Owners of most construction projects, ultimately bound to a fixed budget, consistently raise concerns about delays and disputes over costs caused by time overruns. Not only can delays increase the project cost, but the delay in use of that infrastructure can have serious political and/or business consequences.
The most important control mechanism the owner/developer has to control these costs is scheduling. An owner who enters into a contract with a builder to begin a project without mandating a scheduling agreement that outlines a well-defined and logical path for completing the specified work is literally inviting unexpected costs when problems inevitably occur.
Schedule management is quickly becoming a de facto responsibility of the construction/preconstruction manager (CM), hired by the owner to manage and oversee all design approval, budgeting and purchasing activities.
Before bidding, the owner and CM should define in the contract documents the specific requirements necessary to achieve substantial completion of the project. Defining these requirements – ultimately represented in the scheduling agreement – helps avoid disputes regarding overages and project close-out costs.
It’s important for the owner to specify In the bid that the contractor hire a professional scheduler. To keep their quote low, contractors often don’t include this function in their bid. To avoid this problem and level the playing field for all bidders, owners should include a scheduling specification that requires the project to have a dedicated scheduler. This emphasizes the criticality the owner places on scheduling and ensures that the climate for proper scheduling exists. As a further inducement, the owner may include a mobilization payment to the contractor once the bid is let, contingent on receipt and approval of the contractor’s schedule.
Once a bid has been let, the owner and his/her team should lay out the information and level of detail to be included in a scheduling agreement that is commensurate with the involvement and control the owner wants exercised. A balance must be struck to prevent the requirements from becoming so burdensome that the schedule becomes unmanageable.
The schedule can be as simple as a list of activities that are organized in a logical, time-scaled sequence. Simple schedules, however, are simply not adequate on large construction projects.
Typically, a plan should identify key activities/elements and milestones, set up contingency plans and establish clear timeframes. It should also include procedural instructions, quality assurance elements and a communications protocol, including a plan for capturing and distributing necessary written and electronic information. Finally, to ensure everyone is included in the scheduling loop, it is a good idea to include activities by the owner, design team, prime contractor and subcontractors.
The contractor should also be required to hold a subcontractor workshop in conjunction with the owner’s representative to review the project and the schedule, and to set up regular reporting guidelines.
The owner should provide sufficient time for the contractor to firm the schedule so it is not built on unverified assumptions. To develop a meaningful schedule, design should ideally be advanced to at least the 30-percent level, a goal not always possible but a figure to strive for.
The need to complete a project within a certain time frame or by a specific date is vital as a completion delay can seriously complicate the owner’s post-construction financing agreements. To prevent scheduling from getting off-track as the project nears the end, owners should include an as-built schedule as part of the documents required for final payment and release of retainage.
Ultimately, the owner and contractor should agree on a schedule that meets the intent of the contract documents and outlines a logical path for completing the work. To ensure the project comes in on time and on budget it is important that both the contractor and the owner respect the schedule.
Download Our Quick Reference Guide “Optimizing Project Scheduling.” Our guide will help you better manage your project schedules from pre-construction to construction completion.