a construction planning process - … a construction planning process box-out discussion the process...

BOX-OUT A CONSTRUCTION PLANNIN

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BOX-OUT

A Construction Planning Process

January 12, 2017


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PRESENTERS

Ricky BenefieldDir. of Planning & Scheduling Brasfield & Gorrie LLC

Brian MurrayConstruction ExecutiveBrasfield & Gorrie LLC

Axel Bolvig IIIPartnerBradley Arant Boult Cummings LLP


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BOX-OUT DISCUSSION The process of maintaining a project schedule as a planning tool while accurately documenting delays


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Basis of Presentation

� Today’s presentation is based on our personal experience(s), thought(s) and innovation

� It should not be perceived or thought to be attributed to our employers in any way

� This process is given in the spirit of sharing

� We do not claim to have the “world’s greatest” approach

� It has worked for us


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What is “Box-Out”?

“Box-Out” is a

� Separate Schedule

� Process / Planning Tool� When scheduled progress is disrupted by

unplanned events

� And the Contract schedule is too impacted to be of meaningful use to the Field and Owner as a Planning Tool

� More accurate near term or look ahead


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“Box Out” is not a

� Contract Schedule

� Claim Tool

� Payment Tool

� Decoy schedule

What is “Box-Out”?


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What is the Problem?

� The Government and other institutional Owners include complex Scheduling Specifications in their contracts

� The Specifications require the CPM Schedule to serve several “Masters”:� Planning Function

� Payment Function

� Performance Evaluation Function

� Forensic Function


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Gov’t §3.13.1 General RequirementsPrepare for approval a Project Schedule. . . Show in the schedule the proposed sequence to perform the work and dates contemplated for starting and completing all schedule activities. The scheduling of the entire project is

required. The scheduling of construction . . . is the responsibility of the Contractor.Contractor management personnel must actively participate in its development.Subcontractors and suppliers Designers, Subcontractors and suppliers working on the project must also contribute in developing and maintaining an accurate Project Schedule.

Provide a schedule that is a forward planning as well as a project monitoring tool.

� It is the “Contractor’s Schedule”

� It is a Planning Tool

� It is a Performance Evaluation Tool


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Gov’t § 3.23.2 Basis For Payment And Cost Loading

The schedule is the basis for determining contract earnings during each update period and therefore the amount of each progress payment. The aggregate value of all activities coded to a contract CLIN must equal the value of the CLIN.

Failure to meet the requirements of this specification may result in the disapproval of the preliminary, initial or periodic schedule updates and subsequent rejection of payment requests until compliance is met.

In the event that the Contracting Officer directs schedule revisions and those revisions have not been included in subsequent Project Schedule revisions or updates, the Contracting Officer may withhold 10 percent of pay request amount from each payment period until such revisions to the project schedule have been made.

� It is a Payment Tool

� But is it the Contractor’s Schedule?


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Gov’t §3.3.1

3.3.1 Level of Detail Required

Develop the Project Schedule to the appropriate level of detail to

address major milestones and to allow for satisfactory project planning and execution.

� It’s a Planning Tool


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Gov’t §3.3.7.43.3.7.4 Modification Number

Assign a Modification Number Code to any activity or sequence of activities added to the schedule as a result of a

Contract Modification, when approved by Contracting Officer. Key all Code values to the Government's modification numbering system. An activity can have only one Modification Number Code.

� It is a Contract Value accounting (financial) tool

� What about change orders in process?

� What about Unilateral Modifications, or Contractor COR’s?


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Gov’t § 3.33.3.12 Out-of-Sequence Progress

Activities that have progressed before all preceding logic has been satisfied (Out-of-Sequence Progress) will be allowed only on a case-by-case basis subject to approval by the Contracting Officer.

3.3.13 Added and Deleted Activities

Do not delete activities from the project schedule or add new activities to the schedule without approval from the Contracting Officer.

� It is a Tool by which the Government Controls the Contractor


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Gov’t §3.4.33.4.3 Periodic Schedule Updates

Update information including Actual Start Dates (AS), Actual Finish Dates (AF), Remaining Durations (RD), and Percent Complete is subject to the approval of the Government at the meeting.

AS and AF dates must match the date(s) reported on the Contractor's Quality Control Report for an activity start or finish.

� It is a Forensic Tool


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Gov’t §3.83.8.1 Justification of DelayProvide a time impact analysis that demonstrates the effects of the delay or impact on the project completion date or interim completion date(s). Evaluate multiple impacts chronologically; each with its own justification of delay. With multiple impacts consider any concurrency of delay. A time extension and the schedule fragnet becomes part of the project schedule and all future schedule updates upon approval by the Contracting Officer.3.8.4 Fragmentary NetworkThe proposed fragnet must be approved by the Contracting Officer prior to incorporation into the project schedule.

� It is a Tool by which the Contract Time is accounted for.

� It is a Dispute Resolution Tool.


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The Masters

The Specifications require the CPM Schedule to serve four primary “Masters” (functions):

1. Planning Function

2. Payment Function

3. Performance Evaluation Function

4. Forensics (historical) Function


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Masters in Harmony

� When there are no:� Disagreements as to Progress or Actual

Dates

� Disagreements as to Change Order Fragnets

� Impacts to Plan or Schedule

� Disagreements as to Time Extensions or Methodology

� The “Masters” are in relative harmony and the Contract Schedule can (more or less) serve all Masters


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Masters in Conflict

� When disagreement exists among the four masters (functions), the Contract Schedule typically becomes the center for debate� Progress

� Actual Dates

� RFI Impact(s)

� Change Order Fragnets

� Out of Sequence Progress

� Time Extensions / Relief

� Debate and associated distractionsnegatively affect use of the Contract Schedule as a construction Planning Tool


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Have you ever heard this?

Owner: “You are not building in accordance with your schedule.”

Contractor: “You see Out-of-Sequence Progress because of [select the reason] impacts.”

Owner: “Fix your schedule.”

Contractor: “We cannot, unless you direct us to do so. You must direct it, approve the changes and pay the costs.”

Owner: “No way.”


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Or this ?

Contractor: � “We have a right to perform in accordance

with our Approved Contract Schedule. The Out-of-Sequence Progress you see is caused by [select the reason] impacts.”

� “We cannot resequence and cover up change conditions without a directive, time extension and compensation. Otherwise, it’s at our expense.”

� “Until you direct us to change the Contract Schedule, we will continue to update it and submit the approved contract schedule.”

� “The Field needs a Planning Tool. We will Box-Out impacted areas and submit a Box-Out Schedule, as well.”


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Example Project

� Approx. 1.2 million sf complex facility� Four (4) stories plus basement and mechanical

penthouse� 36 months

� 12 months structure and skin

� 24 months fit-up� Significant quantity and types of owner direct

purchases with direct correlation to construction infrastructure and fit-up

� 12 months into the 24 month fit-up Owner enacts The Surge in an attempt to address and correct missing, critical information and allow for completion of the work


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The SurgeOriginal Drawings

Approx. 5,000

drawings

Owner corrective actions including the

issuance of over 8,000 replacement and/or

new drawings and inclusion of over 3,500

RFI’s


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Post Surge

an additional 3,500 RFI’s

over 800 Change Orders


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The Crew Impact(s)


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Example Project� Over 7,000 of RFI’s

� Average time to resolve > 90 days

� Over 800 Change Orders


� <20% Approved vs Directed

� Over 700 Fragnets


� 50% Approved vs 30% Rejected and 20% unresolved

� Approx. 5,000 original drawings vs. 13,000 + final drawings

� Confusion, lack of coordination, incredible challenge to keep field forces apprised of current, correct construction information, while also satisfying the administrative (masters) of the contract


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What does “Box Out” do?

� It separates the planning tool (most important to project performance) from the other functions

� Supports Coordination, Planning and Execution of the Backlog of Work

� Allows field to focus on the Planning Function� Planning & Execution Master� Allows others to focus on the other

Administrative Functions, � Payment Function� Performance Evaluation Function� Forensic Function


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How Do You Do Box Out?

� Our example involved areas of work that were on-hold (constructively suspended) pending Owner Furnished Equipment (rough-in) purchase and receipt of associated technical information

� Box-Out was implemented for the affected work areas

� A copy of the last reliable approved, schedule update continued to serve as the Contract Schedule

� New activities for the areas on-hold were created and added within the Box-Out schedule


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Incorporate Box-Out

� Prepared and Submitted the process to the Owner


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How we did Box Out

� The Contract Schedule and Box-Out Schedule were updated monthly

� The Contract Schedule and the Box-Out Schedule were submitted to the Owner monthly

� These efforts were made at the Owner’s request. . .


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A

B

C

D

AA

B

C

D

Data Date

Impacted


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A

B

C

D

AA

B

C

D

Data Date

A

B

C

D

AA

B

C

D

Data Date

B

C

Give Notice to the Owner and STOP Give Notice and Work Out-of-Sequence

Choices

Mitigation by the Contractor


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A

B

C

D

A

B

C

D

Data Date

Box-Out

Box Out Schedule

Incorporate Box-Out


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A

B

C

D

AA

B

C

D

Data Date

A

B

C

D

AA

B

C

D

Data Date

B

C

Give Notice to the Owner and STOP Give Notice and Work Out-of-Sequence Box Out Schedule

A

B

C

D

A

B

C

D

Data Date

Box-Out

Choices


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A

B

C

D

AA

B

C

D

Data Date

Fragnet

As Planned Impacted Contract Schedule

Time Impact Analysis


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Mitigation Effort

A

B

C

D

AA

B

C

D

Data

Date

Fragnet

As Planned Impacted Contract Schedule Box Out Schedule

A

B

C

D

A

B

C

D

Data Date

Box-Out

Delay and

Entitlement

Delay and

Entitlement

GC Mitigation


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Effect of Box Out Schedule

� Field Forces experienced improved information, for purposes of Planning and Scheduling

� Owner and User focused attention on Owner Furnished Equipment areas “on hold”

� This Owner had a particularly hard time getting information and decisions from its User

� Contract Schedule exposed the impact by showing Out-of-Sequence work progress


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What Happened In The End?

� Both schedules were updated monthly� The Contract Schedule was used for Payment and

Time Entitlement� The Box Out Schedule showed earlier completion

than the Contract Schedule� Eventually, the as-built end dates of both schedules

converged� The Contract Schedule was used to determine Time

Entitlement.� The Box Out Schedule was used to show

Acceleration and Mitigation.� Allowed the parties to focus directly on the issues.


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Pros

� Most Importantly, the Box Out Schedule liberates the CPM as a Planning Tool and separates it from financial and legal functions

� All parties can use Box Out� Box Out focuses attention on problem areas� Box Out is a comprehensive planning tool that includes

ALL SCOPE(S) OF WORK (pending change orders and COR’s)� More accurate Planner� More accurate Forecaster� Promotes efficiency in the performance of the work

� Can expedite settlement of claim(s) � Potentially mitigates project risk


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Cons

� The cost to maintain and use separate schedules for Planning and Other (Financial, Legal) Functions

� Strong education and experience is required to properly appreciate and use separate schedules

� If the Planning and Other Functions are separated, the Box Out schedule must be maintained until the end of the job

� Could postpone settlement of claim until the end

� Potentially increases project risk


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Questions and Discussion

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