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In which cases should the approved baseline be revised?

18 replies [Last post]
Mon, 2009-06-01 23:58
ali kandemir
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I have some major concerns about revising the baseline. These concerns are generally relates to legal terms as our Contract clauses (not FIDIC or similar, tailor made) allows for Client’s claims other than delay damages where the rate of progress is too slow than the planned. Contract also provides that; when the Contractor wishes to amend the approved programme, it shall be submitted again for approval. This gives a flexbility to amend a baseline.

Now the questions are the following;
1)What is common practice to revise the baseline? Would you update the schedule or just show nill progress and modify the durations, links etc and keep the data date same? The consequences of both options are the following;

a) where you are behind the progress and if the revised programme is approved with the updated information, you will literally recover your delay and the Client will not be able claim that you are behind the schedule anymore.
b) where you are ahead of the schedule you will just equalize your progress to planned which eventually loosing whatever you gained before. This gain will most probably be required during the remaining works.

2) During the course of the Works if you recognize that you have poor planning ie. the productivity parameters of the baseline is not realistic since you didn’t have any realistic data within that enviroment while developing the L3 schedule and the resources has to be changed due to design development (for a design and built contract) would you revise your baseline accordingly or just keep the changes limited to updated schedule? If your answer is NO, how would you compare the actuals vs planned, as the activities has to be added/deleted due to design changes.

For your replies you should again note that these parameters specific for our contract;

1)this is a design and built contract where the changes in design due to design development does not constitute Variation.
2) only milestone within the time schedule is the completion date

thanks in advance
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Replies

Sat, 2009-06-13 16:55
#1
Rafael Davila
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Andrew,

Save a dollar today, spend ten dollars on resolving a dispute tomorrow! Please carry on. A very good point indeed, of course it is an option to consider, not all owners are created equal. There are no absolute rules.

What about some specifications that require you to span baseline critical path along all the contract duration while not allowing you to present your real planning?

What about allocation of float to whoever reaches it first, it is just to the benefit of one side; to the benefit of both is a fallacy, as contractors why not keep a little bit of it? Yes at time you are in need to manipulate a little bit of the schedule, just a little bit. The way specifications and protocols are spelled out you have no other option.

Got to be real:

CPM SCHEDULES ARE NO LONGER PURE MANAGEMENT TOOLS WHEN CONTROLLED BY THE OWNER THROUGH THE CONTRACT DOCUMENTS.

Even if not manipulative, just by including the schedule as part of the contract it becomes a tool that eventually might be used against a contractor. We got to accept scheduling is not what we wish.

Sure you knew your posting was to fire a reaction, this is the idea of debating the issues, we all understand. I appreciate your postings there is a lot of wisdom. Someone got to be the dissenting voice, I volunteer on my own; it does not mean I am not learning from the discussion.

Your dissent trough reason is elegant, is the way to go, whenever someone proves me wrong I learn, I win.

I AM WINNING!

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Sat, 2009-06-13 16:28
#2
Andrew Flowerdew
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Rafeal,

Thought my last post might cause a reaction!

Yes the issues do overlap but the bottom line is the programme is a management tool and not a claims tool.

If you properly use the programme as a management tool - the claims will drop out of it automatically. Many years of site planning for a main contractor have shown me this.

You said "whatever a scheduler submits to the owner will have legal implications, particularly a revised baseline."

Yes it will, but you have to distinguish between a baseline programme, a revised baseline programme and an update programme.

A baseline programme is, (or should be), a unilateral statement by the contractor of his original intended plan of action on the day the contract was executed, it is a statement of intent that does not change. It is fixed for ever unless;

A revised baseline programme is issued. This is a revised unilateral statement by the contractor of his original intended plan of action on the day the contract was executed. We were going to originally build it like this but now we’ve had a think and we’re going to do it like this. The change to the baseline programme is by the contractor to reflect his own changed thinking. This may include comments from the employer when sent for approval if the comments were relevant on the day the contract was executed.

An update programme is a record of what has actually happened and how planned activities have or have not changed. It is a statement of future intentions having regard to what has happened to date and what needs to happen. This involves both contractor and employer related events.

An update programme shows the change in intention from the original baseline, (or revised baseline), at the point in time of the update but it does not change the original intention as stated in the baseline or revised baseline programme.

Comparing the original intention with the updated intention may give rise to a claim if the differences are an employer liability.

So if a baseline programme is sent for approval and the employer says it doesn’t include for this change that happened after the contract was executed or the new information that has come to light after the contract executed, then the revised programme is NOT a revised baseline programme but an update programme.

If on the other hand the comment is that your baseline programme shows you building the 10th floor before the 4th floor then the correction of that mistake would result in a revised baseline programme, not an update programme.

You identify claims by comparing the baseline programme, (or revised baseline), to the update programme or subsequent update programmes.

You demonstrate liability for claims by showing the differences between the baseline programme, (or revised baseline), and the update programme or between subsequent update programmes is down to the employer.

So keeping accurate and meaningful update programmes as and when the current programme, (baseline, revised baseline or update), no longer accurately represents the current circumstances:

1. Allows you to manage the project effectively and properly.
2. Allows you to identify claims as and when they occur which:

a) Allows you if required to submit timely notices and;
b) try and sort things as the project goes along when everything’s fresh in peoples mind so that:

i) the employer knows what he’s got to pay as soon as possible
ii) the contractor gets paid earlier for his claims improving his cashflow
iii) you don’t end up with a huge claim at the end of the job that takes the employer by surprise and is likely to end up in an expensive legal dispute.

All just good project management to which the planner can contribute to greatly if he/she concentrates on his/her primary function - to give up to date, accurate and meaningful information to the project team so that the job can get built in the most effective and efficient manner.

To do that he/she need to maintain an up to date, accurate and meaningful programme. If that’s carried out then the planning process will automatically throw out meaningful and legitimate claims for the planner to identify and substantiate. Meaningful and legitimate claims are more likely to get settled and not end in a costly dispute. Manipulating the programme to generate claims will almost inevitably end in an argument.

But hey, I’m not complaining, scrutinising programmes and showing up where planners have manipulated programmes for the benefit of their companies rather than plan properly for the benefit of the project pays my wages a lot of the time so long may you all carry on doing it. Save a dollar today, spend ten dollars on resolving a dispute tomorrow! Please carry on.
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Sat, 2009-06-13 09:33
#3
Rafael Davila
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Avatars

[COLOR=#666666]As a general rule lack of knowledge of the law is no excuse. [/COLOR] I would recommend any planner to be real and stop playing the naïve. What a schedule should be is one thing but at times in conflict with reality.

A scheduler must know the relevant issues; this is not trying to be lawyers. Within our limits we should all be involved in the discussion of legal issues relevant to what we do. When I was a student we had a course on Construction Law, the professor, an engineer, a litigation lawyer and law professor at a law school a few blocks away from ours did not pretended to make us lawyers.

Maybe we should close the Contracts, Claims and Claims Assessments forum discussion category and label Claim Analysts as irrelevant, I don’t think so. Moving this thread, I don’t think so either, at times issues overlap.

Taking CPM schedules out of the contractual requirements, for good or bad certainly would make scheduling a true planning tool. Until then, whatever a scheduler submits to the owner will have legal implications, particularly a revised baseline.

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Sat, 2009-06-13 06:47
#4
Andrew Flowerdew
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Appears to be a lot of planners here trying to be lawyers, not planners!!!!!!!!!!!!!!!!

The programme is there to predict what and when things are going to happen on site - to allow the project to be effectively managed. It is a live document that evolves over the life of the contract.

The programme should be updated, changed, revised, altered, varied, every time there is a change that results in the programme not reflecting what is actually happening on site, (this includes progress, whether you are behind or ahead or change in work sequence). Ok, maybe not every little change but if enough small changes occur then it the programme might need an update.

If this is done properly then any entitlement to an EoT just drops out of the updates, all activity changes can be managed properly, critical path changes can be observed and appropriate action taken, recovery plans if needed can be properly planned and implemented, etc, etc, etc......

Submit the baseline programme for approval. This is the one both parties initially need to agree and approve.

But the baseline programme can be obsolete on day 2 of a project, to continue trying to manage the project using it is pointless. So change it, record why you’ve changed it and give the employer a copy. It is an update, not a new baseline programme and that should be made clear.

If you carry on trying to manage the project using the baseline, the programme remains a static document that never changes, then the saying, "fail to plan, plan to fail" springs to mind.

Even if the programme is a contract document the same applies, just the arguments over liability for the changes can get a little more complicated.

Remember, just because the contract says you shall submit a programme at the start and probably monthly intervals, that’s just the minimum the employer is asking you to do to keep him informed. It has nothing whatsoever to do with what you actually may need to do to manage the project properly.

It is not saying that doing what is in the contract is sufficient to allow you to effectively manage the project, what that entails is up to the contractor. I would suggest a baseline and monthly updates is a long way off what is needed to effectively manage a project.
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Tue, 2009-06-09 09:25
#5
Rafael Davila
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10-4
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Tue, 2009-06-09 09:09
#6
Samer Zawaydeh
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Thank you Rafael,

This information is appreciated. It added a new perspective to situations that might arise.

With kind regards,

Samer
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Tue, 2009-06-09 07:18
#7
Rafael Davila
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Samer, your request for a clarification is welcomed.

You work with a revised schedule; a revised schedule is not necessarily a revised baseline even when you add a few activities or change some sequencing to correct for example some out-of-sequence logic which is not uncommon.

A new baseline might have legal implications when there are delays claim not settled yet, as well when ahead of schedule. Submittal and acceptance of a revised Baseline might imply that you are reaching an agreement and everything else is thereby agreed.

The original question asks for the common practice. It was well spelled that the contract is a design and built contract where the changes in design due to design development does not constitute Variation. It was not necessary to be spelled out so clearly. The possibility of being ahead as well of being behind schedule was also an open issue.

As a Contractor sometimes you have no other option than to use your real schedule different from your submissions and latter on include pending issues as soon as agreed. Yes the other side might perceive acceptance of a changed schedule is acceptance of change on his part. This is a problem we all have to deal with when the CPM is part of the contract.

I hope this add something useful to the debate.

Cheers!

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Tue, 2009-06-09 05:05
#8
Samer Zawaydeh
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Dear Rafael,

Once the schedule is behind or ahead, as long as it does not represent the actual progress at site, it will revised.

What would you do with an approved schedule that is not representing the actual ongoing activities at site? In the Design Built scenario that our originator is talking about, the client is not going to pay extra for acceleration as long they did not change the design. So, the contractor might as well change the schedule and improve his planning activities to enable them to complete the project per milestone schedule.

With kind regards,

Samer
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Mon, 2009-06-08 21:22
#9
Rafael Davila
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From: Scheduling Best Practices Article I2 Recovery Schedules

“When a contractor finds his project behind schedule and the completion date slipping, the project owner will often request that a new schedule be developed in order to meet the originally scheduled completion date. However, requesting that the contractor attempt to mitigate the slippage through schedule adjustments, and requesting that the contractor develop a recovery schedule are two very different requests.”

“The owner may request the recovery schedule, but there are many reasons that the contractor may resist creating one. By creating a recovery schedule, the contractor may be admitting that the delays are his responsibility. The contractor could also be waiving his right to recover for impacting events that have not yet been quantified. Also, the contractor could be accepting the cost of acceleration.”

For a full discussion of the above please follow the link;

http://www.warnercon.com/articles/Article%2012%20-%20Recovery%20Schedule...

Once a Recovery Schedule is submitted and accepted, it shall be the incorporated into the Accepted Baseline CPM Schedule as a Revised Schedule.

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Mon, 2009-06-08 18:50
#10
Safak Vural
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Dear Ali,

As a CLIENT, if you push your CONTRACTOR to submit a schedule revision that will have a same end date as the CONTRACT then the CONTRACTOR will submit you a schedule that will finish same date but backloaded and UNREAL (I submitted:)). If the CONTRACTOR is a head of the job, no one will want to revise the schedule (everybody reporting to somebody nobody wants to erase the progress).

But if you make a revision to a schedule then your baseline will be revised schedule and your progress will be equalized with baseline. This is mathematical, if you are subtracting a number with itself it will give you zero (first week of the revision).

The CLIENT or CONTRACTOR would want to show the situation according to the CONTRACT or initial schedule. Then you need to monitor 2 data. You need to have 2 baseline. You can have 2 baseline in P3 and more in P6. You can revise your weekly-monthly reports.

If you ask how you would accept a schedule revision from CONTRACTOR as a CLIENT. The important point is not that CONTRACTOR committed end date. If you are aware of that the CONTRACTOR cannot complete the job in time ask for mitigations WRITTEN. Ask for a schedule revision report. Extra resource allocation or procurement rate increase etc.
You can punish CONTRACTOR for delaying the job but YOU need to finish to job in time according to your management.

Best regards,

Safak
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Thu, 2009-06-04 11:57
#11
Samer Zawaydeh
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Dear Anoon,

It was stated clearly by the initiator of this treat (Post #1) that the design development is not considered a change. He will need to follow the Contract clauses. If the clients asked for changes, and the contract allows to consider these changes, then he can claim for extra time for completion and/or money.

If the client/ Engineer notice that the current Program of Works does not represent the actual progress at site, then they can ask for a revised schedule.

When you have a milestone schedule, say 5 milestones in 2 years, then most probably, the client will take note of these 5 milestones, and would not ask about what is going inside the time frames. Usually, these milestones are connected to other contractors or an ongoing operation. And missing them will cause real damage to the client.

With kind regards,

Samer
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Wed, 2009-06-03 05:37
#12
Anoon Iimos
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Dear All,

I’m guessing that Ali is more concerned about the effect of "changes due to design development". What are the main reasons why you need to revise an approved baseline schedule supposing you are within scheduled timeframe?

Iro, I may add that when a Project is deemed delayed then maybe it is an option to revise the baseline schedule, but when you are ahead of your schedule, what would drive you to revise an approved one?

Further, if a critical path is set (following the contractual milestones), then perhaps changes in designs that have impact to the critical path (in the approved baseline schedule), can be made a reason to revise an approved baseline schedule?

cheers!
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Tue, 2009-06-02 12:53
#13
Samer Zawaydeh
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Dear Ali,

This is a standard type of Contract on large projects. They need it to be done on a specific date; By zone, building, floor, etc. If you have a running operation, then you have a really big issue to meet the milestone because you will cause operational losses to the Owner.

Bascially, you have a contract and milestones. Your Program of Works between the milestones is not valid anymore and does not represent the actual progress. So change it. If you are the one approving the schedule, then you must have the supporting data for the actual production rate at site, and you plug them in and go the math. Of couse you much make sure that you meet the milestones if you did not cause any delays to the Contractor.

You will need to assess the limits of changes required and if they are reasonable or not. If you have enough supporting data for accepting the submitted revised schedule then you accept it. This is the only case that I would recommend accepting a major change to the Schedule.

I hope that the information was clear and you benefited from it.

With kind regards,

Samer
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Tue, 2009-06-02 09:20
#14
Iro Iro
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Hi Anoon,

The approved baseline can be revised because of the following:

1. Change in Scope of work

2. The deviations in quantities to meet actual work.

Best regards,

Iro Ukoha
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Tue, 2009-06-02 05:58
#15
Anoon Iimos
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Hi Ali,

Just take this as a side dish.

"2) only milestone within the time schedule is the completion date."

Mike,

I believe it is not a promise to start (of milestones)on certain date(s) but completion of milestones (internal-within the overall timeframe) on certain dates within the agreed timeframe. As it is a D&B contract, how are you going to define the sequencing? Remember Ali said that a change in design is not considered a variation. I supposed your "bottom-up" approach is best to determine the critical path, but with engineering or design elements, a bottom-up schedule is impossible to develop in this case. Perhaps you can define your construction sequencing but with pending designs to support it, how can it be justified?

just an opinion...

cheers!
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Tue, 2009-06-02 02:21
#16
Mike Testro
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Hi Ali

You said in your last sentence "2) only milestone within the time schedule is the completion date."

In most forms of contract the contractor promises to start on a date and finish on a later date - between these dates he can carry out the works in any sequence or duration that he requires.

If the programme is a Contract Document - ie bound into the contract - then it is fixed on both parties. If the Employer or his agent delays the contractor then they are in breach of contract and if they are to preserve their LD’s they must agree to a new reasonable programme.

Otherwise the contract programme is a means to check progress and assess delays - this programme should not be changed while it is being used for this purpose.

The contractor however is free to work to any other programme that is more convenient or realistsic.

Particularly in design and build contracts where the designers may come up with different designs that change the sequence.

Sorry if this reply does not address all your queries in turn but is more of a global response.

I you have any more specific queries please get in touch.

Best regards

Mike Testro


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Tue, 2009-06-02 02:14
#17
Gary Whitehead
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Hi Ali,

A few questions for you:

a) What is the reason for revising the baseline? Has the scope changed? Is it to allow for changes due to design development?
b) I assume the contract is silent on methodology for updating baseline?
c) Does the contract have anything to say on acceptance criteria / valid reasons for client to reject the revised baseline?
d) How is progress measured? Using pre-agreed schedule of rates? At what level of the programme is the resource / progress weighting loaded?
e) Even though you may be adding / deleting activities, am I correct in assuming this does not change the contract value or completion date?

Cheers,

G
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Tue, 2009-06-02 07:50
#18
Mike Testro
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Hi Anoon

Construction contracts usually have three promises from the Contractor:

1. To carry out a defined scope of work.
2. For an agreed sum of money.
3. Within an agreed period of time.

The scope of work may be in sections which will have money and time attached but the three promises remain.

If the programme is a contract document then the timing and se1quencing of the work is fixed.

If not then the contractor can work in any order he wishes.

Regarding design input this should be put into a bottom up programme showing the design stages for each section of the work.

These sub programmes should then be linked to the 1st lead in activity for procurement and mobilisation which in turn is linked to the 1st task that needs the design.

When the Design and procurement tasks are set to ALAP then they all drop into place.

Best regards

Mike Testro
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