A.Sanchez_Part2_Planning and Scheduling Construction Projects_The Schedule Assurance Review

Planning and Scheduling Construction Projects
Guideline to develop and review baseline schedules
Part 2: ScheduleAssurance Review
Prepared by Alberto Sanchez 1

Alberto Sanchez
BEng, MsCLog, MIntBus, GradCertEnSt
Alberto has over 20 years of experience delivering capital
projects with values from $100 million to over $10 billion in
Asia-Pacific, Middle East, Europe and Central Asia and Latin
America in the private and public sector. He has worked
across different industries including oil and gas, chemicals,
utilities and infrastructure throughout all project phases
(feasibility studies through to commissioning) as project
controls manager, head of project controls, planning manager
and head of capital projects for international oil companies,
E&C contractors and consulting firms
2
Alberto holds a bachelor degree in civil engineering, master degree in logistics
and operations, master degree in business and postgraduate in energy studies
from recognised Australian universities. He is often requested as a keynote
speaker at major companies and industry conferences worldwide on
planning/scheduling, risk management and modular construction.
He is always interested in hearing from former colleagues, clients, or just
interesting folk, so feel free to contact him

Contents
• Part 1: The Planning Process
• Common planning problems
• The planning and scheduling process
• The schedule basis
• Productivity rates and construction durations
• Resource loaded schedules and resource leveling
• Some factors impacting the baseline schedule
• Part 2: Schedule Assurance Review
• Schedule quality review
• Schedule risk review
• Schedule benchmark review
• Conclusion 3
PreparedbyA.Sanchez
(amsanchezu@gmail.com)

Schedule Assurance Review
• The construction industry performs large investments in very
complex and risky environments
• To increase project success, clients and contractors perform
independent reviews at specific project decision “gates”
• This review process is called Project Assurance Reviews and it seeks
to assess the ability to meet the project objectives in terms of time,
cost, quality, safety, operability performance, etc.
• The reviews are conducted by independent expert teams or
Subject Matter Experts (SME) in all disciplines that help to
identify weaknesses and shortcomings that may put the project at
risk
• The independent expert teams present recommendations and
other forms of guidance to ensure that stakeholders can meet their
expectations
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4

• Key areas of Project Assurance
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5
PROJECT ASSURANCE
Quality
Assurance
Procurement
& Subcontracts
Assurance
Communication
Assurance
Risk
Assurance
Schedule
Assurance
Cost
Assurance
HSE
Assurance
Technical
Assurance
Organizational
Assurance
NOTE: Project Assurance members should be independent and objective experts from each discipline or
functional department who serve and report to the senior management during project assurance reviews

Applicability: Schedule
Assurance
• The purpose of this section is
to provide guidelines to
assist both the creator of the
baseline schedule (scheduler)
and the reviewer, who
receives the schedule for
review and approval
• The focus of schedule
assurance reviews is on the
overall quality and
completeness of the baseline
schedule. The schedule
review focuses on the
following issues
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c
Inclusion of the
entire project
scope
Sequence and
work flow
Constructability
Timing and
phasing
Adherence to legal
and contractual
requirements
Unambiguous and
clear descriptions
of the work
Resource usage
and balance
Design and coding
of activities
(i.e. OBS & WBS)
Level of detail
Highlighting key or
critical areas of risk
& opportunities

• Schedule Assurance consists of the following steps:
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Schedule
Quality
Review
Schedule
Risk Review
Schedule
Benchmark
Review
ROBUST
Baseline
Schedule

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8
Schedule
Quality
Review
Schedule
Risk Review
Schedule
Benchmark
Review
ROBUST
Baseline
Schedule

Schedule Quality Review
• The following is a recommended checklist that allows the
creator of the baseline schedule and reviewers to
consistently check baseline schedules – example:
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Project Item Description
1 What is the name of this project? ABC project
2 What type of facility is being constructed (e.g., process,
power, infrastructure, or other)?
Industrial process plant
3 Is this a joint venture project? No
4 Where is this project located (city, state, country)? Abu Dhabi, UAE
5 What is the total installed cost of this project (in millions)? 400 MM USD
6 Under what type of contract is this project being executed
(e.g., lump sum, cost reimbursable, cost plus percentage,
or other)?
Engineering, procurement
and construction (EPC)
lump sum
7 What is the scheduled duration of this project in months? 36 months

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10
Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
1 How well do you understand the project scope? e.g. process plant,
infrastructure, greenfield, expansion
2 Does the company have previous experience with this client? e.g.
similar scope, same location, same technology
3 Do you personally have previous experience with similar project?
e.g. same client, similar scope, same location, same technology
4 How well do you understand under what type of contract is this
project being executed? e.g. EPC, EPCm, cost reimbursable, cost plus
percentage, or others
5 How well do you understand the partnering or joint venture split?
e.g. personnel and technology, construction scope
6 How well do you understand the project location (city, state,
country)? e.g. site access, local labor productivities, weather conditions,
local customs
• Section 1: General Checklist Template
General Engineering
Equipment and
material supply
Fabrication Subcontract Construction
Pre-
commissioning

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11
Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
7 How well do you understand the local regulations? e.g. permitting,
local approval authorities and processes, local design authorities
8 How well do you understand the schedule requirements and
phasing? e.g. contract milestones, temporary construction phase, early
production phase, pre-shutdown phase, etc.
9 Is the project being benchmarked against a similar project? e.g.
similar plant, industry averages, productivity metrics
10 Is the work breakdown structure (WBS) or work packages being
defined? e.g. process area, utility areas, buildings, etc.
• Section 1: General Checklist Template
General Engineering
Equipment and
material supply
Pre-
commissioning

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12
Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
11 Is the basic information being reviewed? e.g. license, process flow
diagram (PFDs), equipment list, process units, utility units
12 How well do you understand the plant layout or general layout?
e.g. major equipment location, key layouts
13 Does this project have a complete basic design or FEED package?
e.g. incomplete design, outstanding design items, degree of definition,
basis of design
14 Does this project have multiple engineering execution locations?
e.g. special consultants, architectural design, local designers
15 Does this project have adequate site studies available? e.g. soil
investigation, topographic surveys, initial plant surveys
16 Is the list of engineering deliverables defined? e.g. specifications,
drawings, supporting documents for permits
• Section 2: Engineering Checklist Template
General Engineering
Equipment and
material supply
Pre-
commissioning

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13
Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
17 Does the company have previous experience with the selected
technology or license? e.g. process design basis, process equipment list,
P&IDs
18 Does the company have previous experience with the project
specifications and codes? e.g. high end, industry standards, local
design codes
19 How well do you understand the engineering approval
requirements? e.g. review cycles, third parties, local approval
authorities and processes
20 Is the list of design deliverables and engineering activities being
defined and identified in the schedule? – refers to the project scope
and client requirements
• Section 2: Engineering Checklist Template
General Engineering
Equipment and
material supply
Pre-
commissioning

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Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
21 How well do you understand the procurement policies and
procedures of this project? e.g. minimum number of vendors/bidders,
approval of alternative vendors, purchase order approvals
22 Is the requirement for local vendors defined? e.g. local content,
approval of alternative vendors
23 Is the list of materials or equipment supplied by client defined?
e.g. lead times, novated orders, free issues, vendor design interfaces
24 Is the list of long lead items (materials and/or equipment)
defined? e.g. completeness of engineering datasheets for early
purchasing, licensed equipment, single sources, lead times
25 Are lead times for equipment and material defined? e.g. based on
preliminary quotes, previous orders, historical database, required on site
dates (ROS)
• Section 3: Equipment & Material Supply Checklist
General Engineering
Equipment and
material supply
Pre-
commissioning

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Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
26 Is the location of vendor(s) for critical purchased items defined?
e.g. transport period from vendor shop(s) to site, multimodal transport
(by rail, sea and road), border crossing times
27 Are weather windows for transportation of materials or
equipment defined? e.g. storms, icy roads, high winds
28 How well do you understand the customs clearance and in-
country transport process on this project? e.g. transit times, closure
of custom points, port capacity, inland transport and handling
29 Does the company have adequate laydown area defined? e.g.
availability of warehouse, storage capacity, distance from/to construction
site, alternative sites
30 Is the list of procurement activities being defined and identified in
the schedule? e.g. RFQs, technical and commercial evaluation,
negotiation and purchase order, vendor design, fabrication, factory
acceptance test (FAT), packing and transport, etc…
• Section 3: Equipment & Material Supply Checklist
General Engineering
Equipment and
material supply
Pre-
commissioning

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Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
31 Is the pre-fabrication scope or strategy defined? e.g. rack modules,
process modules, pipe spools, pre-cast elements, prefabricated buildings
32 Is the fabricator(s) subcontract plan defined? e.g. single or multiple
prefabrication shops
33 Does the company have previous experience with the proposed
fabricator(s)? e.g. similar facility, same location
34 Is the material purchasing scope for fabricator(s) defined? e.g.
purchasing by company or fabricator(s), interfaces between material
deliveries and fabrication schedule
35 Is the location of major fabricator(s) defined? e.g. productivity of
workforce, fabrication shop/yard capacity, distance from/to closest port
and/or construction site
36 Is the transport and delivery strategy defined? e.g. large deliveries
vs multiple small-sized deliveries
• Section 4: Fabrication Checklist Template
General Engineering
Equipment and
material supply
Pre-
commissioning

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Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
37 Are weather windows for transportation of pre-fabricated items
defined? e.g. storms, icy roads, high winds
38 How well do you understand the shop inspection and test
requirement? e.g. time and test duration, interfaces with client/owner,
third-party inspections
39 Is the list of pre-fabrication activities being defined and identified
in the schedule? e.g. shop drawings, purchasing of raw materials,
fabrication and assembly, inspection and tests, packing and transport
• Section 4: Fabrication Checklist Template
General Engineering
Equipment and
material supply
Pre-
commissioning

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18
Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
40 Is there any requirement for local subcontractor(s)? e.g. local
content, approval of alternative subcontractor(s), necessary local
licenses, permits, additional mobilization times, visas
41 Is the construction subcontract plan defined? e.g. scope of works,
work packages, single or multiple subcontractors, interface plan
42 How well do you understand under what type of contract is
subcontracting executed? e.g. cost-plus, unit rates, guaranteed
maximum price, fixed price, incentive
43 How well do you understand the subcontractor(s) capability? e.g.
experience in similar work, workforce capabilities, equipment
availability, current on-going commitments and pending awards
44 Does the company have previous experience with the proposed
subcontractor(s)? e.g. worked together in similar project, similar scope,
same location, available historical productivities
• Section 5: Subcontract Checklist Template
General Engineering
Equipment and
material supply
Pre-
commissioning

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Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
45 Is the material purchasing plan for subcontractor(s) agreed? e.g.
purchasing by Company or subcontractor(s), interfaces between material
deliveries and construction schedules
46 Is the list of subcontract activities being defined and identified in
the schedule? e.g. preparation of bid packages, bid evaluation and
reviews, bid negotiation and award, subcontractor(s) mobilisation to site
• Section 5: Subcontract Checklist Template
General Engineering
Equipment and
material supply
Pre-
commissioning

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Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
47 Does the company have performed a constructability review? e.g.
construction methods, modularisation or pre-assembly designs,
standardised design elements, site fabrication vs. shop fabrication
48 Is the construction plan defined? e.g. temporary construction
facilities, construction methods and procedures, site access and
restrictions, heavy lift and rigging studies, safety requirements, etc.
49 How well do you understand the proposed construction sequence
and priorities? e.g. installation sequences, sequence of transport and
erection of modules, sequence of installation of heavy lift equipment,
sequence of tie-ins, sequence of handover of site areas
50 Does the company have access date(s) to construction site defined
and identified in the schedule? e.g. site preparation complete by
client, demining complete, shutdown start date, site permit approved
51 Is the list of preparatory works defined and identified in the
schedule? e.g. labor camp, temporary facilities, laydown areas,
demolition, soil remediation, asbestos removal, etc.
• Section 6: Construction Checklist Template
General Engineering
Equipment and
material supply
Pre-
commissioning

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Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
52 How well do you understand interfaces with other contractors
and/or communities? e.g. future or on-going construction site works,
works by others, traffic and local roads
53 How well do you understand the working calendars and/or
constraints? e.g. max. hours per day, overtime, rosters, non‐work
periods, 24x7 coverage, SimOps calendar
54 How well do you understand local customs, practices or
traditions? e.g. public holidays, religion celebrations, language barriers,
safety culture
55 Are construction labor sources and resources availability known?
e.g. union or open shop labor, local content requirements, current labor
market conditions
56 Are special construction equipment requirements defined? e.g.
heavy cranes, barges, mobilisation time, equipment/plant inspections,
road closure and escorts, etc.
General Engineering
Equipment and
material supply
Pre-
commissioning

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Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
57 Are weather windows for construction defined? e.g. winter, rainy
season, sand storms, extreme heat, etc.
58 Are key construction quantities available? e.g. number of piles, m3
of concrete, ton of steel, DiaInch of pipes, meter of cables
59 Is the list of construction activities being defined and identified in
the schedule? e.g. site preparation, underground, foundations, major
steel structures, large-bore pipes, cable trays, equipment installation, etc.
60 Are estimations of activity durations defined? e.g. based on
quantities (BOQs), productivities, etc. (please refers to part 1 for
details)
General Engineering
Equipment and
material supply
Pre-
commissioning

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Questions
Verywell
Somewhat
well
Nottoo
well
Notatall
N/A
61 How well do you understand the scope of project completion? e.g.
punch lists, site test requirements, hydrotest, loop checks, solo run test
62 How well do you understand the pre-commissioning sequence
and priorities for this project? e.g. storm water, potable water,
firewater, power generation, instrument air, DCS and control room,
cooling water, water treatment, steam, flare s, process trains, etc.
63 How well do you understand the pre-commissioning support
activities for this project? e.g. mobilisation of vendor representatives,
notification to third parties or client representatives
64 Is the list of pre-commissioning activities being defined and
identified in the schedule? e.g. power energisation, hydrotest, running
trials, cleaning and flushing, loop checks, etc.
• Section 7: Pre-commissioning Checklist Template
General Engineering
Equipment and
material supply
Pre-
commissioning

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Schedule
Quality
Review
Schedule
Risk Review
Schedule
Benchmark
Review
ROBUST
Baseline
Schedule

Schedule Risk Review
Once you completed the schedule quality review and the
preliminary baseline schedule is ready, the next step
consists of:
• Assessing the potential variability in the schedule
duration resulting from identified project risks
• Assessing how risks and opportunities may influence the
estimated activity durations and overall schedule
• Understanding which activities have the highest
probability of impacting the project completion date or
key milestones
• Understanding which risks have higher impact on key
milestones or overall schedule
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25

Abrief to Schedule Risk
Review
• Using schedule risk analysis allows you to enter extra
information about the uncertainty of the duration of the
schedule activities
• This extra information is used to produce more accurate
or realistic schedules. It also help you manage your
project more effectively by answering questions such as:
• What is the chance of finishing the project on time?
• What risks have higher impact on the schedule?
• What is the best case? what is the worst case?
• What activities are most likely to cause delays?
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26

• Level 1: Identify the project risks and
opportunities. Typically, this includes
the use of a risk checklist and the start
of the project risk register
• Level 2: Analyse project risks using a
qualitative method based on a
probability x impact matrix. It helps to
prioritise the list of risks
• Level 3: Analyse project risks using a
quantitative method based on Monte
Carlo simulations. It helps to estimate
the potential impacts of risks and
determine the probability of meeting
the project target
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27
Risk Category
Availability of sufficient amount of
suitable soils from nearby borrow pits,
resulting in increase in transport costs
Cost
Shortage of skilled workers, resulting
in longer construction schedule
Schedule
Extreme
High
MediumLowLow
Medium
HighMedium
Low
Impact
Likelihood

• Example:
• Estimated cost: US$ 420 MM
• Target duration: 25 months
• Project location: Africa
• Project award date: Jan 2011
• Target finish date: Jan 2013
• Contract type: EPC lump sum
• Industry: Oil & Gas (offshore)
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E = Engineering; P = Procurement; and C = Construction

Preliminary project schedule
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Project risk register
• Example: risks identified during the risk workshop with
project team members
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30
Risk Pre-mitigation Response Post-mitigation
ID Title Probability Impact Type Probability Impact RBS
001 Decline by qualified subcontractors to bid VL M Reduce VL M Commercial Risk
002 Extended contract sanction period H M Reduce H L Commercial Risk
003 Late comments and/approvals from client or local authorities VL M Reduce VL L Technical Risk
004 Inappropriate selection of subcontractor(s) L H Avoid VL H Commercial Risk
005 Bankruptcy of local subcontractor(s) or supplier(s) VL H Avoid VL H Commercial Risk
006 Late design changes during fabrication L H Reduce L M Technical Risk
007 Late delivery of equipment to fabrication yard L M Reduce L L Fabrication Risk
008 Late material deliveries to fabrication yard L M Reduce L L Fabrication Risk
009 Current workload of preferred fabrication yards in the region M H Reduce M M Fabrication Risk
011 Unavailability of vessels for transport from yard to Africa (missing the window) M H Reduce M M Transport Risk
012
Storms - wind, waves, high currents (Autumn/Winter Period) during transportation of
platform from fabrication yard
M VL Accept M VL Transport Risk
013 Damages to modules during transport from fabrication yard VL H Reduce VL M Installation Risk
014 Piles failure or damage due to unexpected subsea soil conditions L H Avoid VL M Installation Risk
015 Severe weather conditions during offshore heavy lift (especially in winter) H L Accept H L Installation Risk
016 Shortage of local skilled manpower during installation offshore M M Reduce M L Installation Risk
017 Incorrect selection of the flotel L M Avoid VL M Installation Risk
018 Issues with vendor representatives during installation/test offshore L M Reduce L L Commercial Risk
019 Difficulties to meet high local labor content requirements H L Accept H L Commercial Risk
020 Limited access during demolition and revamp works (SimOps) H L Accept H L Installation Risk
021 Delay during final interfaces with existing systems (e.g. telecomm, electrical) M L Reduce L L Installation Risk

Output of the schedule risk
review
• Q: What is the
probability of finishing
the project on or before
25 months (Jan 2013)?
• A: The probability of
completing the project
on 25 months (Jan2013)
is less than 5%
• Most Likely (P50) = 28M
• Worst Case (P90) = 31M
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31
06-Dec-12 25-Jan-13 16-Mar-13 05-May-13 24-Jun-13 13-Aug-13 02-Oct-13 21-Nov-13
Distribution (start of interval)
0
20
40
60
80
100
120
140
160
180
200
220
Hits
0% 04-Dec-12
5% 07-Feb-13
10% 26-Feb-13
15% 12-Mar-13
20% 21-Mar-13
25% 01-Apr-13
30% 09-Apr-13
35% 17-Apr-13
40% 29-Apr-13
45% 03-May-13
50% 10-May-13
55% 16-May-13
60% 23-May-13
65% 30-May-13
70% 06-Jun-13
75% 13-Jun-13
80% 21-Jun-13
85% 02-Jul-13
90% 16-Jul-13
95% 05-Aug-13
100% 07-Nov-13
CumulativeFrequency
OFFSHORE EXAMPLE

Output of the schedule risk
review
• What risks are most likely to cause delays?
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32
16%
18%
19%
20%
22%
25%
27%
28%
41%
48%
Damages to modules during transport from fabrication yard
Delay during final interfaces with existing systems (e.g.
telecomm, electrical)
Decline by qualified subcontractors to bid
Issues with vendor representatives during installation/test
offshore
Incorrect selection of the flotel
Unavailability of vessels for transport from yard to Africa
(missing the window)
Late design changes during fabrication
Piles failure or damage due to unexpected subsea soil conditions
Current workload of fabrication yards in the region
Shortage of "local" skilled manpower during installation offshore

PreparedbyA.Sanchez
33
Schedule
Quality
Review
Schedule
Risk Review
Schedule
Benchmark
Review
ROBUST
Baseline
Schedule

Schedule Benchmark Review
• Benchmarking has long
been used by clients and
contractors to improve the
accuracy of project
performance
• It is the process of
comparing one’s own
baseline (or proposal)
schedule against the results
of similar projects to
validate our proposed
project schedule
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34
PREPARE
BASELINE
SCHEDULE
DEVELOP
PRODUCTIVITY
METRICS
SCHEDULE DATA
COLLECTION
SYSTEM
COMPANY
PROJECTS
DATABASE
(INTERNAL)
SIMILAR
PROJECTS/
NORMS
(EXTERNAL)
CONDUCT
SCHEDULE
BENCHMARK
COMPARISON
VALIDATE
SCHEDULE
SPECIFIC FACTORS
AFFECTING THIS
PROJECT
YES
ACCEPT BASELINE
SCHEDULE
NO

• Example: contractor historical data
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35
Project Project location
Duration
(Months)
Cost
(USD MM)
Project A Europe 27 320
Project B Middle East 28 400
Project C Middle East 30 450
Project D Asia 33 580
Project E North America 35 720
Project F Middle East 36 780
Project in Analysis Africa 25 420

• Example: contractor historical data
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36
320
400
450
580
720
780
420
200
300
400
500
600
700
800
900
24 25 26 27 28 29 30 31 32 33 34 35 36 37
ProjectCost(USDMM)
Project Duration (Months)
• The expected duration of 25
months is below the benchmark
for similar projects
• The expected duration, from
historical data, should be in the
range of 27 to 28 months

Observations Suggestions/Recommendations
The expected duration of 25
months is shorter than
similar projects completed
by the company. The
benchmark data suggests
that the project duration
should be between 27 and 28
months.
Also, the schedule risk
analysis shows that the most
likely scenario or P50 should
be 28 months (3 extra
months)
1. Consider the use of “reusable” engineering or standard design library in
some areas to reduce engineering
2. Consider overdesign vs. waiting for detailed information from vendors
3. Simplify the process of cycle time review (e.g. cross-functional team)
4. Assess the time-cost effect of selective overtime, double-shift, or additional
resources during design and fabrication
5. Relocate appropriate engineering resources to fabrication yards to expedite
technical queries
6. Consider “schedule” as major criteria to evaluate fabrication bids
7. Consider the use of incentive/bonus in the contract for early fabrication
completion
8. Consider the use of single source for critical procurement items to reduce
time of vendors selection
9. Assess the time-cost effect of allocating premiums for early supplier
deliveries
10. Confirm capabilities and capacity of proposed fabrication yards, and
perhaps assign the fabrication of jacket and piles to a separate yard
11. Assess the time-cost effect of using international subcontractors instead of
local subcontractors (e.g. penalties for non-compliance with local content)
12. Consider a cost contingency for eventual penalties and/or prolongation
costs in case schedule cannot be compressed
13. Negotiate a 3-month grace period to prevent cost penalties from LDs
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37
Conclusion: Project Assurance

38
Contact:
amsanchezu@gmail.com
End of Part 2:

A.Sanchez_Part2_Planning and Scheduling Construction Projects_The Schedule Assurance Review

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