Programmes in Construction

Those involved in the construction industry are well used to interpreting drawings to understand the structure that is to be built. The ability to read drawings with cross-sections to represent three dimensions and to read reinforced concrete drawings and bending schedules showing complicated shapes is a skill often taken for granted.

With this level of drawing literacy, it is not surprising that the industry has embraced the use of programmes to represent complicated construction activities. The developments in computer capacity and processing speeds in the last ten years has fuelled the development. Programmes are now used both to manage construction as well as to establish entitlement to extension of time and financial compensation for delay and disruption.

Standard Forms of contract do not adopt a common approach to the type of programmes, the role of the programme in the administration of the contract and the obligations and rights as to programme. The lack of a rigorous and logical contractual role for programmes does not assist the resolution of disputes and indeed can create additional difficulties. This is examined below in relation to the FIDIC Red Book 2000 Edition, after examination of the possible roles for programmes.

Roles of Programmes in Management

The programme has two possible roles in construction, either a Monitor Role or a Dynamic Role. The Monitor Role allows the extent of compliance with the parties' obligations as to time to be assessed at particular stages. The Dynamic Role allows an analysis of progress to determine the corrective actions to be taken to comply with the particular obligation or to ascertain the right to compensation.

The most frequently used type of programme is a Bar Chart, which is a list of those activities required for the project. The planned start and planned finish of each activity are shown in a time grid and are connected as a bar. The bar therefore represents the duration of the activity. The Bar Chart does not model the inter-relationship between activities, and does not model the consequences on expected completion, if the actual timing or duration of an activity is not met. It therefore has a limited role in monitoring progress most commonly using a “TimeLine” presentation as shown in Figure 1.

In order to predict future progress, the programme must model the time characteristics of the project by logic links between activities. The Linked Bar Chart is the most common type of programme used.

Modern software allows a network to be constructed by linking directly on screen the bars representing activities. The Linked Bar Chart produced by such software is a full precedence network creating a mathematical model of the project. An example is shown in Figure 2. The additional mathematical dimension of a Network Programme allows the criticality of activities and float trends to be assessed and allow management decisions to be made based on priorities, as shown in Figure 3. The aim is to identify the corrective actions that needs to be taken at the time of analysis by realistically predicting the future effects of a selection of actions.

Those activities which can be least delayed without affecting the Date for Completion are said to be on the critical path. The line through those activities is the critical path to completion and is usually generated by modern software.

The activities which are not on the critical path will have "float". This is generated by the software and sometimes shown as the difference between the earliest and latest start dates. There are various types of float, all of which are an expression of the relationship of an activity to other activities and milestones. The activities with the least float are on the critical path to completion.

If the programme is to be effective as a management tool it must be revised to show actual progress of activities, and revised to show changes in the construction logic and the incidence of actual events. Unfortunately the management of information to provide accurate revisions to the programme requires considerable effort. A systematic approach to recording and reporting is required which may involve some or all of the following:

Measurement of Work: - a comparison of actual to estimated measure of work may provide an indication of the rate of progress as well as identifying changes. This method of monitoring is the minimum required to accurately record progress. In some contracts the method of payment will require an estimate of percentage completion of activities or stages, or a measure of bill items. This information can then usefully be used to measure progress.
Valuation of Resource Cost: - a comparison of the actual rate of expenditure of resource to the estimate may indicate that a change to the planned programme is required;
Productivity Measurement: - a comparison of actual productivity to estimated will identify the validity or otherwise of the assumptions made for the planned duration of activities. This information is usually readily available to those involved on a day by day basis, but very difficult to analyse later due usually to lack of records. A systematic approach to records such as labour allocation sheets and/or on-going histrograms is needed. Work sampling may be sufficient in many cases, particularly when warned by those involved on a day-to-day basis.
Management Briefings: - Regular team briefings in which progress in terms of start and finish dates, durations, productivities, method of working and inter-relationship of activities is examined will allow a "project-wide" view to be developed. This type of review brings together the team knowledge of recent events, increases awareness and increases the accuracy of reporting. It is vital that the result of such analytical briefings are recorded and if necessary incorporated in revised programmes.

Compensation Programmes

A distinction needs to be made between programmes required by the contract and the related obligations, and programmes required to manage the project and establish entitlement (the Compensation Programme). Frequently the two types of programme required are not the same. In order to identify the programme and information necessary to satisfy both requirements the following steps should be taken at the commencement of the project and periodically reviewed:

Examine all the terms of the contract to establish whether a programme is required, the function of the programme and the type of programme to fulfill the function.
Examine the extension of time clauses to establish how compensation is to be assessed and the party responsible for providing evidence and the party responsible for assessment. Identify the type of programme and information required.
Choose and prepare/obtain the type of programme to fulfill both functions.
Prepare pro-forma to keep records required, identify likely key evidence.

The Compensation Programme is used to establish a contractual entitlement and its measure, or to establish the circumstances necessary for the exercise of certain rights.

In the case of the obligation to complete by a specified date, this only requires the date of actual completion to be compared with the specified date, to establish whether the obligation has been discharged. Even this conceptually most simple obligation requires interpretation of the meaning of "completion" in the contract and evidence of when "completion" actually occurred.

In the case of the obligation to progress the works, this requires the actual progress measured in terms of both time and resources to be compared to the standard of progress specified in the contract. The obligation is most difficult to monitor and analyse. It requires the standard required to be determined by interpretation of the contract. Inevitably the obligation is specified in most general terms. A programme can provide evidence of fact or opinion, of both the reasonable standard of progress and the actual progress achieved for comparison.

The cogency of the evidence provided by the planned programme will depend upon the accuracy of the available information and the effort applied in producing the programme. Programmes produced at tender will reflect the usually limited time available to contractors to prepare their bid, the liklihood of being awarded the contract and the contractual status of the tender programme.

The cogency of the evidence provided by revised programmes and programmes showing actual progress, depends upon the accuracy of the record of dates and events and the providence of the evidence on which they are based. Programmes often show clearly defined start and finishes of activities, but it is usually difficult in practice to define these two dates precisely. The finish date for the purpose of defining the end of tasks for that activity may not be the same date as the finish required to allow another activity to start. There may be different finish dates for the same activity for different logic links. To further complicate matters, in practice once an activity has reached a level of completion to allow other activities to commence, the activity may be left for some time before being finished. If records show the later date of finish and the programme uses logic links based on that date, the programme will be inaccurate and of little evidential value.

The planned programmes and the revisions will be evidence of the steps taken, or the failure to take sufficient steps, by the Contractor to fulfill his obligations as to programme. The specific obligations vary with the contract, but may include the requirement to revise and update programmes, to record actual progress and projected future progress and to show the steps to be taken to overcome the delay caused by events.

The evidence provided by the programme of works is not sufficient in itself to justify compensation. It is necessary to establish

· The Causative Event: There must be a liability to compensate for the event, either in contract or at law.

Causation: There must be a causal connection between the compensation and the Causative Event of the type prescribed by the contract and/or at law.
Measure of Compensation: The compensation must follow the rules and principles of valuation prescribed by the contract and/or at law.

FIDIC Standard Form of Contract

The full role of the programme in FIDIC Red Book 2000 is not clear. The description of the programme in Clause 8.3 of the FIDIC does not specify the form that the programme should take. Although there is an obligation to submit a method statement, there is no obligation to represent the method of working stated in the method statement on the programme in the form of logic links between activities, to show the construction logic. This obligation under Clause 8.3 can be satisfied by a programme in the form of a Bar Chart, together with the supporting report.

It is suggested however that the role of the programme in the FIDIC Red Form is more than simply to allow progress to be monitored. The programme is not a contract document but nonetheless defines (if not creates) the obligations and rights of the parties by the dates for performance stated in the programme. For instance Clause 1.9 provides compensation to the Contractor if the Engineer fails to issue the notified drawing or instruction within a time that is reasonable, and the Contractor suffers delay and/or incurs Cost as a result. It is suggested that one measure of a reasonable time (although not necessarily the only measure) will be the times stated in the programme issued under Clause 8.3. It is suggested that the Employer is under an obligation to provide, or have others provide, information and drawings in accordance with the programme and/or at such times as to allow the Contractor to proceed in accordance with the programme. Unless the Contract expressly states to the contrary, then a failure to do so will be a breach of contract.

The programme under Clause 8.3 is intended to record the actual progress of the Works. Clause 8.3 requires the Contractor to submit a revised programme when the Engineer gives notice that the programme is inconsistent with actual progress and the Contractor's stated intentions. Clause 8.3 independently requires the Contractor to submit a revised programme whenever the previous programme is inconsistent with actual progress.

The further role of the programme is to provide a means of predicting the effect of identified events, and this role is shown in the requirements of Clauses 8.3, 4.21(h) and 8.6.

Clause 8.3 requires the Contractor to promptly give notice to the Engineer of specific probable future events or circumstances which may delay the execution of the work. The Engineer may require the Contractor to submit an estimate of the anticipated effect. In order to provide the estimate, it is suggested that a logical analysis will be required based on an up-to-date programme. The Engineer may also require a proposal for a Variation under Clause 13.3. The Contractor is required to make a submission which includes a programme for the proposed work and the necessary modifications to the programme. It is suggested that any proposals for modification to the programme must be based on a logical analysis of the effects of the proposed work on the progress of the other work based on an up-to-date programme showing actual and predicted progress.

Clause 4.21(h) provides that monthly progress reports are required to state details of any events or circumstances which may jeopardise completion in accordance with the Contract and crucially the measures being (or to be) adopted to overcome delays.

Clause 8.6 gives the Engineer power to instruct the Contractor to submit a revised programme with revised methods to expedite progress and complete within the Time for Completion. The power arises if the actual progress is too slow to complete within the Time for Completion, or if the progress has fallen or will fall behind the programme. The measure of progress against the Clause 8.3 programme can therefore define the right of the Employer to order acceleration and the obligation of the Contractor to do so.

The Clause 8.3 programme is not the specified basis for evaluation of extension of time - it is not a Compensation Programme. The entitlement to compensation under Clause 8.4 arises if completion "is or will be delayed" by the particular cause. The extension of time may therefore be retrospective or prospective. In a retrospective analysis, the programme will only be cogent evidence if it accurately recorded actual progress. If the programme includes Logic Links then it may form the basis for valuation of the entitlement in a prospective analysis, but except in the simplest situations a Network Programme will need to be prepared from the Clause 8.3 programme.

There is a lack of consistency in the FIDIC Form in the use of the Clause 8.3 programme. The Contractor has the primary obligation to proceed in accordance with the programme and to update the programme and the Employer has the right to terminate for failure to follow the programme. In view of this, it is not clear why the entitlement to extension of time should not be determined by analysis of the Clause 8.3 programme. It is suggested that unless the programme clearly does not accurately predict future progress, that it would not be a "fair determination" as required by Clause 3.5 to ignore the results of analysis of the entitlement to extension of time based on or using the Clause 8.3 programme.

It is suggested that Employers should consider specifying a Network Analysis Programme and the form required as well as the software to be adopted, since this will allow easier reporting and monitoring of progress as well as analysis of compensation.

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