Ghost CPM Schedules

    Norman F. Jacobs, Jr., CSI Emeritus 2016

    Project Managers use the approved CPM Schedule in the field office and use a Ghost schedule in the home office. When you have a delay on your project you may use your Ghost schedule to mitigate the delay by making a fragnet of the activities related to the delay.

    When a contractor uses a Ghost Schedule, it is often though of by the contractor as their, as should have been submitted schedule. For example, when an Owner refuses to approve the contractor’s planned early completion CPM Schedule, or rejects the contractor’s time extensions request, either to an early completion schedule resulting from an excusable delay, a contractor may prepare a Ghost Schedule to status the project properly. Contractors may also use a Ghost Schedule to manage subcontractors and suppliers.

    Ghost schedules have been used behind the scenes on construction projects for many years. Contractors could use their Ghost schedules to analyze and determine the proper potential impact of change orders and decision making before beginning their into actual delay discussion.

    Why do we use Ghost Schedules? The implementation and potential pitfalls of the use of good Ghost schedules, the need and use for a Ghost schedule should be defined. The difference between a project schedule and a Ghost schedule must be clearly recognized.

    A contract CPM schedule is the official project schedule approved by the Owner. A Ghost schedule is not the project schedule nor is it defined or recognized by the contract. Instead, it is set apart from the project schedule by the party employing it. Like the project schedule, it is updated regularly, analyzed, discussed, and revised as necessary by its user.

    Every Project Manager must be aware of any liability and risk involved when using Ghost Schedules. Ask yourself is there are any legal question related to Ghost Schedules. There have only been a small number of case law dealing with the use of Ghost Schedules. A significant case concerning Ghost Schedules and their use is Jackson Construction, Inc. v United States. In this case, the U.S. Court of Federal Claims stated that a contractor is under no obligation to advise Owners of planned early completion.  - - - - - - - Jackson Construction Co., Inc. v The United States, 62 Fed. Cl. 84; 2004 U. S. Claims.

    When the Project Managers are developing and utilizing the Ghost Schedule they must be aware of the adversarial relationships this may create on the project.

    Let’s look at a project that utilized Ghost Schedules. Take for example a $300,000,000.00 Convention and Cultural Center which included a domed Convention Hall. The domed structure a poured in place concrete dome. The dome was supported by twenty four flying buttress that were formed, re-bared with poured in place concrete.  

    The original project cost estimate showed the cost of one form system for the twenty four flying buttress. The original CPM Schedule for the project showed ten work days to complete each flying buttress. During the course of the project there were twenty compensable delays and sixteen strikes that delayed the project.

    Examples of the use of Ghost Schedules in construction: 1. Construction of the flying buttress was on the critical path so it was time to study how to reduce the duration as related to resources. The decision was made to build a second form system for the flying buttress at a cost of $75,000.00. In theory this cost would save time and money by cutting the total duration of the twenty four flying buttress.       2. Ghost schedules were used to study the use of ten hour days in lieu of eight hour days. When you go to ten hour days you loose productivity by say fifteen percent therefore you must weigh the time saved verses  the extra cost.     3. A study of adding a night sift of resources was analyzed with the Ghost Schedule. In this study we discovered that the circadian rhythm of the work force may run into extra cost. Also you need to review what critical activities are concurrent.    4. Another example of the use of a Ghost Schedule is to expedite the critical work of sub-contractors.

    The perspicacious Project Manager must be careful when using Ghost schedules and their risk. The contractor underlying problem of maintaining multiple schedules is, “Which one is your real schedule?”

    The use of Ghost Schedules require detail documentation. The prudent Project Manager must know adequate project documentation because every construction project requires detailed documentation to keep comprehensive and contemporaneous records. Conscientious and orderly record-keeping not only provides the information to effectively and efficiently “manage” a project, it is also essential preparation for contract disputes, delays, impacts, and any litigation. Adequate documentation may also satisfy a requirement for a logical and supportable documentation of cause and effect. Remember, documentation last, but memories fade.

    Using Ghost Schedules in handling delays with TIA. All astute Project Managers must be prepared to handle delays with assiduous planning. Unnecessary delays can mean lost time and money, and possible a trip to court. The Project Manager’s role in management of delay and schedules is a most detailed part of his or her responsibility in today’s world of construction. A must is to know the use of fragnets and Time Impact Analysis. Over the years construction methods have been characterized by low management technology; planning and scheduling techniques were most rudimentary and delays in performance of construction were taken in stride. All monthly CPM schedule updates must be critiqued as they relate to delays or impacts.

    TIA and Ghost Schedules are used to analysis the status of projects. Network schedule techniques have great utility in evaluating delay and impacts on a project. Project Managers use the TIA techniques as simultaneous proof of both the fact and the cause of delays or impacts to projects.

    Using Ghost Schedules and FSA to analysis the project schedule status. Forensic Schedule Analysis – Forensic research involves the application of scientific knowledge of legal matters. The sagacious Project Manager who uses “Forensic Schedule Analysis” refers to the study and investigation of events using CPM Schedule calculation methods for potential use in a legal proceeding. It is the study of how actual events or activities interacted in the content of a complex model for the purpose of understanding the significance if a specific deviation or series of deviations from some baseline model and their role in determining the sequence of activities within the complex CPM Schedule Network Diagram.

    Construction Risk Analysis 2015 - Norman Jacobs

    - Construction Risk Analysis 2015     

    Risk allocation in the construction industry is established by the construction contract. The importance of the contract cannot be overemphasized. In the end, the contract serves as a framework of the law between the parties and will establish which party has assumed or negated a particular risk in connection with the project.

    Risk is simply the potential for complications and problems with respect to the completion of an activity and the achievement of a goal. For any project to meet the defined goal, risk must be managed, and thus must be  grated into the project constituents, project budget and overall project management approach. Following the identification of the sources and timing of risk, an understanding of the various types of impacts that routinely result from those risks is necessary to facilitate the development/utilization of potential mitigating and managing mechanisms/processes. The astute Project Manager must critique all contracts in order to manage risk.

    A place to begin with contract documents and manage risk is to study and examine the General Conditions AIA A201 -2010. Evaluate each word related to risk. 

    In addition, to facilitate the understanding it is necessary to analyze the life cycle of a typical construction project, concentrating specifically on the processes that are being implemented as well as their relative timing.  This project life cycle knowledge allows a comprehensive understanding of the major sources of risk identified, including the risk timing and impacts.  It is only through this fundamental understanding that potential mechanisms and process for mitigating the impacts resulting from the major sources of risk can be effectively implemented. The perspicacious Project Manager must use a tool such as the project CPM Schedule to help manage risk.

    Be aware that risk management is the management of events or activities that may or may not occur, and planning for their possible range of impacts to the project. Due to the probabilistic, futuristic and speculative nature of risk management, many sedulous Project Managers and teams feel uncomfortable with the whole topic and avoid it altogether,

    For years, the assiduous Project Managers have been taught to identify, quantify and develop strategies for dealing with risk, yet risk management continues to be one of the weakest areas of project management. In today’s challenging project environment, how can Project Managers manage risk effectively?

    Resources and dollars – A risk budget is the time and/or resources [including funds] budgeted to deal with risk once they occur. There are many causes for insufficient “risk” budgets on construction projects, including:

    … Insufficient time, funds or resources estimated and budgeted by the Project Manager… Risk budgets cut by management 

    … Risk budgets mismanaged by the Project Manager and used to cover poor performance instead of identified risks.

    This budget to deal with risk can be broken into four major categories: 

    1. Avoidance – actions taken to prevent the risk from occurring. 

    2. Mitigation – actions taken to reduce the probability of it occurring, the impact if it does occur, or both. But it does not eliminate either.

    3. Detection/Triggering – actions taken to determine if the risk is likely to occur or if it has already occurred.

    4. Contingency – actions taken to address the results once the risk event has occurred.

    Avoidance requires upfront planning, because many avoidance strategies must be executed just before the start of the project.

    Mitigation requires proactive and preventative actions to be taken throughout the life of the project.

    Direction, or triggering, is a technique to determine the likelihood of the risk’s occurrence and its potential impact. Often this testing can only be initiated just prior to when the risk most likely would occur.

    Contingency plans are not executed until after the risks have occurred; they are contingent upon that event. Contingency often involves cleanup, rework, added manpower, waste and damage. As a result, executing a contingency strategy is often more costly than investing in avoidance or mitigation and detection.

    So, to avoid the common causes of insufficient risk budget, Project Managers need to do the following:

    1. Avoid just tacking on a percentage of the budget for risk and instead, properly estimate and budget for avoidance, mitigation, trigger and contingency actions.

    2. Invest more in prevention than contingency.

    3. Allocate the risk budget to specific actions that will be taken to avoid, mitigate, trigger or respond to identified risks in your risk plan.

    4. Manage the contingency reserve like a allotted budget and use it only for the execution of the contingency strategies developed for identified risks.

    The judicious Project Manager’s risk plan must be integrated with your project game plan. This means the risk budget has to be incorporated into your project CPM Schedule, cost budget and staffing plan. Too many Project Managers have a separate file, tool and process for managing risk apart from the rest of the project. As a result, the risk plans are often forgotten, ineffective or used only for historical purposes or to prove compliance with corporate policy, and they fail to be a useful management tool. Lastly, it is too easy for management to cut a risk budget when it is completely isolated from the project game plan or lumped into one line item on the project budget.

    Using a very simple and practical approach, Project Managers can build realistic risk plans and budgets, integrate them into the project CPM Schedule and reduce the probability that management will slash it. Critique the WBS, work breakdown structure and then identify ways to deal with risk.

    All construction contracts must be reviewed, critiqued and analyzed before they are signed and requires more than merely verifying that the contract sum is the price that was agreed to between the contract parties. Contract review requires that all parties focus on several provisions which appear in almost all construction contracts and which have potentially the most drastic impact on the bottom line. By focusing on the several key contract provisions, understanding how they work and negotiating them effectively.

    Once the contract terms and conditions for the project have been agreed to by all parties, they must “document” the contract, signed by all contract parties, and put into force. One effective tool for minimizing “risk” is to use a well established, preprinted contract format to document the relationship. This should include all of the information that a complete, prudent contract must contain so that the chances of leaving out something critical, such as protection of confidential information or proprietary intellectual property, will be reduced. Every contract needs to include a very clear, unambiguous definition of the scope of work that specifies measurable deliverables and payment terms. A good contract also provides an explicit description of the process to be used if any changes are necessary. Finally, when setting up a contract, minimize the resource “risk” by establishing a “not to exceed” limitation to avoid runaway costs.

    You must do a lot of planning to control construction “risk” and know the way to measure risk probability and consequence of not achieving a defined project goal. Most people agree that risk involves the notion of uncertainty. Risk management is the art or practice of dealing with risk. It includes planning for risk, assessing [identifying and analyzing] risk issues, developing risk handling strategies, and monitoring risk to determine how they have changed. Proper risk management is proactive rather than reactive.

    It is important that a risk management strategy be established early is a project and that risk be continually addressed throughout the project life cycle. Risk management includes several related actions, including risk monitoring and analysis.

    Risk analysis begins with a detailed study of the risk issues that have been identified and approved by decision makers for further evaluation. The objective is to gather enough information about the risk issues to judge the likelihood of occurrence and cost, schedule, and technical performance consequences if the risk occurs. It is important that only approved risk issues be analyzed to prevent resources from being expended on issues may not actually be risks.

    Quantitative risk can be analyzed by using the Monte Carlo process, as applied to risk management, is an attempt to create a series of probability distributions for potential risk items, randomly sample distributions, and then transform these numbers into useful information that reflects quantification of the associated cost, performance, or schedule risks.

    Know Project Risk Management Methodology. The Contract Administrator or the Project Manager must define the methodology to be used to identify the methodology to be used to identify and manage such events or risk that threaten accomplishing the goals of the project; one of the methodologies usually used in the construction industry is Monte Carlo risk simulation, which could be an optional tool for the meticulous Project Manager to be implemented in the development of the RMP.

    Develop a Risk management Schedule with milestones, taking as a reference to the CPM Schedule. The  Risk Management Schedule should include such references as reviews, meetings, assessment milestones, and other significant events are included in the Risk Management plan development. Then too, analysis circadian rhythms as related to human resources. 

    Several risk response strategies are available. The strategy or mix of strategies most likely to be effective should be selected for each risk.  Risk analysis tools, such as decision tree analysis, can be used to choose the most appropriate responses. Then, specific actions are developed to implement that strategy. Primary and backup strategies may be selected. A fallback plan can be developed for implementation if the selected strategy turns out not to be fully effective, or if an accepted risk occurs. Often, a contingency reserve is allocated for time and cost. Finally, contingency plans can be developed, along with identification of the conditions that trigger their execution.

    Study and examine strategies for negative risk or threats. Three strategies typically deal with threats or risk that may have negative impacts on construction project objectives if they occur. These strategies are to avoid, transfer, or mitigate risk.

    Risk avoidance involves changing the project management game plan to eliminate the threats posed by an adverse risk, to isolate the project objectives from the risk’s impact, or to relax the objective that is in jeopardy, such as extending the schedule or reducing scope. Some risk that arise early in the project can be avoided by clarifying requirements, obtaining information, improving communication, or acquiring expertise.

    Risk transference requires shifting the negative impact of the risk, along with ownership of the response, to a third party. Transferring the “risk” simply gives another party responsibility for its management; it does not eliminate it. Transferring liability for risk is most effective in dealing with project time and money. Risk transference nearly always involves payment of a risk premium to the party taking on the risk. Transference tools can be quite diverse. Construction contracts may be used to transfer liability for specified risks to another party.

    Risk mitigation implies a reduction in the probability and/or impact of an adverse “risk” event. Taking early action to reduce the probability and/or impact of a risk occurring on the project is often more effective than trying to repair the damage after the risk has occurred.  Adopting less complex processes, conducting more test, or choosing a more stable management program are examples of mitigation actions. Mitigation may require prototype development to reduce the risk.

    The cognizant Project Manager must manage all risk and construction problems, even those related to the adversarial position between the Architect and a contractor. Could this adversarial relationship become a frenemy? 

    All contract parties must obtain copies of all insurance required by contracts and critique the exclusions in each policy. Note that all insurance certificates in construction have expiration dates and the Project Manager must keep a record and obtain new insurance certificates as the old ones expire.

    Always weigh the risk when you review and examine warranties to see if they are express warranties or limited warranties.

    Know the project safety and security requirements and hold meetings to inform personnel of same.

    Construction risk parameters include but not limited to:  1. Documentation,  2. Insurance coverage, 3. Specifications, 4. Unforeseen soil conditions, 5. Weather, 6. Untrained people, 7. Government regulations, 8. Top management, 9. CPM schedules and updates. Does your Project Manager have an updated risk management plan?

    Construction Law and the Project Manager – Construction Law is becoming a risk issue for the Project Manager. In the event of litigation, the Attorneys will depend on complete records for either defense or prosecution of a claim. This documentation must include contracts, -  daily reports, - submittal log, insurance policies, - weekly labor reports, - monthly billings, - visitors on site, -strikes, - depositions, - material delivery problems,  -WBS work breakdown data, - videos, -  all correspondences, - CPM schedule information including each monthly update, - meeting minutes, - change orders, - payrolls, - request for information [RFI’s], - Architect’s status visits reports, - equipment log, - bid estimates, - testing reports, - time extension request and approvals, - photos, - updated schedules, - expert witnesses, knowledge of specifications, - weather records, - warranty responsibilities, acceleration cost, - time impact studies, - forensic schedule analysis, concurrent delays, - float time, - records of labor inefficiencies, - analysis of delays,  -record of disruptions and interferences, - early completion rights, awareness of schedule milestones, - and people involvement in daily CPM Schedule activities of the project.

     THINK “Construction Problem Avoidance”

    Norman F. Jacobs, Jr., CSI, CPE, SAR, PMI, AACE, IIE