In December 2015, the UK’s National Audit Office reported that one-third of UK government projects were either unachievable or in-doubt. This would have come as a great surprise to most commentators, in particular that two-thirds of the projects were forecast to be on track! It is not immediately clear from the report on what basis these projects are secure about their on-time delivery. How can a project forecast with confidence that it will deliver on time?

1. The Programme Certainty Paradox
Page 1 of 4August 2016
Introduction
In December 20151
, the UK’s National
Audit Office reported that one-third
of UK government projects were
either unachievable or in-doubt.
This would have come as a great
surprise to most commentators,
in particular that two-thirds of the
projects were forecast to be on track!
It is not immediately clear from the
report on what basis these projects
are secure about their on-time
delivery. How can a project forecast
with confidence that it will deliver on
time?
Need for Certainty
Economically the world is smaller,
as regional and local economies
become ever increasingly dependent
on cross-border trade. International
competition that flows from this
globalised economy has significantly
affected the construction industry,
introducing further challenges
that affect both employers and
contractors.
Tocompeteinternationally,employers
need to realise their projects’ benefits
in shorter timescales. At the same
time, a project’s viability is ever more
dependent on world commodity
prices and the globalised movement
of capital.
Contractors are equally affected;
reduced project timescales and the
increased influence of international
contractors in local markets have
intensified pressure on dwindling
profit margins2
.
Due to globalisation, the boundary
between a project’s success and
failure has diminished, which makes
the cost of project overruns even
more expensive. Consequently,
employers and contractors desire
certainty; in particular, to know that
their project will be delivered on time
and to budget.
Paradox
Paradoxically, the path to certainty
is found in uncertainty. This is
particularly true for the timely
completion of projects, where
achievement is premised on an
assumed future performance.
Basis of Project Time
Prior to any examination on how
to achieve certainty3
that a project
will complete on-time; it is prudent
to reflect on the manner in which
project time is evaluated, managed
and monitored. In particular, the
programmes the parties rely on to
make time-related decisions.
Most standard conditions of contract
require the contractor to prepare a
contract programme. This should
demonstrate how it will perform the
works in order to complete by the
contracted completion date.
The contract programme consists of
activities with set durations that are
logically linked to form a network.
As-long-as the total duration of the
longest path through this network
is less than or equal to the time
required for the project; the parties
are usually satisfied the programme
will deliver the project on time.
That viewpoint is overly simplistic
given the programme’s proper
context: it is a forecast, based on
an assumption that these future
activities will be performed in the
sequence and times planned. In the
same way budgets are projections of
future financial expenditure, contract
programmes are estimates of future
performance.
Prospective programmes (including
contract programmes) are time
models on which the project’s
decision-making process is founded.
These include (but are not limited to):
• Cost and budget forecasting;
• Resource management;
• Interface management with
subcontractors and other
parties;
• Change management;
• Risk management;
• Site and logistics management;
and
• Procurement considerations,
including material delivery to
site.
As the programme is a model
based on future events, its value is
directly proportional to its quality
— the results of any programme
interrogation, necessary for a
decision-making process, will only be
as robust as the model used. Rubbish
in will result in rubbish out!
Programme Quality
It is clearly imperative that the
programme model should be as
reliable as practicable, but how is this
achieved?
Assistance is provided in the form
of Schedule Metrics — a series
of objective benchmarks, against
which a programme’s quality can be
measured.
1
United Kingdom National Audit Office, ‘Delivering major projects in government: a briefing for the Committee of Public Accounts’, January
2016.
2
Construction News’ Annual CN100 survey, reported in September 2015.
3
Insofar as it is practicable to achieve.

2. These benchmarks promote quality
through a series of criteria that the
programme is expected to achieve or
better. These include:
• Minimal, if any, use of hard
constraints, such as ‘finish on’ or
‘start on’ dates;
• Preference for Finish-to-Start
logic relationships over other
available logic types;
• Restriction on activities’
durations, for example to less
than one reporting cycle;
• Limited reliance on artificial
constraints such as lags between
activities;
• Use of appropriate calendars for
activities;
• Prohibition on the use of negative
lags; and
• Limited activities with high float
durations.
Schedule Metrics’ benchmarks are
particularly concerned with the
programme’s logic structure and
the development of the longest-
path. This makes them an invaluable
tool when considering whether a
programme is suitable for risk or
delay analysis purposes.
In terms of prospective programmes,
Schedule Metrics should be
considered as best practice guidelines
to assist planners build and maintain
the project’s programme.
Clearly, Schedule Metrics are an
invaluable tool that should form part
of every programme’s development,
although, they have limitations.
Significantly, they cannot talk to the
planned intentions themselves: they
cannot assess whether the plan is, in
fact, buildable.
Generally, it is for the contractor to
determine the sequence in which
it proposes to perform the works.
These intentions should be clearly
represented in the programme. Too
often the plan is put together in
isolation, without input from those
who will deliver it. It becomes merely
a reporting tool, devoid of value.
For the programme to accurately
model the planned intentions, it must
be prepared collaboratively, with buy-
in from the project’s site team.
A Tool to Manage Uncertainty
A collaboratively built and
benchmarked programme will be
more robust. Nevertheless, this
in itself does not provide certainty
that the contracted completion date
will be achieved, as shown in the
programme.
Preparation of a contract or
prospective programme may,
therefore, seem futile. That is not
the case. Instead, these forward
looking programmes need to be given
a more appropriate context. Rather
than seeking to attain certainty, they
should be considered as tools to
manage uncertainty.
Moreover, a robust programme
gives confidence that it is a suitable
model to assess uncertainty and
give authoritative results. This
is important because, as stated
earlier, the path to certainty lies in
understanding uncertainty.
What is Uncertainty?
It is relevant at this juncture to set-
out what is meant by uncertainty.
Uncertainty in the programme sense
is not impossibility or improbability
— it is not unbound and infinite.
Rather, it should be considered as
a range within which uncontrolled
effects may occur. The more limited
the number of potential results that
can be observed, the greater the
perceived level of certainty.
Historic data can be used to set these
boundaries with a satisfactory degree
of confidence. The available results
reduce as the project progresses,
such that certainty is greater at the
end of the works than the beginning.
Duration Uncertainty
Inthesearchforprogrammecertainty,
the first uncertainty to consider is
‘Duration Uncertainty’.
A prospective programme suffers
a significant flaw: it assumes
the duration of a future event is
determinable. On the contrary, it
cannot be stated with any certainty
that a future activity will take the
duration allocated. If the duration
of each activity within the network
cannot be determined; little
confidence can be derived that the
contracted completion date will be
achieved.
It may be impossible to forecast an
activity’s exact duration; however,
historic data can identify the
maximum and minimum time it has
previously taken. From this factual
data, a statistical likelihood for each
duration can be calculated. This can
then be extrapolated to derive the
most likely duration.
Thereby, an activity’s duration is
better expressed as a distribution
between three ranges: the minimum,
most likely and maximum duration
(see Figures 1 and 2).
Page 2 of 4August 2016
The Programme Certainty Paradox
Figure 1 – Historic data can be graphically presented to identify the minimum, most
likely and maximum durations similar activities have historically taken.

3. Page 3 of 4August 2016
The Programme Certainty Paradox
The uncertainty of an activity’s
duration now has boundaries.
Given that each activity’s duration
can be expressed as a range, it
is necessary to assess how these
variable durations may combine to
affect the contracted completion
when they are applied across a
programme (see Figure 3).
Statistical analysis tools, such as a
Monte Carlo Simulation, use over
a thousand ‘what-if’ scenarios to
determine the probabilistic value of
an outcome. This principle can be
employed to assess a programme’s
likely finish date and compare it
against the contracted completion
obligations.
Each ‘what-if’ scenario uses a
duration from the activities’ range
and reviews how they combine to
affect the completion date. When
this is repeated over a thousand
times, it becomes possible to give a
confidence rating for each potential
completion date.
From this assessment, the parties can
assess whether they are comfortable
that the contracted completion date
is likely to be achieved.
However, that is not the end of the
story.
External Factors
The previous steps discussed concern
uncertainty inherent within the
programme. However, there are
external factors that may affect the
project’s timings (both positively as-
well-as negatively) that are not within
the parties’ full control. These risks
andopportunitiesshouldbemanaged
by the parties through a project-wide
risk management strategy.
The core element to this strategy
is to understand the effect various
risks and opportunities have on the
projects’ timings – both before and
after a risk or opportunity is treated.
Arguably the most reliable method
to assess these impacts is to run
a Quantitative Schedule Risk
Analysis (QSRA). This method finds
particular favour in the Oil and
Gas industry, where it has been
successfully used for many years.
A QSRA requires the parties to
collect quantitative data, for each
risk or opportunity. Specifically, a
probabilistic likelihood that it will
occur and, in that event, the effect it
may have in terms of both time and
cost.
Previous projects and published
benchmark data are good sources for
this quantitative information.
Nevertheless, as the QSRA is a
modelled form of analysis, particular
care should be taken to validate this
data prior to incorporation into the
assessment.
Once this quantitative data has been
verified;theriskoropportunitycanbe
attached to the effected programme
activity(ies). Thereafter, statistical
analysis tools can model, amongst
other things, their likely effect on the
contracted completion date.
In assessing the effect on the
completion date; the QSRA provides
two key results (see Figure 4):
• The probabilistic likelihood
that the contracted time for
completion will be achieved; and
• A probabilistic value for each of
the risk determined completion
dates.
In addition, a QSRA can identify the
programme activities that are most
likely to appear on the programme’s
longest path (see Figure 5).
This is particularly valuable as it
allows the project’s management
to focus on those activities that are
statistically most likely to influence
on-time completion.
Benefits for Employers
For an employer the benefits from
programme certainty go beyond
merely knowing when their project
may be realised.
Early risk modelling, especially as
part of the feasibility study, can
identify risks to be transferred to the
contractor and those that must be
managed by the employer. This can
be used to inform an appropriate
contract strategy to best treat these
threats.
Schedule risk techniques allow
the employer to interrogate the
contractor’s tender and contract
programmes. In-so-doing, not only
will it satisfy itself that the contractor
can deliver as promised; it can
use this information to build more
robust cash-flow forecasts and risk
contingency allocation.
Figure 3 – The programme is a network of activities, each with
a range of possible durations.
Figure 2 – The range of an Activity’s
duration should be considered as a
variable, derived from the historic data
(see Figure 1).

4. During the works the employer
should, collaborate with the
contractor to execute a project risk
management strategy with regular
schedule risk up-dates. This on-
going effort promotes early risk
identification and more effective risk
treatment. Resultantly, the project
is significantly more likely to be
delivered on-time and to budget.
For employers, programme certainty
may not be limited to the likely
completion date — especially
for projects made-up by multiple
contract packages. In that case, it is
equally important to have the same
confidence level for the interface
points between contractors. This
sameconceptapplies when managing
multiple interrelated projects as part
of a portfolio.
Benefits for Contractors
As noted earlier, the programme is
integral to the contractor’s decision-
making processes and is a crucial tool
for the management of the works.
With ever tighter project timescales,
theabilitytomakeaccurateandtimely
decisions has become imperative.
This decision-making is significantly
enhanced by schedule risk analysis,
as they are founded on and tested
against more robust information. As
a result, the contractor can manage
the works by exception — that is,
focusing efforts where they will be
most effective. For example, through
schedule risk analysis the contractor
can better identify those activities
that are probabilistically most likely
to be on the longest path and most
sensitive to delay. Management and
resource efforts can be concentrated
on these activities to significantly
reduce the likelihood of delay and
the potential imposition of liquidated
damages.
An on-going risk management
strategy allows the contractor to
identify risks and opportunities that
are most likely to affect these longest
path activities. In-so-doing, efforts
can be more effectively employed to
minimise the effects of these risks,
whilst maximising opportunities.
Like the employer, the contractor
is normally required to manage the
interface with various subcontractors.
To effectively manage this, the
contractor must be certain that the
interface dates can be met and, in the
event that they cannot, undertake
appropriate mitigation measures.
Enhanced programme certainty
provides contractors with an earlier
warning that these interface dates
are at risk, allowing for earlier and
potentially more effective and less
expensive intervention.
August 2016
The Programme Certainty Paradox
Page 4 of 4
Figure 5 – The analysis registers the percentage of times an activity appears on the
longest path across all the ‘What-if?’ scenarios.
Figure 4 – The analysis registers the completion date observed in each ‘What-if?’
scenario. These can be graphically represented and probabilistic values derived. In
this example, the contracted completion date was 11 December 2015, which was only
achieved 15% of the time. Whereas, there is an 80% chance that the project will
complete by 17 December 2015.

5. The Programme Certainty Paradox
Schedule risk techniques also assist
the contractor to overcome project
delay. Events and their affects are
identified earlier so that they can be
treated more effectively, often with
reduced cost impacts. Furthermore,
clear identification of the probabilistic
longest path allows for more effective
recovery measures using ‘programme
crashing’ (or similar) techniques.
Time-Cost Integration
Time and money are not necessarily
linked. However, the programme can
facilitate greater cost certainty.
An activity represents work to be
done and, therefore, has a cost. This
may include (but is not limited to) the
cost for labour, plant and material
necessary to perform the activity.
A cash-flow forecast can be derived
from attaching these costs to their
relevant programme activities. The
resultant model expresses how cost
will be incurred over the project’s
duration.
Like the programme, this cash-flow
is dynamic and influenced by risks
and opportunities. This can be in the
form of additional costs (or savings)
that result from the risk event itself
or more simply the shifting of the
expenditure profile to mirror the
event’s effect on the programme.
The cost associated with risk and
opportunity can be further assessed
throughaQCRAprocess. Theresultant
probabilistic Cost-to-Complete (‘CTC’)
considers:
• The probabilistic cost effect of
identified risks and opportunities;
• A cash-flow forecast, adjusted to
account for an activity’s duration
uncertainty;
• Themostlikelyprojectcompletion
date and, therefore, its total
duration; and
• The project’s cost sensitivity in
response to change.
Conclusion
Managing the project’s programme
and subsequent up-dates is pivotal
to on-time delivery. However,
prospective programmes model a
single outcome, based on a series
of variable future events (such as
an activity’s actual duration). They
cannot give certainty that the project
will complete on or before the
contracted completion date.
Various techniques narrow this
uncertainty to a range of outcomes.
Therefore, the project’s management
can focus its efforts and decision-
making on the tasks that will achieve
the best outcome, directly benefiting
the project and its on-time delivery.
Otherwise, prospective programmes
remain antithetical Cassandran
prophecies: people blindly believe
their foresight, except those who
prepared them.
However, with minimal investment
the programme can become a
powerful tool to manage the
uncertainty that can prevent the
project’s achievement. As a result,
the project is significantly more
likely to be achieved on-time and to
budget. n
This article is written by Lee Baker,
Director, Hill International, Inc.
Lee is responsible for the Forensic
Delay Group in the Asia region. Lee
is a delay analyst with over 12 years’
industry experience, who specialises in
time-related matters and programme
risk management. He has been
appointed to prepare expert reports
and regularly advises clients on
dispute avoidance and resolution. Lee
has extensive international experience
of high value mega-projects, across
a wide-range of industry sectors.
These include Power Generation,
Aviation, Rail, High-rise buildings
and Prestige Retail and Commercial
developments. Lee prepares and
presents courses for the RICS and his
recent speaking engagements include:
FIDIC Asia Pacific Conference, Annual
Construction Risk Management
Conference, PMI (Singapore Branch)
Symposium and the YSIAC Advocacy
Roadshow.
Disclaimer: This article does not constitute
advice, legal or otherwise, and is provided only
as general commentary. Appropriate professional
advice should always be obtained before taking or
refraining from taking any action in relation to such
information and/or the application of applicable
law. This article and the materials contained in it are
provided on the basis that all liability for any loss or
damage, whether direct or indirect, arising out of
or in connection with any use or reliance upon this
article is excluded to the fullest extent permitted by
law.
Page 4 of 4August 2016
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