Im my ver humble opinion I believe all prudent parties to a project ought to include contingency in their plans (and costs) - given the historical eveidence of delays and overspend, not to do so is negligent.
As far as I know there are not contracts that say contingency periords should not be included in project schedules.
Whether you show your contingency periods (which I advocate) or add then covertly (extending durations or whatever) is up to you but taking the latter course is fraught with its own problems.
The contingencies build into the program are not highlighted to the client and is limited to the planning team and management of contractors only.
Even for subbies (Sub-Contractor), the contingencies are not given and duration to complete the activity is less compared to the baseline program agreed with the client.
Contingencies are mostly in cost controlling and monitoring and as efficient planner, every body would like to have these contingencies build into the cost sheets and program, so that even if there is any impact in the cost, profit margins will never go down.
As far as contingencies in the duration of program are considered, every planner/construction manager would like to have some contingencies build into the program for safer side.
Have you ever heard of "Rollling Wave Planning". Contingencies play a major role in Rolling wave planning and is of utmost importance during those early high level WBS programs.
As a planner, most of the times, WBS and WBS dictionary reflect the project scope evolution, as it becomes more detailed until the work package level is reached. So, there is a need to include small reserves, both in terms of duration and cost as well.
These contingencies to be used at the discretion of the project manager to deal with anticipated, but not certain events. THESE EVENTS ARE "KNOWN UNKNOWNS" and are part of the project scope and baselines (time and cost).
These contingencies need to be added in the form of progressive ellaboration. e.g. where the work to be accomplished in the near term is planned in detail at a low level of WBS, while work far in the future is planned for WBS components that are at a relatively high level of WBS.
Floats are relected in the schedule and can be used by stakeholders, whereas, contingencies are consumed at the discretion of PM only.
If contingency is not float, who is responsible for putting or considering this so-called "contingency period" into the schedule? The Client or the Contractor?
regards,
Anoon
Member for
23 years 7 months
Member for23 years7 months
Submitted by David Bordoli on Fri, 2007-06-01 08:59
I sort of agree with you in that terminal float could be defined as a period of free float at the end of a project.
What I am suggesting is that contingency is not float. It is a defined period (perhaps at the end of a project) to take account of say, unforeseen risks.
So it is possible to have an identified contingency period and a period of free float (or terminal float) at the end of a project.
Not specifically identifying and utilising some of that possible free float as a contingency means it remains as free float.
Why I think this is important is that some people are I think conflating float and contingency and in doing so dilute the precise meaning of the words and will lead to misunderstanding and misinterpretation of culpability for instance in the event of delays.
Thanks for your contribution and for taking the time to reply.
David
Member for
18 years 6 months
Member for18 years6 months
Submitted by Oliver Melling on Fri, 2007-06-01 08:09
I think terminal float is open to interpretation, depending upon the construction of your plan.
If the finish date of a baseline programme is agreed by the client as being prior to the contract finish date, then the difference between the two can be construed as either float or contingency.
I would say it depends as to whether the contract finish date is a milestone/activity in your plan.
If it is, then the difference (according to PERT) is float.
If it is not, then it would become client agreed contingency.
Regards,
Oliver
Member for
23 years 7 months
Member for23 years7 months
Submitted by David Bordoli on Fri, 2007-06-01 07:45
Excuse me if I don’t address you question, maybe if you ask me in a different thread, I would prefer this thread to be about terminal float, not whether I am and educator or not and what is the difference between planning at the sharp-end and not planning at the sharp-end. I fear a closed mind that seems to think the only alternative to sharp-end is dull-end is of little use to me.
Apologies for sounding rude but I am trying to find out some thing that is important to me and, I think is important to our discipline. If you can’t see the importance of being able to differentiate between float and contingency then maybe you should look and learn, you don’t have to get involved in every thread, just take part in those you can contribute to for a change. Chat with Charlie if you want inane banter.
Thus far in the lexicon of planning ‘float’ has a specific meaning and generated as a function of the network. Contingency is not float, simplistically it is time (or money or some other resources) allocated to take guard against some future risk. It seems to me that someone, somewhere coined the phrase, or misused the phrase ‘terminal float’ to mean ‘time contingency at the end of the project’. Which is why I think it was contrived by a non-planner as a planner would know what float really is. All I am trying to find out is where/when the usage came about.
David
ps. No, I am not an educator, I have been involved in the sharp end of planning, the doing, for 30 years!
Thanks for replying. I guess I got carried away in my post... all I really wanted to know is:
Can anyone tell me where the term ’Terminal Float’ came from? I have heard it referred to recently in conjunction with the NEC contracts. A Google search on those terms does throw up a few learned papers that mention it and there are a couple of references to it in other threads on PlanningPlanet.
I imagine it was contrived by a non-planner and really means time contingency (or buffer) at the end of the project.
Considering that your view is still "under development", i guess this is where terminal float might apply. Perhaps if you can explain further if whats the meaning of the term terminal and its relation to float, then there might be further discussions and confusions.
regards
Member for
23 years 7 months
Member for23 years7 months
Submitted by David Bordoli on Thu, 2007-05-24 09:32
Pretty much what I have read elsewhere but I am wondering if it is a correct application, at lease of the terminology.
If the contractors accepted programme is just left hanging and completing before the contract date dose that terminal float automatically get assigned as contingency or a time risk allowance if it is not specifically noted as that?
To me terminal float means float at the end, which is not the same as a contingency at the end. As I said, I am worried that we are confusing float and contingency and being aided and abetted in this by those who use precise language loosely?
Member for
23 years 7 monthsRE: Terminal Float
Anoon
Im my ver humble opinion I believe all prudent parties to a project ought to include contingency in their plans (and costs) - given the historical eveidence of delays and overspend, not to do so is negligent.
As far as I know there are not contracts that say contingency periords should not be included in project schedules.
Whether you show your contingency periods (which I advocate) or add then covertly (extending durations or whatever) is up to you but taking the latter course is fraught with its own problems.
David
Member for
18 years 5 monthsRE: Terminal Float
Anoon,
PM of contractor of course.
The contingencies build into the program are not highlighted to the client and is limited to the planning team and management of contractors only.
Even for subbies (Sub-Contractor), the contingencies are not given and duration to complete the activity is less compared to the baseline program agreed with the client.
Contingencies are mostly in cost controlling and monitoring and as efficient planner, every body would like to have these contingencies build into the cost sheets and program, so that even if there is any impact in the cost, profit margins will never go down.
As far as contingencies in the duration of program are considered, every planner/construction manager would like to have some contingencies build into the program for safer side.
Have you ever heard of "Rollling Wave Planning". Contingencies play a major role in Rolling wave planning and is of utmost importance during those early high level WBS programs.
Cheers,
Raviraj A Bhedase
Member for
19 years 1 monthRE: Terminal Float
Raviraj,
PM of what? PM representing the Client or the Contractor?
by the way, my project scope / baseline does not include contigencies, am I allowed to add this contigencies even if not required in the contract?
regards
Member for
18 years 5 monthsRE: Terminal Float
Hi Anoon,
As a planner, most of the times, WBS and WBS dictionary reflect the project scope evolution, as it becomes more detailed until the work package level is reached. So, there is a need to include small reserves, both in terms of duration and cost as well.
These contingencies to be used at the discretion of the project manager to deal with anticipated, but not certain events. THESE EVENTS ARE "KNOWN UNKNOWNS" and are part of the project scope and baselines (time and cost).
These contingencies need to be added in the form of progressive ellaboration. e.g. where the work to be accomplished in the near term is planned in detail at a low level of WBS, while work far in the future is planned for WBS components that are at a relatively high level of WBS.
Floats are relected in the schedule and can be used by stakeholders, whereas, contingencies are consumed at the discretion of PM only.
Hope I am Clear.
Cheers,
Raviraj
Member for
19 years 1 monthRE: Terminal Float
David,
If contingency is not float, who is responsible for putting or considering this so-called "contingency period" into the schedule? The Client or the Contractor?
regards,
Anoon
Member for
23 years 7 monthsRE: Terminal Float
Oliver...
I sort of agree with you in that terminal float could be defined as a period of free float at the end of a project.
What I am suggesting is that contingency is not float. It is a defined period (perhaps at the end of a project) to take account of say, unforeseen risks.
So it is possible to have an identified contingency period and a period of free float (or terminal float) at the end of a project.
Not specifically identifying and utilising some of that possible free float as a contingency means it remains as free float.
Why I think this is important is that some people are I think conflating float and contingency and in doing so dilute the precise meaning of the words and will lead to misunderstanding and misinterpretation of culpability for instance in the event of delays.
Thanks for your contribution and for taking the time to reply.
David
Member for
18 years 6 monthsRE: Terminal Float
David,
I think terminal float is open to interpretation, depending upon the construction of your plan.
If the finish date of a baseline programme is agreed by the client as being prior to the contract finish date, then the difference between the two can be construed as either float or contingency.
I would say it depends as to whether the contract finish date is a milestone/activity in your plan.
If it is, then the difference (according to PERT) is float.
If it is not, then it would become client agreed contingency.
Regards,
Oliver
Member for
23 years 7 monthsRE: Terminal Float
Anoon
Excuse me if I don’t address you question, maybe if you ask me in a different thread, I would prefer this thread to be about terminal float, not whether I am and educator or not and what is the difference between planning at the sharp-end and not planning at the sharp-end. I fear a closed mind that seems to think the only alternative to sharp-end is dull-end is of little use to me.
Apologies for sounding rude but I am trying to find out some thing that is important to me and, I think is important to our discipline. If you can’t see the importance of being able to differentiate between float and contingency then maybe you should look and learn, you don’t have to get involved in every thread, just take part in those you can contribute to for a change. Chat with Charlie if you want inane banter.
David
Member for
19 years 1 monthRE: Terminal Float
David,
I believe you are both, a Planner and an Educator. Why did you call "the doing" is the sharp end of Planning? What is the dull end?
Member for
23 years 7 monthsRE: Terminal Float
Anoon
Thus far in the lexicon of planning ‘float’ has a specific meaning and generated as a function of the network. Contingency is not float, simplistically it is time (or money or some other resources) allocated to take guard against some future risk. It seems to me that someone, somewhere coined the phrase, or misused the phrase ‘terminal float’ to mean ‘time contingency at the end of the project’. Which is why I think it was contrived by a non-planner as a planner would know what float really is. All I am trying to find out is where/when the usage came about.
David
ps. No, I am not an educator, I have been involved in the sharp end of planning, the doing, for 30 years!
Member for
19 years 1 monthRE: Terminal Float
Hi David,
I believe all people got carried away sometimes. And I supposed youre an educator and always wanting to know the scene behind certain things.
Why did you say that it was contrived by a non-planner?
regards
Member for
23 years 7 monthsRE: Terminal Float
Hello Anoon
Thanks for replying. I guess I got carried away in my post... all I really wanted to know is:
Can anyone tell me where the term ’Terminal Float’ came from? I have heard it referred to recently in conjunction with the NEC contracts. A Google search on those terms does throw up a few learned papers that mention it and there are a couple of references to it in other threads on PlanningPlanet.
I imagine it was contrived by a non-planner and really means time contingency (or buffer) at the end of the project.
Thanks again
David
Member for
19 years 1 monthRE: Terminal Float
David,
Considering that your view is still "under development", i guess this is where terminal float might apply. Perhaps if you can explain further if whats the meaning of the term terminal and its relation to float, then there might be further discussions and confusions.
regards
Member for
23 years 7 monthsRE: Terminal Float
Thanks Matthew
Pretty much what I have read elsewhere but I am wondering if it is a correct application, at lease of the terminology.
If the contractors accepted programme is just left hanging and completing before the contract date dose that terminal float automatically get assigned as contingency or a time risk allowance if it is not specifically noted as that?
To me terminal float means float at the end, which is not the same as a contingency at the end. As I said, I am worried that we are confusing float and contingency and being aided and abetted in this by those who use precise language loosely?
Thanks again for taking the time to post.
David