor to submit a revised programme if the actual progress doesnt conform to the original programme. I have two enquieries:

1) Is the new revised programme considered a "new baseline"? or we have to stick to the original consented baseline.

2) If the original baseline cannot be contractually chenged, how it can be used as a reference to assess claims even it is not doable anymore?

Thank you

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Waleed Mahfouz
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THE APPROVED REVISED PROGRAM - CLAUSE 14.2 SUPERSEDE THE PREVIOUS ONE, AND SO ANY CLAIM SHOULD BE BASED ON IT.
ELSE, WHAT IS THE BENEFIT OF IT?
James Barnes
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Trevor

Sorry if I misunderstood anything you said, but it is clear that we don’t agree

If you think that the use-by date of teh baseline is the first report (and so I guess the useby date of teh rewritten plan is each reporting cycle) then my opinion hasn’t changed.

OTOH, I fully accept that the baseline will only be as good as the resources and effort put into producing it. To give you an idea, we finished a 6 week project in April this year. It was not on time, but within strategic contingencies. We plan on a ES+0Float basis with an overall strategic level contingency against risk which is not communicated to the contractors at the start. It’s not the most efficient way, when you do start using your float, you can find suddenly that ordered resources are available too quickly, but it is an investment that the refinery makes on the basis that a couple of days earlier and therefore back in production is cheaper than the standing time of some cranes. When I worked in new build we would include this float in the baseline.

The point being that the baseline survived without needing any strategic changes. Yes the progressed copy streched in some places and compressed in others, things went right and things went wrong, but the overall strategy was maintained (despite the efforts of some to subvert it) and each day we were able to judge our current progress against what we had initially planned and reassign resources as appropriate to keep the project moving in the right direction. Thus it worked as route and map. the 2 were interlinked.

In that 6 weeks we spent >30M euros. The plan update cycle was daily, twice daily in the event of significant night shift work (in the event this was not necessary). Our baseline, in very broad terms, was to the level of detail of containing an activity for every man-shift. I know that most new build projects cannot produce a plan to this level of detail, it’s not that it’s impossible but the resources are just not made available in a timely manner. The total planning effort, including developing cost control, scoping, materials order queing etc on our turnaround was probably in the order of 10 Man Years. Oil and Gas is pretty good at seeing the benefit ni putting this much effort in up front. >1M a day lost production opportunity during shutdown focusses the mind :)

I also recognise that planning maintainence work on a plant is not the same as planning a new construction. I have done both. The fundamentals are the same though. Most "unforseen" occurances are in actuallity something that wasn’t studied due to budget/time constraints and so went wrong, most often lack of sufficient ground surveys for foundations. The truely unforseen (strikes, floods whatever) are much rarer (although I was working in the US embassy in Beijing when they blew up the Tanzanian one back in the late 90s, that created some unforsen circumstances I can tell you.)

Back to sailing again (somewhat a passion of mine, although I live a little landlocked at the moment) I did not say that you would leave sydney and just head south, I said you would be crazy to. My point was that the baseline is part route and part map ... if you have the time and reasources to give it the respect in developement it deserves.

Finally, your 2 wartime examples. There is an army adage "the first casualty of war is the plan". Construction is not war, although it may often feel like we’re laying seige to the site. We can be more organised than that. Recognising when the plan needs to be changed isn’t something that should be ignored, I think we agree on that point. Expecting from the outset that it will need to be is what we seem to disagree on and is setting up for failure imo.

tbh this arguement comes up every couple of weeks on pp, see you at the next one 0/
Trevor Rabey
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James, you tend to read things into what I say that I did not say. I did not say that the Baseline should not exist or that it should not be good. It should be done as early as possible and should be the absolute best that you can come up with at the time. It must be a complete, accurate representation of what is intended at the time it is made. Its existence, and how good it is will determine how easy and quickly it can be revised. You have to have a plan to change a plan. But it has a use-by date.

The construction industry is plagued by very poor planning to start with, and then by a reluctance to devote the necessary effort to frequently review and update.

I did not say leave Sydney with no plan and just point in the general direction of South and hope for the best.

In the allied invasion of Normandy there was a very good plan to start with but 5 days after it started things had not all gone according to plan. But the guys on the ground focussed on and planned for the best way to tackle the next stage based on what had been encountered and what remained to be done. They left the discussion of how and where and why the original plan had succeeded or failed to the historians.

At Stalingrad the German army was stuck with senior management which insisted on sticking to the original plan long after it was obvious that a new plan was needed.
Philip Alva
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Khalil,

I may not be an expert but I got your point, (again... in my opinion) like i said there are several reasons why the program must be revised. Four of those are due to the (1)engineer’s issuance of variations, (2)delay on the part of the engineer/client, (3)failure of the contractor to comply with the specification and (4)delay on the part of the contractor.

Opinion A. If the reason is due to Items (1) and (2) above, then the programme can be revised as per clause 14.2 (refer to Opinion Note below) and the contractor is entitled for a claim buy comparing it to clause 14.1 which you said as the original consented baseline.

Opinion Note: Let me quote clause 14.2. Approval might be by acceleration nor extension, it depends on the engineer’s advise. If they issued a variation and they wanted the contractor to stick with original duration then the contractor is entitled for an acceleration and if they wanted the contractor to keep their contract resources then they must consider an extension on their revised programme and it has to be approved by the engineer. Both are claimable as explained in my Opinion A.

Opinion B. If the reason is due to items (3) and (4) then the programme will be revised as per clause 14.2 but within the duration given in the contract. The same options above, you may accelerate nor extend your duration but all are of contractor’s costs.

Have i answered a few? or far from what you needed...

Your opinion is welcomed.

Cheers.
James Barnes
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If your baseline is usually obsolete/useless by the time the first progress assessment is made then I sympathise with you. You have started the project with a useless baseline and done so so often that you now expect it. I don’t say that this is not the state of the industry, I have certainly worked on projects where the plan was more of a marketing tool than a management mechanism, but it should not be.

A lousy baseline is probably the product of a lack of resources having been put into its production and/or Lack of buy-in to the strategy by those in charge of the day to day activities. As you’re on PP then you know how to plan, so the last possibility (bad planner) won’t apply ;)

To follow up your sailing analogy, a properly constructed and sufficiently detailed baseline plan is not only the route to the end, it is also the map. When the unexpected happens (as it always will) the baseline should be able to accommodate that and continue to show you the path to the end. That path will vary depending on day to day reality as you say, but the baseline will have predicted certain possible occurances (through multiple scenarios) and made certain allowances for the truly unforeseen, usually in the form of float. If reality overtakes these allowances, then a recovery plan becomes necessary.

You might set out from Sydney towards Hobart without a course marked on your chart (although I’d advise against it) you would be nuts to go without the chart and only a compass bearing to your destination. Knowing that you are off your planned course does not (always) necessitate returning to the start, I don’t understand why you said that.

My job is to write baselines and report against them during project execution. If they became irrelevant every reporting cycle I would not expect to have my job for very long. But I do.
Trevor Rabey
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Khalil,
I think that you are more right than you know.
You suspect that the Baseline is made irrelevant very quickly. I agree. The Baseline serves a purpose when it is first made but is quickly superseded by unfolding reality and is obsolete/useless by the time the first progress assessment is made and the first essential update, review, and revision is released. Looking backwards to the Baseline instead of forwards to the remainder of the project has only a limited, superficial, legalistic use. It is for accountants and lawyers, not project managers.

When you set out to sail a yacht race from Sydney to Hobart you draw a line on a chart from Sydney to Hobart and estimate an ETA based on what the weather is doing and what you think it will do. 24 hours later you are not on that line but you are probably closer to the destination. Effective action lies in making a plan to sail from wherever you are to the target. You do not sail back to the line first.
Karim Mounir
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That is called : Concurrent Delays
Andrew Flowerdew
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James,

No straight forward easy answer to that, but most likely answer would be just one week. ie, the employer delayed the contractor by a further one week therefore this period gets added to the original completion date.
James Barnes
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Ah, I understand what you mean wrt new events. so we were talking somewhat at cross purposes, my point was about judging progress of planned activities during the execution.

Now I understand what you mean about contractors thinking they can claim delay against baseline for items that would only have been critical should the baseline have been followed but in the event were rendered subcritical due to other driving delays.

Then (coz I’m interested and you’re in forensics),

say (in your example), the contractor is 4 weeks behind baseline at some point but the client issues his drawings 5 weeks late, thus pushing the contractor a further week behind. Accelleration is not possible (or doesn’t achieve anything) so the project completes 5 weeks behind baseline. You would consider the contractor responsible for 4 weeks and the client for one?

Most of my contracting work has been in SE Asia, where they tend to take a "last man standing" approach, whether legally correct or not (and "legally" in most countries in SE Asia will tend to be somewhat flexible anyway). There’s also the "he who holds the cash wins the argument" approach, which I particularly enjoy ;)
Andrew Flowerdew
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James,

No simple way of explaining but the impact of new events should be judged against the actual state of progress when they occurred.

Therefore, if the contractor is 1 month late, (to the baseline), and say for example the client issues drawings 1 mnth late, (to the baseline), then it is possible that the client has caused no delay as the drawing issue was in line with progress and happened when needed. The fact that its 1 mnth later than shown on the baseline is irrelevant.

Hope this helps
James Barnes
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Not responding to the OP, but to this discussion about the different programmes on a project.

OK, imo the definitions of the different plans arebasically in line with what Andrew says.

What I don’t understand is how you can judge delay against a programme that is updated regularly (The Updated Construction Programme)? the delay becomes a part of the programme and so no judgement is possible, surely.

or, to put it another way; let’s say I am a contractor and I update my plan to show that I will finish a month after the baseline (or tender programme etc) says I will. Next month I update again showing no further delay. Am I no longer in delay? The third month I show a further 2 week slippage. Am I now 6 weeks in delay (which I would be, judged against Baseline) or only 2 weeks (judged against the last issue of the Updated Construction Schedule). When we all end up in court because the job was turned over 2 months after the originally agreed date (in the baseline) will I be able to get out my last issued Updated construction schedule and claim to be "on time" or will the client whip out the baseline and say I am late?

I’m missing something because it seems that you’re judging reality against itself by comparing progress with an updated schedule that that progress has been entered into.

Now (as I’m thinking about this I perhaps see what Andrew means)

If I am a month late (behind baseline) so I adjust the programme for the rest of the project and this is accepted by all parties while maintaining contracted milestones then I agree, progress moving forward needs to be judged against that. Stages for this are, in my experience, as follows

1. Eat the open float in the schedule
2. Eat the hidden float in the activities
3. Eat yourself Accellerate
4. Delay contract milestones

In any of these could be a change in project strategy, which would be an effective abandonment of the plan.

Item 1 is fairly common and in my mind does not constitute abandonment of the plan. Item 2 is equally common but more dangerous. Hidden float is by definition non-transparent and the tempation is to adjust durations to fit the desired outcome, rendering tehm impractical. Neither of these really constitute what I would call a "recovery plan" though, unless a strategic change has been made. float reduction on the project (arguments about who owns that float notwithstanding) does not constitute delay.

Accelleration, on the other hand, normally requires some sort of additional resource input and thus requires either the client to issue an instruction or the contractor to accept culpability for the acceleration costs (although I believe an instruction should still be issued). Once no more accelleration is possible, contract milestones slip and then an EOT is required, again this can be to the client or contractor’s account

If, however, this is occuring every reporting cycle then there is a fundamental problem with the plan. Once you reach the point that you are unable to judge progress of your critical paths in detail, and your bulk (or long float) items at least at a strategic "hours earned" level then I would say the plan has been abandoned.

It’s most likely we’re all saying the same thing, just using different terms. I am so sensitive on the issue because I was in the situation a few years ago as a project coordinator (thankfully not teh PM or Planner) where a major (nominated) supplier updated his programme each month and simply reset his baseline to match whatever had happened to his finish milestones, without giving thought to highlighting slippages, explaining them or offerring solutions to recover them. At the end of the job, he felt able to claim that he had finished "100% on time" as his baseline matched his progressed plan. Well, of course it did, he updated it every month! Fortunately (in some ways) he sent this letter direct to our client who proceeded to go absolutely mental but at least began to understand what we had been dealing with.
Karim Mounir
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IMO, there is 2 scenarios:
1- If the contractor granted an EoT, then he has to prepare a revised sch. which has a new completion date different from the org. sch. (and consider it to be a new baseline).
2- If the actual progress is very slow and/or progress has fallen, the employer can instruct the contractor to prepare a revised sch. in which he has to fix the org. completion date (ie. by squeezing durations, modifying relationships, working more shifts, etc..).

The contractor has to use his org. baseline as a ground for any dispute occurs, in fact the org. baseline is considered the basis in which he has to prepare his revised programme.

Once EoT is granted, the contractor has to maintain his revised sch. and stick to the new completion date (ie. as in case of issuing revised dwgs., u must follow rev.2 instead of rev. 1) but if again a delay occurs, he will use the revised sch. as his basis for claiming.

Regards,
Karim

Khalil Masoud
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A fruitful discussion guys;

Philip, I think you got my confusion when you said "Let say that the revised programme submitted is again approved, will it not be considered a baseline?"
This is a daily urguement in my project between the Contractor and the Client!!!
In other words, if the (Original Consented Baseline)is not valid anymore, how it can be considered as a reference for future claims!!! I don’t think this is fair.
Andrew Flowerdew
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In an ideal world they are all the same program!

But we don’t live in an ideal world.

Usual process:

Contractor submits tender with a programme: the Tender programme

Contractor wins job and has to submit a detailed programme: the Construction programme

Client approves construction programme: the Approved programme which in its original form, becomes the Baseline programme for the project.

The Construction programme is then updated for progress, events, etc, throughout the project on a regular basis: the Updated construction programme.

I have not mentioned yet the Contract programme as it’s meaning can vary. It may be a programme incorporated into the contract, it may mean (usual) the original Approved programme which is the same as the Baseline programme. It may also have a different meaning depending on what your contract says.

Contrary to popular belief, delays are normally measured using the Updated Construction programme, NOT the Baseline programme. One of the biggest mistakes contractors tend to make. But it isn’t always the case.
Philip Alva
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I think i am just misunderstood because I did’nt say that the baseline is not the approved programme. Of course whenever we are saying a baseline then it must be the approve programme. The thread author is asking about clause 14.2 so, it means that if the actual progress doesnt conform to clause 14.1 then you must revise the programme showing the modifications (as per clause 14.2) subject to clause 43. Let say that the revised programme submitted is again approved, will it not be considered a baseline?

It seems that we have different perseptions with regards to the terms that we are being applied here. All are just opinions my friends, don’t make things complicated. The longer explanation therehas the bigger the misinterpretation was. Lets go back to the basic and don’t be too smart.

Can somebody define the following please?

1. Baseline programme
2. Approved programme
3. Tender programme
4. Contract programme
5. Construction programme

Providing your definition for the items above will answer everybody’s questions.
James Barnes
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The Baseline signifies the workable programme based on your current situation.

^I dissagree

The Baseline is the agreed programme, it does not change on a daily basis to reflect the actual site situation

Your Plan Moving Forward, on the other hand (how you get from today to the end of the job) of course will change based upon circumstances of current progress. In the ideal world it will be the same as the baseline. In reality it is likely to be the baseline with less (but still >=0) float or some degree of accellerated recovery plan (which is actually the baseline with hidden float removed, actual accelleration needs to be covered with an instruction).

If the progress slips so that the achievement of the Baseline objectives becomes unfeasible (the Plan Moving Forward cannot satisfy the aims of the baseline any more without accellerating beyond zero float into true accelleration, or the limits that accellerating parties are willing to accept) then the baseline may need to be changed, but this means that these changes need to be agreed, usually through the formality of an acelleration instruction or EOT. Until that happens, the baseline (which daily progress is judged against) reamins static.

What often (should I even say always?) happens, however, is that the client and contractors cannot agree on the reasons behind the extension / requirement for accelleration and so continue blaming each other and the decision gets shelved till the end of the project. EOT or accelleration instruction need not be admitions of guilt by either party, however it is usually viewed this way.
ashraf alawady
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Hi,Philip

as mentioned in claue 14.1 oof the general condition of contract, the contractor has to submit ,within 28 days from the letter of acceptance date ,detailed working program to show how the contractor is planning to complete the diferent construction activities for the complete scope of works within the original contract period.

So ,it is a construction program for the construction stage not program for tender as you stated.

and i can not agree that Most of the time the program is also unworkable , if the program will be prepared professionally and it should be ,then the program will be workable and will be the best leader for all parties contractor, engineer and the client.
Philip Alva
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Good day Khalil,

1. In my opinion, yes, because the baseline signifies the workable programme based on your current situation.

NOTE: There are two reasons why the programme must be revised; Contractor’s failure or inclusions of changes due to variations issued by the Engineer/Client.

2. Original Programme is the basis of how you priced your tender. Most of the time it is also unworkable but it will give you the idea of how much time you need to complete each activities (if properly estimated). So, if there are variations to be issued by the Engineer/Client then you have a chance to be granted with EOT or Acceleration thereby comparing the Original programme vs. the Revised programme.

Philip
Karim Mounir
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Hi Khalil,

1) Revised programme means that u will crash/fastrack the activities on site in order to stick to the original completion date (as defined in your org baseline).

2) The org programme must be used in granting an EoT as it shows which side hold the responsibility that caused the delay(s).

Best Regards,
Karim