Schedule Contract

Management
Schedule Strategy
• Many Clients have ‘Schedule’ as the Paramount
value for them. Being ahead of Schedule delights
them
• Time is money ; Schedule drive pays back
• If you want to be focussed on Safety, Quality and
Productivity, you should not be all the time under
Client Pressure for Schedule. Take charge and lead
the client
• LD Penalties will sweep your Margin
 First step in Schedule Management

• Contract Construction Schedule is a very important

card in later on Contracts Management
• Take care to establish a clear Construction schedule in
the Contract finalisation stage itself
• If not done, go forward to establish “Original
Construction Schedules” and bind on client in the
initial period of Contract (within 3 months)
 Kinds of Schedule one has to be clear about
• Given
Contract completion date + Total quantum of various
items
In this kind, make Quantum schedule start to contract
completion date for major items like Concreting,
Strcutures carefully establishing peak capacity (Rate of
Progress) linking with infrastructure / resource
commitments
• Given
Milestones + Total Quantum of various items
In this kind make schedule with milestones and major
item quantum spreading carefully establishing Peak
capacity (Rate of progress) and maximum period of
individual Milestones, linking with Infrastruture / resource
commitments
Kinds of Schedule one has to be clear about
• Given
Milestones + Quantum spreading for Milestones

Here, make schedules with Milestones and Quantum

spread for all items of works establishing carefully
capacity and Milestones period linking with
Infrastructure / Resource commitments

In Schedule Framing catch points are :-

– Resource Commitments
– Capacity (Rate of Progress)
– Milestones Period
 Capacity (Rate of Progress)
• Maximum Quantum of work that can be done with considered
infrastructure and resource in contract. Say, Concreting
capacity is determined by Batch Plant capacity; fabrication
Capacity is determined by the infrastructure (Yard area,
Gantry Cranes) and Resources commitments, welding m/c
etc.

• Capacity building is done in the initial phase of Project interms

of Infrastructure and resource. During the course of contract,
capacity may be reviewed in the following circumstances :

• Contract failed to perform at his capacity in the past, given

fronts availability and all client inputs, In order to catch up the
schedules, contractor has to build on additional capacity at his
cost Contd..
 Capacity (Rate of Progress)
• Client failed to release fronts in the past and could not enable
the contractor perform at the original capacity, In orderto catch
up schedule, additional capacity is built at client cost

• Capacity can be stretched maximum 10% to 20% on the

available Infrastructure and resources. Beyond that level
capacity can be stretched in the following ways one or
combined
• Infrastructure Development - this takes additional expenditure
and considerable time
• Committing Additional Resources - this means going beyond
Budgeted Resource provisions, This call for Additional
expenditure and time

Capacity stretching takes additional expenditure and

additional time
 Minimum time required for work start

• Just after front realease Client jump on us to start the work, the
very next moment and declare “Front Available; Work not
done”
• Let us establish minimum time required to start the work after
inputs are cleared from Client. To explain, for a foundation job
the following steps are involved after drawing release by Client
• Drawing study / Quantity survey / Material management / Job
Planning / material Procurement / Labour mobilisation /
Redirection.
• The above takes minimum 3 to 4 weeks time
• hence, calculate work fronts for the month applying minimum
time to start
 Work front concepts……...
• “Work Front Available” is the quantum of work can be turned
over immediately with inputs - Drawings, materials, Structural
Foundation, Clearance etc. available on the date in complete
order / sequence with respect to time

• To explain further with example, equipment erection inputs

availability is as below :
– Drawing available - 500T
– Equipment available - 400T
– Foundation available - 300T
– Matching drg/Eqpt/Fdn - 70T
– Work front available is 70T only Contd..
 Work front concepts……...
• In case sequential input is required little later, work front available,
will be spelt out by quantum of work that can be done upto that
point of time.
Example
– Structural drawings - 250T
– Fabricated structure - 170T
– Sequential inputs of tie beam - 50T
– fabrication completion front
available upto coln. erection - 120T
– Work front for the month means …………….

• Work front that can be turned over during the most considering
minimum period for work start
Example
– minimum time for work start is 20 days
– work front on 05/09/98 is 300T
– work front on 10/09/98 is 400T
– work front on 15/09/98 is 500T
– work front for the month is 400T
 Front Release recording
• Front release position becomes the deciding point
Contractual Schedule matters

• Record Front release monthly with a definite cut of

date and minimum time for job start duly taken

• Front recording is an important as progress recording

• Let us minute the same with Client monthly

 Keep your ear on the ground to know front
release for the second and third month ….
• It helps you contractually
• Get commitments from client about front release for the
2/3 month
• incase client commitment not forthcoming, applying your
ground information, establish likely front positions with
assumptions
• Let us do this without any bias towards clients and with
honest assesment
• please bear in mind no client can turn off in front
projection. They will commit
 Have a definite period for scheduling
with cut off dates
• Example
– Month closing 20th
– Front finalisation 25th
– Scheduling 30th
• Once 3 months scheduling is finalised for the month,
do not get into scheduling exercise afterwards during
the month
• Please tell clients schedules finalised can not be
changed during the month
• In the same way, look ahead schedules for 2 and 3
month can not be changed
• Changes can be done only in the schedule exercise in
the next month
 3 Months fronts commitments
• Arranging things takes time
• Skilled Manpower mobilisation takes one month
• Plant & Machinery mobilisation takes 2 months
• Material procurement takes 1 or 2 months
• To get resources in time, we have to look ahead
• Look ahead planning is very important for timely
execution of jobs
• Client should commit 3 months fronts and help us in
look ahead planning
 3 Months look ahead planning
First Second Third
Month Month Month

Resource Resource Resource

Direction Mobilisation Budgeting

• “Resource Budgeting” is planning the resource requirements 3

months ahead and get prepared sub-contractor / Resource
Department for Resourcing action
• “Resource Mobilisation” is finalising the resource requirements
2 months ahead and mobilising the resources before month
closing of 1st month
• “Resource Direction” is directing the Resource for the planned
work in the first month
 First Month Scheduling ….

• Finalise front for the month with Cut off date, say ‘A’.
Check ‘A’ within capacity
• Check last month look ahead work plan for the month,
say ‘B’.
• Check resources were mobilised for the look ahead
plan ‘B’
• If front availability ‘A’ is more than look ahead plan for
the month ‘B’, freeze month plan ‘B’; stretch 20% to
30% ‘B’ plan is meeting Client requirements.
If ‘A’ is less than ‘B’, freeze month plan as ‘A’ and
make a claim on Clients for under utilisation of
resources mobilised for ‘B’ plan
• Direct execution of final plan
 Second month front study/Scheduling
• Finalise 1st month plan ‘A’
• Assess front availability and arrive work plan for 2nd month, say ‘B’.
Check the last month look ahead plan for 2nd month and resources
are budgeted
• Check ‘B’ plan with ‘A’ plan
a) B>A
Checkup 3rd month work plan C
B>C
Finalise 2nd month plan by balancing the work plan for sustained
resource deployment in 2 and 3rd month
Balance plan will be one B+C
2 Contd..
B<C
Finalise 2nd month plan as ‘B’
Second month front study/Scheduling
• b) B<A
Finalise 2nd month plan as ‘B’

• If final plan for the 2nd month is more than the the present
resources can make, commit additional resources for the final
second month plan

• If final plan of 2nd Month is less than the plan the present
resources can make, inform claim that resources are underutilised
and ask for additional front release.

• Direct mobilisation of resources

3rd month front study/Scheduling
• Assess front availability and arrive tentative work plan for for
3rd month, say ‘C’.
• Finalise 1st and 2nd month scheduling
• Check 3rd month tentatibe plan ‘C’ with ‘B’
a) if C<B
balance the 3rd month work plan for sustained resource
deployment and make it B+C
2
b) if C<B
Finalise 3rd month plan as ‘C’
• Budget Additional Resources required for the month
Contd..
 Milestones and quantum are the Two eyes of
Schedule Management

• In the initial period, Quantum Management takes the show

At the end, Milestones Reigns and Quantum is forgotten

• Team should focus on achieving progress and milestones together. All reviews
should follow this sacrosantly.

Example;
R8 - Rack completion (Milestone) 28.02.99
R8 - Rack Piping (Quantum) Jan 4000 ID, Feb 500 ID
 S - Curve
• Represent Construction Quantum Schedule, Capacity,
Front release, Progress achieved in ‘S’ curve

• ‘S’ curve is a powerful communication document in

Contracts Management

• In just minutes people can understand Schedule

Management

• You can follow as agreed with Clients the criteria -

• Work value in invoicing term Major Quantum
(Concreting, Piping etc)
• Work measurement by point system Contd..
 50000

45000

40000

35000

30000

25000

20000

15000

10000

5000
Inch dia

0
Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec-
97 97 98 98 98 98 98 98 98 98 98 98 98 98

Month
Origiunal fab. Prog. Actual Fab. Prgs. Avl. Net front (fab.)
Original Eren Prog. Actual Eren. Prgs. Avl. Net front (eren.)
• Like you have ‘S’ curve for quantum schedule, have a
golden frame for Milestone schedule
Delay Accountable
Sl. Original Revised Delay Dates
Milestones Client ECC
No. Date Date
Area Project Area Project Area Project
1
2
3
4
5
6

Record delay days Accountability from day one

substantiating with reasons
 • Record Monthly Historical Data on Resource
Deployment of
– Plant and Machineries
– Manpower
– Staff
• Compare it with Budgetted in Original Schedule
• These data recording will support us during Resource
overrun claim deleberations
• Example : Manpower Deployed (CPP Job)
Category Upto last month MD This Month (Nov'98) MD Cumulative

High Skill 2324 1030 3354

Skill 10608 34321 44929
Semi Skill 5437 1716 7153
Unskill 6751 2402 9153

TOTAL 25120 39469 64589

 Report Monthly Areawise
• Scope / Fronts status
• Quantum progress achieved / plan
• Milestones achieved / plan
• Reasons for shortfall
• S-Curve
– 3 months fronts projection
– 3 months quantum / milestones plan
– 3 months resource plan
– Resource historical dat
 Do Monthly reporting with credibility
• Finalise Reporting fromat in consultation with client
• Support Monthly Reporting with Weekly reports / documents
• Reports with cut off date and timely, say within 10 days from
Month closing date
• Respond to client comments on Monthly reporting with
openness and correct the same where ever required
• Be honest to admit our side problems and record them
 Budgeted Resource means…….
• Resource committed as per Contract Mobilistion schedule
or
• Resource required as per contract work schedule, the
production capacity determining the peak resource
requirement
• It is the resource quantum that can be mobilised in Normal
means i.e. from departmental resource bank
• Additional resources mobilisation beyond ‘budgeted’ means
going beyond normal means of mobilisation and hence we
will incur extra expenditure
• Example
We are asked to mobilise 100 welding machines against budgeted
70 welding machines. We shall claim extra for additional 30 welding
machines mobilised. It will be the difference between market hire
charge and dept. hire charge
 Catch up……………..

• In construction, schedules sometimes get derailed on Time Track

• Catching up the original schedules in time bound way comes up
often
• ‘Catch up’ is executed normally in 2 to 3 months time considering
front availability and ‘Capacity’
• ‘Catch up’ of our own shortfall may demand stretching of our
‘Capacity’ incurring additional cost at our end.
• Catch up of Client shortfall’ will be taken up with client for suitable
compensation for additional ‘Capacity’ building, if we can not catch
up schedule with ‘Present Capacity’.
 Quarterly ‘L1’ Schedule submission to client

• We have seen that short term contract schedule management

is best done by 3 months look ahead planning
• Complement this with submitting quarterly quantum /
milestones schedules up to final completion
• Take from clients or assume front releases for final completion
• Project likely overrun establishing the delay accountability to
client and our side
 Arrow Diagram Network …….
• Prepare simple arrow diagram network activities / milestones
of various areas showing total job completion programme.
Establish critical path of total job completion
• Update and submit to Client the Network diagram showing the
dalays in individual areas and resultant delays in critical path
of total job completion
• Supplement Network updation with S2 statement as below:
Sl. Original Date Actual Date Delays Accountable
Area
No Start Compl. Start Compl. Area Project ECC Client
Not just drgs. and materials, clients
input covers
• Take up with client various inputs they have to
take care :
– laydown area
– roads / approaches
– drainage facility
– uninterrupted power suply
– water supply
 Track scope variation closely area /
building wise
• Quantum may be doubled, still, client will insist for
original schedule
• Revise your schedule for quantum increase
• If you agree to stick to the schedule by stretching
your capacity, ask for compensation
 Contract Scope …..
• What ever appearing in construction drgs. can not be
taken as our Contract scope. Check the items are
covered in SOR and contract work description
• Contract scope as applied for scope variation clause
means value of items of SOR and other items derived
there from. Hence separate out work done value
under heads
– SOR / Derived items
– Extra items
– Extra claims
 When Scope decreases..…..
• Where as built up work capacity with P&M and
infrastructure remains. The built up capacity is under
utilised to the extent of scope reduction also
overhead spread on quantum decreases
• We shall make claims for under utilisation of capacity
and overhead spread loss
 When Scope increases..…..
• Rate of progress might increase calling for
additional resources. These resources can
not be obtained from departmental / regular
source. We have to go for getting them at
higher cost. Also additional infrastructure at
higher cost, might be required. We shall
make claims for the additional resource and
infrastructure cost
 Contractual claims..…..
Sl
Case Claim Check
No.
I) No time Overrun a) Resource overrun beyond provision due to
No Scope variatin phase out of schedule and special provision per
client requirement
b) Specification changes
II) Time Overrun a) Resource overrun beyond provision due to
No Scope increase phase out of time overrun and special provision
per client requirement
b) Overhead / Infra expenses for the time overrun
period
c) Escalation for material / labour for the quantum
after the Contract period
d) Specification changes
 Contractual claims..…..
Sl
Case Claim Check
No.
III) No Time Overrun a) Special provision per client requirement
Scope increases
b) Compensation for additional resourcing /
infrastructure at higher cost
c) Specification changes
IV) No Time Overrun a) Special provision per client requirement
Scope decreases
b) Compensation for under utilization of
resources and overhead spread loss
c) Specification changes
 Contractual claims..…..
Sl
Case Claim Check
No.
V) Time Overrun a) Resource overrun beyond provision proportinal
Scope varies to the new scope
b) Compensation for additional resourcing /
infrastructure at higher cost if scope increases
c) Additional overhead / infra expenses beyond
provisions proportional to the new scope
d) Escalation for material / labour beyond period
e) Specification changes
 Contractor Inputs Variation
Under utilization of resources due to non availability of
Work front non sequential supplies and non fulfillment
of client obligation (Basic infrastructure etc.)
Additional inputs beyond contract understanding

Sl
Major Inputs Quantum Cost Claim Ststus
No.
01. SFL Safety 9.7 Bill Passed, further Provision
Directly by Clients
02. Fab. Yard 54 Claim Sumbitted
Development

Note : Figures are in lakhs

 Invoicing Status ...
Sl Work
Major Items Scope Certified Billed Paid Recovery Outstanding
No Done
01. Main Works 2322
02. Extra Works 518
03. Escalation 147
Total 2987 2511 2125 1834 78 677

• Number of Days Outstanding

– Rs. Lakhs - 60 Days (Jan bill certified)
– Rs. 268 Lakhs - 30 Days (Feb bill to be submitted)
– Rs. 54 Lakhs - More than 90 days (Fabn. Yard)
– Rs. 61 Lakhs - 60 days (paint rate duspute)
• Price Variation Clause
– Escalation payable monthly
Note : Figures are in lakhs
 Disputes / Unsettled Claims ...
Sl Value
Description
No. (Rs.)
01. Fab. Yard Development Works 54
02. Painting rates 61
03. Scope Variation Claim (50% only taken) 177
04. Overrun Compensation Claim 123
TOTAL 415

Note : Figures are in lakhs

 Contracts Management ...
Site : TDL, Gummidipoondi Job No. : MPFG 1870 Month : Feb'97
Original Scope Actual Scope Variation
Sl No. Major Items UOM
Q V Q V Q V
01 Str. Fabn/ Eren. MT 4179 647.07 2607 443.62 -1572 -203.45
02 Painting SQM 112698 50.87 52677 173.63 -60021 122.76
03 Sheeting SQM 51510 428.25 33300 366.24 -18210 -62.01
04 Other Str. Works 56.61 6.21 -50.4
05 Concrete CUM 17535 429.68 17800 448.13 265 18.45
06 Rebars MT 1404 95.95 782 53.44 -622 -42.51
07 Shuttering SQM 43134 118.22 31721 84.1 -11413 -34.12
08 Other Civil Works 1238.55 746.62 -491.93
Total 3065.2 2321.99 -743.21

Contractual % Scope variation allowed : + 20%

Actual % Scope Variation : -24.2%
Cost Impact :
Schedule Impact : Note : Figures are in lakhs
 Term / Specification Changes
Sl Cost Schedule Date Impact
Changes Change order Status
No Impact Area Project
01 Low Hydrogen Welding 11 2 Weeks Received
W.O. not recd. Rate
02 Painting Spec. change 122.8 4 Months 4 Months dispute
Internal Liner rate
03 Sheeting spec. change -62.01 1 Month 1 Month submitted
04 Sand filling / Netlon for Compaction - 2 Months 1 Month Received
05 False Ceiling Grg. - - Scope deleted
06 Fire Wall - - Received

Note : Figures are in lakhs

 Time Overrun
Sl Completion Overrun
Dates Start
No Date Days
01 Contractual Date (Main works) 01/11/1995 30/10/1996
02 Actual Date 01/11/1998 30/04/1997 180

Accountability
Sl Major Reasons for O/R Days
ECC Client
01 Paint spec change 120 4
02 Sheeting spec. change / Design 30 4
changes / re design
03 Compaction Clearance 30 4

Delay Correspondences Status : Letter No. LTCG/TDL/014 dtd. 11/10/96

Contract Extension Period Granted : Indefinetly Granted
Liquidity Damage : Submitted Claim for Rs. 30.7 Lakhs/month
vide letter dtd. 02/11/96
Over Run Compensation : 2 Reminders sent

Note : Figures are in lakhs

 Contract Schedule Management -
A Service to Client
It is a Project Management Support
Client becomes clear about
Fronts, Rate of Progress etc;
He works on his obligations
He comes to help the Contractor
For the additional inputs required
To catch up schedules
His Apprehensions about schedules are allayed
By our Assurance through
SCHEDULE MANAGEMENT PRACTICE
bashyamp@gmail.com

Thank U